The Duty to Act in Good Faith

The duty to act in good faith in the context of collective bargaining is set out in section 32 of the Employment Relations Act 2000. It includes:

• The employer and union must try their best to agree to a process by which the bargaining will take place.
• They must meet with one another for the purposes of bargaining.
• They must each seriously consider and respond to one another’s proposals. Dismissing a proposal out of hand or making quite unreasonable proposals might amount to acting in bad faith.
• Both parties must recognise the role and authority of one another’s chosen representatives and must not act to undermine them. This has implications for the way employers communicate with their staff during negotiations.
• Both parties must, on request, provide one another with information that is necessary to substantiate the claims upon which their bargaining position is based.
• The parties are not obliged to come to an agreement. They are not even obliged to make concessions to one another, as long as their failure to do so is for genuine reasons and not just because they want to stonewall the bargaining process (section 33).

Unfair Bargaining in Individual Employment Agreements

The duty to act in good faith applies equally to CEAs and IEAs. Because the circumstances surrounding IEAs are likely to be more flexible, the Employment Relations Act specifically protects employees on IEAs from ‘unfair bargaining’. Unfair bargaining is prohibited under the Act (sections 68–69). It forbids either party to take advantage of the other party’s vulnerability due to:

• age
• sickness
• mental or educational disability
• emotional distress
• a disability relating to communication.

If you are relying on the skill, care, or advice of another party to the bargaining, the other party cannot take advantage of that. This is more concerned with the conduct of the parties during bargaining, rather than the terms of the agreement you reach.

If you feel aggrieved, you can take the matter to the Employment Authority. If the Authority finds there has been unfair bargaining it can compensate you, cancel or vary the agreement, and make any other orders it considers necessary. If either party is dissatisfied with the outcome, they may take the matter to the Employment Court.

Employers and employees entering into individual employment agreements (IEAs) should develop protocols to clarify their expectations of one another during their relationship. These could be based on codes of good faith from their industry.

You can choose whoever you like as your bargaining agent for an IEA. Employees on IEAs can negotiate their own contracts, or employ the services of a lawyer or any other bargaining agent. This differs from collective employment agreements (CEAs), where employees can only be represented by their union.