Source: http://employersassociates.co.nz/News.html
Timestamp: 2020-07-11 21:56:06
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Covid-19 border controls: implications for employers – Minimum Wage increase takes effect on 1 April 2020 – CPI
Covid-19 border controls: implications for employers
Tighter border controls were announced on Saturday, 14 March 2020, in an attempt to slow the spread of Covid-19 infection in New Zealand. As of 1.00 a.m. 16 March (Monday early morning), everyone arriving in New Zealand from overseas, aside from the Pacific, will have to self isolate for 14 days. This applies to New Zealand citizens and residents as well as international visitors, and will be reviewed in 16 days. No cruise ships will be able to dock in New Zealand until 30 June, and strict border exit rules to the Pacific Island are being put in place. New Zealanders are advised to reconsider any non essential overseas travel.
There are a number of implications of the new requirements for employers to bear in mind. The primary obligation for employers to bear in mind, of course, is to maintain a healthy and safe workplace.
Business international travel
Given the government’s request that non essential overseas travel be deferred, employers should look to cancel overseas business travel that may be planned. It is unlikely that work related travel will be regarded as essential in most industries.
Employees currently overseas
Employees who are currently overseas, whether on work related or private travel, will have to self isolate for 14 days on their return. This means they will not be able to attend their workplace. These employees will of course have generally been unaware of this requirement at the time they commenced their travel.
Airlines are severely reducing routes, and this is likely to impact on the return plans of many travellers currently overseas. Some may need to return on a different date from that currently planned.
Employers should be proactive in making contact with such employees, using whatever means they can (phone calls, emails, text messages, Messenger and so forth). The employee may not be aware of the requirements and the first priority will be making sure they have some advance warning. Employers should ensure that the employee is away that they cannot attend the workplace during their self isolation, and should be prepared to discuss options such as working from home, how much leave the employee has, and so forth.
Employees who cannot attend work due to the requirement to self isolate are likely to be concerned and anxious about the potential loss of income. Employers should consider whether such an employee can work from home during this time. Many employees, but not all, can work remotely. Employers may need to make arrangements such as delivering laptops or other equipment to the employee’s home. Where this occurs, the person delivering the equipment will need to ensure they do not breach the self isolation requirements – arranging a time to leave things on the doorstep rather than handing them over, for instance. While an employee may not be able to carry out all of their usual role from home, if some useful work can be done, this is a preferred option to placing the employee on leave. Employers should also consider whether they have any project work or similar which could be done from home for employees who might not be able to carry out their usual work from home.
As always, if an employee is working from home, the employer remains responsible for their health and safety while working. This means the employer should be ensuring the employee has a safe and appropriate work station setup, is taking breaks as appropriate, is reporting any discomfort, and is coping with working from home.
What about employees who simply can’t work from home? If there is no project work or the like that the employee could usefully do, the employee is going to have to take leave from work. This might include annual leave, sick leave by agreement, leave without pay, or special leave. Employers should check the employee’s employment agreement in the first instance.
Where an employee is required to self isolate following business travel, the same option will apply for working from home where at all possible. Given that the requirement to self isolate has arisen from the employee carrying out their role, employers should look to pay an employee who has to self isolate as a result of business travel.
Employees who have annual leave booked
Many employers will have employees who have booked annual leave but have not yet left. Employers should be proactive in having discussions with these employees as soon as possible, particularly those who are intending to depart this week. This should include asking them whether their plans include travel overseas, ensuring they are aware of the government’s advice that non essential travel should be deferred, and ensuring that they are aware that self isolation will be required for 14 days on their return, and they will need to ensure they have sufficient leave to do this should they decide to go ahead with their plans.
Employers should be open to employees changing their plans, including seeking to defer their annual leave. Employees will be concerned about the potential loss of money they may have invested in their trip, and some will seek to defer their annual leave until they can take the intended overseas trip. If employers are able to accommodate this, this is likely to help the employee at a stressful time.
If an employee wants to proceed with their trip, the employer should ensure that they are aware of what will happen during the self isolation period. Of course, if working from home is an option, this can apply. If not, the employee will need to be aware that proceeding with their trip at this time means they will not have work for two weeks on their return, and will need to take annual leave, annual leave in advance, or leave without pay.
In some cases, employees may have compassionate reasons for needing to travel. These decisions will be difficult ones for employees and employers may be able to help employees work through the implications and risks, or to provide support to them to do so.
At this time, some Pacific countries are exempt from the self isolation requirement, but this is likely to change for any country where covid-19 cases occur. Where an employee is intending to travel to a currently exempt country, the employer should discuss with the employee what might happen if the current requirements change, and what would happen if self isolation was required.
Employees who apply for annual leave
Where employees apply for annual leave, employers should be proactive in discussing with them whether they are intending to travel overseas, the fact that government has advised that non essential overseas travel should be deferred, and the fact that they will be required to self isolate for 14 days on return. The employer should ensure the employee has sufficient leave, if travelling overseas, to cover 14 days of isolation on return (unless working from home is an option). The actual travel dates should be ascertained and the employee may be asked to apply for leave to cover their self isolation period. If the combined period will put too much strain on the employer’s operations, the employer is entitled to decline the leave application or to request the employee look at a shorter time period to allow for the self isolation period.
It is possible that further measures may be taken in the future, and employers need to consider and prepare for these. Employers should consider what will happen if further border restrictions take place and employees overseas have difficulty getting home, how they will cope if restrictions are applied to reduce community transmission here as have occurred in countries overseas, and what they will do to reduce the potential of transmission if an employee has been working and tests positive for covid-19. Business continuity plans, and plans for reducing transmission of infections, both inside and outside of work, such as physical distancing, reducing or cleaning common use items, hand washing facilities and requirements, and so forth should be considered. Simple measures such as requesting employees to take laptops home each night, or to have a work station at home that they can use in the event that they cannot attend work at short notice, should be considered and prepared now.
Some employees are likely to find current events unsettling and concerning, and employers should ensure there are appropriate supports in place for employees who are having difficulties. Considering how to alleviate the effects of isolation if some or all of the staff are required to work from home, such as regular teleconferences, social media groups or the like to stay in touch, may make this easier for many employees. Employers in industries that are likely to be significantly affected by the new border controls will be already considering how they will manage this and may need to consider their staffing; employees working in these industries are likely to be anxious and concerned as a result of this, and this needs to be borne in mind by their employers.
If you would like to discuss the employment implications further, please don’t hesitate to contact us. Angela can assist with employment relations issues and implications, and David and Sherry with health and safety implications.
Minimum Wage increase takes effect on 1 April 2019
The minimum wage increases to $18.90 per hour on 1 April 2020. The starting out and training minimum rates increase to $15.12 per hour on the same date.
Employers should check current wages rates for lower paid staff and make sure that they are increased from Wednesday 1 April 2020, in the case of anyone whose current wage rate is less than the new minimum wage.
CPI is currently 1.9%, as at December 2019. The next CPI rate will be for the year ended March 2019, and this should be available in mid April.
The Employment Relations Amendment Bill has been introduced, had its first reading and been referred to Select Committee. It is due to be reported back on 1 August 2018.
As noted in our previous update, much of the Bill will undo recent changes made to the Act. In most cases, the wording of these changes is either similar to or the same as it was in the past. This update will largely focus on implications of the new provisions in the Bill.
Paid time for union delegates to represent employees
Appointed union delegates will be entitled to “reasonable” paid time to represent fellow employees during their normal working hours, provided this doesn’t unreasonably disrupt the employer’s business or the delegate’s performance of their duties. The Bill provides for the employee to either agree with the employer that they can undertake such activities from time to time without further notice, or to notify their employer when they intend to do so and tell them how long they intend to spend doing so. The only reasons the employer can refuse are that the employer is satisfied on reasonable grounds that the activities would unreasonably disrupt the employer’s business or the delegate’s performance of their duties.
Of course, one employer’s view of what is reasonable or unreasonable may not be another’s, and may well not be the view of the delegate or of their union.
In practice, most employers do allow delegates some time on pay to participate in collective bargaining and/or to represent colleagues in disciplinary meetings, performance issues and the like. Practical issues with this are most likely to arise where views differ about what is reasonable and how much is too much.
The Bill provides that these provisions will come into force four months after the date of Royal assent, so there will be some delay on these provisions taking effect.
Collective agreements must contain the rates of wages or salary payable
Section 54 of the Act currently provides for clauses that must be included in a collective agreement; a coverage clause, a plain language explanation of the services available to resolve employment relationship problems and reference to the 90 day time limit to raise personal grievances, a variation clause and an expiry date. Added to this will be the rates of wages or salary payable to employees. The Bill states that a collective agreement will comply with this requirement if it provides for the wages or salary payable for certain work or types of work, or certain employees or types of employees, or provides ranges of wages of salary, or provides one or more methods of calculating rates of wages or salary payable. It also states that a collective agreement will not comply if it purports to determine wages or salary solely by reference to a document or process that is not part of the agreement or gives the employer sole discretion to determine the wages or salary payable.
What will this mean in practice? Collective agreements which contain specific rates or ranges for employees will comply, but those which refer to a remuneration policy, to a remuneration forum or process or to the employer setting rates, will not. This is a very significant change and it is likely we may see some litigation around exactly what does and does not comply.
Again, the Bill provides that these provisions will come into force four months after the date of Royal assent, so there will be some delay on these provisions taking effect. Once this section commences, it will only apply to collective agreements which are concluded after that time. Collective agreements which were already concluded prior to the section coming into force will not need to include wages or salary. This means that employers who are currently in bargaining won’t have to include these provisions if the agreement is concluded before the section commences – but of course concluding the agreement will depend on agreement being be reached between the parties.
Collective bargaining must be concluded unless there is genuine reason not to
The Bill restores the previous wording about the requirement to conclude a collective agreement unless there is a genuine reason, based on reasonable grounds, not to, but with one new aspect. Previously, the Act stated that a genuine reason did not include opposition or objection in principle to collective bargaining or being a party to a collective agreement, or disagreement about whether a bargaining fee should be included. Added to this, however, will be a new provision that opposition or objection in principle to including rates of wages or salary in a collective agreement will not be a genuine reason not to conclude a collective agreement.
Again, the Bill provides that these provisions will come into force four months after the date of Royal assent. Once in effect, however, the requirement will apply to all bargaining that hasn’t been concluded, regardless of when the bargaining was initiated.
Information about the union for new employees
The Bill provides that a union party to a collective agreement can request the employer to provide specified information about the role and functions of the union to their new employees. The employer can only refuse if the information is either defamatory or confidential. The employer will be assumed to have agreed to the request if they don’t respond to the request within 10 working days. This information has to be provided to new employees when they are sent their offer of employment (see next section).
New employees covered by the terms of a collective agreement for their first 30 days
The “30 day rule”, which employers with collective agreements will recall, is being reinstated, but with three differences. Essentially, the 30 day rule means that new employees whose work is covered by a collective agreement must be employed on the terms and conditions of the collective agreement for their first 30 days of employment, and the employer must provide a copy of the collective agreement and advise the employee how to contact the union, that they may join the union, and that if they do so, they will be bound by the collective agreement.
Employers who have more than one collective agreement covering the same type of work will recall that the collective agreement which covered the most employees was the one which sets the terms and conditions for new employees. However, one of the changes this time around is that the employer will now have to provide information relating to each union, and provide copies of each collective agreement, rather than just the dominant agreement.
The second change is that information about the union will need to be provided where the union so requests (see the previous section). This also applies to all of the unions, if there is more than one collective agreement which covers the work the employee is doing.
The third change is that within 10 days of the new employee starting work, the employer must give them an approved form to complete which notifies the employer:
whether the employee is joining a union
whether the employee objects to the employer providing information about the employee to one or more unions
The form will be a standard form issued by MBIE. The employer will need to notify the employee that they must return the form within the time period of between 10 and 40 days after commencing their employment, and explain that unless the employee objects on the form, the union/s party to any collective agreement which cover the employee’s work will be given the employee’s name and told that the employee has joined or not joined the union, or not completed the form, as the case may be. The employer will then be obliged to provide that information to the union/s within 20 working days after the time period of 40 days after the employee commenced work.
This is a new provision, and while it is likely that the notice as well as the form will be provided and therefore employers will simply need to ensure they issue them and then provide the information in the required time frames, this is likely to prove confusing or problematic to comply with for some employers.
Again, these provisions will come into force four months after Royal assent. Once the section commences, it will apply to new employees who commence work or sign an employment agreement on or after the date the section came into force.
Changes to discrimination provisions
The Employment Relations Act currently provides that discrimination is a ground for taking a personal grievance claim. Discrimination includes adverse treatment of an employee due to their involvement in the activities of a union within the last 12 months. The Bill changes this aspect to union membership status or involvement in union activities within the last 18 months. Involvement in a union’s activities means being an official, representative or delegate, being involved in the formation of a union, acting as a negotiator in collective bargaining, participating in a lawful strike, making or supporting a claim or personal grievance, or taking employment relations education leave.
This means that an employee arguing that they have been discriminated against may now argue this on the basis of simply being a member of a union, or intending to join a union – they will no longer have to demonstrate that the discrimination relates to their involvement in a union’s activities. The time period for involvement in union activities has also been lengthened.
These provisions will come into force six months after Royal assent.
The Bill reinstates specific timings for breaks to be taken. However, there is a difference in the drafting of the provision from the previous wording. The Bill provides for one 10 minute paid rest break if the employee works at least two hours and no more than four hours. It provides for one rest break and one meal break if the employee works at least four hours and no more than six hours – and so forth. However, what is not clear is what entitlement applies for an employee who works exactly four hours. Do they get just one rest break, or do they get one rest break and one meal break? This appears to be poorly drafted, as the previous provisions referred to working “more than” four hours. This style of drafting continues throughout the provisions about entitlements for varying work periods.
The other new aspect of the breaks provisions is that an employer engaged in an essential service where the continuity of that service is critical to public interest, including but not limited to public safety, who would incur unreasonable cost in replacing any employee for breaks without compromising public safety, will be exempt from these requirements. This provision has clearly been written to cover the situation of air traffic controllers at small airports and the like. Where this applies, the employer and employee can agree on the breaks being taken in a different manner, or if they don’t agree, the employer must provide compensatory measures. A compensatory measure must be reasonable and compensate the employee for not getting breaks; it can include time off at an alternative time, financial compensation or both. Time off must be at least equivalent time off, and compensation at least equivalent to the amount the employee would have earned during the time of the break.
These provisions will come into force four months after Royal assent.
The Bill provides that trial periods will only be able to be used by small employers – those who employ less than 20 employees as at the beginning of the day that the employment agreement is entered into. This section will commence four months after Royal assent.
Larger employers will be able to continue to rely on trial periods which were entered into before this section comes into force, but will not be able to enter into any new trial periods once this section commences.
Employment Relations Act changes announced – CPI – Mileage rates changed
Employment Relations Act changes announced
The government has announced that a Bill will be introduced to Parliament shortly to amend the Employment Relations Act. The summary of the Bill states that there will be a number of changes; many will undo or adjust recent changes to the Act under the National government, but there will also be some new matters.
The proposed changes which will undo recent changes are:
Restrict trial periods to employers with less than 20 employees only
Put the detailed requirements around rest and meal breaks back into the Act (with a very limited exemption for essential services where an employee cannot be replaced – e.g. air traffic controllers)
Put back the obligation to conclude collective bargaining and repeal recent provisions that allowed for bargaining to be declared to be over
Allow unions to have a “head start” in initiating collective bargaining, as used to be the case
Remove the option for employers to opt out of multi employer collective bargaining
Reinstate the “30 day rule” which required new employees to be employed on the collective agreement provisions for their first 30 days of employment
Remove the right to make partial strike pay deductions
Make reinstatement the primary remedy again for personal grievance claims
Remove the requirement for the employer to consent to union access to a workplace before the union official enters
Remove the recent exemptions for small employers with regard to contracting out, allow employees more time to decide if they want to transfer to the new employer, and make changes to the provisions around the transfer of information
The new matters are:
Introducing a requirement to include pay rates in collective agreements (this may include pay ranges or methods of calculation)
Union delegates to be provided with reasonable paid time to represent other employees, such as in collective bargaining
Employers will be required to provide prospective employees with information about unions in the workplace and a form to indicate whether they want to be a member
New protections against discrimination based on union membership or activities
While the media coverage has tended to focus on changes to trial periods, and this will have a considerable impact on many employers who use these, perhaps the most significant proposed change for many employers with collective agreements will be the proposed requirement to include pay rates in collective agreements. While currently a lot of collective agreements contain either minimum rates or ranges or steps, many do not. Exactly what will be required will depend on the exact wording, but this looks likely to be a significant change to collective bargaining, particularly in the public sector and related areas where market and performance based pay systems are common.
