Appendix 1: Part 6A Continuity of employment if employees' work affected by restructuring (provisions referred to in this discussion paper)

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Subpart 1: Specified categories of employees

69A Object of this subpart

The object of this subpart is to provide protection to specified categories of employees if, as a result of a proposed restructuring, their work is to be performed by another person and, to this end, to give-

(a) the employees a right to elect to transfer to the other person as employees on the same terms and conditions of employment; and

(b) the employees who have transferred a right,-

1. subject to their employment agreements, to bargain for redundancy entitlements from the other person if made redundant by the other person for reasons relating to the transfer of the employees or to the circumstances arising from the transfer of the employees; and
2. if redundancy entitlements cannot be agreed with the other person, to have the redundancy entitlements determined by the Authority.

69F Application of this subpart

(1) This subpart applies to an employee if-

(a) Schedule 1A applies to the employee; and

(b) as a result of a proposed restructuring,-

1. the employee will no longer be required by his or her employer to perform the work performed by the employee; and
2. the work performed by the employee (or work that is substantially similar) is to be performed by or on behalf of another person.

(2) To avoid doubt, this subpart applies even though the performance of the work by or on behalf of the other person does not begin immediately after an employee ceases to perform the work for his or her employer.

69G Notice of right to make election

(1) Before a restructuring takes effect, the employer of the employees who will be affected by the restructuring must provide the employees affected with-

(a) a reasonable opportunity to exercise the right to make an election under section 69I(1); and

(b) the date by which the right to make an election must be exercised; and

(c) information sufficient for the employees to make an informed decision about whether to exercise the right to make an election.

(2) Without limiting subsection (1)(c), the information provided under that provision must include-

(a) the name of the new employer:

(b) the nature and scope of the restructuring:

(c) the date on which the restructuring is to take effect:

(d) how to make an election, the person to whom an election is to be sent, and the form in which the election is to be sent (for example by post, fax, or email).

(3) If the restructuring is a contracting in or a subsequent contracting, person A in the definition that applies must give the employer sufficient notice of, and information about, the restructuring to enable the employer to comply with subsection (1).

(4) An employer or other person who fails to comply with this section is liable to a penalty imposed by the Authority.

69H Employee bargaining for alternative arrangements

(1) To avoid doubt, an employee may, after his or her employer has complied with section 69G and before deciding whether to elect to transfer to the new employer, bargain with his or her employer for alternative arrangements.

(2) If the employee and employer agree on alternative arrangements,-

(a) the alternative arrangements must be recorded in writing; and

(b) if paragraph (a) is complied with, the employee may not subsequently elect to transfer to the new employer.

69I Employee may elect to transfer to new employer

(1) An employee to whom this subpart applies may, before the date provided to the employee under section 69G(1)(b), elect to transfer to the new employer.

(2) If an employee elects to transfer to the new employer, then to the extent that the employee's work is to be performed by the new employer, the employee-

(a) becomes an employee of the new employer on and from the specified date; and

(b) is employed on the same terms and conditions by the new employer as applied to the employee immediately before the specified date, including terms and conditions relating to whether the employee is employed full-time or part-time; and

(c) is not entitled to any redundancy entitlements under those terms and conditions of employment from his or her previous employer because of the transfer.

(3) To avoid doubt,-

(a) the election of an employee to transfer to a new employer may result in the employee being employed by more than 1 employer if-

1. only part of the employee's work is affected by the restructuring; or
2. the work performed by the employee will be performed by or on behalf of more than one new employer; and

(b) a person becomes the new employer of an employee who elects to transfer to the new employer whether or not the new employer-

1. has, or intends to have, employees performing the type of work (or work that is substantially similar) to the work performed by the employee who has elected to transfer to the new employer; or
2. was an employer before the employee transferred to the new employer.

(c) this section does not affect the employment agreement of an employee who elects not to transfer to the new employer.

(4) In this section, specified date means the date on which the restructuring takes effect.

69J Employment of employee who elects to transfer to new employer treated as continuous

(1) The employment of an employee who elects to transfer to a new employer is to be treated as continuous, including for the purpose of service-related entitlements whether legislative or otherwise.

