PLEASE NOTE: This article was published on the date listed below and may now contain information that has since been updated or changed. We have retained this article as it may still contain helpful comments. However, we advise you to make an appointment to see us for the most up to date information on this topic.

November 2000

Employment Relations Act Update

Changes to employment law in New Zealand by the introduction of the Employment Relations Act were passed into law on 2 October 2000. Changes to the Bill, after Select Committee sittings, affect the clauses relating to independent contractors, fixed term agreements, directors’ liabilities, and the obligation to provide financial information during the collective bargaining process.

The Act makes significant changes to the way employment disputes are resolved. The main features of the new dispute resolution structure are:

  • An emphasis on mediation;
  • Reinstatement is to be the primary remedy;
  • The introduction of a mediation service run by the Department of Labour;
  • The Employment Tribunal will be replaced by the Employment Relations Authority; and
  • The Employment Court is retained.

Mediation Service

This nationwide service is aimed at providing a broad range of options for a speedy resolution of employment relationship problems and personal grievances. The services provided by the Department of Labour include a mediation service and the provision of information by pamphlets/brochures, telephone, fax, Internet or email. Mediators employed by the Department of Labour may come to the workplace to assist disputing parties to agree to a solution. An employment relationship problem may include a personal grievance, a dispute about the meaning of an employment agreement, problems about holiday pay or union related matters.

The mediators can decide on the process best suited to the employment relationship problem and, if the parties agree, the mediator can sign a settlement that is final and binding. If both parties agree, the mediator can impose a decision that is final and binding.

Employment Relations Authority

The Authority’s aim is to provide a speedy, informal and practical solution to employment relationship problems by establishing the facts and making a determination without regard to technicalities. The Authority can investigate and decide on a procedure that it thinks is appropriate for a particular dispute. The Authority can call evidence, examine witnesses, interview people and take into account any evidence.

The Authority must consider whether the parties have used the mediation service run by the Department of Labour before coming to the Authority. If they have not, the Authority must direct the parties to use the mediation service unless it considers that it would not be a constructive process for those particular parties. The Authority imposes a decision on the parties.

The Employment Court

The Employment Court is to be retained in its present form. A new role for the Employment Court is that it will be responsible for conducting a full judicial hearing of the original problem previously determined by the Authority. This is different from the Court’s current role, where (in most circumstances) it hears appeals from the Employment Tribunal, and it does not conduct the full judicial hearing.

Like the Authority, the Employment Court is also required to consider whether there has been an attempt to resolve the dispute by the use of the mediation service. If there has been no attempt or the Court thinks the attempt was inadequate, it must direct the parties to use the mediation service unless it would not serve any constructive purpose.


The new Act is a sweeping change. It creates new rights and obligations and will affect every employment relationship. If you have any queries please contact Greg Stringer, our Litigation Partner, to discuss this further.