We will be looking further at the detail of what is proposed once the Bill itself is available.
The annual change in CPI rates as at December 2017 (announced on 25 January 2018) was 1.6%.
Mileage rates changed
The 2017 review of the maximum mileage rate saw the rate adjusted to 73 cents per kilometre. The rate is reviewed each year.
Employment Standards Legislation Bill passed – Changes to zero hours contracts and to shift provisions – Summary of the changes to employment legislation – What you need to do to prepare for the changes – Goodbye Health and Safety in Employment Act, hello Health and Safety at Work Act
Employment Standards Legislation Bill passed
The Employment Standards Legislation Bill has now been separated into its various amendments to current employment legislation, which have been to their third and final reading, and have now been unanimously passed. The new legislation now only requires royal assent to become law. Changes have been agreed to the availability provisions and to the changes to shifts sections in order to ensure sufficient votes which we summarise below. We have also summarised the changes below.
Changes to zero hours contracts and to shift provisions
As was expected, further changes took place to the availability and cancellation of shifts provisions in the Bill in order to ensure that it would have sufficient support to be passed. These changes mean that employers with “zero hours contracts” or with shifts which can be cancelled are likely to need to revisit their employment agreements.
The revised legislation will provide that an employment agreement may contain an availability provision, meaning a clause providing that the employee is required to make themselves available for work that the employer offers but the employer is not obliged to offer work, only where there are some guaranteed hours. Or in other words, a zero hours contract, which provides for the employee to be available but provides no guaranteed hours in return, will not be lawful.
Even when guaranteed hours are provided, there will be limits on availability provisions.
Firstly, of course, there must be some guaranteed hours provided.
Secondly, there must be genuine reasons based on reasonable grounds for including the availability provision, and the number of hours included in the availability provision. An assessment of whether there are genuine reasons based on reasonable grounds includes whether it is practicable for the employer to staff without having an availability provision, the number of hours the employee is required to be available, and the proportion of those hours to the agreed hours of work.
Thirdly, an availability provision can only be used where the employment agreement provides for reasonable compensation for the employee making himself or herself available. Compensation is to be determined by considering how many hours the employee is required to be available, the proportion of hours the employee is required to be available compared to the agreed hours of work, and the hourly rate or salary paid. A salaried employee may agree with the employer that the salary includes compensation for the employee being available. In practice, of course, it would need to be demonstrable that the employee’s salary covers both the guaranteed hours, and the maximum number of hours the employee may be available for, without paying less than the minimum wage.
If there is no compliant availability provision, employees can refuse to work additional hours and cannot be treated adversely (dismissed, not offered opportunities etc) if they do so.
In practice, this means that employers who currently use zero hours contracts will need to revisit their employment agreements. There are a range of options which will remain lawful. Firstly, of course, guaranteeing a set number of hours a week will resolve the problem. If there may be additional hours available, these can either be by agreement (meaning that the employee can either accept or decline extra hours offered), or if the employer wishes to guarantee the employee’s availability, an availability provision will need to be included which specifies the maximum number of hours the employee must be available for, and the compensation which will be paid for the availability – an “on call” provision, effectively. If the employer does not require guaranteed availability, a casual employment agreement is of course lawful, provided it has been agreed between the employer and employee. A casual agreement is casual on both sides – the employer has no obligation to offer hours, and the employee has no obligation to work if work is offered. Finally, if a salaried agreement is an option, this may offer some employers a means to incorporate an availability provision so that both parties know what the remuneration will be.
The revised legislation will provide that an employment agreement will need to specify a reasonable period of notice that has to be given, and reasonable compensation that will have to be paid if the shift is cancelled without giving that notice, if an employer wishes to be able to cancel a shift. An employer will need to either give the notice provided, or pay the compensation provided in the employment agreement – otherwise a shift will not be able to be cancelled.
What is a reasonable period of notice? The legislation will provide that reasonableness will depend on the nature of the employer’s business and the degree to which it can control or foresee the circumstances leading to the cancellation, the nature of the employee’s work and how much effect the cancellation will have on her/him, and the employment agreement (whether there are agreed hours of work and the number of hours that are guaranteed).
What is reasonable compensation? The relevant factors will be how much notice needs to be given, the remuneration the employee would have received, and whether the nature of the work meant the employee incurred any costs preparing for the shift.
The revised legislation provides that if the shift is cancelled and there is no provision about cancelling shifts in the employment agreement, or if the employee is only notified of the cancellation at or after the shift’s start time, the employee is entitled to what they would have earned had they worked the shift.
In practice, therefore, employers of shift workers will need to consider whether they need to cancel shifts from time to time. If so, they will need to ensure there is a compliant provision in the employment agreement allowing for the cancellation of shifts, stating the notice that needs to be given, and specifying the compensation payable if the notice isn’t given. If there is no such provision or the shift is only cancelled or the employee only notified at the time the shift starts or later, the employer will need to pay the employee/s for the full shift.
A shift is defined as a period of work in a system of work where the periods of work are continuous (or effectively continuous) which may occur at different times on different days of the week. The former definition of shift work involving employees succeeding each other according to a pattern, including a rotating pattern, has been removed. This means in practice that the definition of a “shift” has been made considerably broader (and rather more obscure), and the provisions will therefore impact on employers who might not consider that they employ “shift workers”.
Summary of the changes to employment legislation
The most significant changes to employment legislation as a result of the Employment Standards Legislation Bill are as follows.
Changes come into force on 1 April 2016
Agreed hours of work will need be specified in the employment agreement, meaning any or all of: number of guaranteed hours; days that work will be performed; start and finish times; and/or any flexibility in the days or times
Availability provisions can only be included in employment agreements where some hours are guaranteed, where there are genuine reasons for doing so, and where there is compensation for the employee being available, and provided the availability provision includes the number of hours the employee is to be available and the compensation
Salaried employees may have a salary which covers their availability instead of separate compensation (provided the salary will cover the guaranteed hours and all the hours the employee needs to make themselves available)
An employee who doesn’t have a compliant availability provision in their employment agreement may refuse to perform additional hours and cannot be disadvantaged for doing so
Shifts cannot be cancelled unless there is a provision in the employment agreement about cancelling shifts and the provision sets out the notice that must be given and the compensation that must be paid if the notice is not given
If there is no provision for cancelling shifts, or if the employee isn’t notified of the cancellation until the commencement of the shift or during the shift, payment for the full shift will need to be made
Provisions limiting secondary employment will only be able to be included in employment agreements where there are genuine reasons based on reasonable grounds for doing so (e.g. commercially sensitive information, intellectual property rights, commercial reputation or a conflict of interest), and those reasons are set out in the clause about secondary employment, and the limitations are the minimum necessary to achieve that
It will be grounds to take a personal grievance if an employee is disadvantaged as a result of their employment agreement not complying with the requirements regarding hours of work, availability provisions, shift cancellations or secondary employment clauses, or because the employer has disadvantaged the employee when he/she refused to work and there was no appropriate availability provision
Wage and time records will need to record the number of hours worked for all employees whether waged or salaried, except where the employee always works the same hours and these are recorded in the employment agreement, or the employee is salaried and the employment agreement provides for additional hours to be worked, provided that enough detail is kept to prove that the employer is complying with minimum entitlements (e.g. minimum wage)
The sections relating to specifying the hours of work, availability provisions, cancellation of shifts and secondary employment provisions will apply as follows:
Where a collective agreement is in force immediately prior to 1 April 2016, the new requirements apply to the next collective agreement that is negotiated (or the replacement individual agreement)
If an individual agreement has been entered into or applies to an employee as at 1 April 2016, the new requirements apply from 1 April 2017 (giving the parties a year to agree on a new compliant employment agreement and to change non compliant practices)
In the case of a new employee covered by an individual agreement who is employed on or after 1 April 2016, the agreement will need to be compliant immediately (unless the parties had previously agreed on the individual agreement that would apply before the new legislation commenced)
There are some changes to some of the enforcement provisions in the Act, and additional provisions about enforcement of employment standards which include provision for labour inspector applications to the court for declarations of breach, penalties, compensation and banning orders and making insurance for penalties unlawful
Mediation will be the primary problem solving mechanism, except for enforcing employment standards, but mediation can be used with regard to employment standards issues when it would be a cheaper and quicker way to clarify disputed facts, the breach is minor or inadvertent, the parties agree, or the Authority / court feels mediation is appropriate.
Parental Leave and Employment Protection Act
· Commences on 1 April 2016
Maternity leave becomes “primary carer’s leave”
The “primary carer” is the biological mother or primary carer; a primary carer can include the partner of the biological mother where she has transferred her entitlement to a parental leave payment to her partner
A primary carer can include an adoptive or permanent whangai parent, and there can only be one “primary carer” for a child
Parental leave will now be available to whangai parents as well as to the parents of formally adopted children
Paternity/partner’s leave becomes “partner’s leave” and is available to the primary carer’s partner
Extended leave can be taken by an employee who has been employed for six months (up to 26 weeks); if the employee has been employed for 12 months or more the entitlement is up to 52 weeks
Extended leave can be taken by the primary carer, their partner or a combination of both
The combined entitlement to extended leave is 26 weeks if both partners have been employed for less than 12 months, or 52 weeks if one partner has been employed for 12 months or more
Extended leave will be able to be taken in more than one period by mutual agreement
Negotiated carer leave can be requested if the employee has been employed for less than six months but would be entitled to the parental leave payment (employed for at least 10 hours per week on at least 26 weeks of the last 52 weeks); negotiated carer leave allows an employee who needs to take parental leave to access the parental leave payment to do so
The employee needs to request negotiated carer leave in writing; the employer must decide whether it will be granted as soon as possible and within one month of receiving the request
An application for negotiated carer leave can only be refused if the employer cannot reorganise work amongst other staff or recruit other staff, or it would affect quality or performance, or due to planned structural changes, burdensome additional costs or a detrimental effect on meeting customer demand
Self employed people will be entitled to paid parental leave provided they meet the requirements
Additional parental leave payments will be available for parents of preterm babies (born prior to the end of the 36th week) of up to 13 weeks, depending on how early the baby is, with the primary parental leave payment applying in addition to this
·The employee will be able to work up to 40 hours during the time they are receiving paid parental leave (“keeping in touch hours”) to allow for attendance at training courses and the like
Keeping in touch hours cannot be used during the first 28 days of the baby’s life, except in the case of a preterm baby; there are additional entitlements of keeping in touch hours for the parent of a preterm baby
Wages Protection Act
Consent is given to deductions from wages or salary where an employment agreement contains a general deductions clause authorising the deduction
An employer will not be able to make a deduction from an employee’s pay in accordance with a general deductions clause in the agreement without first consulting the employee
The employer will not be able to make a deduction from the employee’s pay if the deduction is unreasonable
What you need to do to prepare for the changes
Employers may wish to consider taking the following steps:
If you have employment forms relating to parental leave, these may need updating, including references to maternity and paternity leave.
If you have policies about parental leave, these may need reviewing and updating if they specify detail about how the legislation works
You should ensure you have a system for recording hours worked by all employees so that accurate wage and time records are kept
If you have salaried employees, remember that you will need to start recording their hours worked unless they always work their “usual hours”, or reasonable additional hours are included in the employment agreement as covered by the salary
You may need to update salaried employees’ employment agreements to ensure that hours of work are appropriately set out
If you have employees working varying hours, on call or additional hours, and these hours can be set by the employer (as opposed to being offered but not compulsory), review your employment agreements to ensure they will comply with the new requirements
If you have zero hour contracts, these will need to be changed, as it will no longer be lawful to have agreements that are fully “zero hours” with no guaranteed hours, and compensation will need to be included for any availability provision
If you have shift workers, review your employment agreements to make sure they comply with the requirements re cancellation notice and compensation for cancelled shifts, if you may need to cancel shifts
If you have clauses about secondary employment in your employment agreements, review these agreements to ensure your clauses will comply with the new requirements
You may wish to make sure your employment agreements contain appropriate deductions provisions
If you are employing a new employee on or after 1 April 2016, your employment agreement will need to be compliant then, so make sure you plan now to ensure your agreement will be compliant
If you are employing a new employee before 1 April 2016, you don’t legally have to make the changes straight away, but you may want to plan for the changes so that the agreement won’t need to be varied by 1 April 2017
If you are negotiating a replacement collective agreement which will take effect on or after 1 April 2016, make sure you take account of the new requirements before finalising the agreement
Plan for any non compliant existing individual employment agreements to be updated before 1 April 2017 (remember to allow time for discussion, negotiation, and consideration of the draft agreement, and remember to advise employees that they are entitled to seek advice)
If you would like to discuss the implications of the Bill further, contact Angela Walker.
Goodbye Health and Safety in Employment Act, Hello Health and Safety at Work Act
The replacement of the Health and Safety in Employment Act with the Health and Safety at Work Act on 4 April has been pretty well publicised, and has received a lot media content.
For the majority of employers, who have active health and safety systems in place, there shouldn’t be that many changes. Some of the key things that changed on the 4th of April are:
Notifiable accidents and incidents
You will need to update your incident reporting processes to ensure notifiable incidents are reported to WorkSafe and check the definition of notifiable accident, to make sure you have an understanding of what to report to WorkSafe, and that you need to report initially by the fastest available means, after which WorkSafe will let you know if further information is required.
Hazard /risk management
You should update your hazard management procedures to reflect the risk management approach of the Act and Regulations.
You are no longer asked to assess hazards to determine which are significant hazards (the ones you need to do something about), the Act asks you to identify and assess risks, so you have a process to decide which risks need attention, and in what priority.
The hierarchy of risk controls changes from “Eliminate, Isolate and Minimise” to:
Eliminate the risk, if not reasonably practicable then:
Minimise the risk through:
Other changes that may take a bit longer to consider is how you manage safety with other businesses you interact with such as contractors, joint venture partners, and businesses you may share premises with.
The expectation that those who are the decision makers for businesses to understand and actively managed health and safety in their business are also made quite clear.
As always, if you have any questions, or would like any further information regarding any health and safety and ACC matters, please feel free to contact Sherry or David.
Employment Standards Legislation Bill reported back from Select Committee - Minimum wage increase – Living wage increase also announced – CPI - IRD mileage rates – Health and Safety at Work Act and Regulations
Employment Standards Legislation Bill reported back from Select Committee
The Employment Standards Legislation Bill has now been reported back from Select Committee with some proposed amendments, following the submission process. As might be expected, many of the submissions focused on the issue of zero-hours contracts. The second reading is due to occur shortly and there may yet be further changes to the Bill as a result of political processes, as the zero hour contracts and cancellation of shifts provisions are of concern to some parties. We have set out the proposed Bill as reported back from the Select Committee; we will keep you updated if there are further changes.
There are a number of amendments proposed with regard to the changes to the Parental Leave and Employment Protection Act, including redefining a primary carer and providing examples so that nannies and childcare providers are not inadvertently included, clarifying the reference to a child “not more than five years of age” to be a child “under the age of six years”, including additional parental leave payments for parents of preterm babies of up to 13 weeks, with the primary parental leave payment applying in addition to this, and including provision for up to 40 hours to be worked during the time an employee is receiving paid parental leave (“keeping in touch hours”) to allow for attendance at training courses and the like. These hours cannot be used during the first 28 days of the baby’s life, except in the case of a preterm baby, where they can be used (the logic behind this is that a parent of a preterm baby often hasn’t had time to do a handover at work due to the baby’s early arrival). Extended leave would be able to be taken in more than one period by mutual agreement.
