Union and Collective Agreement Obligations During a Restructure in New Zealand

When a restructure affects employees who are members of a union, employers face obligations that go beyond the standard good faith consultation requirements. Getting these wrong is a common source of successful personal grievance claims and mediation referrals by unions, even where the restructure itself is entirely legitimate.

This guide explains what NZ employers owe to unions during a restructure, how collective agreement clauses interact with the ERA 2000, and what section 31 access rights mean in practice.

Why Union Obligations Are Separate from General Good Faith

The good faith obligation in section 4 of the ERA 2000 applies to all employment relationships, whether or not a union is involved. But where a union has members affected by a proposed restructure, additional layers apply:

The union has independent rights to be informed and consulted, not just the individual employees

The collective agreement may impose obligations beyond the ERA 2000 minimum

Section 31 gives union representatives a right to enter the workplace that cannot be contractually excluded

Unions can file personal grievances on behalf of members, raise matters with the Employment Relations Authority, and call upon mediation services

Failing to engage with a union properly during a restructure is not just a procedural failure. It can invalidate the consultation process entirely, even if the employer genuinely engaged with the affected individuals.

Step 1: Read the Collective Agreement First

Before drafting a proposal or setting a consultation timeline, read the collective agreement that covers the affected employees. Look specifically for:

Redundancy and restructure clauses: many collective agreements contain provisions that go beyond the ERA 2000 minimum. Common examples include:

Minimum consultation periods (e.g. "not less than 20 working days")

Specific information that must be provided at the outset

Redeployment obligations or preferences for affected members

Enhanced redundancy entitlements (note: NZ has no statutory redundancy payment, so contractual entitlements are particularly important)

Change of ownership clauses: if the restructure involves a business sale or transfer, the collective agreement may have its own provisions for what happens to affected members' terms and conditions.

Union notification clauses: some collective agreements require the employer to notify the union a specified number of days before issuing any proposal to members. This is separate from the ERA 2000 good faith obligation.

Subcontracting and outsourcing clauses: if the work is being contracted out, the collective agreement may restrict this or impose conditions on it.

If any collective agreement clause imposes a higher standard than the ERA 2000 minimum, the higher standard applies. You cannot fall back on "we met the statutory minimum" if the agreement required more.

Step 2: Notify the Union at the Right Time

Under the good faith obligation, the union representing affected employees must be informed of a proposed restructure at the appropriate time. The key rule is:

Notify the union at the same time as affected employees are notified, or before.

If a union representative finds out about the restructure from a member who received a proposal letter, the process is already compromised. The Employment Relations Authority has found this to be a breach of good faith in multiple cases.

In practice, this means:

Before issuing any proposal letters, send a written notification to the union

The notification should include the same proposal document you are giving to members, or a summary of it with equivalent detail

Confirm a contact person within the union who will be the employer's primary point of contact during the consultation period

When the union doesn't cover all affected employees

If some affected employees are union members and some are not (individual employment agreements), you still have the same obligations to the union for its members. Non-union employees are consulted directly. The timelines should be aligned. Do not run two separate consultation processes with different start dates if the roles are at risk for the same reason.

Step 3: Provide Adequate Information

The union is entitled to receive the information necessary to provide meaningful input on behalf of its members. This includes:

The written proposal (same document as given to members)

The reasons for the proposed change: commercial, operational, or financial

Which roles are affected and how many union members are in those roles

The proposed consultation timeline

Selection criteria and process (if a pool of roles is being reduced)

Redeployment opportunities being considered

The union does not have an absolute right to commercially sensitive financial information. But it does have the right to understand why the restructure is being proposed and how the selection will be conducted. A vague "we need to reduce costs" is not enough.

Section 31: Union Access Rights

Section 31 of the ERA 2000 gives union representatives the right to enter any workplace where union members are employed during working hours for the purpose of:

Meeting with members

Discussing union matters with members

Carrying out union business

This right cannot be excluded by contract. It applies regardless of what the employment agreement says about external visitors or workplace access policies.

