Everyone
Lockouts
Lockouts are usually a last resort taken by employers after ongoing industrial action.
What a lockout involves
A lockout is when an employer tries to get employees to accept terms of employment or comply with their demands by:
- closing, suspending, or discontinuing their business or a part of it
- breaking some or all of an employee’s employment agreement
- suspending employees or not giving them work they would usually give them.
Employers may also lock out employees on health and safety grounds.
Lockouts can:
- have major emotional and economic effects on you, your employees, and their families — and in some cases on society
- significantly harm the relationships of the bargaining parties.
They should be a last resort, only used if all other options have failed.
When employers can order a lockout
A lockout may be legal:
- if it relates to bargaining for a collective agreement and at least 1 of the employees’ existing collective agreements has expired and the parties began bargaining at least 40 days earlier, or
- where part of a collective agreement is illegal and the Employment Court has made an order suspending that part, or
- if it is in an essential service specified in Schedule 1 of the Employment Relations Act and the requirements for notice have been met, or
- if the employer thinks it’s justified for health or safety reasons based on reasonable grounds.
Employers cannot order a lockout:
- if less than 40 days have passed since collective bargaining was initiated
- if there is a current collective agreement
- over including a bargaining fee clause in the collective agreement
- over a personal grievance or a dispute
- for reasons relating to freedom of association
- if the business is an essential service and the right notice has not been given
- if the lockout is against a court order.
If the lockout is not legal, employees can apply to the Employment Court for an injunction to stop it or to sue for loss caused by the lockout.
Giving notice before a lockout
A lockout is unlawful if the employer does not give the required notice. The notice requirements are designed to allow time for negotiations and mediation and making contingency plans.
Before any lockout action starts, employers must give written notice to:
- the union
- the Chief Executive of the Ministry of Business, Innovation and Employment.
The notice must state:
- when the lockout will start (the period of notice)
- the nature of the lockout and whether it will be continuous
- where it will happen
- the date and time it will start and end (or what event will end it)
- the names of the employees to be locked out.
It must be signed by a representative of the employer, and by a representative of the union, if possible.
The information in the notice must be clear enough so that a reasonable recipient of the notice would be able to make plans to deal with the lockout without using up the timeframe trying to clarify the information provided.
Employers must also ensure that their method of giving notice actually brings it to the attention of the other party — for example, pushing an envelope under closed doors after hours will not bring the notice to the attention of the other party.
If a business is an essential service, an employer must give notice:
- within 28 days before the start of the intended lockout if:
- it will affect the public interest, including public safety or health (the legislation doesn’t define ‘public interest’), and
- it relates to:
- bargaining for a collective agreement which will bind the employees being locked out, or
- an aspect of a collective agreement that the court has declared there is a right to strike or lockout.
- not less than 14 days before the intended lockout if it is an essential service described in Part A of Schedule 1 of the Employment Relations Act 2000, or
- not less than 3 days before the intended lockout if it is an essential service described in Part B of Schedule 1 of the Employment Relations Act 2000.
Essential services include:
- production, processing, and sale or supply of gas, petroleum or electricity
- hospitals and ambulances
- water supply to cities and districts
- sewage disposal
- port facilities
- the operation of passenger services
- milk and cream production, distribution and sales.
See a complete list of essential services in Schedule I of the Employment Relations Act 2000.
Schedule I – Employment Relations Act 2000 - New Zealand Legislation(external link)
During the lockout
Employers do not have to pay employees while they are locked out.
The duty of good faith continues with a lockout. This means communication should be accurate and both parties should continue bargaining and trying to resolve the issues.
Employing other workers
Employers can get another employee to perform the work of a locked-out employee if the person:
- agrees, and
- is already employed by the employer at the time the lockout starts, and
- hasn’t been employed mainly to do the work of locked out employees.
Employers can only employ a new person to do the work if:
- there are reasonable safety or health reasons, and
- the person only does the work as far as they need to satisfy those safety or health reasons.
Keep a record
Throughout the lockout, employers must keep a record using the record of strike or lockout form.
Ending a lockout
Employers can withdraw a lockout notice at any time by written notice to the other party and the Chief Executive of the Ministry of Business, Innovation and Employment.
Send us a record of the lockout
Within a month of the lockout ending, employers must:
- complete the record of strike or lockout form and
- email it to the Ministry of Business, Innovation and Employment at strike.notices@mbie.govt.nz or post to:
Work Stoppages
Employment Services
Regulatory and Advisory Services
PO Box 1473
15 Stout Street
Wellington 6011
Get advice
If you are unsure about your rights or need advice, call us on 0800 20 90 20 or email us a query.
For help at any stage of the collective bargaining process or during a lockout, you can:
- get support from an employment mediator
- ask the Employment Relations Authority for a declaration stating bargaining has ended (or not)
- ask the Employment Relations Authority to fix the terms of a collective agreement where bargaining is undermined by sustained and serious breaches of good faith.
Employment Relations Authority(external link)
Lockouts are serious matters and can involve complicated legal issues. We recommend seeking your own legal advice.