With regard to hours of work provisions, the Select Committee has proposed an amendment to the requirement to record hours worked and other detail for all employees, so that hours need not be recorded for salaried employees who are working their usual hours. “Usual hours” would also include any reasonable additional hours worked under the employee’s employment agreement where these don’t affect minimum entitlements (such as the minimum wage). This does not, however, apply to salaried employees whose hours vary beyond this, so employment agreements for salaried employees will need to be carefully drafted to ensure this issue is covered off.
With regard to zero hours contracts, the Select Committee has proposed that an employment agreement can only contain an “availability provision” (a requirement for an employee to be available for work) where there are genuine reasons based on reasonable grounds for the employer to include this provision (there is a list of criteria provided in the legislation) and where “reasonable” compensation is provided for (again, a list of criteria is included in the Act). A salaried employee who has additional hours provided for may agree that the salary covers the compensation for the coverage of the additional hours. There would be a new section entitling employees to refuse additional non-guaranteed hours if the employment agreement did not contain an availability provision providing for reasonable compensation for availability. These provisions will mean that employers with varying hours, or with provision for on-call or additional hours, will need to ensure that their employment agreements are carefully drafted.
The Select Committee has proposed that the new provision requiring employment agreements of shift workers to contain a period of notice to be given when a shift is cancelled, should also specify that “reasonable” compensation (again, there is a list of criteria as to what constitutes “reasonable”) must be set out in the employment agreement. A definition of shift work would be included in the legislation. Again, this means that employment agreements for shift workers will need to contain specific provisions about cancellation of and compensation for shifts.
With regard to secondary employment, the Bill provides that there must be genuine reasons based on reasonable grounds for including limits on secondary employment in employment agreements. The reasons must be specified in the employment agreement. This includes clauses which allow for secondary employment only if the employer consents. The Select Committee has proposed an amendment that a provision that does not fulfil this requirement must not be included in an employment agreement, and that where a provision is included, only the minimum restriction necessary to achieve the required outcome can be included. Again, this will require review of employment agreements to ensure that any secondary employment provisions are compliant.
In addition to the provision in the Bill banning “unreasonable” deductions from employees’ wages, the Select Committee have proposed amendments to clarify that where the employment agreement includes a deductions clause this constitutes the employee’s written consent to the deduction, but that deductions still must not be made without first consulting the employee.
The Select Committee has also recommended a change to when some of these changes would need to be included in employment agreements. This applies to the provisions about zero and agreed hours, availability provisions, cancellation of shifts and secondary employment. New agreements entered into on or after 1 April 2016 will need to comply with the new requirements straight away. Existing individual employment agreements would need to be changed by 1 April 2017. Replacement employment agreements (whether collective or individual) would need to be compliant once the legislation was passed, meaning that once an employment agreement is renegotiated at any time after 1 April 2016, the new agreement will need to be compliant.
The Bill provides for labour inspectors to be able to apply for a compensation order against an employer in breach where the breach caused loss or damage to an employee; the Select Committee has recommended an amendment so that the employee can apply directly for the compensation order. The provision that previous similar conduct as established in the Employment Relations Authority can be taken into account in considering the level of penalty to apply to an employ is proposed to be extended to also cover conduct established in the Employment Court. There are also changes to the wording providing for mediation to be bypassed with cases about employment standards so that mediation would still be required in some cases and so that cases involving employment relations issues do not bypass mediation.
Employers should note that most of the Bill is intended to come into force on 1 April 2016, and therefore time is getting quite short for any changes that may be required to comply.
If you have policies about parental leave, these may need reviewing and updating if they specify detail about how the legislation works.
You should ensure you have a system for recording hours worked by all employees so that accurate wage and time records are kept. This might involve time sheets, a manual record, a time clock or other methods.
If you have salaried employees, remember that you will need to start recording their hours worked unless they always work their “usual hours”, or reasonable additional hours are included in the employment agreement as covered by the salary. If you are not sure how this works, seek advice.
You may need to update salaried employees’ employment agreements to ensure that hours of work are appropriately set out.
If you have employees working varying hours, on call or additional hours, and these hours can be set by the employer (as opposed to being offered but not compulsory), review your employment agreements to ensure they will comply with the new requirements.
If you have shift workers, review your employment agreements to make sure they comply with the new requirements re cancellation notice and compensation for cancelled shifts. If you are not sure whether your employees are shift workers or are not sure whether your agreements comply, seek advice.
If you have clauses about secondary employment in your employment agreements, review these agreements to ensure your clauses will comply with the new requirements.
You may wish to make sure your employment agreements contain appropriate deductions provisions.
If you are employing a new employee on or after 1 April 2016, your employment agreement will need to be compliant then, so make sure you plan ahead to ensure your agreement is compliant.
If you are employing a new employee before 1 April 2016, you don’t legally have to make the changes straight away, but you may want to plan for the changes so that the agreement won’t need to be varied before 1 April 2017.
If you are negotiating a replacement collective agreement which will take effect on or after 1 April 2016, make sure you take account of the new requirements before finalising the agreement.
As noted, the Bill is awaiting its second and third readings and thus there may be further changes before it is passed.
The minimum wage will increase on 1 April 2016 by 50 cents an hour, from $14.75 to $15.25. The starting out and training rates will increase from $11.80 to $12.20 on the same date. The minimum wage also increased by 50 in 2015 and 2014. The minimum wage increases are significantly higher than CPI movements; CPI has averaged annual increases of less than 1% across those years (December annual increases used, as this is the figure available when the minimum wage increase takes effect). This compares with the minimum wage increases, which average 3.5% annually for these years.
This increase will obviously be good news for employees on the minimum wage, who will receive a much higher increase as a result than the increase in the cost of living. It will be likely to be problematic for employers of low paid employees where the main form of income is constrained, such as government funding. It will also be likely to present a challenge for employers who have some employees at the bottom of scales on minimum wage and others at higher rates, as relativity becomes an issue when the bottom rates are increased at a higher rate.
Employers will need to ensure that all employees, except for those who are starting out or training, are paid a minimum of $15.25 from 1 April 2016 onwards. This applies regardless of what rate is set in the employee’s employment agreement.
Living wage increase also announced
The “living wage”, which is set by the Living Wage Movement, was set up in 2013 to be the hourly wage a worker needs to pay for the necessities of life and to participate as an active citizen in the community, reflecting basic expenses for workers and their families (www.livingwage.org.nz). The rate in 2013 was $18.40 and has increased annually since that time. However, the increases do not reflect a recalculation of the costs of the necessities of life; the increases are calculated on the basis of wage movements (percentage of wage movement as at June of the previous year from Statistics NZ’s Quarterly Employment Survey). Every five years the living wage is to be reassessed analysing movements in expenditure items, wages and inflation. This means that while the original living wage was calculated on the basis of the amount required to support a household of two adults and two children receiving 1.5 incomes, including a reasonable but not luxurious standard of living such as a computer for the household, participating in school trips and the occasional trip to Australia or similar, the adjustments since the original calculation have reflected wages adjustments, not changes to the cost of living for such a household.
The 2015 living wage was $19.25 per hour, and the 2016 rate, which is effective from 1 July 2016, will be $19.80. This is an increase of 55 cents per hour, considerably higher than the increase in cost of living over that time.
The living wage is not a legal minimum as the minimum wage is, it is an optional commitment which a number of employers have committed to. Employers who have committed to paying the living wage in their employment agreements will need to ensure that the new rate is paid from 1 July 2016. This only applies to employers who have committed to the concept of paying living wage on an ongoing basis.
CPI continues to be very low – the annual change as at December 2015, announced in January 2016, was 0.1%, so almost nil change. The next CPI figures will be for the year ended March 2016 and will be available in mid April.
IRD mileage rates
Do you pay mileage rates to staff?
The IRD recently concluded its 2015 review of mileage rates and reduced the rate to 74 cents per kilometre. This is the first time the rate has changed since it was increased to 77 cents in 2012 and the first reduction in the rate in a long time. IRD stated that the reduction was mostly due to lower average fuel costs during the 2015 income year, and to some extent, more efficient vehicles.
This mileage rate can be used for reimbursing employees for the use of a private vehicle for work use from 1 April 2015. Employers can also use alternative rates, such as data published by other reputable sources such as IRD. Actual costs can also be used, provided records showing actual expenditure are kept, and a rate lower than the IRD’s rate will also be accepted as a non-taxable reimbursement.
The Health and Safety at Work Act comes into effect on 4 April 2016.
The Act outlines the health and safety responsibilities for persons in control of a business or undertaking (PCBU’s), employees, those engaging contractors, designers and suppliers of plant, substances and structures and others.
If you want to refresh yourself on the changes, go to our article on the new Act in our September 2015 update further down this page.
Much of the detail of health and safety requirements for workplaces is contained in regulations, and the regulations that will apply to most workplaces are the:
Health and Safety at Work (General Risk and Workplace Management) Regulations.
These regulations outline requirements for:
Identifying hazards and applying appropriate controls
Duties to provide information, supervision, training, and instruction.
General requirements for workplaces (Suitability, washing facilities etc)
Restrictions on employing young persons
Managing risks associated with remote or isolated work
Health monitoring requirements where workers are exposed to occupational health hazards and more
Health and Safety at Work (Worker Engagement, Participation and Representation) Regulations.
These regulations outline requirements for employee safety representatives, safety committees and training of employee safety representatives.
Other regulations apply to:
Major Hazard Facilities;
Adventure Activities;
Mining Operations and Quarrying Operations and
Petroleum Exploration and Extraction.
Many of these regulations will also come into effect on 4 April 2016.
If you have any questions about the new obligations, contact Sherry Johnston or David Wutzler.
Health and Safety at Work Act – Paid parental leave extended for parents of pre-term babies - Equal pay case developments – The difference between zero hours contracts and casual staff - CPI and labour market statistics
The new health and safety legislation for New Zealand workplaces has finally been passed! The Health and Safety at Work Act will come into effect on 4 April 2016. There are a number of key changes in the new legislation.
Who is now responsible for health and safety in the workplace?
The current law places the responsibility mostly on the employer, but the new Act identifies the “Person Conducting a Business or Undertaking” (PCBU) as having the primary responsibility. This will normally be a business or company rather than an individual, unless they are self-employed.
This means that the duty is wider than an employer being responsible for their employees, as PCBUs have responsibility for anyone affected by the business operations, even if they are not employees, e.g. contractors, volunteers, employees of other businesses, customers, visitors etc. It also means that there are responsibilities on designers, manufacturers, and suppliers of equipment, substances, and structures which could be used in a workplace to ensure that these do not put health and safety at risk.
The PCBU is required to ensure, so far as is “reasonably practicable”, the safety of “workers”, and that the health and safety of other people is not put at risk by the work being carried out. This includes: providing and maintaining a workplace that is without risk to health and safety, ensuring safe use of equipment and substances, providing facilities, providing information and training, and monitoring the health of workers. Another key point is that these responsibilities are not just linked to a physical workplace, but arise in any situation that is affected by the work carried out by the PCBU.
It will be important to know what “reasonably practicable” means, as this will be the test of whether or not you have done enough. “Reasonably practicable” is defined in the legislation, and takes into account: the likelihood of the hazard or risk, the degree of harm, what the person knows or ought reasonably to know about managing the hazard, availability of ways to manage the risk, and after taking all these things into account, the cost associated with managing the risk.
Key principle: The key principle under the new Act will be the management of risks, with the aim of eliminating risks to health and safety, so far as is reasonably practicable, or else minimising the risks.
Officers: Senior managers and decision makers for a PCBU are defined as “officers” (e.g. a director, partner, chief executive etc). Officers must exercise “due diligence” which includes taking reasonable steps to keep up-to-date with health and safety matters, gain an understanding of risks in the business, ensure appropriate resources are provided for health and safety, obtain information on health and safety risks and incidents, ensure there are processes to comply with the legislation, and verify that these things are occurring.
Duties of workers: workers must take reasonable care for their own health and safety, and the health and safety of other persons, must comply with reasonable instructions, and cooperate with any reasonable policy or procedure of the PCBU.
Notifiable incidents: as with current requirements for notification of serious harm injuries, the new Act will require notification to WorkSafe of specific situations. There will be a requirement to notify as soon as possible, and if required by WorkSafe, in writing within 48 hours, of any:
“notifiable injury and illness”, which includes anything greater than first-aid injuries for amputation, head and eye injuries, and spinal injury; hospitalisation for immediate treatment; serious infections; and also
“notifiable events”, which includes exposing a person to a serious risk to their health and safety, as a result of: spills, explosions, electric shock, fall from height, or collapse of a structure etc.
Worker engagement, participation, and representation: The PCBU must engage with workers about matters relating to work health or safety. There are requirements to have worker participation practices, and in most cases, to have health and safety representatives based on work groups. Health and safety representatives will continue to need training, and will also have a wide range of powers – including the power to direct that unsafe work must cease, and issuing a “provisional improvement notice”.
Enforcement and offences: The new Act includes a wider range of enforcement options: improvement notices, prohibition notices, non-disturbance notices, and infringement notices which can be issued by an inspector. WorkSafe can carry out remedial action if a prohibition notice is not complied with, and can issue an “enforceable undertaking” where the company identifies the actions that they will take to address an issue. In addition, the court can require an “adverse publicity order” or a “work health and safety project order” requiring publication of information on breaches of the Act, or carrying out a specific project to improve health and safety. And of course WorkSafe can take a prosecution, with the maximum fine under the new Act being up to $300,000 and five years imprisonment for an individual, and up to $3,000,000 for a body corporate - in the case of reckless conduct in respect of a health and safety duty, with lesser penalties for simply failing to comply with a duty.
There will be a number of regulations, which are to be drafted over the next few months which will provide detail on the specific requirements for workplaces that will come under the Act; these include specific regulations for high risk industries as well as regulations for all workplaces, such as for the provision of first aid.
Paid parental leave to be extended for parents of pre-term babies
The government has announced on 8 September that paid parental leave would be extended for parents of pre-term babies. From 1 April this year, paid parental leave increased from 14 to 16 weeks, and there will be a further increase on 1 April 2016 to 18 weeks. In the case of pre-term babies, parents will be entitled to additional paid parental leave for each week prior to 37 weeks that the baby is born. This change will be added to the Employment Standards Legislation Bill, which is currently before Parliament.
Equal pay case developments
Many employers will be familiar with the pay equity case taken by the Service and Food Workers Union against Terranova Homes and Care Ltd. The Court of Appeal upheld the Employment Court’s decision in October 2014 and the employer applied for leave to appeal to the Supreme Court. The case is about whether equal pay, when it comes to work predominantly carried out by women, can be determined by reference to what men would be paid for equivalent work, having regard to skills, responsibility and the like, and whether the work has been systematically undervalued as a result of gender discrimination. The Terranova case is about residential aged care and the applicant is a caregiver, but there are obviously wider implications for other occupations.
The Supreme Court declined leave to appeal, noting that the next step was for the setting of principles under the Equal Pay Act, prior to examining the specific claim taken by the employee, as had been stated by the Court of Appeal. The Supreme Court stated that it would be premature for it to look at the issue prior to, at least, the setting of principles by the Employment Court, and then any appeal on that matter being considered by the Court of Appeal.
At the end of July 2015, the Otago Daily Times ran a story stating that the government wants to settle the case out of court and quoting a Ministry of Health senior adviser stating that the government had decided to enter into negotiations over the case. The Service and Food Workers Union has a statement on its webpage that “the government wants to talk money” which states that “nothing is official yet”. If a deal is done, this won’t be the first time the Service and Food Workers Union have followed litigation with a settlement with the government – many employers will recollect the very complex deal done following the famous “sleepover case”, and there are also negotiations taking place over “travel time” – the payment of community support workers for the time spent travelling between clients in the community. These cases all share a number of factors in common – they feature occupations that have been poorly paid, they feature caring work, and they are dependent on government funding.
