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A recent decision by the Employment Court considered a claim by a volunteer worker that they were actually an employee. The Employment Court provided useful comment on the differences between volunteers and employees and the circumstances where a volunteer may be deemed to be an employee.

Case summary
The individual in this case was a long-term resident of a campground that performed duties on a part time, rostered basis. He claimed that he was an employee. The campground owners argued that the resident was a volunteer who was provided with a free camp site, use of the camp’s facilities and cash payments in return for his help.

The Employment Relations Act 2000 defines an employee as “any person of any age employed by an employer to do any work for hire or reward”. ‘Volunteers’ are excluded from this definition and the Court has confirmed that a volunteer offers services with no expectation of reward.

A volunteer is not an employee and therefore minimum employment law entitlements such as minimum wage entitlements, holiday and leave entitlements, access to personal grievance procedures do not apply to them (with the exception of health and safety).

The campground was a private business. The claimant carried out duties in the camping ground and expected in return the “insubstantial” reward of not having to pay for his caravan site and being able to use the utilities on the grounds. He also received cash payments for the days he provided services.

The Court looked at various tests to determine the reality of the relationship. The Court determined that as the individual’s duties were largely controlled by the campground owners, he was integrated into the business to a large extent, was not working for himself and did not carry out work for other people. He was also rewarded, including by the cash payments, and accordingly was held to be an employee.

What impact could this have on you
If you rely on volunteers to perform services, it is crucial that you are clear about their relationship with your organisation, and we recommend using a written agreement for this purpose. It is also crucial that your volunteers do not expect payment and/or actually receive payment for any services performed. It may be appropriate to reimburse volunteers for out of pocket expenses such as mileage.

We recommend seeking advice regarding your engagement of volunteers, to make sure your risk of an argument that they are actually employees, with access to minimum employment rights, is appropriately managed.

21 February 2017

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.

All employers have until 1 April 2017 to ensure all their existing employment agreements are amended to reflect the changes to the new law.

We have written a number of articles outlining the employment legislative changes. To access this information click on the following links:

https://www.copelandashcroft.co.nz/news/have-you-updated-your-employment-agreements-yet

https://www.copelandashcroft.co.nz/news/recent-employment-law-changes-faqs-hours-work-shift-cancellation-secondary-employment-and

https://www.copelandashcroft.co.nz/news/zero-hour-contract-restrictions

https://www.copelandashcroft.co.nz/news/employment-standards-legislation-bill-passes

Many employers are unclear as to whether they need to amend their current employment agreements. Clauses such as “The employee is required to work all additional hours” Or “The hours of work will depend on the availability of work and our business demands” may not adhere to the current legislative requirements.

If you have clauses similar to this in your individual employment agreement, we recommend you contact us so we can advise whether your existing employment agreements comply with the new changes.

Written 21 February 2017

Copeland Ashcroft Law Principal Janet Copeland recently spoke on the Morning Report on Radio New Zealand about the latest pay equity claim. Listen to the broadcast here

The law in relation to drug and alcohol testing in workplaces continues to develop slowly in New Zealand, but a strong step forward is signalled for maritime and aviation operators soon. In line with the Ministry of Transport, Civil Aviation Authority and Maritime New Zealand’s “Clear Heads” initiative, new drug and alcohol testing requirements in the commercial maritime sector may be introduced later this year.

By the “Clear Heads” initiative, the government is set to implement three changes:

To require all commercial aviation and maritime operators to have a drug and alcohol management plan, including random testing for all safety sensitive workers;
Maritime New Zealand and the Civil Aviation Authority to have the power to undertake non-notified alcohol and drug testing as part of their oversight and monitoring role, against the standards set in the operator’s drug and alcohol management plan.
The Ministry of Transport will explore the viability of enabling the Transport Accident Investigation Commission (TAIC) to require alcohol and drug testing from survivors of an aviation, maritime or rail accident in the commercial and recreational sectors.
Proposed changes to the Maritime Transport Act 1994 (Act)
The Maritime Transport Amendment Bill (Bill) proposes changes to the Act to require that every commercial maritime operator (operator) manages risks associated with drug and alcohol use, to align with the Health and Safety at Work Act 2015, and to give effect to the Clear Heads initiative.

An “operator” is defined as a person who operates a ship other than a pleasure craft; who holds a maritime document for operating that ship; who has established a prescribed safety system; and whose ship carries out one or more safety sensitive activities.

In summary, if the proposed changes set out in the Bill are adopted, operators will be required to have a drug and alcohol management plan (management plan) in place specifying testable drugs, permissible levels and testing procedures. The plan will need to be incorporated into the operator’s existing employment agreements and contracts for services and must not be in breach of current employment legislation relating to drug and alcohol testing.

