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What's good faith, anyway?

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20.08.2019

OPINION: Employment relationships are underpinned by the concept of "good faith". This term is thrown around liberally by employment advocates in the context of disputes and personal grievances, but it is not well understood.

The Employment Relations Act does not expressly define "good faith" except to say that it is wider in scope than the "implied mutual obligations of trust and confidence" and it requires parties to employment relationships to be "active and constructive" and also "responsive and communicative" in their dealings with each other.

These obligations reflect the relational nature of employment agreements, as opposed to a purely contractual model. It is notable in this respect that the legislation that was in force immediately before the Employment Relations Act came into effect in 2004 was titled the "Employment Contracts Act".

The change in title and approach was explained by the Honourable Margaret Wilson, Minister of Labour at the time, who said during the first reading; "The key difference between this bill and its predecessors is that it does not assume that the employment relationship is built on mutual distrust and conflict. This bill makes a clear and unequivocal statement that........

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