If a settlement is reached in this case, it will be likely to involve additional government funding to boost caregivers’ wages to a more acceptable level. It will be interesting to see how this is achieved on a practical level, as well as what level of wages is negotiated and considered by the union to be sufficient to abandon the litigation. It will also be interesting to see whether the matter rests there, given the implications for other occupations, or whether there is further litigation in other sectors.
The difference between zero hours contracts and casual staff
There has been quite a focus on “zero hours contracts” in the media over the last couple of years. Unions have mounted campaigns against them and some employers have made decisions to stop using them. There has recently been comment on whether the government is banning them altogether in the proposed Employment Standards Bill or whether the Bill will simply “make new rules for how to use them”. But do you know what zero hours contracts actually do?
A zero hours contract is a contract that requires an employee to make themselves available for work, whenever they are required, but does not guarantee any minimum number of hours of work will be offered.
This differs from a casual employment agreement. A casual agreement also does not guarantee any hours of work, but a casual employee can take or leave the work. The casual does not have to agree to an offer of casual hours, and may choose to work casually for other employers.
Why is this different? Essentially, a casual has the right to turn down work. This means the employer cannot depend on them to fill gaps or to be on the roster – the employer can offer the work, but the employee can choose to take it or leave it. This means in turn that the casual employee can commit to other things – for example, study, or work for other employers. By contrast, the zero hours contract requires the employee to be available for work, but does not provide any commitment in return. Essentially, the casual agreement is “casual” for both parties – neither have a permanent commitment – whereas a zero hours contract requires the employee to be permanently committed to and available to the employer, and may preclude the employee from working for other employers, but does not require the employer to commit to a set number of hours.
CPI and labour market statistics
CPI has remained very low – the annual change as at June 2015 was 0.3%. The next CPI figures will be for the year ended September 2015 and will be available in mid October.
The Labour Market Statistics for the June quarter show an annual “wages inflation” figure of 1.6%. The private sector rate was 1.8%, while the public sector increase was a smaller 1.2%. “Wage inflation” measures salary and wage rates, including overtime.
The annual labour cost index figures have been higher than annual CPI figures (with one exception, when the figures were identical) since December 2011. However, if you compare the average increases over five years, they are very similar – an average 1.795% CPI compared with an average 1.775% for the labour cost index. During that time period, the annual CPI figures have ranged from a low of 0.1% to a high of 5.3%, quite significant fluctuations. The LCI figures have been much more consistent – a low of 1.6% and a high of 2%.
It is interesting to see that despite debate about the relationship between CPI and wage inflation, wages do tend to increase, over time, by roughly the same amount as costs increase.
“Mondayising” of ANZAC Day – What’s happening with the reform of NZ’s health and safety legislation? - The “rude cake” case - Proposed Employment Standards Bill - Minimum wage increase reminder
“Mondayising” of ANZAC Day
ANZAC Day this month will be the first time section 45A, the amendment to the Holidays Act to allow for the transfer of ANZAC and Waitangi Day, will be used.
ANZAC Day, 25 April, falls on a Saturday this year. The holiday is either recognised on the Saturday or on the following Monday, and this can differ for different employees in the workplace. This works in the same way as the transfer of the Christmas and New Year holidays when they fall on weekend days.
If Saturday would otherwise be a working day for an employee, the holiday is recognised on the Saturday for that employee. Is Saturday would not otherwise be a working day for an employee, the holiday is recognised on the following Monday. No employee is entitled to more than one “ANZAC Day” holiday.
If Saturday would otherwise be a working day: holiday is on the Saturday
If Monday would otherwise be a working day: holiday is on the Monday
If Saturday and Monday would both otherwise be working days: holiday is on the Saturday
If neither Saturday nor Monday would otherwise be working days: holiday is on the Monday
Make sure you understand the implications for your employees. If you work on Saturdays and during the week, you may have some employees for whom the Saturday is the holiday, and others recognising it on the Monday. If you’re considering working one day and not the other, make sure you work out what will work best for you and what costs will be incurred if you have employees working on either the 25th or the 27th. If you would like to discuss the implications further or want to make sure your understanding is correct, please contact Angela.
What’s happening with the reform of New Zealand’s health and safety legislation?
The Health and Safety Reform Bill is still being considered by Parliament’s Transport and Industrial Relations Select Committee. The Committee is due to report back on the Bill at the end of May. The reported back Bill will give an indication of whether any changes are recommended from the version of the Bill which was published for consultation in 2014.
The draft Bill attracted a number of submissions from employers, unions and other interested parties which are being considered by the committee.
The Health and Safety Reform Bill is likely to replace the Health and Safety in Employment Act in 2016, and will set the framework for the duties and responsibilities for health and safety in the workplace.
WorkSafe has recently released drafts of some of the regulations that will operate under the new safety legislation. These regulations contain the detail of what workplaces will need to do in relation to providing facilities, first aid, monitoring health hazards and provision of protective equipment. These are similar to some of the provisions of the current Health and Safety in Employment Regulations, but also contain some of the requirements that are in the current Health and Safety in Employment Act, such as requirements for emergency procedures.
Draft regulations have also been published for work involving asbestos and major hazard facilities.
Government is seeking feedback on the draft regulations by 15 May 2015. Further details are available on the WorkSafe website.
If you would like to discuss the reforms further, please contact David or Sherry.
The “rude cake” case – Hammond v Credit Union Baywide
You may well have read about the Human Rights Review Tribunal case of Hammond v Credit Union Baywide, as the case has had quite a bit of publicity. There are some interesting issues for employers regarding the Privacy Act.
The employee in question, who had resigned from her employment a week earlier, made a cake at a dinner party for a co-worker who had also resigned, following mediation with Baywide. The cake was iced with a reference to the employer and what we will describe as the “f word” and the “c word” so as to not offend anyone’s server settings. A picture of the cake was uploaded to Ms Hammond’s Facebook page. Her privacy settings meant that the picture could only be viewed by her Facebook friends.
The employer heard about the photo of the cake and attempted to view it on Facebook, but could not do so due to the privacy settings. The HR manager approached the one employee who was still a Facebook friend of Ms Hammond, a 21 year old who had been employed at Credit Union Baywide for four months. The Tribunal held the HR manager bullied the employee into logging in to her Facebook account to show the HR manager the photo, which the HR manager took a screenshot of.
The HR manager then telephoned at least four recruitment agencies to warn them against employing Ms Hammond and sent them a copy of the screenshot of the cake. The HR manager said in her evidence that she was instructed to do this by the Chief Operating Officer.
The CEO then sent out an email to all staff describing the cake and discussing the circumstances in which Ms Hammond had resigned.
The employer then got in touch with Ms Hammond’s new employer, who was seriously ill at the time, and advised that they would not deal with Ms Hammond, effectively threatening the new employer’s business. Ms Hammond subsequently resigned as she stated that the ongoing pressure on her new employer made her position untenable, as she could not do the work she had been employed to do.
Ms Hammond was unemployed for 10 months and subsequently obtained a more junior position. She stated that she only applied for positions where employers were advertising direct due to Baywide having contacted the recruitment agencies.
The Tribunal accepted the evidence of Ms Hammond and her witnesses over that of the Baywide witnesses. The Tribunal found that the evidence of the Baywide witnesses was conflicting and unrealistically downplayed and minimised the consequences of their actions, which were “shameful”. The Tribunal found that the HR manager subjected the young employee asked to provide Facebook access to unfair pressure, if not bullied her, and was never given the option to say no. The Tribunal concluded that Ms Hammond’s new employer was placed under enormous pressure to terminate Ms Hammond’s employment by Baywide, who made her position there untenable.
Ms Hammond contended that Baywide breached privacy principles 1 to 4 and 11 of the Privacy Act. Baywide accepted that it had breached principle 11, but claimed there was no interference with Ms Hammond’s privacy.
Principle 1 requires that personal information only be collected for a lawful purpose where it is necessary.
Principle 2 requires personal information to be collected from the individual concerned unless one of a number of exceptions applies.
Principle 3 requires that where information is collected from the individual, the individual is advised of the collection, purpose, intended recipients, and so forth, again unless one of a number of exceptions applies.
Principle 4 requires that information not be collected by unlawful, unfair or unreasonably intrusive means.
Principle 11 requires that personal information is not to be disclosed other than in certain circumstances.
The Privacy Act provides that an action is an interference with the privacy of an individual if it breaches a privacy principle and has caused or may cause loss, detriment, damage or injury to that individual, or has affected or may affect the individual’s rights, benefits, privileges, obligations or interests, or has resulted in or may result in humiliation, loss of dignity or injury to feelings. Or in other words, both a breach of a privacy principle, and evidence of harm or potential harm, must exist. The Tribunal held that the claim regarding principles 1 to 4 was not made out as Ms Hammond had not established a causal connection between the alleged breaches of these principles and forms of harm.
With regard to the claim regarding principle 11, Baywide conceded it breached this principle in contacting the recruitment agencies, emailing the picture of the cake and emailing the staff about Ms Hammond’s departure. Baywide claimed it was not a breach to provide the cake screenshot to the new employer as he had already seen the cake. However, the Tribunal found that it was the disclosure itself which mattered, not whether the person receiving the information was already aware of it.
In considering the issue of harm caused by the disclosure, the Tribunal found that the disclosures to the recruitment agencies were made expressly so that Ms Hammond would not find further employment, that the disclosure to her new employer was made with the intention of having her new employment terminated, and the email to other staff was to portray Ms Hammond in a poor light. The consequences of these actions were that Ms Hammond felt she had no option but to resign from her new employment and suffered a period of unemployment, finally obtaining a position in a different field beneath her skills and experience.
The Tribunal accepted that her close relationships were affected, there were significant impacts on her family, financial and otherwise, and she was humiliated. The Tribunal concluded that there was both a breach of principle 11 and evidence of loss, detriment, damage or injury; her rights, benefits, privileges, obligations or interests were adversely affected, and she suffered humiliation, loss of dignity and injury to feelings.
The Tribunal therefore concluded that Baywide interfered with Ms Hammond’s privacy and awarded her lost earnings, legal expenses, the difference between her former salary and new position, and damages for humiliation, loss of dignity and injury to feelings of $98,000, a total of just over $168,000. The Tribunal noted that the previous highest award for a principle 11 breach was $40,000, but stated that Ms Hammond’s case was arguably the most serious to come before the Tribunal. Orders were also made to restrain Baywide from any further breaches, requiring it to send retractions to the recruitment agencies and to the staff, and requiring it to provide training in the Privacy Act obligations to management staff.
Proposed Employment Standards Bill
The Government has announced that it proposes to introduce an “Employment Standards Bill” later this year. The Ministry of Business Innovation and Employment has summarised the changes as including:
Tougher sanctions for employers who breach minimum standards – higher penalties (up to $100,000 for serious breaches by companies), publicly naming employers who breach minimum standards, banning individuals who persistently or seriously breach employment standards from being employers, and persons other than the employer (directors, senior managers, advisers) can be held accountable for knowingly being involved in an employer breaking the law
Changes to record keeping requirements (consistency across employment legislation for wage, time, holidays and leave records; employers will be required to be able to produce a record of the number of hours an employee has worked on each day in a pay period, infringement notices where employers do not comply with record keeping requirements)
Increased tools for Labour Inspectors (information sharing with other regulators such as IRD, Immigration NZ and the Companies Office, ability to request records such as bank statements)
Changes to the Employment Relations Authority approach (cases about breaches of employment standards won’t automatically be directed to mediation in the first instance, and penalties will apply for minimum entitlement breaches of the Holidays Act and Minimum Wage Act)
The Bill has not yet been introduced, so the exact changes proposed to legislation are not yet available.
Many of these changes are understandable attempts to close loopholes being relied on by a small minority of employers who persistently don’t meet the minimum requirements. For instance, there have recently been two cases against the same restaurant chain within a week or two for breaches of wages and holidays legislation. Some of the changes should prove interesting in practice, such as banning individuals from being employers. The proposed changes are also interesting in the light of the Hammond case summarised above.
The adult minimum wage increased to $14.75 on 1 April 2015. The new rate applies for any work done on and after 1 April.
The starting out and training minimum wages also increased to $11.80.
Employment Relations Act changes on 6 March 2015; are you prepared? – Minimum wage increase – CPI figures
Employment Relations Act changes on 6 March 2015; are you prepared?
The Employment Relations Amendment Act takes effect very shortly on 6 March 2015, so this is a good time to check that you are prepared for the changes. Take a minute to look through our quick list to see if there is anything you need to do.
If you currently have one or more collective agreements, you will need to change your processes and paperwork for new employees who come within the coverage of your collective agreement. New employees will be covered by the collective agreement if a union member, but if not, you will need to offer an individual employment agreement. This means that in most cases, you will need to send both the collective and a draft individual agreement, plus information about the union and the collective agreement, so your letter of offer will need to change. Let us know if you would like us to assist with rewording or checking your new version.
If you are currently in collective bargaining, make sure you understand the new rules for new employees, and be careful with clauses about new employees going into collective agreements. You will also want to make sure you understand the new notice provisions for industrial action if there is any question of strikes or lockouts from 6 March 2015.
If you receive initiation for a multi employer collective agreement, you will be able to opt out if you receive this from 6 March - but you will need to do so very promptly and in accordance with the requirements. Seek advice if you are at all unsure.
If you are contracting out or in, selling or buying a business, make sure you understand the increasingly complex requirements and how they will affect you, whether you are the “old employer” or the “new employer”. If you employ less than 20 staff, you will qualify for exemption from the obligation to take on “vulnerable employees” – you will need to provide a warranty confirming this.
If the current meal and tea break requirements are causing problems, you may be able to change these in certain circumstances from 6 March. Remember that changes should be done by agreement with the employee, and if there are provisions in the employment agreement, these will need to be negotiated. Seek advice before you implement any unilateral change – you can only change the status quo in certain limited circumstances and you must be reasonable.
If you have part time employees with short working days you may be approached by some part time employees who would prefer to have their paid breaks tacked on to the end of their working day. This could be agreed once the changes take effect, but make sure the agreement is in writing and that any employment agreement provisions are updated.
Please don’t hesitate to contact us if you would like to discuss the implications of the changes in further detail.
An increase to the minimum wage has been announced today (25 February 2015). The adult minimum wage will increase 50 cents per hour, from $14.25 to $14.75.
The starting out and training minimum wages will also increase, by 40 cents per hour, from $11.40 to $11.80.
The increases take effect from 1 April 2015.
The latest CPI figures show that the increase in cost of living through the consumers’ price index for the year ended December 2014 was 0.8%. The CPI actually fell for the December quarter.
The next CPI figures will be available in mid April 2015 (for the year ended March 2015).
Court of Appeal decision on the Equal Pay Act case appealed - Employment Relations Act changes take effect on 6 March 2015 – Confidentiality at mediation; Henry v The Warehouse – Merry Christmas!
Court of Appeal decision on the Equal Pay Act case appealed
Many employers will be familiar with the pay equity case taken by the Service and Food Workers Union against Terranova Homes and Care Ltd and the fact that the employer sought leave to appeal the decision - see our September 2013 News for a summary of the Employment Court case. The Court had held that the Equal Pay Act, in assessing whether caregivers were being paid a lower rate of pay than would be the case if the sector was not so female dominated, requires comparison with a “hypothetical male” and that the assessment may need to be done by looking at jobs with a similar value.
The Court of Appeal issued its decision on 28 October. The Court of Appeal upheld the Employment Court’s decision, but in doing so, noted that it had been a difficult case to decide with strong arguments favouring both sides of the debate.
In late November, the New Zealand Aged Care Association announced that the decision would be appealed to the Supreme Court, stating that the fact that the Court of Appeal had said the decision was finely balanced, and the implications for many rest homes who would need to close if wages were significantly adjusted upwards without any increase in government funding, left no option but to appeal.