The management plan must include mandatory random drug and alcohol testing of individuals who carry out work for an operator that involves undertaking a “safety sensitive” activity (i.e. an activity that could significantly affect the health and safety of any person on board a ship) in any capacity (i.e. an employee, independent contractor, volunteer, or the operator if they are an individual). The content and procedural requirements for the management plan, testing and other related matters will be established by amendments to the “maritime rules”.

Submissions on the Bill are open
The Bill has had its first reading in Parliament in November 2016 and has been referred to a Select Committee for review. Submissions on the Bill are open until 1 February 2017.

We can assist with drafting and reviewing drug and alcohol plans and policies and would recommend that employers in the commercial maritime sector, who are testing for drug and alcohol impairment, seek advice prior to implementing their plans and policies.

If you would like advice regarding drug and alcohol testing, please contact us.

26 January 2017

Company officer held personally liable for unpaid wages
A recent decision by the Employment Relations Authority (ERA) determined that as the employer company was in liquidation, a company officer was personally liable to pay eight staff unpaid wages and holiday pay totalling $70,053.54.

Case summary
The claim was brought by a Labour Inspector in relation to eight former employees of the company, for unpaid wages and holiday pay. The liquidators confirmed they would abide by the Authority’s decision, but noted that there were no funds available to pay the former employees.

The Labour Inspector also sought authority to bring an action against a director, and his wife who it was alleged was an officer of the company. The director was then declared bankrupt. The Employment Court has described a declaration of bankruptcy as one of ‘clear and unarguable circumstances’ where the Authority can authorise a Labour Inspector not to bring an action against a third party. Therefore, the Labour Inspector did not pursue him any further.

The director’s wife stated that she ‘had no official relation’ with the company and she was not an officer at any time. She said she only assisted the operation of the company when her husband was in hospital and that each and every direction given during this time was at the direction of her husband.

The Authority determined that the eight employees were owed wages and holiday pay and that the director’s wife was indeed an officer of the company as she was involved in it at a senior level and had managerial responsibility for paying employees. The employees’ evidence was that they had been instructed to speak to her regarding queries about their pay as she was in charge of these matters. She also sent a number of emails on behalf of the company over several years. The Authority determined that as a result of her extensive involvement in the business, she was personally liable for the money owed to the employees

What impact could this decision have on you?
This matter was decided under a section of the Employment Relations Act 2000 that is now repealed. However, recent changes to the Employment Relations Act 2000 has broadened the number of people that may now be held personally responsible for breaches to an individual’s employment agreement, the Employment Relations Act 2000, Minimum Wage Act 1983, Wages Protection Act 1983 and/or Holidays Act 2003.

Senior managers and directors need to take steps to ensure that their company is complying with all employment law requirements otherwise, they could be held personally liable for these non-compliances in conjunction with the company they work for. The individual fines for non compliance are between $20,000 – $50,000 depending on the circumstances.

If you would like to know more about how this decision may affect you or what your liabilities are under the ERA, please contact us.

26 January 2017

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

Changes to Minimum Wage Rates will come into effect from 1 April 2017.

The adult minimum wage rate will increase from $15.25 per hour to $15.75 (before tax) an hour.

The starting out wage and training minimum wage will increase from $12.20 to $12.60 (before tax) per hour.

26 January 2017

Since 1 April 2011, all employers, regardless of the number of staff they have, have been able to employ a new employee on a 90 day trial period.

WHAT IS A 90 DAY TRIAL PERIOD?

Under a 90 day trial period, a new employee can be dismissed within the first 90 days of employment and cannot raise a personal grievance for unjustified dismissal. However, they can still raise a personal grievance on other grounds such as discrimination, harassment or unjustified disadvantage if it’s not related to the dismissal itself.

The law for trial periods is set out in ss 67A and B of the Employment Relations Act 2000. Case law has shown that the Courts strictly interpret trial periods and therefore employers can only rely on the trial period to dismiss an employee if they adhere to all of the requirements.

WHAT ARE THE REQUIREMENTS?

What does the trial period need to state?
If you want to be able to rely on the trial period the clause needs to clearly state:
– That the employer may dismiss the employee in the first 90 days of employment; and
– There is no entitlement to bring a personal grievance for unjustified dismissal.

Before the commencement of employment
A trial period will only be valid if the person is a new employee. That means they cannot have done work for this employer in the past. A person that starts work, even just for five minutes, will not be considered a new employee. Make sure you double check this – it is especially relevant where you are purchasing a business with existing employees when timeframes are often tight and getting staff to sign contracts a low priority.

The Court has held that the trial period clause must be:
– Included in the employee’s written employment agreement; and
– Signed by the employee prior to their first day of work (even an hour after starting has been held to be too late!).

Employee’s have a right to know that their employment is subject to a trial period. We recommend that you inform the employee when you are making a job offer that their employment agreement contains a trial period. It is also a good idea to include a sentence in your offer of employment letter that states that the agreement includes a trial period.