(2) To avoid doubt, and without limiting subsection (1),-

(a) in relation to an employee's entitlements under the Holidays Act 2003,-

1. the period of employment of an employee with the employer that ends with the transfer must be treated as a period of employment with the new employer for the purpose of determining the employee's entitlement to annual holidays, sick leave, and bereavement leave; and
2. the employer must not pay the employee for annual holidays not taken before the date of transfer; and
3. the new employer must recognise the employee's entitlement to-
   (A) any sick leave, including any sick leave carried over under section 66 of that Act, not taken before the date of transfer; and
   (B) any annual holidays not taken before the date of transfer; and
   (C) any alternative holidays not taken or exchanged for payment under section 61 of that Act before the date of transfer:

(b) for the purposes of determining an employee's rights and benefits to parental leave and parental leave payments under the Parental Leave and Employment Protection Act 1987,-

1. the period of employment of an employee with the employer that ends with the transfer must be treated as a period of employment with the new employer; and
2. the new employer must treat any notice given to or by the employer under the Act as if it had been given to or by the new employer.

69N Employee who transfers may bargain for redundancy entitlements with new employer

(1) This section applies to an employee if-

(a) the employee elects, under section 69I(1), to transfer to a new employer; and

(b) the new employer proposes to make the employee redundant for reasons relating to the transfer of the employees or to the circumstances arising from the transfer of the employees; and

(c) the employee's employment agreement-

1. does not provide for redundancy entitlements for those reasons or in those circumstances; or
2. does not expressly exclude redundancy entitlements for those reasons or in those circumstances.

(2) The employee is entitled to redundancy entitlements from his or her new employer.

(3) If an employee seeks redundancy entitlements from his or her new employer, the employee and new employer must bargain with a view to reaching agreement on appropriate redundancy entitlements.

69O Authority may investigate bargaining and determine redundancy entitlements

(1) If an employee and his or her new employer fail to agree on redundancy entitlements under section 69N(3), the employee or new employer may apply to the Authority to investigate the bargaining relating to the matter.

(2) After concluding the investigation, the Authority must determine-

(a) if, in the Authority's view, it is possible for the bargaining to continue, how further bargaining should occur; or

(b) if, in the Authority's view, further bargaining is not warranted, the redundancy entitlements due to an employee.

Subpart 2: Disclosure of costs relating to transfer of employees under proposed restructuring

69OA Object of this subpart

The object of this subpart is to provide for the disclosure of employee transfer costs information if-

(a) disclosure is sought for the purpose of-

1. deciding whether to terminate an agreement or let it expire; or
2. negotiating an agreement; or
3. deciding whether to enter into an agreement; or
4. tendering for an agreement; and
5. a restructuring would result if the agreement were to be-
6. terminated or to expire; or
7. concluded; or
8. entered into; or
9. awarded.

69OB Interpretation

(1) In this subpart, employee transfer costs information, in relation to a proposed restructuring,-

(a) means information about the employment-related entitlements of the employees who would be eligible to elect, under section 69I, to transfer to a new employer if the proposed restructuring were to proceed; and

(b) includes-

1. the number of employees who would be eligible to elect to do so; and
2. (the wages or salary payable in a stated period (for example, a week, fortnight, or month) to the employees for performing the work that would be subject to the proposed restructuring; and
3. the total number of hours the employees spend in a stated period (for example, a week, fortnight, or month) performing the work that would be subject to the proposed restructuring; and
4. the cost of service-related entitlements of the employees whether legislative or otherwise; and
5. the cost of any other entitlements of the employees in their capacity as employees, including any entitlements already agreed but not due until a future date or time.

(2) Any term or expression defined in subpart 1 and used but not defined in this subpart has the same meaning as in subpart 1.

69OC Disclosure of employee transfer costs information

(1) A request for the disclosure of employee transfer costs information may be made if-

(a) disclosure is sought for the purpose of-

1. deciding whether to terminate an agreement or let it expire; or
2. negotiating an agreement; or
3. deciding whether to enter into an agreement; or
4. tendering for an agreement; and
5. (b) a restructuring would result if the agreement were to be-
6. terminated or to expire; or
7. concluded; or
8. entered into; or
9. awarded.