Now that the matter is to be heard by the Supreme Court, it is likely to be months before the decision is issued. If the Supreme Court agrees with the Employment Court and the Court of Appeal, the Employment Court will then have to decide how it will assess what rate caregivers should be paid. Watch this space.
Employment Relations Act changes take effect on 6 March 2015
We provided a detailed update of the Amendment Act last month (see November’s News on our website if you would like to revisit the changes and what you need to do to get your organisation ready). Royal assent has been given and the changes commence on 6 March 2015.
Confidentiality at mediation – Henry v The Warehouse
As employers who have resolved a personal grievance claim at mediation will know, it is a common practice to put a confidentiality provision into the record of settlement. Employers often express some cynicism about the effectiveness of such provisions, and indeed it is not unknown for employees to comment about mediation settlements, notwithstanding confidentiality provisions. If an employee lets the cat out of the bag, can the employer do anything?
This was the subject of a 2011 case, Henry v The Warehouse. While not a new case, it’s worth mentioning. The employee and employer had agreed on a settlement at mediation which included a sum of compensation and a confidentiality provision. Two days later, an employee at the store Ms Henry had worked at told her supervisor that Ms Henry had been in and had told her that she had “won her case”. Accordingly, the employer sought an explanation and was told by Ms Henry’s lawyer that she refuted these allegations. The employer advised that they would treat the mediated settlement as having been refuted by Ms Henry and the compensation payable would therefore be held in trust. The employee sought the compensation in the mediated settlement, while the employer counterclaimed for a penalty for the breach.
The employee disputed that she had made the statement about winning her case, but the Authority accepted on the evidence that she must have done so. Accordingly, the Authority concluded that the employee had breached the terms of her settlement and had accordingly deprived herself of the benefit of it. The Authority accordingly held that the employee should forgo the compensation but should not be further penalised, effectively meaning the employee was penalised $2,500 (the amount of the compensation).
This is an interesting case because the breach of confidentiality took place before the payment had been made, which meant that the employer was able to withhold paying it. This is not, of course, always the case, but if an employer finds out that there has been a breach after a payment has been made, there is still the ability to seek a penalty from the employee.
The other interesting thing about this case is the fact that the confidentiality was held to be breached. The employee did not specify the amount of compensation she had received, merely that she had “won her case”. This was held to be enough to constitute a breach of the confidentiality provision. This means that discussion of the fact that compensation has been paid, or implications of having “won” a case, could breach a requirement for confidentiality even though the specifics of the record of settlement are not disclosed.
We hope you have a great Christmas and a lovely break – hopefully with some better weather than we have been having – and we look forward to working with you next year.
Employment Relations Amendment Bill passed – What do you need to do as a result of the changes?
Employment Relations Amendment Bill passed
The Employment Relations Amendment Bill 2013 was finally passed on 30 October 2014. The changes don’t take effect until four months after the date of Royal assent, which usually happens within about a week of the legislation being passed. This means we can expect to see the changes take effect approximately mid March 2015.
While the tea breaks changes got a lot of media attention and a petition, we don’t think this is necessarily the most significant area of change. The following is a summary of the changes.
Providing information to an employee whose employment may be affected:
The requirements to provide information to an employee whose employment may be discontinued have been amended. Employers will recall the Massey case, which requires employers selecting employees for redundancy to provide information to those selected for redundancy, about other employees in the selection pool such as assessment scores. The original wording in the Bill, which was intended to overturn the Massey decision, was watered down through the Select Committee process, and the provision now only allows information about another employee to be withheld if this would involve the unwarranted disclosure of the affairs of the other employee. Given that the Authority and Court could have a different view from the employer as to whether the disclosure was unwarranted or not, we are likely to see cases testing the meaning of the new wording.
The “head start” which unions currently have of being able to initiate collective bargaining 20 days before the employer can do so is removed, meaning that either the employer or the union can initiate bargaining 60 days before the old collective agreement expires. However, employers still cannot initiate bargaining if they haven’t previously been a party to a collective agreement.
Employers will be able to opt out of multi employer bargaining, as long as they do so within 10 days of receiving the bargaining initiation. This involves giving a notice to all of the other parties in the initiation notice (which could be quite an undertaking in the case of a bargaining initiation involving hundreds of employers).
The obligation to conclude collective bargaining, unless there is a genuine reason not to, has been removed, as has the obligation to continue to bargain about other issues when a deadlock has been reached on a particular aspect of the bargaining. There is a new section providing that the parties are not obliged to agree on clauses to be included in a collective agreement or to agree a collective agreement, but the employer cannot refuse to enter into a collective agreement because they are opposed in principle to collective bargaining or collective agreements.
The Employment Relations Authority will be able to determine, following an application from one of the parties to collective bargaining, that the bargaining has concluded, except where the party seeking the declaration has acted in bad faith. The Authority will generally direct the parties to undertake the facilitation process in the first instance.
The “30 day rule” which requires new employees to be employed on the terms and conditions of the collective agreement if it covers the work they are doing is removed. This means that new employees will go onto the collective agreement if they are union members, but if they are not union members, they will need to be offered an individual agreement. The requirement to tell the new employee that the collective agreement exists and that the employee can join the union and therefore be bound by the collective agreement, and to provide details on how to contact the union, still remains, however. The employer will still have to give the employee a copy of the collective agreement.
Employees will no longer need to have care of a person, or to have been employed for six months, to ask for flexible working arrangements. Employers will need to respond to requests for flexible working arrangements quicker – within one month, rather than within three months. There will no longer be a limit of one request per 12 months.
Restructuring due to contracting out, sale of business etc
There are a number of changes to these provisions. Employers with 19 or less employees, who provide a warranty confirming this, will be exempt from the provisions. This will mean that such an employer will not be required to take on those of the employees from the old employer that elect to transfer in a restructuring situation – which will probably give such employers something of an advantage in tendering where the reason for the change is dissatisfaction with the service being provided by the employees.
Employers will need to ensure that where their employees will be affected by a restructure, they are advised as soon as practicable, and at least 15 days prior to the restructuring taking effect, about their right to make an election to transfer to the new employer, and that they need to do so within five days. The employer will then need to send the election to the new employer within five days. If the potential new employer is exempt, the employee needs to be advised about that.
There are new provisions apportioning responsibility for service related entitlements of an employee who transfers to a new employer (such as annual leave accrued), to close a loophole in the Act. The provisions allow for the old and new employers to agree on this, but if agreement is not reached, the old employer is responsible for any entitlements, such as annual leave, that would have been payable on termination if the employee had resigned, while the new employer is responsible for any entitlements which are not paid out on resignation, such as sick leave accrued. The old employer must pay the new employer for this and if they do not do so, the new employer can recover it as a debt from the old employer. If the parties are in dispute about the issue, they can go to mediation or to the Employment Relations Authority.
The old employer will be considered to have given an implied warranty that the work, the employees and their terms and conditions have not been changed (for example, to saddle the new employer with higher labour costs or with employees who are not experienced).
There is also provision for employee transfer costs information (such as hourly rates, hours and entitlements) and employee personnel records (including disciplinary and personal grievance records, the employment agreement and wages and holiday records) to be provided to incoming employers and potential tenderers. An exempt employer cannot request this information.
Meal and tea breaks
Instead of prescriptive requirements as to when meal and tea breaks are to be taken and how long they will be, there will now be a requirement to provide breaks (including paid tea breaks) that allow a reasonable opportunity for rest, relaxation and attention to personal matters, appropriate for the duration of the employee’s work period. The breaks may be subject to reasonable and necessary restrictions having regard to the nature of the work, or agreed between the employer and employee, such as continuing to be aware of or performing some duties, circumstances where the break may be interrupted, or needing to take the break in a specific place in the workplace. The timing and duration will be as agreed between the employer and employee, or if not agreed (there must be reasonable opportunity to negotiate this), at reasonable times and for a reasonable duration as specified by the employer.
Alternatively, reasonable “compensatory measures” can be provided instead of breaks where the employer and employee agree to this, or where the employer cannot reasonably provide breaks due to the nature of the work. Compensatory measures can include the equivalent period of time off work by starting later, finishing earlier, or accruing time off.
Unions will now need to give written notice of any strike, with the notice setting out how much notice is being given, what action will be taken, where and when the strike will occur and when it will end. The time periods and notice provisions for essential services, passenger transport services and schools will still apply, but will now also require the end of the strike to be notified. Employers will also have to give notice of the same matters in the case of a lockout. A strike or lockout notice can be withdrawn at any time.
Employers will be able to make deductions from pay in the case of partial strikes, except in the case of strikes on the ground of health and safety; or in the case of payment by piecework, or where the employees are refusing to work overtime or do callouts (as their remuneration would already be affected in these situations). Notice has to be given that the employer will be making deductions before deductions can be made. The employer can either calculate the amount of time that would be lost or make a flat 10% deduction. There are provisions for the union to seek information and to challenge incorrect pay deductions.
You can see our previous summaries of the original Bill and the changes at Select Committee here:
http://www.employersassociates.co.nz/News.html
If you’d like to read the Bill itself prior to the release of the Amendment Act in its final form, you can see it at:
http://www.legislation.govt.nz/bill/government/2013/0105/latest/whole.html#DLM5160206
What do you need to do as a result of the changes?
If the current meal and tea break requirements are causing the organisation problems:
You may be able to change these in certain circumstances. Remember that changes should be done by agreement with the employee, and if there are provisions in the employment agreement, these will need to be negotiated.
If you want to make changes but your employees don’t agree, seek advice before you implement any change – you can only change the status quo in certain limited circumstances and you must be reasonable.
Some employers may be approached by part time employees who would prefer to have their paid breaks tacked on to the end of their working day. This could be agreed once the changes take effect, but make sure the agreement is in writing and that any employment agreement provisions are updated.
Review template employment agreements with regard to current meal and tea break provisions.
If you have a collective agreement:
You will need to change your processes and paperwork for new employees, and you will need to offer an individual employment agreement, unless the new employee is a union member. Make sure you understand what you need to do before the changes take effect.
If you are in collective bargaining:
Some unions are putting up claims to attempt to counter some of the new provisions, for example clauses to provide that new employees will still be employed on the collective agreement for their first 30 days. It is our view that such a clause would be unlawful once the new provisions come into force. Carefully consider claims for new clauses, particularly those which tie in with the changes, and seek advice if necessary to make sure you understand the implications.
Be conscious that the impending changes may result in changes to the way unions manage industrial action.
If industrial action is threatened after the new provisions take effect, ensure that notice is given by the union prior to action being taken, and that the notice complies with the requirements.
If you are considering a deduction from pay in the case of partial strike action, ensure that you follow the requirements carefully – seek advice if you are not sure.
If you receive initiation for a multi employer collective agreement:
Note that you can choose to opt out, once the new provisions come into force – but you will need to do so very promptly and in accordance with the requirements. Seek advice if you are at all unsure.
If you are contracting out or in, selling or buying a business:
You will need to understand the increasingly complex requirements and how they will affect you, whether you are the “old employer” or the “new employer”.
If you are considering contracting out or in or selling or buying, you should consider the implications first before making any decisions.
If you employ less than 20 staff, you will qualify for exemption from the obligation to take on “vulnerable employees” – you will need to provide a warranty confirming this.
Employment Relations Amendment Bill unlikely to pass prior to election – Unsuccessful applicant allowed to see other applicants’ CVs – Another sleepover case - Employee producing an apparently dubious medical certificate in support of absence at a time that leave had been declined
Employment Relations Amendment Bill unlikely to pass prior to election
With the departure of John Banks, the government apparently no longer has the numbers to pass the Employment Relations Amendment Bill, meaning that there will now be no changes to the employment legislation prior to the election in September.
Unsuccessful applicant allowed to see other applicants’ CVs
In Waters v Alpine Energy Ltd, Mr Waters made unsuccessful applications for two jobs with Alpine Energy Ltd. He was a previous employee who had resigned four years previously. At the time he applied for the positions he was 62 years old, and he concluded he had been discriminated against due to his age. Mr Waters took his case to the Human Rights Review Tribunal, and in preparation for his case, applied for disclosure of information about other applicants for the positions in question. The company argued that the information sought contained confidential personal information.
The Tribunal noted that there was a public interest component in discriminatory conduct being hidden behind of a cloak of “confidentiality”. The Tribunal held that a claim of confidentiality could not be allowed to shield allegedly discriminatory acts from investigation. The Tribunal noted that the discovery process precludes documents being used or made available for any purposes other than the proceedings. The Tribunal held that all of the job applications, both successful and unsuccessful, were to be disclosed, including names, with the exception of contact information. The Tribunal also required that similar information held by a recruitment agency which was contracted to recruit for one of the positions for the company must be disclosed. Mr Waters was required to give a written undertaking to the Tribunal that he would respect the confidentiality of the documents and not disclose them.
Employers have expressed concern about this case, following as it does the Massey case regarding disclosure of information such as scoring of candidates to employees made redundant following a selection process.
This case has received media attention and it is therefore likely that other unsuccessful applicants contending that they have been discriminated against may seek to obtain information about other applicants. It should be noted that the case was decided on, and therefore only applies to, claims of unlawful discrimination. There are some practical steps employers can take to avoid such claims being made. The first and most obvious is, of course, not to discriminate unlawfully when making employment decisions. Secondly, an employer who has a good, well documented, rigorous selection process is likely to be able to defend such a claim – and to provide appropriate information which does not breach confidentiality at an early stage to assure an unsuccessful applicant that they have not been discriminated against.
If you would like to discuss the implications of the case further or would like assistance with a recruitment process, please contact Angela Walker.
Another sleepover case
In the case of Law and others v Board of Trustees at Woodford House and others, boarding housemistresses who were sleeping over at hostels at boarding schools claimed that they were working during the times the boarders were sleeping. They were provided with accommodation and could sleep, but were required to be responsible for the boarders. They were salaried and provided with meals, power, telephone and internet at no cost. They were restricted during sleepovers and could not have visitors, smoke or make noise that would disturb the boarders, and had to remain sober and available at all times to respond immediately to any emergency. There was some factual dispute about the degree to which the housemistresses could sleep uninterrupted during the night but the Court accepted the staff’s evidence of being frequently interrupted, both in terms of responding to incidents and for proactive safety reasons such as security checks. The Court found that the staff needed to be constantly available to deal with unpredictable events and held that they were not simply paid to sleep and be turned to only occasionally.
The Court stated that the proactive preventative routine activities meant that while the staff could sleep lightly for parts of the sleepovers, they must be considered in law to be working during the sleepovers. The Court noted that the statutory requirements (the Education (Hostel) Regulations 2005) require, in practice, at least the immediate availability of hostel staff when boarders are present. The schools argued that the employees were effectively “at home” because they were entitled to, and some did, use their boarding house rooms as residences. The Court found that this did not mean the employees were not working.
The Court applied the same considerations applied in the Idea Services case, holding that the sleepovers placed significant constraints on the employee’s freedoms, that they had significant and extensive responsibilities, and that the role was essential to the continuation of the boarding schools. The Court found that the degree and significance of these considerations was at least as great as in the Idea Services case. The Court concluded that the employees were working while undertaking sleepovers and were therefore entitled to the minimum wage during those times.
The Court then looked at whether the employees, who were salaried, should have their earnings averaged over their hours, including the sleepovers. The Court held that this was not appropriate, finding that the schools were adamant that the hours spent on sleepovers were not time spent working, and that the employment agreements made it clear that the sleepover hours were not included in the “ordinary hours”, and therefore payment for them could not be included in the salary.
Employee producing an apparently dubious medical certificate in support of absence at a time that leave had been declined
A recent case, Narayan v Telecom NZ found the dismissal of a help desk employee, who had not returned from annual leave as scheduled and whose medical certificate appeared to be suspicious, to be unjustified.
