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Unable to agree

If parties can’t agree, they have several options to choose from. These include asking for help from Employment Mediation Services or the Employment Relations Authority.

Unions and employers have to bargain in good faith but if negotiations have come to a standstill or the parties are deadlocked about something, they don’t have to keep trying to bargain. They have a number of options. They can:

  • ask the Employment Mediation Services for free assistance
  • agree that collective bargaining has ended and they will stop negotiating
  • ask the Employment Relations Authority (ERA) to decide whether bargaining has ended
  • strike and/or lock out employees to try to get things moving again
  • ask the ERA to facilitate bargaining
  • ask the ERA to fix the terms of the collective agreement (if there is a serious and sustained breach of good faith).

How the ERA can help

Facilitation of bargaining

If collective bargaining runs into problems, one or more of the bargaining employers and unions can ask the ERA to facilitate their bargaining. The ERA can only facilitate their bargaining if:

  • there has been a serious and sustained breach of good faith that has undermined the collective bargaining, or
  • the bargaining has been unduly protracted and extensive efforts including mediation haven’t been able to resolve the problems, or
  • there has been an extended or unfriendly strike or lockout action, or
  • a proposed strike or lockout is likely to substantially affect the public interest.

If the Authority agrees to help the parties, the Authority member who facilitates will decide what process will be used to help bargaining and the facilitation will be conducted in private.

The bargaining continues during facilitation, and employers and employees can still use strikes and lockouts.

ERA recommendations

  • At the end of the facilitation process, the Authority can make recommendations about:
    • the process the parties should use to reach agreement, and/or
    • the terms and conditions of the collective agreement.
  • The parties don’t have to follow these recommendations, but they must consider them in good faith first.
  • The Authority may choose to make their recommendations public in the interests of encouraging a settlement.

Declaration that bargaining has concluded

If, after trying in good faith, the parties just can’t agree on the collective terms and conditions, either party can apply for a declaration that bargaining has concluded from the Employment Relations Authority (ERA). (external link)

If they do this, the ERA:

  • will consider whether both parties have made a real effort to reach agreement and acted in good faith, and
  • will consider whether the parties have already tried to sort out the issues using mediation or facilitation, and
  • may direct the parties to mediation (or further mediation), and
  • will direct that facilitation be used first if:
    • there has been a serious and sustained breach of good faith that has undermined the bargaining, or
    • the bargaining has been unduly extended and extensive efforts including mediation haven’t been able to resolve the difficulties, or
    • there has been an extended or acrimonious strike or lockout, or
    • a proposed strike or lockout is likely to substantially affect public interest. (This means that the strike or lockout is likely to endanger people’s lives, safety or health, or result in widespread, long-term or irreversible disruption to social, environmental, or economic interests, but
  • won’t direct the parties to facilitation if:
    • they think it won’t help to resolve the issues, or
    • it won’t, in all the circumstances, be in the public interest, or
    • it will undermine the urgency of the process, or
    • in the circumstances it will be impractical or inappropriate
  • must dismiss an application if the party applying hasn’t acted in good faith in the bargaining and that this has undermined the bargaining (unless they have rectified it), and
  • can make orders, recommendations or issue directions about what steps any or all of the parties (not just the party who didn’t act in good faith) should or must take to rectify a breach of good faith.

Effect of ERA determination about bargaining

If the ERA determines and declares that bargaining has concluded, none of the parties can initiate further bargaining before the end of the next 60 days (unless the other parties agree).

  • If the ERA determines that bargaining hasn’t concluded, they can recommend the process for the parties to follow to resolve the difficulties. None of the parties can make another application until they have followed the Authority’s process.
  • If the ERA determines that bargaining hasn’t concluded but they don’t recommend a process for the parties to follow, the parties can’t make another application to the ERA for a determination that bargaining has concluded, before the end of the next 60 days (unless the other parties agree).

Fixing the terms of a collective agreement after serious and sustained breach of good faith

A party can apply to the ERA to fix the terms of a collective agreement. They can only do this if:

  • it is appropriate, and
  • there has been breach of good faith in the bargaining that was so serious and ongoing that it significantly undermined the bargaining, and
  • all other reasonable alternatives have been used up, and
  • setting the terms is the only effective remedy available.

The effect of fixing the terms of a collective

If the ERA fix the terms of a collective, this means that the ERA decides what all the terms of the agreement will be. It becomes a binding and enforceable collective employment agreement just as if it had been agreed, ratified and signed by the parties.

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