EMPLOYMENT LAW UPDATE ALICE ANDERSON
Good faith in a crisis
Alice Anderson, Solicitor at Dundas Street Employment Lawyers, looks at what employers may have to deal with in the business-recovery phase, following the COVID-19 seven-week lockdown. She discusses the requirement for employers to act in good faith, and explores implications employers may face when working with employees over this period.
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he COVID-19 global pandemic has put New Zealand workplaces to the test as they have navigated their employment relationships in a world full of new restrictions and changing government assistance programmes. The requirement to deal with one another in good faith, as set out in section 4 of the Employment Relations Act 2000 (the Act), can act as a guiding principle to employers during this uncertain crisis. The duty of good faith underpins the Act and should colour every employment interaction. The duty is wider than the implied duty of trust and confidence and, similar to acting ‘fairly and reasonably’, how it looks practically, depends entirely on the 20
HUMAN RESOURCES
WINTER 2020
situation. While the duty is a two-way street, it is often the employer being put to the test as to whether they have acted in good faith.
importantly, the duty applies to unions too). In the bargaining context, the law is well-established and accessible to parties when bargaining.
The Act provides that good faith requires:
Perhaps more relevant when we think about a ‘crisis’, however, is a redundancy situation. As New Zealand workplaces have navigated their COVID-19 pandemic responses, they have had to do so in a way that is consistent with their good faith obligations. The COVID-19 crisis did not and does not mean that employment laws no longer apply. Although the government-offered assistance programmes have potentially prevented some redundancies, and possibly prevented an employer from implementing a redundancy for a 12-week period, workplaces will still be facing this possibility.
• the parties to be ‘active and constructive’ in establishing and maintaining a productive employment relationship, including an obligation to be ‘responsive and communicative’ • the parties not to do anything that misleads or deceives the other, or that is likely to mislead or deceive the other • where an employer is proposing to make decisions that will, or are likely to have, an adverse effect on the continuation of an employee’s employment, the employer must provide the employee with access to information relevant to their decision-making, and an opportunity to comment on that. Section 4(4) of the Act confirms where the duty applies but is a nonexhaustive list (section 4(5)). The list confirms that good faith is central to collective bargaining, which is expanded on in section 32 of the Act, and places specific requirements on the parties to uphold the duty (and
Section 4(4)(e) of the Act confirms that the duty of good faith applies when making an employee redundant. When proposing redundancies, employers must demonstrate a genuine business
The requirement to deal with one another in good faith […] can act as a guiding principle to employers during this uncertain crisis.