The employee had applied for annual leave until 3 January for a trip to Fiji but had only been granted leave until 27 December. He did not return to work until 3 January, emailing Telecom on 27 December to state that he was unwell and could not return to work. He had been in Fiji and said he had visited a doctor on 24 December but did not know who the doctor was, as he had asked a taxi driver to take him to the nearest doctor. He emailed again on 29 December to say that he was still sick and would be seeking a second medical opinion. He produced a medical certificate from the Accident and Emergency ward of a hospital in Suva after his return to work. The certificate was partly printed and partly handwritten and had no letterhead. This appeared a little odd to his employer, who was already conscious that Mr Narayan had returned on the day he had originally sought, but been declined, leave until. The employer carried out enquiries of hospitals in Fiji as to whether non letterhead medical certificates were usual and had mixed responses. The employee was subsequently asked for the details of the doctor he had seen and the employer then made contact with the hospital and forwarded the medical certificate to it. The hospital responded that the number on the medical certificate indicated a different patient and that it had been issued by another doctor some years previously, and therefore the certificate appeared to be fake.
The employer went through a disciplinary process. Prior to deciding to dismiss Mr Narayan, the hospital advised Telecom that the doctor in question had confirmed he had seen the employee and issued the certificate. The employee also managed to obtain written confirmation from the hospital that the medical certificate had been issued by the doctor as he had stated. This was received on the day Mr Narayan was dismissed and Telecom did not have access to it at the time of deciding to dismiss.
Telecom concluded that it did not believe Mr Narayan. It concluded that he should be dismissed.
The employee claimed that the dismissal was unjustified and that the employer’s approach to the medical certificate was discrimination on the basis of his ethnic and national origin.
Mr Narayan took his case to the Employment Relations Authority, who found his dismissal to be justified. He appealed to the Employment Court.
The Court was critical of Telecom’s approaching hospitals “behind his back” and noted that the employer should have simply asked him for the name of the hospital and the doctor. The Court noted that the employer had had the information that the doctor had confirmed seeing Mr Narayan and the information provided should have alerted Telecom to the fact that he may have been telling the truth about how he had obtained the certificate. The Court found that at that point, continuing with the investigation was problematic. The Court acknowledged that it was understandable that the employer had had initial suspicions but the employer subsequently ignored a fact that substantially undermined its conclusion. The Court therefore held that the dismissal was unjustifiable. The Court held there was insufficient evidence of discrimination occurring, and other claims made by Mr Narayan were also dismissed. The Court awarded four weeks lost wages and $7,000 compensation, which were reduced by 10% in the light of the employee’s contributory conduct.
Interestingly, the decision is sceptical about the evidence about the GP the employee claimed to have visited initially, and in areas where the employer witnesses and the employee differed in their evidence, the Court generally accepted the employer’s version of events.
Other employers would be likely to sympathise with Telecom’s situation. The employee, having been declined some of his leave, took it anyway, and produced what appeared to be a quite dodgy medical certificate to justify his failure to return on time. It appears that there are a couple of things that, with the benefit of hindsight, the employer might have done differently. Firstly, the employer could have asked the employee for information about where the certificate had come from rather than contacting various hospitals. Secondly, once the employer had been advised that the doctor concerned had confirmed issuing the medical certificate, the case for the medical certificate being faked effectively crumbled. At this point, Telecom could have done some further checking into the hospital and the doctor, or it could have accepted that its suspicion about the medical certificate being faked was groundless. It could potentially have taken further the issue of whether the employee was in fact well enough to travel home, or concluded that the employee had not intended to return home given that it appeared that flights home had not been booked ahead of time. However, it was difficult to conclude that the certificate was fake when the doctor had confirmed seeing Mr Narayan and issuing the certificate.
Can an employer reopen a disciplinary investigation where an outcome has been decided? - Worksafe New Zealand Guidelines for managing bullying - CPI - Minimum wage increase - Changes Coming to NZ’s Health and Safety Legislation - Star Safety Rating System.
B v Virgin Australia (NZ) Employment and Crewing Ltd – Can an employer reopen a disciplinary investigation where an outcome has been decided?
A number of our clients have recently had situations where an employment matter had been investigated and an outcome decided, only for additional information to come to light which changed the views of the employer. Can an employer who has already reached a conclusion about outcomes change their mind?
The recent case of B v Virgin Australia (NZ) Employment and Crewing Ltd (previously Pacific Blue) illustrates just this scenario. B was a pilot who was investigated when a crew member stated that she had been hospitalised following a gathering at B’s house, where she and other crew members were each given a pill by B, which each took. The crew member’s parents had involved the police, who were investigating the matter (ultimately B was not charged). The pilot stated that the pill was a vitamin pill. Other crew members who had been at the pilot’s house on the night in question and had also taken a pill had not suffered ill effects. There were also issues about the amount of alcohol that had been consumed. The employee gave undertakings to change his behaviour, including abstaining from alcohol, and the employer concluded that a final warning was an appropriate outcome, an outcome which the pilot accepted.
Subsequently, however, the employer was able to obtain a toxicology report which stated that the crew member appeared to have ingested BZP. The pilot refused to provide the police file to the employer. The employer reopened the investigation and ultimately took the decision to dismiss the pilot. The pilot claimed that the dismissal was unfair as the employer had reopened an investigation which had been concluded and closed. The doctrine of res judicata was argued (which means that litigation cannot be reopened save through the appeal process – often described as “you can’t be tried twice for the same crime”). The Court noted that res judicata was not relevant; a disciplinary investigation is not a form of adjudication. Whether an employer can re-open such an investigation depends on whether it is fair to do so. In this case, additional information had come to light which justified future enquiry.
The Court also stated that the pilot had failed to meet his obligations to the employer when he declined to provide the police report, stating that good faith obligations to be responsive and communicative are mandatory. The decision states that it would have been preferable for the employer to have told B that failing to provide the police report could lead to his dismissal, but the employer was still entitled to conclude its investigation on the basis of the information it had. Although the process was not text-book perfect, it was a fair process overall.
The dismissal was held to be justified.
It is always difficult if fresh information comes to light after a conclusion has been reached about an outcome. However, if the fresh information warrants reopening the matter, employers are entitled to do so. Employees are often understandably unhappy about issues being reopened that they thought to have been concluded, so such decisions should be considered very carefully. If you would like further advice on how to handle such a situation, please contact Angela Walker.
Worksafe New Zealand – Guidelines for managing bullying
You may have heard that Worksafe New Zealand has released best practice guidelines for managing workplace bullying. You can access the guidelines by following this link to Worksafe New Zealand’s website:
http://www.business.govt.nz/worksafe/information-guidance/all-guidance-items/bullying-guidelines
The guidelines set out a definition of bullying and give examples of bullying behaviour (and some good examples of what is not bullying). There are useful sections of advice for employees dealing with bullying, including low key solutions, for employees accused of bullying, for employers looking to prevent bullying occurring, and for employers dealing with complaints of bullying.
The definition of bullying used is the Safe Work Australia definition. If you have a policy on bullying, we recommend comparing your definition with the one set out in the guidelines. While the definition used in the guidelines is not mandatory and does not form law, and has not yet been referred to by the Employment Relations Authority or the Employment Court, the fact that the guidelines are issued by a government agency and adopted by MBIE means that the definition is likely to become something of a benchmark. If your definition is quite different, it might be a good time to review your policy.
The definition focuses on behaviour which is repeated and unreasonable, and creates a risk to health and safety. It should be noted that there is no requirement that the person perpetuating the behaviour intended to or appreciated that it could cause harm.
If you would like assistance with reviewing or putting together a bullying policy, or would like some advice on managing a bullying situation, please don’t hesitate to contact us. Angela regularly carries out investigations into bullying or harassment complaints where an external investigator is appropriate.
The latest CPI figures have just been released. The increase in cost of living through the consumers’ price index for the year ended March 2014 was 1.5%.
The minimum wage increased from 1 April 2014. The current adult minimum wage is now $14.25 per hour, and applies to those aged 16 and over, except for those .
The “starting out” and “training” minimum wage is now $11.40 per hour.
The “starting out wage” is the minimum wage payable for employees who are:
16 or 17 years old, and have not yet completed six months continuous employment with their current employer (including time the employee was aged less than 16)
18 or 19 years old, and have not yet completed six months continuous employment with any employer since being on a specified social security benefit
16-19 years old, and required by their employment agreement to undertake industry training for at least 40 credits per year to become qualified
The “training” minimum wage is the minimum rate payable for employees who are aged 20 or over required by their employment agreement to undertake industry training for at least 60 credits per year to become qualified.
For further information or any assistance you may need for employment related matters contact:
Changes Coming for NZ’s Health and Safety Legislation
The Health and Safety Reform Bill was introduced into Parliament last month and is intended to replace the Health and Safety in Employment Act. The Bill contains some significant changes to the current legislation:
Overall responsibility moves from the employer to the Person Conducting a Business or Undertaking (PCBU)
The term employee is replaced with “worker” which includes contractors, volunteers etc
The Bill changes the reporting requirements from current “serious harm” to a new range of “notifiable injury and illness” and “notifiable incident”, which include events that haven’t actually caused injury
There are much stronger expectations and obligations for employee participation in health and safety
Specific duties for directors and others with governance responsibilities for undertakings
There are significant increases in fines and penalties (up to $3 million)
The Schedules to the Bill propose some changes for workplace incentive schemes such as the ACC WSMP Programme, a requirement for a National Workplace Health and Safety Strategy and transfer of responsibility for Hazardous Substances to WorkSafe
Industry-specific requirements are expected to be contained in Regulations that will be developed following the passing of the Bill
These changes will have significant impact on all businesses. Further information on the Bill is available on the Worksafe website.
Submissions on the Bill close on 9 May 2014.
Star Safety Rating System
he 2013 cabinet paper “Improving Health and Safety at Work: Joint Approach to Injury Prevention and Incentive Programmes between ACC And Worksafe New Zealand” outlines some of the Government thinking regarding the future of incentive programmes and safety rating systems for measuring individual business health and safety performance.
The cabinet paper referred to above indicates a desire to develop a Star Safety Rating System” (SSRS): “…to encourage a proactive focus on injury prevention, compliance with health and safety legislation, and more effective workplace health and safety practices.” It would do this by:
Creating a credible standard to allow stakeholders to compare businesses’ health and safety practices and outcomes.
Giving government agencies a pathway into working with businesses to improve safety practices and performance”
Work on the development of the SSRS is expected to start in mid-2014. For further information or any assistance you may need for health and safety and ACC matters contact:
Sherry Johnston or David Wutzler
Changes to the Employment Relations Amendment Bill
The Select Committee today released its report on the Employment Relations Amendment Bill, following the hearing of submissions. There are a number of changes to the proposed Bill. We summarise the most significant changes.
Providing information to an employee whose continuing employment may be affected
The infamous Massey case held that employers must provide relevant information to employees whose continuing employment might be affected by a decision being made by their employer. In this case, the employees concerned, who were selected for redundancy, were found to be entitled to information about the scores of other employees who were retained by the organisation, as well as evaluative information such as references which were provided during the selection process.
The Bill originally provided that information about another identifiable employee could not be provided to the employee, and nor could evaluative or opinion material, or information about the identity of a person who supplied evaluative or opinion material (such as a referee). These aspects have been considerably watered down by the proposed changes. The clauses allowing for evaluative and opinion material, and information about the identity of the person supplying such material, have been removed, which means that employers will continue to need to supply such information to employees. Employers will be able to refuse to provide material about an identifiable employee (for instance, an employee who was selected to be retained in a restructuring situation) only if providing access to the information would involve the unwarranted disclosure of the affairs of the other employee.
This is, in our opinion, the most significant change to the Bill. We believe that this provision would be likely to be interpreted by the Employment Court as meaning that information about other employees will still need to be provided in a restructuring situation, given that the Court would be likely to decide that it was “warranted” to do so. We don’t believe this is what the Select Committee intended – but if the Bill is passed in its current form, we believe case law will effectively re-establish the Massey requirements in time.
The changes here are mostly about rebalancing the provisions of the Act. The obligation to conclude bargaining will still be removed from the Act – but there will be an exception providing that employers cannot refuse to settle a collective agreement simply because they object in principle to collective bargaining or collective agreements – there must be other reasons for not settling, for instance reaching a stalemate in the bargaining.
In the case of the initiation of multi employer bargaining, employers will be able to elect to opt out of the bargaining, as provided in the original Bill, and this has been extended to the situation where a union initiates bargaining with an employer with the intention of bargaining about the employer becoming a party to an already-settled multi employer collective agreement. The period of time allowed for advising employees about the initiation of bargaining is extended to 15 days instead of 10 in the case of multi employer bargaining.
The Employment Relations Authority will be able to determine that bargaining has been concluded, as provided in the original Bill, but the Authority can determine whether facilitation is appropriate first. The Bill has been clarified to state that the Authority “must” (rather than “may”) make a declaration if it decides that bargaining has concluded. These changes should make the new provisions more workable.
The only change proposed here is that employers will need to put their response to a request for flexible working hours in writing.
Part 6A – continuity of employment
There are a number of amendments here which make this section of the Act even more detailed and complex. The Bill provided that employers of less than 20 staff would be exempt from having to comply with the requirements when “restructuring” (contracting in, contracting out, loss of a contract and so forth). Franchise holders who are acting independently of the franchisor will now also be exempt employers. There are a number of technical changes intended to make the procedures for providing information more effective. A penalty will apply to an employer who does not request or provide information appropriately. A small loophole has been closed in that an employer who is ceasing to do the work cannot switch the employees who will transfer to the new employer with less efficient or less experienced staff.
The original Bill provided for notice to be given of all strikes and lockouts; this provision has been amended to provide that the notice must include the start date and time, and the end date and time of the proposed industrial action (or an event that will end the action). This means that the other party will have more certainty about when the industrial action will start and finish, and will be able to make pay deductions accordingly in the case of partial strikes. The definition of a partial strike is changed to emphasise that an employee on partial strike will be continuing to perform some work (so a refusal to perform overtime, for example, does not qualify). This is a practical point, as an employee who is refusing to perform overtime will not be doing any work during the time they would otherwise have been working overtime, and therefore will not be entitled to any pay, so the pay deduction provisions would not apply in any event.
The original Bill provided for the Authority to have to give oral determinations or indications of preliminary findings for all cases. This has been toned down to apply “wherever practicable”. Clarification is added that the Authority continues to be able to determine a matter “on the papers” without holding a hearing. Appeals of Authority decisions will need to wait until the written decision is made available. The Authority will have specific matters that will need to be covered in written decisions. The Authority will be able to correct inaccurate oral decisions when the written decision is issued, but only if there is a manifest error in the reasoning or an important matter of law or precedent was overlooked. These changes would only apply to proceedings commenced after the Bill came into force.
The Bill will now go before the House for its final reading.
If you would like to discuss the implications of any of the Bill’s provisions further, please don’t hesitate to contact us.
Major Changes to New Zealand Health and Safety Legislation Announced
The Minister of Labour has announced major changes to New Zealand health and safety legislation, (a new “Health and Safety at Work Act”, based on Australian Model Work Health and Safety Law) which is scheduled to be introduced to Parliament in December 2013.
The changes propose to:
· Change the definition of the person responsible for health and safety from the employer to “the person conducting a business or undertaking” (the duty holder).
· Clarify the current “all practicable steps” definition to define what is “reasonably practicable” to provide a safe workplace.
· A positive due diligence duty so that those with governance roles in firms and organisations must actively manage workplace health and safety.
· More use of regulations and codes of practice to define safe work expectations.
· Changes to the hazardous substances legislation.
· Development of a representative body for health and safety professionals to give employers more confidence in the quality of advice they may receive from health and safety professionals.
· Development of a 5 star safety rating system businesses can use to benchmark their health and safety processes.
· Development of controls for facilities that present high hazards, such as the storage of large volumes of hazardous substances.
· All duty holders will be required to have worker participation practices appropriate to the workplace, not just workplaces with more than 30 employees, or where a worker or union has requested it, as is the case under current legislation.