(2) The persons who may make the request are the persons who would, if the restructuring were to proceed and they were parties to the restructuring, be-

(a) person A in the definition of contracting in:

(b) person B in the definition of contracting out:

(c) person C in the definition of subsequent contracting:

(d) the person to whom an employer's business (or part of it) is sold or transferred.

(3) The persons to whom a request may be made are the persons who would, if the restructuring were to proceed and they were parties to the restructuring, be-

(a) person B in the definition of contracting in:

(b) person A in the definition of contracting out:

(c) person A in the definition of subsequent contracting:

(d) the seller or transferor in the case of the sale or transfer of an employer's business (or part of it).

(4) A person to whom a request is made under subsection (3) must provide to the person who made the request under subsection (2) employee transfer costs information that relates to the proposed restructuring.

(5) A person must provide the employee transfer costs information in sufficient time for the person who made the request to take the information into account for the purpose for which it was requested.

(6) Employee transfer costs information provided under this section must be provided-

(a) in aggregate form; and

(b) to the extent practicable, in a form that protects the privacy of the employees concerned.

69OD Provision of employee transfer costs information by other persons

(1) Subsection (2) applies to a person who receives a request for employee transfer costs information under section 69OC(3)(a).

(2) If the request relates (whether wholly or in part) to work that has been subcontracted and the person receiving the request does not have some or all of the information requested, the person must immediately require the subcontractor to provide the information.

(3) Subsection (4) applies to a person who receives a request for employee transfer costs information under section 69OC(3)(c).

(4) If the person does not have some or all of the information requested, the person must immediately require the person who performs the work to which the request relates to provide the information.

(5) If the person who performs the work has subcontracted some or all of the work and does not have some or all of the information requested, the person must immediately require the subcontractor to provide the information.

(6) A person required to provide information-

(a) under subsection (2) or (4) must provide the information-

1. to the person who received the request; and
2. in time for that person to comply with section 69OC(5):

(b) under subsection (5) must provide the information-

1. to the person who required the information; and
2. in time for the person who received the request to comply with section 69OC(5).

(7) However, if the subcontractor who is required to provide the information under subsection (2) or (5) does not have some or all of the information requested because the work has been further subcontracted, the subcontractor must immediately provide to the person who required the information any details the subcontractor has about who the other subcontractor is and how to contact the other subcontractor, and (to avoid doubt) subsection (2) or (5) (as the case may require) applies accordingly.

(8) Employee transfer costs information provided under this section must be provided-

(a) in aggregate form; and

(b) to the extent practicable, in a form that protects the privacy of the employees concerned.

69OE Updating disclosure of employee transfer costs information

(1) This section applies if-

(a) employee transfer costs information has been provided under section 69OC or 69OD; and

(b) after the provision of the information, there is a change in the employment-related entitlements or circumstances that the information relates to; and

(c) the change makes the information provided out of date.

(2) The person who provided the employee transfer costs information must, immediately after the change in the employment-related entitlements or circumstances, provide to the person who was originally provided with the information details specifying-

(a) the information that is out of date; and

(b) what the up-to-date information is.

(3) If the person who is provided with the up-to-date employee transfer costs information is not the person who made the request for the original information under section 69OC,-

(a) the person must, immediately after receiving the up-to-date information, provide it to the person who received the request for the original information; and

(b) that person must, immediately after receiving the up-to-date information, provide it to the person who made the request for the original information.

(4) A person is not required to provide up-to-date information if, at the time of the change in the employment-related entitlements or circumstances, a request could not have been made for the information under section 69OC.

Subpart 3: Other employees

69OH Object of this subpart

The object of this subpart is to provide protection to employees to whom subpart 1 does not apply if, as a result of a restructuring, their work is to be performed by or on behalf of another person and, to this end, to require their employment agreements to contain employee protection provisions relating to negotiations between the employer and the other person about the transfer of affected employees to the other person.

