Are you managing risks around employment?

General / 25 April 2018
Are you managing risks around employment?

Managing people has become increasingly complex, with employers struggling to keep up to date with the multiple laws they must comply with and the latest best practice in human resource methods. At the same time, employers face greater risks on the people front than ever before.  Staff are more aware of their legal rights and regulators like WorkSafe, the Ministry of Business, Innovation and Employment’s Labour Inspectorate, and Immigration New Zealand, are very proactive in investigating employer practices and taking action where these do not comply with the law.

As a minimum, employers must ensure:

All employees have an employment agreement that complies with current law;
Minimum rights for holidays and wages are met, and records kept to demonstrate compliance;
They know how the Health and Safety at Work Act 2015 (HSWA) impacts their business, and have a comprehensive workplace health and safety management plan in place; and
Employees from overseas are not engaged without valid work visas.
Where an employer receives a penalty or similar for a breach of New Zealand employment law, there is an automatic Immigration New Zealand stand down for employers who infringe minimum rights, meaning those employers are banned for various time frames from using migrant workers.  For the most serious offences they can be banned from employing people altogether.

Cost is a factor for those who make a mistake during any employment process with an employee.  Recent Employment Court and Employment Relations Authority decisions have awarded employees with successful personal grievance claims a lot more compensation for hurt and humiliation. Mid-range awards have recently increased to around $20,000.

Another area of change is the use of laws such as the Privacy Act 1993, and the Human Rights Act 1993.  Employees are relying on these more commonly to bring claims to the Human Rights Review Tribunal which has given large awards of up to around $100,000, making this a newly-popular forum for claims.

In welcome news, the Government has announced a review of the Holidays Act 2003, with a report expected mid-2019.  At present, claims under the Holidays Act 2003 have a six-year limitation period.  The same applies for wage claims.  This is a significant liability risk for employers who have not been applying these minimum rights correctly and the Labour Inspectorate has a raft of enforcement tools including the ability to seek significant penalties for these failures.

Against this background, it is more important than ever for employers to seek good advice and professional support in managing people so they can limit the risks and avoid unnecessary costs in resolving problems after they arise.

What does this mean for you?
Aside from the obvious necessity of compliance, there are some real benefits in engagement and productivity to be gained from making people management a positive focus in the business, which ultimately contribute more to the bottom line.  Employers can benefit from looking at their “employment infrastructure” regularly to ensure it is fit for purpose and achieving their objectives, by asking, for example:

is documentation up to date for best practice?
are systems in place to ensure compliance requirements are met?
are people inducted appropriately to what the business is seeking to achieve, and how their role contributes to this?
does the reward system match the business strategy and achieve employee buy in to delivering to this?
If you would like to know more about managing employment risks, please contact us.

Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.


July 2018

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