When offering an employment agreement, make sure you advise the employee that they have the right to seek independent legal advice and give them an opportunity to seek such advice prior to signing the agreement.

DISMISSING UNDER A TRIAL PERIOD

If you are concerned about an employee’s performance, and their employment is subject to a trial period, we recommend that you first check that you have adhered to the above requirements. Secondly, raise your concerns with the employee and explore how you can assist them with training, mentoring and/or additional support to help them improve their performance within the trial period. Regularly meeting and mentoring staff about what is required of them will go a long way to meeting your obligations of good faith that still apply even if an employee is under a trial period.

If you still see no improvement in the employee’s performance, and are considering dismissing them on the basis of the trial period, at the very least write to them setting out your concerns and invite them to a meeting setting out that you are considering terminating their employment under the trial period. Ensure that you inform them of their right to have a representative present. At the meeting, outline your concerns again and ask them for their explanations and comments in regard to the possible dismissal. Ensure you take time to consider the employee’s explanations and feedback. After this considering, we recommend that you meet again to deliver the decision and confirm this when you write to them with the final decision.

There may of course be reasons other than underperformance that may cause you to want to dismiss an employee under a trial period such as incompatibility. But if an employee has behaved in a way that amounts to serious misconduct, you really should be going through a full disciplinary process rather than relying on a trial period to dismiss.

Although you don’t have to give a reason for dismissing unless you are asked, it is good to be able to point to something if you are. This is because you are still required to be proactive in your communication with the employee, including telling the employee why you are dismissing them if they ask, even if those reasons wouldn’t usually be a justifiable reason for dismissing them without the trial period.

It is essential if you are to be able to rely on the protections of the trial period provision, to make it clear that you are dismissing the employee on the basis of the trial period, adhering to any notice period in the employment agreement, and any other obligations you may have. However don’t forget that you just because an employee is on a trial period, you can’t treat them any differently to any other employee except to the extent allowed by law.

Disclaimer: We remind you that while this article provides commentary on employment law topics, it should not be used as a substitute for legal or professional advice for specific situations. We recommend that you obtain legal advice specific to your situation before proceeding and would be happy to help in this regard.

Discrimination claims and complaints are becoming more popular with employees, and employers need to understand their obligations in this area and take action where an issue of discrimination arises.

Employees can choose to bring a discrimination claim in either the Human Rights Review Tribunal (HRRT) (within one year) or the Employment Relations Authority (ERA) (within 90 days). Recent remedies awarded by the HRRT at a significantly higher level than the ERA suggest this avenue is likely to be used increasingly in future.

What is workplace discrimination?
In summary, workplace discrimination means treating an employee differently, to the employee’s disadvantage, on the basis of a number of prohibited grounds which are outlined in the Human Rights Act 1993 (HRA) and the Employment Relations Act 2000 (Act). The prohibited grounds include age, race or colour, sex, sexual orientation, disability, religious or ethical belief and marital status. Prohibited grounds also include refusal to do work on the grounds of health and safety, and union involvement.

The HRA and the Act provide that an employer discriminates against an employee if, because of one of the prohibited grounds, they:

refuse or omit to offer or afford to that employee the same terms and conditions of employment, benefits or opportunities as are made to other employees of the same, or substantially the same, qualifications, experience or skills and employed in the same or substantially similar circumstances;
dismisses or subjects the employee to any detriment, in circumstances in which other employees of that description are not, or would not, be dismissed or subjected to such detriment; or
retires that employees, or causes the employee to retire or resign.
In discrimination cases, the key test is whether one of the prohibited grounds is a material ingredient in making the decision to treat an employee in the way he or she was treated. Discrimination can occur directly, where an employee is treated less favourably due to one of the prohibited grounds, or indirectly, where one of the prohibited grounds is applied to a group the employee belongs to, therefore disadvantaging them and others in that group. For example, indirect discrimination could occur where a minimum height restriction is stated for a role in a recruitment process. While the job advertisement might not directly say women cannot apply, as women are generally shorter then men, a lot of women would not be able to satisfy the necessary requirement. Indirect gender discrimination may therefore occur.

Are there certain situations where an employer can lawfully discriminate?
In some circumstances, an employer can lawfully discriminate, where a requirement is a genuine occupational qualification, such as a specification based on gender or age. For example, a role modelling female clothing may reasonably require a female employee.

However, employers are obliged to ensure the requirement is truly needed for the role, and must accommodate employees’ needs and differences, unless they can’t reasonably do that. For example, where an employee refuses to work a particular day of the week for religious reasons, an employer must accommodate this if they can do so without unreasonable disruption to their business.

Conclusion
We recommend that employers educate employees on what discrimination is – especially senior managers, and having a clear company policy outlining the steps an employee who is concerned they are being discriminated against may take to address this.

