Good Faith in Employment

Good faith is one of the core principles in New Zealand employment law. It means being honest, fair, and open in how employers and employees deal with each other. It’s not just about doing the right thing, it’s a legal requirement under the Employment Relations Act 2000 that shapes how workplaces operate across the country.

For New Zealand businesses, acting in good faith helps build strong, trusting relationships at work. It can prevent misunderstandings, reduce personal grievances, and create a culture where people feel respected. From recruitment to redundancy, every stage of the employment relationship should reflect fairness and openness.

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We’ve worked with Auckland employers who learned that being upfront; even during difficult changes; helps avoid costly disputes later. When people feel included and informed, they’re more likely to stay engaged and cooperative, even through tough times.

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In this guide you’ll learn:

• What good faith means in New Zealand employment law
• Why it’s important for both employers and employees
• How to act in good faith day to day
• Examples of what breaches can look like
• What to do if a breach happens

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What Good Faith Means in NZ

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Under section 4 of the Employment Relations Act, good faith means more than just not lying; it’s about being active, constructive, and responsive in your dealings with others. According to Employment New Zealand, this includes:

• Being open and communicative.
• Not misleading or deceiving anyone.
• Sharing relevant information when decisions could affect someone’s job.

For example, if an employer is considering a restructure, they must tell affected employees what’s happening and allow them to give feedback before decisions are made.

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In short, good faith employment is about keeping communication clear, fair, and two-way.

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Good Faith in Collective Bargaining

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When unions and employers negotiate collective agreements, both sides must follow the Code of Good Faith in Collective Bargaining. This includes genuinely considering each other’s proposals and avoiding any behaviour that undermines negotiations.

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Examples of Breach of Good Faith

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Here are a few examples of what breaching good faith can look like:

• Reducing an employee’s hours or changing their duties without consultation.
• Misleading staff about the reasons for a restructure.
• Withholding information during a disciplinary process.
• Ignoring employee feedback on proposals that affect them.
• Refusing to genuinely negotiate with a union during bargaining.

Each of these examples damages trust and can lead to legal and cultural problems.

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How Good Faith Connects With Other Employment Laws

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Good faith underpins most areas of employment law in New Zealand. It’s closely linked with how employers handle dismissals, personal grievances, performance management, and workplace change.

Businesses that embed good faith into everyday practice tend to have fewer disputes, stronger teams, and a better reputation in the job market.

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If you’re unsure how to apply good faith in a specific situation, the People & Culture team can help review your processes, train managers, and guide you through complex changes while staying compliant.

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Key Takeaways for Employers and Employees

• Good faith means being open, honest, and fair in all employment matters.
• Both employers and employees have a duty to communicate clearly and not mislead each other.
• Employers must consult and share relevant information before making decisions that affect jobs.
• Acting in good faith helps prevent personal grievances and builds a stronger workplace culture.
• If a breach happens, raise it early and seek advice or mediation to resolve the issue fairly.