69OI Interpretation

(1) In this subpart, unless the context otherwise requires,-employee means an employee to whom Schedule 1A does not apply

employee protection provision means a provision-

(a) the purpose of which is to provide protection for the employment of employees affected by a restructuring; and

(b) that includes-

1. a process that the employer must follow in negotiating with a new employer about the restructuring to the extent that it relates to affected employees; and
2. the matters relating to the affected employees' employment that the employer will negotiate with the new employer, including whether the affected employees will transfer to the new employer on the same terms and conditions of employment; and
3. the process to be followed at the time of the restructuring to determine what entitlements, if any, are available for employees who do not transfer to the new employer

new employer, in relation to a restructuring, means,-

(a) in the case of a contracting out, person B in the definition of that term; or

(b) in the case of a sale or transfer of a business, the person to whom the business is sold or transferred

restructuring-

(a) means-

1. contracting out; or
2. selling or transferring the employer's business (or part of it) to another person; but

(b) to avoid doubt, does not include-

1. contracting in; or
2. subsequent contracting; or
3. in the case of an employer that is a company, the sale or transfer of any or all of the shares in the company; or
4. any contract, arrangement, sale, or transfer entered into, made, or concluded while the employer is adjudged bankrupt or in receivership or liquidation.

(2) For the purposes of this subpart, an employee is an affected employee if,-

(a) as a result of a restructuring, the employee is, or will be, no longer required by his or her employer to perform the work performed by the employee; and

(b) the type of work performed by the employee (or work that is substantially similar) is, or is to be, performed by or on behalf of another person.

(3) Any term or expression defined in subpart 1 and used but not defined in this subpart has the same meaning as in subpart 1.

69OJ Collective agreements and individual employment agreements must contain employee protection provision

Every collective agreement and every individual employment agreement must contain an employee protection provision to the extent that the agreement binds employees to whom this subpart applies.

69OK Affected employee may choose whether to transfer to new employer

If an employer, in relation to a restructuring, arranges for an affected employee to transfer to the new employer, the affected employee may-

(a) choose to transfer to the new employer; or

(b) choose not to transfer to the new employer.

Section 237A Amendments to Schedule 1A

(1) The Governor-General may, by Order in Council, amend Schedule 1A to add to, omit from, or vary the categories of employees.

(2) An Order in Council must not be made under subsection (1) unless made on the recommendation of the Minister.

(3) The Minister must not make a recommendation under subsection (2) unless the Minister-

(a) has received from any person or organisation a request to amend Schedule 1A that specifies the grounds on which it is believed that the criteria in subsection (4) are met; and

(b) has received a report from the department that assesses the request; and

(c) has provided the department's assessment to, and has consulted, such employers, employees, the representatives of such employers and employees, and such other persons and organisations, as the Minister considers appropriate; and

(d) is satisfied that the criteria in subsection (4) are met.

(4) The criteria are-

(a) whether the employees concerned are employed in a sector in which the restructuring of an employer's business occurs frequently:

(b) whether the restructuring of employers' businesses in the sector concerned has tended to undermine the employees' terms and conditions of employment:

(c) whether the employees concerned have little bargaining power.

(5) In this section, restructuring has the same meaning as in subpart 1 of Part 6A.

Schedule 1A:

Employees to whom subpart 1 of Part 6A applies

Employees who provide the following services in the specified sectors, facilities, or places of work:

(a) cleaning services, food catering services, caretaking, or laundry services for the education sector (being the public and private pre-school, primary, secondary, and tertiary educational institutions):

(b) cleaning services, food catering services, orderly services, or laundry services for the health sector (being any hospital, as defined by the Hospitals Act 1957 and any hospital within the meaning of the Mental Health (Compulsory Assessment and Treatment) Act 1992):

(c) cleaning services, food catering services, orderly services, or laundry services in the age-related residential care sector:

(d) cleaning services or food catering services in the public service (as defined in Schedule 1 of the State Sector Act 1988) or local government sector:

(e) cleaning services or food catering services in relation to any airport facility or for the aviation sector:

(f) cleaning services or food catering services in relation to any other place of work (within the meaning of the Health and Safety in Employment Act 1992)

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