Complaints about discrimination need to be addressed swiftly, by a full and fair investigation. If in doubt – seek professional legal advice.

Recent changes to employment and health and safety law mean that all employers need to update their health and safety plans and employment agreements. We’re offering fixed price reviews of your health and safety plans and employment agreements – contact us for your fixed price and to discuss how we can help you make sure you’re covered in terms of the changes.

Employment law changes:
On 1 April 2016, amendments were made to several key pieces of employment law. The impact of the new law included:

Addressing unfair employment practices such as “zero hour contracts”, by setting requirements for agreed hours of work, “availability” provisions, and cancellation of shifts;
Making wage, time and leave record keeping obligations consistent across all employment laws;
Requiring employers to consult regarding deductions from remuneration, and prohibiting unreasonable deductions;
Restricting unreasonable prohibitions on secondary employment;
Extending paid parental leave to more workers and increase flexibility; and
Strengthening enforcement of employment standards.

All employment agreements issued from 1 April 2016 have to comply with the new legal requirements however, employers have until 1 April 2017 to ensure all their existing employment agreements are amended to reflect the changes to the new law.

Many employers are unclear as to whether they need to amend their current employment agreements. We recommend that employment agreements are reviewed, at least, as many clauses commonly in use including for example “the employee is required to work all additional hours”, “the hours of work will depend on the availability of work and our business demands” or “the employee may not work elsewhere without the employer’s consent” no longer adhere to the current legislative requirements.

Health and safety law changes:
With the recent changes to the health and safety legislation, changes to your current health and safety plan are also likely to be necessary. As a minimum, these should be reviewed in terms of the following areas:

Policy and commitment statement
Roles and responsibilities
Review and auditing processes
Incident and accident recording, investigation analysis and review
Emergency response procedures
Hazard identification and risk management process
Information, supervision and training
Worker communication, engagement and participation
Contractor management processes
Governance reporting
Measuring, evaluating health and safety performance
Health and safety management plans are not all created equal. Making sure you are using a plan which is “fit for purpose” and customised to suit your business is crucial to managing your health and safety risk successfully. This is both in terms of practical risk management – i.e. the work your business does is safe and healthy and in terms of managing your legal risk – i.e. you can demonstrate to WorkSafe NZ that you have managed your health and safety risks appropriately.

Contact our team to discuss your fixed price review today. For more information on the changes to the law, see our Copeland Ashcroft Law’s previous articles.

The Harmful Digital Communications Act 2015 (HDCA) comes into effect in 2017, and is intended to address “cyber-bullying”. This may impact workplaces as employers who control social media or websites which are used for harmful digital communications will have obligations to address these.

The HDCA mandates a sentence of up to two years’ jail for a person sending or “posting” digital communications deemed harmful or material that is likely to cause distress to the recipient (also referred to as “cyber-bullying”), as well as fines of up to $50,000 for an individual or $200,000 for businesses. A digital posting or email that incites another individual to suicide could result in a prison sentence of up to 3 years.

In summary, per the HDCA, a digital communication should not include:

sensitive personal facts about an individual
threatening, intimidating or menacing material
grossly offensive material in reference to a reasonable person in the position of the affected individual
indecent or obscene content
harass an individual
a false allegation
a matter that is published in breach of confidence
incitement or encouragement of anyone to send a message to an individual for the purpose of causing harm to the individual.
incitement or encouragement of an individual to commit suicide.
denigrating of an individual by reason of his or her colour, race, ethnic or national origins, religion, gender, sexual orientation, or disability.
Employer duties include diligence in monitoring information posted on all digital communications (including the company website, emails sent from the company’s server and social media outlets maintained by the company). Companies posting harmful digital communication may avoid liability by removing offensive material within 48 hours of receiving a complaint about it.

HDCA amendments to Principle 10 of the Privacy Act 1993 mean that distribution/use of digital content which is deemed “unfair or unreasonable” to an individual will be unlawful, even if this information already exists in the public domain (previously, Principle 10 allowed for exceptions if the information was already publically available).

To enforce the HDCA, the government intends to set up an enforcement agency to address complaints on behalf of complainants. This agency is being formed with the capability to be able to liaise directly with web publishers of social media sites such as Facebook, Twitter and Instagram, to address complaints. Large web publishers are notoriously difficult for members of the public to contact, so the intention is that an agency such as NetSafe in coordination with the NZ Police, InternetNZ and the Ministry of Education will be able to communicate directly with these large corporate web publishers in order to effectively address breaches.

Once established, an employer may call upon the designated agency to help resolve issues involving harmful digital communications in the work place. To manage the risk around the HDCA, employers may consider revising corporate communication and social media policies, and ensure that complaints processes reflect the requirements of the HDCA. It may also be worthwhile to consider creating a “digital communications officer” role to manage these responsibilities.

For advice on the steps your business or organisation should take, contact one of our team.