Collective Agreements 30-Day Rule To Be Scrapped

The ‘union recruitment rule’ which requires employers to sign up new employees up to the same terms and conditions of an applicable Collective Employment Agreement (‘CEA’) when they start a job is set to be scrapped.

This will be welcomed news to employers in terms of promoting free choice and reducing the administration burden placed on to employers.

Currently, if a CEA is in place in a workplace, then the rule requires that a new employee’s terms and conditions of employment must reflect the same as those contained in the operative CEA for the first thirty [30] days of their employment. This rule applies irrespective of whether the new employee joins the union, or not. Essentially, this rule operates as a measure to strengthen the position of unions across various workplaces in New Zealand. This is because it ensures any new employees who join an employer’s business where there is an existing CEA in place receive the same terms and conditions as union members – even where they do not pay any union membership fees for the first thirty [30] days of their employment.

Administratively, this rule has also been at the expense and off-the back of the employer. This it made it the employer’s obligation to ensure the various administrative components associated with newly onboarded employees are complied with – to the benefit of the union.

Removal of this rule ensures that employees are free to choose to negotiate the terms and conditions of employment that suit their preferences. This is a choice that the employee ought to have from the start of their employment.

The removal of this rule will allow employers who would have previously been precluded from using a 90-Day Trial Period to include trial periods for new hires. Most CEAs in New Zealand do not contain trial periods (or expressly exclude the use of them) since the issue would be a key bargaining claim at the collective bargaining table and therefore mean that employers are unable to use trial periods in the circumstances where the current 30-Day Rule applied. Accordingly, removing this rule means that new employees where the rule previously applied, will be able to be put on to 90-Day Trial Periods (after the law takes effect).

In addition, unions will no longer be able to force employers to provide union-based information, i.e information about their purposes and functions to new employees. This will be another administration burden lifted from the shoulders of employers who were previously impacted by these issues.

These changes are included in the Employment Relations Amendment Bill which will be introduced to parliament later this year and expected to become law by the end of 2025.