· Increased maximum penalties for breaching health and safety legislation:
o “Reckless conduct”, up to $600,000 and/or 5 years imprisonment for an individual, up to $3M for corporates
o “Failure that exposes someone to serious risk of harm”, up to $300,000 for individuals and $1.5m for corporates
o “Failing to comply with a health and safety duty” up to $100,000 for an individual and $500,000 for a corporate.
For further information or any assistance you may need for health and safety and ACC matters contact:
· Update on legislation changes - CPI – another trial period case
· Health and safety – successful defence of a contractor related health and safety prosecution upheld
Update on legislation changes
You may have noticed potential changes to employment relations legislation being discussed in the media. Here’s a quick update of where things are at with proposed changes to the Employment Relations Act.
This is a substantial Bill signalling a significant number of employment relations changes. We provided a summary of the Bill in our last employer update – please advise if you would like another copy of this.
The Bill has now been introduced, has passed its first reading and been sent to Select Committee. Public submissions are now open and close on 25 July 2013. The Select Committee will report back to Parliament on 5 December 2013. If the Bill is passed in due course, there will still be some time until it is implemented – the changes take effect four months after receiving Royal assent.
If you have some views about the Bill or about further changes that might be required, now is your opportunity to express those views. Make sure you get your submission in by the due date of 25 July 2013. To make an online submission, follow this link:
http://www.parliament.nz/en-nz/pb/sc/make-submission/50SCTIR_SCF_00DBHOH_BILL12107_1/employment-relations-amendment-bill
If you would like some assistance with drafting your submission or would like us to check it for you, please don’t hesitate to contact us.
Employment Relations (Continuity of Labour) Amendment Bill
This Bill was drawn from the members’ bill ballot. This is a very short Bill – it simply seeks to repeal section 97 of the Employment Relations Act. Section 97 is the section stating that employers can only replace a striking or locked out employee if the replacement is already a current employee and agrees to do the work, or if there are reasonable grounds to believe it is necessary to employ the replacement for safety and health reasons. Therefore, if this Bill was to be enacted, employers would be able to employ staff to replace striking employees without restrictions.
The latest CPI figures have just been released. For the year ended June 2013, CPI increased by 0.7%, continuing the trend of CPI changes of less than 1%. Statistics NZ are reporting that the increase is the lowest since 1999.
Another trial period case
There has been another trial period case demonstrating (yet again!) that applying the trial period provided in the Employment Relations Act is not always easy for employers. In Menzies v Safari Group NZ Ltd [2013] NZERA Auckland 114, the Authority found that the employer had not used a valid trial period clause. The employer had offered an employment agreement containing a probationary period clause which they believed to be a trial period clause. The clause, however, did not contain explicit references to termination of employment and the fact that the employee would not be able to challenge termination of employment through the personal grievance procedure.
The Authority noted that there were two types of probationary or trial provisions which could be included in an employment agreement – a probationary period under s.67 of the Employment Relations Act, in which case the personal grievance procedures would still apply, or a trial period under s.67(A) and (B), which would preclude the employee from challenging their dismissal. The Authority held that the clause in the employee’s agreement was a probationary period, not a trial period, and the employer therefore needed to follow proper processes to terminate the employee’s employment. The Authority held the dismissal to be unjustified and granted two months lost remuneration and $4000 compensation for humiliation, loss of dignity and injury to feelings.
This case is yet another reminder of the importance of using an effective trial period clause which complies with the requirements of the Employment Relations Act. There are a lot of requirements to comply with if seeking to rely on a trial period clause – if not 100% sure, employers should seek advice before terminating an employee’s employment. We are always happy to discuss the requirements further and to advise on compliant clauses.
http://employersassociates.co.nz/Contact%20Us.html
Health and Safety Responsibilities for Contractors – some clarification!
There has been some clarification provided by the Courts in relation to the amount of responsibility that is placed on the principal contractor in relation to health and safety of contractors and sub-contractors. The Ministry of Business, Innovation and Employment (previously Department of Labour/OSH) has lost its appeal to the High Court in relation to the charges that they had laid against South Roads Limited (which had earlier been dismissed by the District Court).
South Roads Ltd was the “Principal” (contractor) on a railway project to replace bridges near Dunedin. They engaged a specialist piling contractor to design and build temporary platforms alongside the bridges. During the project one of these platforms collapsed and a crane fell into the harbour. No injuries occurred.
The Ministry of Business, Innovation and Employment prosecuted South Roads on the basis that they should have monitored the technical piling work to ensure that it was appropriate. South Roads defended the court case on the grounds that they were unable to monitor technical work that they did not understand. A key question in the District Court case was around the degree to which the principal contractor retains authority and responsibility in the respect of technical issues.
The District Court dismissed the case against South Roads on the grounds that they did not have sufficient expertise, knowledge or equipment to carry out the work itself and therefore relied on the specialist knowledge of the contractor.
The Ministry of Business, Innovation and Employment appealed this decision to the High Court, and the High Court has upheld the District Court decision. The High Court indicated that the error by the sub-contractor was not one that would have been obvious to South Roads who were not required to oversee technical aspects of work that had been sub-contracted to a specialist.
However, it is important to remember that each case will be determined on the circumstances, and it is still clear that the principal will retain overall responsibility for monitoring general health and safety, and will have responsibility e.g. in cases where the contractor’s technical failure is obvious and visible.
Managing health and safety responsibilities in relation to contractors and sub-contractors is something many companies struggle with, and numerous court cases have demonstrated that it is important to have good formal health and safety process in place when engaging a contractor to carry out work, particularly work where there is a risk of serious harm. This case does show there is a point a company can demonstrate they have taken “all practicable steps”.
If you need any assistance in reviewing your contractor control processes, or training for your staff who engage and monitor contractors and sub-contractors, please contact David or Sherry.
The long awaited Bill to amend the Employment Relations Act has been released. There are a number of significant potential changes for employers and we summarise the most important ones below.
The Bill has to go through the Select Committee process, so changes are still likely to be some time off, and of course changes often get made at Select Committee.
If there are aspects of the Bill you particularly like or dislike, you may wish to make a submission. If you would like assistance for your organisation to make a submission, please let us know – we have drafted submissions and appeared before the Select Committee and can help with this if need be. We would also be interested in your thoughts about the proposed changes. If a number of our clients have strong feelings about the merits or otherwise of aspects of the Bill, we may be able to make a submission on behalf of a number of clients.
The commencement is four months after the Bill receives Royal assent. Given that the Select Committee process still needs to occur, the changes probably won’t be law until the beginning of 2014.
The Bill removes the prescriptive requirements for breaks and replaces them with a simple statement that breaks must be provided to allow for a reasonable opportunity for rest, refreshment and attention to personal matters. Breaks may be subject to necessary restrictions such as continuing to perform some duties or staying on the premises where the employee’s work so requires or the restrictions are reasonable and agreed. Breaks are to be taken as agreed between employer and employee, and if no agreement is reached after a reasonable negotiation, as (reasonably) specified by the employer. Alternatively, the employer and employee will be able to agree to compensatory measures, which means time off at an alternative time, starting later or finishing earlier, or accumulating time in lieu. Compensatory measures can also apply where the nature of the work means breaks cannot be provided.
Employees seeking a flexible working arrangement will no longer have to have care of another person – meaning that any employee will be able to seek a variation of their working arrangements at any time. The employer will need to respond to such a request within one month (not three months as is currently the case). The limitation of one request per 12 months will also be lifted.
Restructuring – information that has to be provided
The Bill seeks to undo the effects of the infamous Massey decision, which stated that an employer was required to give information to a potentially affected employee being selected for redundancy about other employees in the selection process. The Bill provides that an employer will not have to provide information during a restructure to a potentially affected employee about another identifiable employee, evaluative or opinion material, or information about the identity of a person who provided evaluative or opinion material. The Bill also states that the Official Information Act and Privacy Act apply. There is provision for information to be provided either by summary or by making appropriate deletions or alterations.
It will be interesting to see how the new wording is interpreted by the Courts in due course.
Restructuring – contracting out, sales, transfers etc
There are some changes to the part of part 6A which deals with “vulnerable” employees – cleaners, laundry staff, food caterers etc. Employers of less than 20 employees (including employees of holding companies, subsidiaries and sub contractors, to avoid large employers restructuring their businesses to come within this category) will become exempt employers, as long as they provide a warranty to the other affected employer confirming their status as an employer of 19 employees or less. Someone with no employees at all can also be an exempt employer. This means in practice that small employers will no longer have to take on the “vulnerable employees” of the outgoing employer if they are the successful tenderer. This will probably give an interesting advantage to small companies where the reason for changing the contractor is dissatisfaction with standards of performance. The warranty has to be provided by the small company, otherwise the exemption will not apply.
“Vulnerable” employees will now have to be given information about their right to transfer to the new employer, and will now have to elect to transfer in writing. There is also a new section providing what will happen to service related entitlements of such employees who transfer – the outgoing employer and incoming employer will be able to agree, but if they do not agree, the outgoing employer will be liable for everything they would have had to pay out on termination on the date the employee transferred (including annual leave and alternative holidays) and the incoming employer will be liable for things that would not be paid out (e.g. untaken sick leave). This will close a current hole in the legislation. There will also be an implied warranty that the outgoing employer has not changed the work and terms and conditions before the transfer, with the incoming employer able to sue for damages if this is breached. This prevents outgoing contractors from jacking up the price of labour for incoming competitors. There is also provision for employee transfer costs information and employee records to be provided to incoming employers and potential tenderers, but an exempt employer cannot request this information.
The requirement for parties bargaining for a collective agreement (CEA) to conclude a collective agreement is removed in the Bill and replaced with a provision that says that good faith does not require the parties to enter into a collective agreement or to agree on any matter to be included.
The 20 days “head start” allowing unions to initiate bargaining 60 days prior to a collective agreement expiring (whereas employers could only do so 40 days prior to expiry) is removed in the Bill. Either unions or employers will be able to initiate 60 days before expiry. The same approach applies to multi party collective agreements.
Employers will no longer have to participate in multi-employer bargaining – the Bill provides that an employer who receives an initiation notice for a multi employer collective agreement (MECA) will be able to opt out, as long as they do so within 10 days of receiving the initiation notice. This has to be a written and signed notice to all of the other intended parties, unions and employers. Employers will be able to opt out of any multi-employer bargaining, including renewal of an existing MECA.
The Employment Relations Authority will be able to determine that bargaining has been concluded where the employer or union apply to the Authority. The Authority will have to look at whether the parties mediated and, if applicable, used facilitation, and may direct further mediation or facilitation. If there is a declaration that bargaining has been concluded, neither party will be able to initiate for further bargaining for 60 days unless the other party agrees. If the Authority doesn’t make a declaration that bargaining is concluded, the Authority can make a recommendation about the process the parties should follow, and if that happens neither the union nor the employer can make another application for a declaration that bargaining has concluded until the recommendation has been followed. If no recommendation was made by the Authority, neither party can make another application for a declaration that bargaining has concluded for 60 days, unless the other party agrees.
Section 52, which provides for a CEA to be extended for 12 months if the union initiates bargaining before the CEA expires, will be changed – now this will apply whether bargaining was initiated by the employer or the union, as long as the initiation occurs before the CEA expires.
The requirement for employers to employ new employees on the CEA for their first 30 days will be removed. The obligations to explain that the CEA exists and how to contact the union will remain, however. This will mean that new employees will be covered by the CEA if they join the union. This will be likely to create some interesting arguments where CEAs contain a “new employees” clause which provides for the new employees to be covered by the CEA for their first 30 days (as quite a number of current CEAs do) and some clarification that such clauses would cease to have effect would also be useful.
This change will of course also mean that the issue of whether a trial period can be used for a new employee where there is an applicable CEA which doesn’t provide for trial periods, will become a moot point, as there will no longer be a need for the additional individual terms and conditions to be consistent with the CEA. This will mean in practice that unions would no longer be able to prevent employers from agreeing trial periods with new employees, unless the new employee was a union member.
Notice in writing will need to be given of all strikes and lockouts, including the period of notice, the nature of the action, place or places, and times and dates of commencement and end of the action (dates only in the case of lockouts). The notice will have to be given before the time the strike or lockout commences. The notice can be withdrawn at any time by written notice.
In the case of essential services and passenger transport services, the current provisions will apply instead, but there will be a new requirement to include the beginning and ending dates.
In the case of partial strikes, employers will be able to make deductions from pay, except when the strike is on health and safety grounds or in the case of employees paid on a piecework basis. The employer will have to give notice to each employee or to their union first. Interestingly, the notice won’t have to specify the amount or proportion of the pay deduction. The deductions are limited to the time the employee would spend on strike, or alternatively a straight 10% of pay. There will be provision to allow the union to seek information about pay deductions made and for problem resolution processes in the case of disputes, and injunctions will be able to be granted stopping pay deductions.
The Employment Relations Authority will have to give determinations orally at the conclusion of investigation meetings (hearings), or give an oral indication of preliminary findings, and then provide the written decision within three months. Where the Authority Member gives an indication of preliminary findings, this can be subject to any further evidence or information. This will mean that the Authority will need to decide on the direction of a case before the matter ends, rather than being able to consider the decision in the light of case law and the like. This could cause some rather rushed decisions in our view and may result in the Authority changing its processes.
Employers Associates has a new director - Health and Safety responsibilities for Directors and Boards – Mondayising of Anzac and Waitangi Days passed
Employers Associates welcomes Sherry Johnston
This month we are pleased to advise that Sherry Johnston has joined the team at Employers Associates. Sherry has been running her own Health and Safety Consulting and Auditing business for over 10 years and has taken the opportunity to join us (for more information look at our Meet the Team page). Health and safety is clearly an important issue for companies (see the next article about directors’ and boards’ responsibilities) and we are pleased that we can extend the current services offered through our group.
Health and safety management is both a legal compliance issue and a business improvement opportunity. The topic has received a lot of media attention in the last few years in the light of several national and international disasters. All parts of a business have their responsibilities to ensure that appropriate systems are in place and are implemented – and if you can prove that you have good systems in place, then there are potential incentives/rewards through ACC premium discounts, improved productivity, and less down time and costs.
If you want to know more about the rewards of good health and safety systems and wish to develop or improve yours, or want to have your systems checked to see if you meet requirements or could qualify for ACC discounts, contact Sherry or David.
Health and Safety responsibilities for Directors and Boards:
Health and safety is generally well understood in New Zealand to be a key responsibility of an employer, as well as there being obligations in a contracting situation. But recently there has been considerable media attention on H&S responsibilities higher up in an organisation. The Pike River Mine tragedy, Ice Pak Coolstores and other fatal events in New Zealand have drawn attention to the issue of where the responsibility might also lie in the hierarchy of an organisation.
There are health and safety responsibilities for directors under the Health and Safety in Employment Act, but they are currently not specific to the board or an individual director, as they apply where it can be shown that the director or board authorised, directed, acquiesced or participated in a failure where the company is already liable for an offence. However, The Royal Commission on the Pike River Coal Mine tragedy recommends legislative change to improve corporate governance at board level, and to more clearly identify the responsibilities.
“The board and directors are best placed to ensure that the company effectively manages health and safety. They should provide the necessary leadership and are responsible for the major decisions that most influence health and safety: the strategic direction, securing and allocating resources and ensuring the company has appropriate people, systems and equipment”
Royal Commission on the Pike River Coal Mine Tragedy
The Commission's report suggests that directors need to ensure that:
· the company has a comprehensive health and safety management plan;
· the plan is fit for purpose and reviewed regularly;
· adequate resources and time for that plan to be implemented are provided; and
· independent evidence of the effectiveness of that plan is obtained
Specific legal requirements on directors and boards have already been written into legislation in Australia and Great Britain, and prosecutions have been taken against “officers” of companies for failing to fulfil their obligations.
Directors of all types of organisations, in both the private and public sectors, have responsibilities for ensuring that health and safety risks arising from their organisation’s activities are properly managed. In the context of effective corporate governance, managing corporate risk is a key issue for all directors and senior managers.
