Hubbard, Thomas and Vamham have written that “employment differs from other contracts in that there is frequently a substantial inequality of bargaining, especially in times of widespread unemployment”.
This essay will discuss about the notion of equality of bargaining in an employment agreement. This will also discuss the provisions and related cases on unjustifiable dismissal in the Employment Relations Act 2000.
Over the course of the last century, the employment law has favoured strongly between providing significant protections for employees to greater power for employers. This made the employment law to be known as the “political football”.
Under New Zealand's Employment Relations Act 2000, the employment law anchor is reasonably balanced to the centre, although in certain aspects, that anchor rests slightly on the employees' side of the line.
The Employment Relations Act 2000 is the principal statute governing employment law in New Zealand. The act applies to all relationships between employers and employees, and between unions, their members, and employers with whom unions enter into collective agreements. The Act arrays most of the rules for casting an employment relationship, through an employment agreement. One of the objectives of the Act is “to build productive employment relationships through the promotion of good faith in all aspects of the employment environment and of the employment relationship—by acknowledging and addressing the inherent inequality of power in employment relationships”.
As defined in the Employment Relations Act 2000, “employment agreement means a contract of service which includes a contract for services between an employer and a homeworker and includes an employee's terms and conditions of employment in a collective agreement. It may also include a collective agreement together with any additional terms and conditions of employment or an individual employment agreement”.
Collective agreement is defined as “an agreement that is binding on 1 or more unions; and 1 or more employers; and 2 or more employees”.
As stated by the Ministry of Business, Innovation and Employment, “good faith applies throughout collective bargaining – from the start of the bargaining process to its conclusion, at each stage in between, and in correspondence and communications after the completion of bargaining. Good faith also applies to every relationship involved in collective bargaining, irrespective of how many parties are involved”.
Good faith as defined in the Employment Relations Act 2000, means dealing with each other honestly, openly and without misleading each other. It also requires parties to be functional and effective in initiating and maintaining a productive relationship in which they are receptive and communicative.
The duty of good faith establishes collective bargaining. The Employment Relations Act 2000 notes that there is no particular way to bargain. Every bargaining process and situation is distinct and it is natural for both sides to have different views on how to proceed and what is required for their circumstances. Employees may look to specify their interests more effectively through collective bargaining. Where their interests digress, both bargaining parties are likely to behave more prudent in an effort to achieve outcomes that are most favourable to them. And this shows the inequality of bargaining power in many employment relationships. Good faith plays a significant role in the collective agreements. It is a legal requirement. Good faith, if worked on flexibly and enthusiastically, can help parties in their dealings with one another. However, inequality arises if bad faith is conducted.
Another type of employment agreement is the individual employment agreement. Generally, individual employment agreements are of permanent period, and may only be dismissed in accordance with the termination provisions of the agreement, and the Employment Act. On the other hand,