There are special protections in place under the Employment Relations Act 2000 (the Act) to protect specific employees if a business is sold, transferred, or a contract for services is lost.
These rules protect vulnerable workers in sectors considered susceptible to frequent restructuring where employees have little bargaining power.
Previously, these rules have applied to cleaning services and food catering services in any workplace, laundry services in the education, health or age-related residential sectors, orderly services in the health or age-related residential care sector, and caretaking services in the education sector.
In 2021, Security Officers were added to the list of protected employees. This places additional obligations on employers who engage these employees should a business be sold or restructured.
What categories of security workers are considered protected employees?
Security officers engaged for the following services are included as protected employees:
- guarding personal property.
- monitoring premises on site and in real time (e.g. via CCTV).
- controlling crowds at events.
- escorting prisoners or performing courtroom custodial duty.
- undertaking mobile patrols.
- collecting cash from premises (e.g. banks, retail stores).
The rules exclude those that work as private investigators, security technicians, security consultants, confidential document destruction workers, repossession workers, personal guards, court security officers, police officers, or corrections officers.
What Protections Apply?
The protections for these categories of employees apply when:
- a business is sold or transferred
- a business decides to contract work out or in (insourcing or outsourcing) or
- a contract for services is lost to another party.
In these circumstances, the protected employees can choose to transfer their employment to the new business on the same terms and conditions. Employees may, however, choose not to transfer to the new employer.
Incoming employers are required to offer employment to these employees on the same terms and conditions.
What Needs to Occur?
There are obligations on both the outgoing employer and the incoming employer. These rules are complex with strict timeframes, so seek advice if you think these rules may apply to your business.
As an overview:
the outgoing employer needs to give a notice to their employees and provide information to the incoming employer, as well as a warranty that they have not taken any steps which will damage the business of the new employer; and
the incoming employer must offer employment on the same terms and conditions to the protected employees and negotiate with the outgoing employer about how the employee’s entitlements will transfer, so that the employee is not disadvantaged due to the transfer (for example sick leave and annual leave entitlements).