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Employment Relations Act 1999

Part III: Changes affecting bargaining unit

66.If an employer’s business changes in structure or scope, or if it changes significantly in size, it may be appropriate for collective bargaining arrangements to alter to reflect the change in the business. In the case of voluntary agreements, including agreements for recognition, this is a matter for negotiation between parties. Where recognition has been imposed by the procedure in Part I, Part III provides a procedure for altering the recognition arrangements. Figure 3 illustrates the application procedure. In this Part of the Schedule, it is possible for the original unit to split into one or more new units. References in these notes on Part III to the new unit should generally be taken to mean the new unit or units, except where noted. In some places, it is necessary for the Schedule to distinguish between the cases of one new unit and more than one new unit; these notes make it clear where this happens.

Figure 3: Changes affecting bargaining unit

67.Paragraph 66 allows the employer or the union to apply to the CAC for a decision as to whether the original bargaining unit is no longer appropriate. For the CAC to accept the application, paragraph 67 means there must be evidence to that effect because the organisation, structure, nature or size of the business has changed. Sub-paragraph (2) defines the matters which may lead to the bargaining unit being declared inappropriate.

68.Paragraph 68 provides that the CAC must reject an application unless:

  • there is evidence that the original unit is no longer appropriate (paragraph 67);

  • it is made in the proper form (paragraph 92(1)); and

  • a copy of the application, with its supporting documents, is given to the union if an employer applies or to the employer if a union applies (paragraphs 92(2) and 92(3))

69.Paragraph 69 gives 10 working days in which the employer and union may attempt to agree a new bargaining unit or units. If they do so, the CAC must decide whether the new unit contains (or any of the new units contain) workers covered by a collective agreement with another union. If so, the CAC will take no further action on the application. If not, the CAC must declare the union recognised for the new unit, and the method of collective bargaining for the original unit will apply to the new unit, with any modifications the CAC thinks necessary to take account of the change of unit. If the union and employer do not agree, paragraphs 70(2) and 70(7) give the CAC 10 working days in which to decide:

  • whether the original unit remains appropriate, using the same criteria as in paragraph 67; and

  • if the original unit is not appropriate, what other unit is appropriate.

70.If the CAC decides that the original unit remains appropriate, it will take no further action. If the CAC decides that the original unit is not appropriate, it will decide the appropriate unit, taking into account the factors in paragraphs 70(4), (5) and (6). These are the same criteria used for applications under Part I, plus a requirement that if there is more than one new unit then the new units must not overlap. Once the appropriate unit is determined, the CAC must decide under paragraphs 82-89 whether the union should be recognised for that unit. If there are any workers in the original unit who do not fall into a new unit, paragraph 73 provides that the union will cease to be recognised to represent them in collective bargaining.

71.The employer may also seek to end recognition if he believes the bargaining unit for which the union is recognised has ceased to exist. Paragraph 74 gives details of how the employer must notify the union of such a claim. The CAC must decide whether the notice is valid. Paragraph 75 allows the union 10 working days from the receipt of a valid application to apply to the CAC to decide whether the original unit has ceased to exist or is no longer appropriate. If the union does not apply to the CAC, recognition will end. Paragraph 76 requires the CAC to check that the union’s application is admissible, in terms of paragraph 92. If it is not, the CAC must reject it.

72.If the CAC accepts an application, paragraph 77 requires it to give both parties an opportunity to give evidence. If the CAC decides the original unit remains appropriate, the employer’s notice has no effect. If there is evidence that the original bargaining unit is no longer appropriate, the CAC must give notice to that effect. In that event, paragraph 78 applies and the parties have 10 working days to agree a new bargaining unit. If they do so, the CAC must declare the union recognised for the new unit, and the method of collective bargaining for the original unit shall apply to the new unit, as in paragraph 69. If the union and employer do not agree, paragraph 79 gives the CAC has 10 working days in which to decide:

  • whether the original unit is appropriate, using the same criteria as in paragraph 67; and

  • if the original unit is not appropriate, what other unit is appropriate.

73.The procedure the CAC follows is similar to the one in paragraphs 70-73: the CAC will decide the appropriate unit, taking into account the factors in paragraphs 79(3), 79(4) and 79(5), and must then decide under paragraph 82 whether the union should be recognised for that unit.

Figure 4: CAC decides new bargaining unit

74.Paragraph 82 applies if the CAC decides one or more new bargaining units under paragraph 70 or 79. The procedure is illustrated in Figure 4. If there is more than one new unit, the procedure in paragraphs 83-89 is applied separately to each of them. Paragraph 83 deals with a new unit which overlaps with a statutory outside bargaining unit (ie contains at least one worker who is part of another bargaining unit for which a union is recognised under Part I or Part III following a declaration by the CAC). In this case, the collective bargaining arrangements shall cease in respect of workers in the new unit who were in the original unit or were in a statutory outside unit. The CAC will take no further action, but it would be possible for a union (or unions) to request recognition under Part I of the Schedule for the new unit.

75.Paragraph 84 deals with a new unit which overlaps with a voluntary outside bargaining unit (ie contains at least one worker who was part of another bargaining unit for which a union was recognised voluntarily, including by an agreement for recognition under Part II) but not with any statutory bargaining unit. In this case, the collective bargaining arrangements must cease in respect of workers in the new unit who were in the original unit. Those in the outside unit will not be affected. The CAC will take no further action.

76.If the new unit contains no workers covered by other collective agreements, paragraph 85 requires the CAC to decide whether the difference between the new unit and the original unit is such that support for recognition needs to be reassessed. If support does not need to be assessed (ie the changes to the bargaining unit are sufficiently minor), the CAC must declare the union recognised for the new unit, and the original method for collective bargaining will apply, with any modifications the CAC decides are necessary as a result of the change in bargaining unit. If support does need to be assessed, then the tests parallel those in Part I: paragraph 86 requires the CAC to decide whether the union has 10% membership in the new unit, and recognition is likely to have majority support. If the test is failed, then the union ceases to be recognised. If not, then automatic recognition may be granted to unions with over 50% membership of the bargaining unit under paragraph 87, or a ballot will be held under paragraph 88.

77.Paragraph 89 allows the union and employer to agree to cancel the ballot. If they do not, the ballot will be run in the same way as in Part I, paragraphs 25-29. If the ballot is not in favour of recognition, then the union is derecognised. Paragraph 90 means the union ceases to be recognised in respect of any workers in the original unit who fall outside the new unit (or all of the new units). Paragraph 91 removes workers who are in the new unit from any statutory outside bargaining unit, and allows the CAC, where a statutory method of collective bargaining applies to that unit, to modify it to take account of the change of unit.

78.Paragraph 93 ensures that applications to the CAC cannot be withdrawn after the CAC makes a decision or declaration that recognition should continue or should cease, or after a recognition ballot is cancelled by the union under paragraph 89(1). Paragraph 94 defines collective bargaining for the purpose of Part III and provides that the union and employer can agree to alter the scope of collective bargaining. Paragraph 95 allows the union and employer to vary a statutory bargaining method by agreement.

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