Plain language law

New Zealand law explained for everyone

Employment Relations Act 2000

Continuity of employment if employees' work affected by restructuring - Specified categories of employees

69LC: Implied warranty by employer of transferring employees

You could also call this:

“The old boss promises not to make bad changes to workers' jobs before they move to a new boss.”

When you choose to work for a new employer because your job is affected by changes in the company, there are some rules to protect you. Your current employer promises the new employer that they haven’t made unfair changes to your job or working conditions.

This promise means your current employer can’t change your work, replace you with less experienced workers, or change your employment terms without a good reason. This applies from the time your employer finds out about the company changes until the day before you start with the new employer.

If your current employer breaks this promise and it causes problems for your new employer, the new employer can take your current employer to court. The court will look at the reasons for any changes to decide if they were fair.

Remember, if you want to know more about how this works, you can check section 69I of this law.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6408381.

Topics:
Work and jobs > Worker rights
Business > Fair trading
Rights and equality > Anti-discrimination
Previous

69LB: Resolving disputes about apportioning liability for costs of service-related entitlements, or

“When companies can't agree on who pays for employee benefits during job changes, they can get help to solve their argument.”

Next

69M: New employer becomes party to collective agreement that binds employee electing to transfer, or

“When a worker changes jobs, their new boss has to follow the old work agreement, but only for that worker.”

Part 6A Continuity of employment if employees' work affected by restructuring
Specified categories of employees

69LCImplied warranty by employer of transferring employees

  1. This section applies if 1 or more employees of an employer elect to transfer to a new employer, as provided for in section 69I.

  2. There is an implied warranty by the employees’ employer to the new employer that the employees' employer has not, without good reason, changed—

  3. the work affected by the restructuring; or
    1. the employees who perform the work affected by the restructuring (for example, replacing employees with employees who are less experienced or less efficient); or
      1. the terms and conditions of employment of 1 or more of those employees.

        1. The warranty implied by this section applies in relation to changes occurring in the period—

        2. beginning on the day on which the employees' employer is informed about the proposed restructuring; and
          1. ending on the day before the specified date.

            1. If the employees' employer breaches the implied warranty, and that breach adversely affects the new employer, the new employer may commence proceedings for damages, in any court of competent jurisdiction, against that employer.

            2. For the purposes of subsection (2), whether a reason is a good reason is to be determined on an objective basis.

            Notes
            • Section 69LC: inserted, on , by section 40 of the Employment Relations Amendment Act 2014 (2014 No 61).