We believe that this is an area where many organisations need to review their current processes for identifying H&S direction, systems, information and decision making processes, implementation reviews and confirmation of effectiveness to ensure that they can demonstrate that they meet the requirements for good governance from the board and directors and throughout the organisation.
If you would like more information, or help in assessment, or training – please contact Sherry or David.
Mondayising of ANZAC and Waitangi Days passed
The new Mondayising amendment applying to ANZAC and Waitangi Days has been passed, although it does not come into force until 1 January 2014, and will not actually apply until the next time one of these days falls on the weekend – which will be ANZAC Day in 2015.
This means that when either Waitangi Day or ANZAC Day fall on a Saturday or Sunday, it is treated the same way as the Christmas and New Year holidays are.
For example, if ANZAC Day falls on a Saturday:
· those who would otherwise work on a Saturday will have the holiday recognised on the Saturday
· those who work not otherwise work on a Saturday will have the holiday recognised on the following Monday.
For further information on this or any other employment matters contact Angela
Minimum wage increased – Employment Authority case regarding misrepresented skills
The minimum wage is set to increase from 1 April 2013. The new rate for adults will be $13.75 per hour (up 25 cents from the existing $13.50). Those who employ staff on the training / new entrants minimum wage should note that this will also increase. The new training and new entrants minimum wage rate will be $11.00 per hour (up 20 cents from the existing $10.80).
This is a smaller increase than in 2012, when the adult minimum wage rose 50 cents per hour.
Employee misrepresents skills?
Gostmann v Independent Refrigeration and Electrical Ltd - employee who misrepresented his skills and experience gets $10,000
A recent Authority case has been concerning a number of employers. The employee, who had recently moved from South Africa with his wife and held a work visa valid for the position with the employer only, had been dismissed because he was incompetent at refrigeration. The Authority held that the employer could not summarily dismiss in a case of poor performance without trying to improve the employee's performance through a performance management process. There had been no warning process followed and the Authority found the dismissal unjustified substantively and procedurally.
The employee sought reinstatement, but this was not granted as the employer was able to demonstrate that the employee was not capable of doing the role competently or safely. The employee's colleagues expressed safety concerns and said they did not want to work with him. The Authority agreed that reinstatement was not practical or reasonable and found that the employee was not competent to undertake refrigeration work unsupervised - which made reinstatement impractical and unreasonable. The Authority accepted that the employer reasonably held the view that the employee did not have the requisite skills and had proven incapable of learning them and found that he had irretrievably lost the confidence of the company and of his colleagues.
The employee's qualification was the equivalent of 10 days full time training, compared with the NZ equivalent of three years full time study. The employee admitted he wrote his reference himself and the Authority concluded he had misrepresented his experience in South Africa.
The Authority accepted that there had been an incident where an apprentice could have been electrocuted due to the employee's actions. The employee denied that this had happened, but the Authority accepted the apprentice's evidence.
The employee was awarded $5,000 compensation and $10,608 lost remuneration, the later of which was reduced by 50% due to the employee's contribution to the situation.
The Authority held that the employee had misrepresented his skills and experience but found that the employer could not recover losses caused by errors or poor workmanship. The Authority found that the employer would have not suffered as much loss if it had made thorough enquiries at the pre-employment stage, talked to the employee's referees and questioned the employee more closely.
While it is predictable that a dismissal for poor performance would be found unjustified, given that the employer had not followed a proper process or warned the employee, it is concerning that the Authority found that the employee had misrepresented his skills and experience but did not conclude that this constituted a 100% contribution to the situation. It does not appear that the dismissal was stated to be due to the employee's misrepresentation - which would have been a better approach for the employer to have taken. Even so, the Authority made findings which essentially showed that the employee had lied (including preferring the evidence of the apprentice to the employee's own evidence at the Authority about the safety incident), and that the falsehoods were both about his skills and experience, and what had happened - but still concluded that had the employer "closely questioned" the employee before employing him it would have avoided the problem.
What should employers do, faced with this sort of situation? If you believe an employee has misrepresented their skills and experience, it makes sense to make that the focus of the investigation, rather than dismissing the employee for being incompetent. Can you prove misrepresentation? The employer should be able to show that the employee deliberately lied - not just that he/she didn't volunteer certain information or missed answering a question on the application form. Was the fact lied about crucial to the decision to hire? The employer needs to be able to show that, had it known about the issue the employee lied about, it would not have employed the employee. The misrepresentation has to be material. And finally, why didn't the employee tell the employer the truth? The employer should be able to show that the employee misrepresented the facts because he/she knew that if he/she told the truth, they wouldn't be hired.
As with any other type of dismissal, there's a process to follow when dealing with misrepresentation - you can't just conclude the employee lied and dismiss him or her forthwith. You do need to investigate, discuss the findings with the employee, and give them an opportunity to explain. As always, the employee is entitled to seek advice and to be represented, and explanations need to be carefully considered and investigated. However, misrepresentation is not a situation for a formal warning process - if the employer concludes the employee misrepresented his or her skills or experience, that he or she did so to get the job, and that had the employer known the truth, the employee would never have been hired, dismissal is likely to be justified provided a proper process was followed.
There's another reminder for all employers in this case, of course. Always, always do your homework with recruitment. Always reference check, and always check skills and experience thoroughly - particularly with overseas qualifications and experience, which can be difficult to check. Always make sure that employees have answered all of the questions on an application form. It is much easier not to employ the wrong person than it is to dismiss them later on!
For further advice on recruitment, dealing with misrepresentation or dismissal, contact Employers Associates.
Holidays Amendment Bill - The New World case
Holidays Amendment Bill - proposed "Mondayising" of ANZAC and Waitangi Day
Last month, the Transport and Industrial Relations Committee reported back on the Holidays (Full Recognition of Waitangi Day and ANZAC Day) Amendment Bill. This Bill was introduced in February 2012 to "Mondayise" Waitangi and ANZAC Days when they fall on a weekend day and has been before Select Committee since July. Submissions closed in September.
Essentially, the Bill provides for the same process for ANZAC Day and Waitangi Day as is used for the Christmas and New Year holidays. When one of the holidays falls on a weekend day, it will be recognised on the day it falls for employees who would otherwise have been working on that day. For employees who would not be working on the weekend day that the holiday falls, the holiday is instead recognised as falling on the following Monday. This means that 24/7 employers would be required to pay both their Saturday or Sunday and their Monday employees for holidays.
hose who would be working on both days would have the holiday recognised on the Saturday or Sunday as the case may be, while employees who wouldn't be working on either the weekend day or the Monday don't receive a paid holiday (but if they worked on the Monday as a one off, would be entitled to time and a half payment for doing so).
The Committee reached a majority view that the Bill should not be passed, with minority views from the Labour Party and the Green Party in favour of its enactment expressed in the report. The Committee also reached unanimous views about the changes that should be made if the Bill is passed.
· The commencement date would be 1 January 2014 (the next time one of these days falls on a weekend day is April 2015, when ANZAC Day falls on a Saturday)
· The wording is tidied up to say that for the avoidance of doubt, an employee will only be entitled to one paid holiday for each of ANZAC Day and Waitangi Day (the previous wording referred to "two public holidays for the days listed in section 44(1)(e) or (h)" which was both harder to follow, and could have had the unintended consequence of giving an employee two Waitangi Day holidays, for example
· Tidy ups in other legislation to alter the definition of a "working day"
It appears that the Bill is opposed by National and supported by Labour, the Greens, NZ First, Maori Party, United and the Mana Party, so it is likely to be passed.
You can go to the full version of the Bill including the current changes on the New Zealand legislation website: Holidays (Full Recognition of Waitangi Day and ANZAC Day) Amendment Bill
The New World case – employee who gave loaf of bread to customer without paying for it justifiably dismissed
Employers are sometimes faced with situations where an employee has taken something of the employer's without authority - but the item or items are relatively small and of low value. Employers frequently want to proceed with dismissal, as the value of the item is less important than the fact that the employee effectively stole it - but often worry about whether the fact that the item is only worth a few dollars make such a decision seem too harsh. You may have seen recent news items on one such case, an employee who took a loaf of banana bread from the New World supermarket where she worked without paying for it and gave it to a customer. The fact that the employee received no benefit herself from this action attracted some media attention and comment.
The employee was a supervisor, and was well familiar with the rules for staff purchases, which were written, as was the fact that not following the rules for staff purchases was regarded as serious misconduct and may result in summary dismissal. The employee was filling an order for a regular customer who was blind and phoned in her order. While doing so, the employee added in a loaf of banana bread which she subsequently said she had intended to pay for herself. When the order was scanned, she held the banana bread separately and told the checkout operator not to scan it. The employee said when asked to explain later than she had intended to pay for the item at her morning tea time but was distracted by a kitten coming in to the store. The customer had already picked up her shopping by that time. The employee also failed to pay for the bread at her lunch break.
The Employment Relations Authority held that the employee knowingly breached the rules and that this fell within the definition of serious misconduct. The Authority also held that the process followed by the employer was fair and that the employee’s contribution to the grievance was in any event 100%, meaning that if the dismissal was held to be unjustified the employee would be entitled to no remedies.
You can read the case at:
http://www.dol.govt.nz/workplace/determinations/PDF/2012/2012_NZERA_Auckland_415.pdf
Potential changes to employment legislation - Part 6A - Restructuring - Flexible Work Arrangements - Collective Bargaining - Rest and Meal Breaks
Potential changes to our employment legislation
There has been some recent media coverage about potential changes to employment law. The issue that seems to be getting most of the attention is the proposal to limit Part 6A, the part of the Employment Relations Act which deals with contracting out and sales of business, and provides for some employees to have an automatic right to transfer to the incoming employer when a contract goes to a new business, to only apply to employers with 20 staff or more.
No Bill has been released yet, so the following summary is based on the information which has been released about the proposed changes.
Employers of less than 20 staff will be exempt from the provisions of Part 6A. This will mean in practice that an incoming small employer taking over a contract would not have to employ the staff of the outgoing employer.
There will be a time limit for “vulnerable employees” of an employer who loses a contract or contracts out work “vulnerable employees” are mainly cleaners, laundry, orderly and catering staff) to advise they want to transfer to the new employer.
Outgoing employers will have to provide information about employee entitlements (such as wage rates, leave entitlements etc) to the incoming employer.
There will be provisions for negotiating apportionment of financial liability for employee entitlements (such as leave accrued by transferring employees) between the outgoing and incoming employers, and a default apportionment formula will apply if agreement is not reached.
Outgoing employers will have to provide an “implied warranty” that they have not taken action which could damage the business of the incoming employer (such as putting up the wages rates or leave entitlements before the employees transferred), with breaches of such implied warranties subject to civil legal action (including damages).
The Act will be amended to state that employers are not required to provide employees with evaluative material about the employee, or confidential information about another person, when restructuring. This results from the Massey case which held that employers had to provide affected employees with all the information they were taking into account when selecting employees for redundancy – including selection evaluation and information about other employees.
All employees (not just caregivers) will be able to request flexible work arrangements.
Employees will be able to request flexible work arrangements right from the start of their employment – currently they have to wait until they have been employed for six months.
There will no longer be a limit on how many times an employee can request flexible working arrangements.
Removal of the current requirement for bargaining to be concluded.
There will be a process to apply to the Employment Relations Authority for a determination that collective bargaining has concluded.
Employers will be able to opt out of multi-employer bargaining.
Employers will be able to make partial pay reductions in the case of partial strikes.
The 30 day rule (new employees automatically being covered by the conditions of the collective agreement on site for their first 30 days of employment, whether union members or not) will be removed.
Notice will have to be given for strikes and lockouts.
The changes which have already gone through the Select Committee process will be incorporated
Likely timing of changes
The Bill, when drafted, will go through the Select Committee process and submissions will be sought. The changes are likely to take effect in the second half of 2013.
Mileage Rates Increase - Raising a Personal Grievance via the Employment Relations Authority? - Incompatibility
Mileage Rates Increase
The maximum rate per kilometre that the Inland Revenue Department accepts as a tax free reimbursement of the costs of running a motor vehicle has increased. The rate, previously 74 cents per kilometre, has increased to 77 cents per kilometre. This rate can be used when an employee uses their private vehicle for work purposes to reimburse the employee for their expenses in doing so.
Raising a Personal Grievance via the Employment Relations Authority?
A recent case, Premier Events Group Ltd v Beattie (no. 3) ARC 22/11, examined whether an employee can raise a personal grievance with their employer by filing a Statement of Problem in the Employment Relations Authority. In this case, an employee never raised his grievance directly with his former employer - but a Statement of Problem was lodged in the Authority, and served on the employer, within the 90 day statutory time period. This was the first time this facts scenario was considered by the Employment Court. The Court referred to previous cases where the wrong employer had been advised of a personal grievance and had forwarded it to the right employer - within the required time frame. In those previous cases, the employee was held to have raised their grievance if a third party brought it to their employer's attention, and the Court held that this was exactly what had happened in this scenario. The employee had had their grievance bought to their former employer's attention when the Authority served the papers on the employer. Since this had occurred within 90 days, the Court held that the employee had taken steps to make his former employer aware that a personal grievance was being raised, even though the employee never raised the grievance directly with the employer.
While this is perhaps not a surprising outcome - it would be hard to argue that you don't know an employee has a grievance when you have just been served legal papers saying so! - one implication of this decision is that the usual low level dispute resolution process will not have occurred. If the first time you know a former employee has a grievance is when you receive papers to that effect, you are unlikely to suggest meeting to talk it through. You will be focused on the requirement to file a Statement in Reply, which has to occur within 14 days, and chances are, that process will put you straight into litigation mode. You will almost certainly be directed to attend mediation, but you may well have incurred some costs filing your Statement in Reply, and you're probably not feeling very inclined towards resolution. This is not an ideal scenario and it does not make the low level resolution of the grievance a very likely outcome.
A recent Employment Relations Authority case, Campuzano v Western Bay Dental Care Ltd [2011] NZERA Auckland 198 dealt with an employee who was dismissed due to incompatibility. The employee, a receptionist, had been told she was being issued with a verbal warning after having verbal altercations with the other receptionist.
Following some further exchanges, the other receptionist subsequently resigned and cited the employee as a factor in her decision to resign. The employer sought to meet the employee with a potential outcome being a written warning; the employee said she was going to resign but did not do so. The warning was issued, and the employee responded with a long and strongly worded letter about how she had been treated by the practice, including stating that she had been bullied, that the employer had a personality conflict with her, that the employer personally disliked her, and there was an obvious lack of kindness from the employer in detailing with her.
The employer and employee met, and the employee said she did not accept that her behaviour was unsatisfactory. The employee and her partner, who was there as her support person, said there was no point in continuing with the meeting as the divide between them was so great, and stated that all further discussions would have to be conducted in writing. The employer's issues were not therefore addressed in the meeting.
The employer then wrote to the employee to state that there was a serious problem in the employment relationship, that the practice was small and the situation was disruptive, that it was completely untenable to try and resolve the issues by correspondence. The employer said that given the employee's refusal to discuss things further, terminating her employment on the basis that there had been a complete breakdown in trust and confidence was now being considered. The employer invited the employee to make comment before a final decision was made.
The employee responded and proposed mediation. The employer, however, felt she had reached the point where she could no longer deal with the employee in her business, and terminated her employment.
The Authority found that although it is rare and unusual for an employer to be able to justify dismissal on the basis of an irreconcilable breakdown of trust and confidence in the employment relationship, it was justified in this case. The Authority referred to the strong allegations made by the employee about the employer, the employee's refusal to retract the allegations, and the small size of the practice, and held that the employee had created a situation that meant it was impossible for the employment relationship to continue. The Authority found that the situation was irretrievable by the time the employee suggested mediation. The Authority expressed some reservations about fairness of the issuing of the written warning but held that it was not a substantive factor in the decision to terminate employment.
This case is a good example of the degree of breakdown that has to have occurred to justify dismissal on the basis of incompatibility.