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Strikes and lockouts

Strikes and lockouts can be used as a tool by parties to collective bargaining or for health and safety reasons. Notice must be given of strikes and lockouts.

Strikes and lockouts are legitimate actions used by parties to advance their bargaining aims. These actions can have a significant impact on both parties and shouldn’t be taken lightly. They can:

  • have major emotional and economic effects on the parties, their families and in some cases, on society
  • significantly harm the relationships of those bargaining.

Strikes and lockouts are also lawful where those striking or locking out have reasonable grounds for believing health or safety is being compromised.

Strikes

Employees strike when a number of employees totally or partially:

  • break their employment agreement
  • stop work or don’t accept some or all the work they usually do
  • reduce their normal output, performance, or rate of work.

Employees don’t have to stop work completely for them to be on strike.

To be a strike the action must be part of a combination, agreement, common understanding, or joint action made or done by the employees. Employees can do this action to try to make their employer give in to their demands. Employers can’t discriminate against employees for taking part in a lawful strike.

Lockouts

Employers lockout employees when they close, suspend, or discontinue their business or a part of it, break some or all of an employee’s employment agreement, don’t give them work they would usually give them, or suspend employees. To be a lockout, this action must be done to try to make their employees, (or to help another employer make their employees), accept terms of employment or comply with their demands. Employers may also lock out on health and safety grounds.

When employees can legally strike or be locked out

Employees can only legally strike or be locked out for health and safety reasons or in relation to collective bargaining if they will be bound by the collective agreement being bargained for. If a strike or lockout is legal (and the right notice has been given), it can’t be stopped by a court order.
Strikes and lockouts related to collective bargaining may be legal:

  • if they relate to bargaining for a single-party or multi-party collective agreement; and at least 1 of the employees’ existing collective agreements has expired; and the parties began bargaining at least 40 days earlier; or
  • where part of a collective agreement is illegal and the Employment Court has made an order suspending that part
  • if it is in an essential service (specified in Schedule 1 of the Employment Relations Act) but only if the requirements for notice have been met.

Employees can’t go on strike or be locked out if:

  • less than 40 days have passed since the bargaining was initiated
  • there is a current collective agreement
  • it relates to including a bargaining fee clause in the collective agreement
  • it relates to a personal grievance
  • it relates to a dispute
  • it relates to freedom of association
  • it is in an essential service and the right notice hasn’t been given
  • it is against a court order.

If a strike or lockout isn’t legal, a party can apply to the Employment Court for an injunction to stop it or to sue for loss caused by the strike or lockout. For example, loss of work or hours which has affected a contract and impacted on the earnings of a business. A party trying to stop the strike or lockout often applies for an interim injunction first because of the tight timeframes involved.

A union must hold a secret ballot before going on strike (unless a strike is for a health or safety issue). All union members can participate in the secret ballot. The majority of members who vote must be in favour of the action for it to proceed. The union must announce the results of the ballot to the members who were entitled to vote as soon as reasonably practicable.

A employer doesn’t have to pay someone if they are locked out or suspended, but their service will be continuous

If an employee is on a partial strike (performing only some of their usual duties), their employer may make a partial deduction from their pay unless:

  • the partial strike is for safety or health reasons or
  • the employee is paid by piecework and the partial strike reduces their normal output; or
  • the partial strike is a refusal to work overtime or do call outs and the employee would normally receive a special payment for it.

The employer can work out how much to pay employees on a partial strike using the following steps:

  • Identify the striking employees’ usual hours of work for the day(s) of the partial strike.
  • Identify the work that the employees did not do because of the strike (using information from the strike notice).
  • Estimate how much time the employees would have spent doing the work affected by the strike on the proposed day(s) of the strike.
  • Calculate this time as a percentage of the employees’ usual hours of work for the specified day(s).

Alternatively, they can deduct 10 percent from an employee’s pay.

If an employer is going to make a deduction for a partial strike they must give written notice of this:

  • before a deduction is made,
  • saying which pay periods the deduction will be made in.

There are strict notice requirements for strikes and lockouts designed to allow an opportunity for negotiations and mediation, and to allow for conting ency plans to be prepared. A strike or lockout is unlawful if it fails to give the required notice.

Before any strike or lockout action starts, unions and employers must give written notice to:

  • the other party (employers or unions)
  • the Chief Executive of the Ministry of Business, Innovation and Employment.

For both strikes and lockouts, the notice must:

  • be signed by a representative of the employer (for lockouts) or the union (for employees)
  • say how long it is before the strike or lockout starts (ie the period of notice). Note that there are minimum notice periods for some sectors, see below.
  • say the nature of the strike or lockout; including if it will be continuous
  • say where it will happen
  • say the date and time it will start and end (or what event will end it).

The information in the notice must be clear enough so that a reasonable recipient of the notice would be able to make plans to deal with the action without using up the timeframe trying to clarify the information provided. While compliance with notice requirements is expected, the Employment Court may choose to take a practical rather than pedantic approach to interpreting the legality of a strike or lockout notice.

