bronte - Copeland Ashcroft

On 22 February 2018 the Employment (Pay Equity and Equal Pay) Bill 2018 (the Bill) was introduced to Parliament by Minister Denise Lee. The Bill effectively mirrors the sentiments of the former National Government’s Employment (Pay Equity and Equal Pay) Bill 2017 which was withdrawn in November last year.

If passed, the Bill will repeal and replace the Equal Pay Act 1972 as well as the Government Service Equal Pay Act 1960 and will also amend the Employment Relations Act 2000.

What you need to know:
The purpose of the Bill, according to its explanatory note, is to “eliminate and prevent discrimination, on the basis of sex, in the remuneration and other terms and conditions of employment, and in doing so, promote enduring settlement of claims relating to sex discrimination on pay equity grounds.”

The Bill:

prohibits employers from discriminating, on the basis of sex, in remuneration and other terms and conditions;
enables employees to make claims relating to sex discrimination in employment;
distinguishes between three types of claims (equal pay, unlawful discrimination on matters other than remuneration, and pay equity);
sets out the processes for resolving the different types of claims; and
re-enacts, in an up-to-date and accessible form, the relevant provisions of the Equal Pay Act 1972.
The Bill should make it easier for employees to file pay equity claims directly with their employer, rather than having to go through the Courts.

Under the Bill, a pay equity claim must have merit, on the basis that it “relates to work predominantly performed by women and there are reasonable grounds to believe that the work has been historically undervalued and continues to be undervalued.” If a claim has merit, the parties must enter into a bargaining process to resolve it.

Where to from here:
The Bill will be particularly relevant for employers in workforces where employees are traditionally dominated by women where the average rate of pay is low, such as the early child care sector.

If you would like to discuss what this could mean for your workplace, or if you are an employee who would like to discuss raising a pay equity claim, please don’t hesitate to 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.

March 2018

Being clear about what is expected of employees is the best way to set the employment relationship up for success. An employee policy handbook is a great tool to set guidelines for employees, to reflect your organisational culture and set out your values/vision. It can also cover any additional rules/code of conduct guidelines that you wish, to set expectations around behaviour.

A handbook sits alongside your best practice employment agreement, and can be easily changed to suit your needs, following consultation with/notice to employees. This is in contrast to changes to employment agreement terms and conditions, which require employee agreement.

We recommend the following as best practice policy documents to include in an employee handbook (as applicable):

Uniform/personal presentation;
Performance/pay review process;
Training and development;
Electronic communications (covering internet/social media) and mobile phones;
Travel and expenses;
Privacy;
Leave (covering application requirements and timeframes);
Driving and vehicle use;
Drug and alcohol testing (if required); and
Bullying and harassment.
A handbook should also include or explain where to find key forms such as for leave applications and expenses claims.

Fixed price offer
Until April 2018, we’re offering a fixed price on handbooks including the policies above, of $3,500 (plus GST and disbursements), which is a significant reduction in the cost of preparing the policies individually.

If you’d like us to prepare a fixed price handbook for you, please contact our team.

With the end of the year fast approaching, many businesses will be organising staff parties to celebrate their employees’ contributions. Christmas functions can be a great way to unwind and get to know one another. But, when alcohol is involved, which it almost inevitably is, there is room for bad decisions, injuries, inappropriate behaviour, reputational damage, and disciplinary issues.

Health and safety rules apply – even at work parties
The Health and Safety at Work Act 2015 (Act) requires you to ensure, so far as is reasonably practicable, that the workplace, the means of entering and exiting the workplace and anything arising from the workplace is without risks to the health and safety of any person. Even if a party or function is held offsite, the venue will be considered a “workplace” for the purposes of the Act.

Alcohol is a well recognised hazard that poses very serious risks to health and safety resulting in risk taking and dangerous behaviour. Under the Act hazards must be eliminated so far as is reasonably practicable. If you decide not to take the reasonably practicable step of eliminating alcohol completely from your celebrations, then steps you can take to minimise the risks posed by alcohol so far as is reasonably practicable may include the following:

Inspecting the venue before the function takes place to identify hazards and associated risks
Ensuring the venue is in a safe location (i.e. away from traffic or a cliff face)
Communicating health and safety considerations to your employees
Asking staff to volunteer to be a designated sober party goer in case of an emergency
Engaging security at the venue
Limiting the number of drinks your staff can consume
Ensuring alcohol is not served to persons under the age of 18
Ensuring alcohol is not served to intoxicated persons
Providing entertainment and activities
Ensuring free food and non-alcoholic beverages is readily available
Arranging transport to ensure staff get home safely
Misconduct
Make sure your policies provide guidance and set out what the appropriate standards of behaviour are. Even if misconduct at a staff party occurs outside of normal working hours it may still justify dismissal, provided that the behaviour if sufficiently serious and the employer undertakes a fair and reasonable disciplinary process. For more information on undertaking a disciplinary process see here.

