Employment relations is an important part of everyone’s working life. It concerns maintaining a good relationship between the employers to its employees and vice-versa, which thus leads to better productivity and also helps boost company morale and enthusiasm to perform exceptionally well. The main function of the Employment Relations Act 2000 (ERA) is to help make a productive employment relationship in all aspects of the employment sector through the promotion of good faith and collective bargaining (p.17, 2013). According to the Ministry of Business, Innovation & Employment (MBIE), both employers and employees are obliged to deal with each other honestly and reasonable, in other words, both parties must “be constructive and cooperative”, “keep an open mind, listen to each other and be prepared to change opinion about particular situation or behaviour”, and “treat each other respectfully” (2010).
As mentioned by Rasmussen (p.107, 2009), the Employment Relations Act 2000 “consists of eleven parts and six schedules”, and one of the important one is “collective bargaining (Part 5)”. The ERA keeps focus on the employment relationships and good faith bargaining as oppose to the Employment Contracts Act which focused more on the employment contracts, (Rasmussen, p.107, 2009). Good faith applies to a number of matters, both in collective and individual agreements; hence, it provides a more important role for unions. Good faith employment relation is an effective requirement of the ERA because it makes the employers responsibility to respect the bargaining process as well as the consultation and the release of information (Rasmussen, p.108, 2009). There could be issues in regards to employees who are not part of the collective bargaining as they may be seen as free-riders or free-loaders, i.e. in most times they also get all the benefits as union members without putting in any effort in the bargaining process.
Good faith means that everyone should have equal opportunities and employees have the right to speak before any decisions are made. It is necessary to have set rules and regulations for dealing with issues and everyone should be aware of them. The theory of good faith bargaining is made part of any legislation for the first time in New Zealand and is thoroughly described in Part 5 of the Employment Relations Act 2000 (Rasmussen, p.111, 2009), and its purpose is to promote collective bargaining. Collective bargaining is a process by which the employers and employees negotiate and reach collective agreements. A union usually represents the employee’s interests and complaints to reach these agreements. However, according to the MBIE, (2010), the Employment Relations Act 2000 states that there is no way to bargain and that every bargaining situation is different and it is common to have parties with different views on how to handle different situations. The act also includes that the employers and employees should bargain in good faith in order to make arrangements on how the bargaining would progress.
The purpose of the Employment Relations Act 2000 is mostly based around the notion of good faith and it concerns all part of the employment relationship. Good faith bargaining is an effective requirement in the ERA because it helps manage the similarities and differences that the employers and employees share within each other. Good faith gives importance to unions, unlike the Employments Contracts Act which was anti-union and gave more power to the employers. The significance of the ERA is that in case there is a disparity of bargaining power between employers and employees in employment relationships, the employees may communicate their interest more successfully through these unions, and so the bargaining parties may achieve more desirable results in favour of the employees through collective bargaining (MBIE, 2010). Fortunately, the conditions for good faith bargaining also indicate that it is only mandatory for parties to