Existing agreements (entered into prior to 1 December) must be brought up to date by 1 December 2005, or when the employment agreement is next amended or when the employer’s business is restructured.
What the clause says will depend upon the type of employee that the agreement covers.
‘Vulnerable’ Employees
Employees who work in cleaning, food catering, laundry and orderly services in education, health, and age related residential care are now considered to be “vulnerable” . They are given greater protection in certain situations including when a business is sold or transferred or where work is contracted out.
If the original employer no longer requires the employee and the new employer does the same or similar types of work, the employee can decide to transfer to the new employer, take redundancy or make alternative arrangements with the original employer.
If they decide to transfer, they become employees of the new employer on the same terms and conditions. If the new employer does not wish to employ them, the employee is made redundant under the terms of the employee’s previous employment agreement.
If the employment agreement does not provide for redundancy entitlements or does not expressly exclude redundancy entitlements then the employee is entitled to redundancy entitlements from their new employer.
Firstly the employee and employer must bargain, to reach agreement on appropriate redundancy entitlements. If no agreement is reached the Employment Relations Authority may investigate and determine the employee’s redundancy entitlement.
All Other Employees
All other employees are also protected under the Act if a business is sold, transferred, or work is contracted out.
All employment agreements need to provide three additional things:
(a) the process the employer must follow negotiating with a new employer about restructuring as it affects employees; and
(b) matters relating to affected employees employment including whether they will transfer to the new employer on the same terms and conditions of employment; and
(c) the process at restructuring time to determine what entitlements, if any, are available for employees who do not transfer to the new employer.
All employers need to ensure that new employment agreements meet the requirements of the law and existing agreements are amended.
If you have any queries on the amendments to the Employment Relations Act, please contact one of our employment team: Mary-Jane Thomas (partner) or Sarah McKenzie (senior associate) on 211 0080
Miriam Sinclair is Preston Russell Law’s 2004-05 summer law clerk.