Additional content for strike notices

A strike notice doesn’t need to give the employees’ names if it states that it covers all the employees who are:

  • members of the union that is party to the bargaining
  • covered by the bargaining
  • employed in the relevant part of the workplace or where the relevant work is done.

Additional content for lockout notices

Lockout notices must include the names of the employees to be locked out.

Strike or lockout notices in essential services

Strike and lockout notices are an important part of a strike or lockout in essential services (or certain transport services and schools). They give the parties a chance to reach an agreement to avoid the strike or lockout, and give the other parties a chance to make contingency plans. If the notice rules are followed the strike or lockout will be lawful and can’t be stopped (even by the Employment Court).

Notice of intention to strike or lockout in an essential service must be given:

  • within 28 days before the start of the intended strike or lockout in an essential service if:
    • It will affect the public interest, including public safety or health (the legislation doesn’t define ‘public interest’) and
    • relates to bargaining for a collective agreement which will bind the employees striking or being locked out or
      • the strike or lockout relates to an aspect of a collective agreement that the court has declared there is a right to strike or lockout.
    • and not less than 14 days before the intended strike or lockout if it is an essential service described in Part A of Schedule 1 of the Employment Relations Act 2000; or
  • not less than 3 days’ before the intended strike or lockout if it is an essential service described in Part B of Schedule 1 of the Employment Relations Act 2000.

Essential services include eg:

  • production, processing, and sale or supply of gas, petroleum or electricity
  • hospitals and ambulances
  • water supply to cities and districts
  • sewage disposal
  • port facilities
  • the operation of passenger services.
  • milk and cream production, distribution and sales

See a complete list of essential services.

If there is a strike or lock-out over collective bargaining in an essential service, and the proposed strike will affect the public interest (including public safety or health) a union or employer must give written notice to the other parties within the specified timeframe. If they don’t give the right notice then the strike or lockout isn’t legal. The party giving notice should make sure that the method of giving notice actually brings it to the attention of the other party, eg pushing an envelope under closed doors after hours will not bring it to the attention of the other party.

Written notice must also be given to the Chief Executive of the Ministry of Business, Innovation and Employment. This should be done at the same time as notice is given to the other party so that employment mediation services can be offered as soon as possible.

A strike or lockout notice can be withdrawn at any time by written notice to the other party and the Chief Executive of the Ministry of Business, Innovation and Employment. There is no minimum time for this to be done but employers need to know when a strike ends to be able to quickly restart normal pay to striking employees.

Striking employees

An employer can suspend an employee who is on strike but must let them know why they plan to suspend them, including which section of the Employment Relations Act 2000 the employer is relying on. The suspension lasts until the end of the strike (unless the employer stops it earlier), but it doesn’t break the employee’s service. A suspended employee keeps being a party to the strike.

Employers don’t have to pay employees while they are suspended.

Non-striking employees

Employers can suspend non-striking employees until the strike ends, if the work they normally do is not available because of the strike. The employer doesn’t have to pay them while they’re suspended but their service is continuous.

Non-striking employees can go to the Employment Relations Authority for a compliance order if they want to challenge the suspension. They can also ask for remedies eg back pay of wages.

The duty of good faith continues with a strike or lockout. This means communication should be accurate and the parties should be trying to resolve their issues. The parties still have to deal with each party’s representative on bargaining matters during a strike or lockout.

Strikes and lockouts are legal if the employee or employer thinks it’s justified for health or safety reasons based on reasonable grounds.

If an employer gets someone else to do the work of a striking or locked out employee (in relation to safety or health or collective bargaining), they can only do this during the strike or lockout. If an employer gets someone else to do the work without following the rules below, they can be liable for a penalty from the Employment Relations Authority for each person they got to do the work.

An employer can get another of their employees to perform the work of a striking or locked out employee if the person:

  • is already employed by the employer at the time the strike or lockout starts; and
  • hasn’t been employed mainly to do the work of striking or locked out employees; and
  • the person agrees.

An employee can employ a new person to do the work only if there are reasonable safety or health reasons for this and the person only does the work as far as they need to for the safety or health reasons.

If a strike or lockout happens, the employer of the employees participating in the strike or affected by the lockout must:

  1. keep a record, in the right form of the strike or lockout; and
  2. give the completed form to the Ministry of Business, Innovation and Employment, within 1 month after the strike or lockout ends.

The Minsitry of Business, Innovation and Employment (external link) website has information on annual national work stoppages.

Where there are difficulties, parties can get support through a number of different channels. This includes:

  • support from an employment mediator , at any stage of the collective bargaining process
  • asking the Employment Relations Authority for a declaration stating bargaining has ended (or not)
  • asking the Employment Relations Authority to fix the terms of a collective agreement where bargaining is undermined by sustained and serious breaches of good faith.

Strikes and lockouts are serious matters and can involve complicated legal issues. Employers, employees and unions should seek their own legal advice about these matters.

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