Employers should be aware that they may have difficulty disciplining an employee for inappropriate behaviour if they have exposed them to unlimited, free alcohol, because of the need to balance the employer’s obligation to provide a healthy and safe workplace with the employee’s culpability for their actions.

Some examples of misconduct associated with the intake of alcohol include:

Conduct that brings the employer into disrepute
Serious breaches of work rules or policies
Any form of harassment
Fighting, physical abuse or assault
Unauthorised possession or damage to property
Any crime, offence or dishonest act
Have fun and be safe this Christmas.

Be proactive in the planning phase and consult your company policies (i.e. health and safety, social media, bullying and harassment, drug and alcohol, disciplinary etc.) to make sure these are adhered to. Consider what the most appropriate location will be, who will host the event, what your expectations are of staff, what ground rules should be in place, and how you might communicate this to your employees.

If you are planning a work function, or are updating your current workplace policies around alcohol and work, please contact us for advice.

September 2017

We’ve been watching with interest the news around Fonterra’s standing down of truck drivers who weigh over the rating limit for seats, on the basis that, the safety functions of the seat may not necessarily perform to standard in a serious accident.

Questions have been raised around the fact Fonterra had employed the drivers through a stringent recruitment process, and weight isn’t addressed in the annual medicals. Concerns have also been raised about drivers that have a naturally bigger build and would not be able to lose the weight.

This issue highlights the impact health and safety obligations can have on parties within an employment relationship and the requirement for employers to identify health and safety risks and how to eliminate or minimise them. There are also employment law obligations to act fairly and reasonably, and while health and safety is often held out as the “trump card”, balancing these dual obligations can be difficult in practice.

The employer here has a primary duty of care to workers, and is seeking to minimise the risk of harm to their drivers in an accident situation by ensuring the seats as safety measures in place are used properly and in accordance with manufacturer specifications. Yet as a consequence, heavier drivers have been suspended from their driving duties, which has implications from an employment perspective and if not properly handled could arguably give rise to an unjustified disadvantage claim. While weight on its own is not a prohibited ground of discrimination per the Human Rights Act 1993, it is unlawful to discriminate on the basis of a disability and this could be relevant if a driver’s weight was linked to a disability.

While this has been addressed as a safety issue, it is also a health issue, and many employers are now recognising the numerous benefits of addressing worker health and wellbeing by offering measures to support this, as being good for the individual and good for productivity, attendance, and business overall. Policies on these types of issues should be well thought out to avoid unintended consequences like possible discrimination issues, and employees should be consulted regarding the draft before it is implemented.

If you are concerned about a health and safety matter, wanting to implement a workplace policy or address a challenging situation with serious employment ramifications, our team of specialists can offer guidance.

September 2017

Stay inTouch on employment and health and safety law changes

A year and a half after the new Health and Safety at Work Act 2015 (HSWA) came into force on 4 April 2016, we have our first two decisions interpreting the new law.

WorkSafe New Zealand v Budget Plastics (New Zealand) Limited
In this case, a portion of a worker’s hand was amputated after it was caught in the auger of a plastic extrusion machine he was operating.

WorkSafe’s Investigation
Among other things, the following were areas of concern for WorkSafe:

The extrusion machine was insufficiently guarded because it was possible to reach the moving auger.
The machine was not fitted with appropriately located emergency stop controls. The emergency stop was approximately two metres away.
No adequate systems for identifying hazards were in place.
There were no adequate safe operating procedures (SOPs) for the machine’s use.
There were no adequate policies or processes in place for training workers in the safe use of the machine.
The Court placed significant reliance on the Australian/New Zealand standards for Safety of Machinery and noted WorkSafe has also published relevant factsheets and guidelines..

The Decision
The Judge set the reparation at $37,500 for emotional harm, but did not comment on the consequences of the amputation to the victim, so that it is hard to glean the reasons for this level of reparation.

The Court set the fine at $100,000, noting the fine would have sat between $210,000 and $315,000. The Court declined to provide any detailed “sentencing guidelines”. In coming to this range the Judge commented on a number of factors that resulted in discounts including an early guilty plea, cooperation during the investigation, character and payment of reparation to the victim. It also took into account evidence that Budget Plastics could not afford a higher fine.

