Ask most people how they want to be treated in life and you’ll usually be met with a request for fair and reasonable treatment. As you might expect, this is no different in the workplace.
For the symbiotic employer/employee relationship to flourish, both parties must act fairly and reasonably towards each other. This truism is so critical that it’s been written into New Zealand law; the Employment Relations Act 2000 requires employees and employers to deal with each other in – what it refers to as – “good faith”.
So, what does good faith look like?
Good faith requires an individual or company to act with honesty, integrity, and sincerity. It goes beyond simply complying with the law and implies a genuine intention to be fair in all business interactions and relationships.
On a basic level, to be seen to be acting in good faith involves
- Not misleading or deceiving people/companies
- being responsive and communicative
- Before making a decision, which may result in employees losing their job, the employer must give the affected employees sufficient information to be able to understand the proposal and then give them a proper opportunity to comment
More broadly, good faith requires employers, employees, and unions to:
- act honestly, openly and without hidden motives
- raise concerns or issues in a fair and timely way
- work together constructively and positively
- share relevant information as soon as possible in advance of when it is needed
- keep an open mind, listen to each other and be prepared to change an opinion about a particular situation or behaviour
- treat each other with respect
You can read more about the definition of good faith on the Employment New Zealand website.
Good faith is good for growth
Acting in good faith is more than a moral imperative, it’s a strategic necessity for businesses seeking long-term growth. Building trust, cultivating positive relationships and upholding a credible reputation internally and externally, all contribute to the resilience and longevity of a business. By making good faith a guiding principle, businesses can overcome adversity more easily and secure competitive, sustainable growth.
When good faith goes bad
Failing to act in good faith, on the other hand, will not bode so well for business.
Employees are entitled to raise personal grievances against employers they believe have not acted in good faith. If the Employment Relations Authority or the Employment Court uphold a grievance they may require a party to pay a penalty. The maximum penalties that can be awarded are $10,000 against an individual and $20,000 against a company.
We can help
The good faith obligation requires all Kiwi employers to be responsive, open-minded, and honest with their employees. In return, employers can expect the same treatment back.
If you need support establishing what good faith should look like in your business or want some advice on the best way to approach an employment dispute, we can help.
Our initial chat is always free and, if you decide you’d like some independent, impartial, and up-to-date support, you can make use of our qualified HR expertise for as little as an hour, or as long as you’d like. It’s up to you.
Disclaimer: While this article provides commentary on HR and employment law topics, it should not be used as a substitute for professional advice for specific situations. Please seek professional advice for any questions specific to your workplace.