What section 31 means during a restructure

During a restructure consultation period, union representatives will typically exercise section 31 rights to:

Meet with affected members collectively or individually to explain the proposal

Gather members' concerns and instructions before preparing the union's response

Attend meetings with management as member representatives

As an employer, you must not:

Refuse entry to a union representative with a section 31 purpose

Require advance notice beyond what is reasonable in the circumstances

Restrict access to only certain parts of the workplace where members work

Schedule mandatory activities for members during the period when the union has requested access

You are entitled to:

Be notified before the representative arrives (24 hours' notice is typically considered reasonable, though not always required)

Have the representative meet members in a designated area rather than on the production floor if there is a genuine operational reason

Require the representative to comply with health and safety requirements for the site

Refusing section 31 access or obstructing it during a restructure is a serious breach. It can support an inference that the employer was not acting in good faith throughout the process.

The Union's Response to the Proposal

The union will typically provide a written response to the restructure proposal during the consultation period. This response may:

Challenge the business rationale for the restructure

Question the selection criteria or process

Propose alternatives to redundancy (reduced hours, voluntary redundancy, redeployment)

Raise concerns about affected members' specific situations

Request more time to consult

The employer must genuinely consider the union's response before making a final decision. This is the same standard as for individual employees: the decision must be capable of being changed by the response. A form response that thanks the union for its input and proceeds unchanged is not genuine consideration.

If the union proposes a credible alternative (for example, offering to explore voluntary redundancy before any compulsory selection), that alternative must be tested and documented. You do not have to accept it. But you must genuinely explore it.

Collective Agreements and Enhanced Entitlements

Many collective agreements contain redundancy provisions that go beyond the ERA 2000:

| Typical enhanced provision | Effect |

|---|---|

| Enhanced redundancy payment (e.g. 2 weeks per year of service) | Payable to union members made redundant, on top of other entitlements |

| Extended consultation period | Must allow the minimum period specified, even if the statutory requirement would be shorter |

| Priority redeployment for union members | Must offer union members redeployment opportunities ahead of external recruitment |

| Preferred positions for senior members | Seniority-based selection may be required if the agreement specifies it |

If your collective agreement contains any of these, they are contractually binding. Failing to apply them is a breach of contract as well as a breach of good faith.

Part 6A and Collective Agreements

If your restructure involves work transferring to a new employer (a business sale, outsourcing a function, or contracting out work), Part 6A of the ERA 2000 may apply. Part 6A gives affected employees the right to transfer to the new employer on their existing terms and conditions, including any applicable collective agreement.

For union members, this means:

The incoming employer must recognise the collective agreement (or negotiate a new one with the union)

Affected union members transfer with their existing terms, including union membership and collective agreement coverage

The union must be informed of the transfer and the incoming employer's position on the collective agreement

Part 6A interactions with collective agreements are complex and fact-specific. If your restructure involves a transfer of business or work, consult with an employment lawyer before proceeding. The consequences of getting this wrong include personal grievance liability for both the outgoing and incoming employer.

Documentation During a Union Consultation Process

Keep the following records throughout:

[ ] Written notification to the union (date sent, content)

[ ] Confirmation the union received the notification (email read receipt or acknowledgement)

[ ] Union's written response(s) to the proposal

[ ] Records of any meetings with union representatives (date, attendees, topics discussed)

[ ] Records of section 31 access requests and how they were handled

[ ] Written record of how the union's feedback was considered

[ ] Final decision letter and whether it addresses the union's key concerns

If a union files a personal grievance on behalf of a member, this documentation is your evidence that the process was genuine and compliant.

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*Restructured tracks consultation timelines, documentation, and affected employee status across the full restructure workflow, including where multiple employees are union members with different consultation requirements. See how it works or start free.*