Comments
Under the old legislation a case of guarding would have likely resulted in a fine between $30,000-$40,000 so in this case, we are seeing a six fold increase of this amount. This case is being appealed by WorkSafe, and we hope that the appellate court may provide us further guidance as to sentencing guidelines and starting points with fines being imposed.

WorkSafe New Zealand v Philip Benjamin Burrows
This case unusually involved prosecution against an individual as a sole trader rather than a company, and the injured person was a child, not a worker.

Mr Burrows trained horses and on this occasion, his son and his 10 year old friend (the victim) went with him to the stables. Mr Burrows was driving around the track wetting it down. The truck was moving at walking pace or less and Mr Burrows saw the boys off the truck running in the water at times and then jumping back on the truck. On the second lap Mr Burrows felt a bump, immediately stopped and found the victim lying on the track on his side. The victim’s mid-section had been run over by the right rear wheels of the truck. The victim spent a month in hospital with his injuries including fractures to his traverse lumbar, sacral alar, pelvis and ribs. He also suffered from a collapsed lung, diaphragmatic hernia and a renal laceration.

The Decision
Mr Burrows was prosecuted for failing to ensure that no children or any other person, rode or jumped on or off the water truck while it was in use. The Judge said “to allow the victim and your son to ride on the truck as they did and to jump on and off, effectively unsupervised, was fraught with obvious risk…You had full control of the situation. The risks were obvious… you have a high level of culpability”.

When discussing the fine and reparation the Judge took into account Mr Burrows’ ability to pay, including that his business had traded at a small loss the previous year, and his personal net worth was $12,000.

$25,000 reparation was ordered to be paid to the victim in $5,000 increments per year. The Judge did not issue a fine on top of this because he concluded there was no ability to pay, and he was required to apply the means to pay to reparation first.

Comments
Both cases involved arguments regarding the financial capacity of the business or individual to meet the fine. Given the large increase in the possible maximum fines, it is likely we will see this regularly raised for small to medium sized businesses.

For any health and safety law queries, please contact us.

September 2017

We are sad to announce that Charlie Arms-Harris is leaving our team, we wish her all the best on her travels. We would like to introduce Jessica Frame who will be in our Queenstown team. Jessica will be working alongside Carolyn Moffat for 6 months while we recuit a replacement. Jessica will still be working alongside Rebecca Laney in our Dunedin office.

Since 2015 we have seen a number of cases before the Employment Court (EC) where it has signalled a need for larger awards for hurt and humiliation compensation under the Employment Relations Act 2000 (Act). These awards have until recently remained relatively stagnant in the employment context, generally sitting below $10,000. This stagnation sharply contrasts with Human Rights Review Tribunal awards, with payments of $45,000 and $98,000 ordered in recent cases.

In 2015, the EC noted that the need to ensure consistency of awards meant there was a danger of keeping these at an artificially low level, and commented that awards had fallen “woefully” behind, and did not reflect inflation. Since then there have been a number of decisions reflecting acknowledgement of this comment. For example, in Rodkiss v Carter Holt Harvey, the EC awarded $20,000 for Mr Rodkiss’ unjustifiable constructive dismissal. Also in Nelson v Katavich and Haldeman LLC, the EC awarded Ms Nelson $30,000 for unjustified dismissal for serious misconduct.

In October this year, the EC released a further decision, Archibald v Waikato District Health Board (DHB), which continues the trend of increasing awards. Ms Archibald was made redundant, after she was given an ultimatum by the Waikato DHB to accept a changed role (which required significantly increased travel time to attend) or have her employment terminated. She argued she had no option but to choose the latter, and that she was unjustifiably dismissed. The EC doubled the award the ERA had made for hurt and humiliation, to $20,000.

In fixing the award, the Chief Judge of the EC’s approach was twofold. First, to consider the extent of the injury suffered by the employee and second, to assess “where it sits in the spectrum of cases routinely coming before the Court”. The Chief Judge commented that in setting the level of award, she felt it helpful to consider three bands:

Band one involving low level loss/damage;
Band two medium level loss/damage; and
Band three high level loss/damage.
Without specifying what the compensation range was for each band, the Chief Judge noted that the award of $20,000 to Ms Archibald was around the middle of band two.

What does this mean for you?
While it remains to be seen whether this banding approach is adopted universally in future, it is clear that compensatory awards will continue to increase. We expect this to impact negotiations for exit packages, and resolution of personal grievance claims.

This means that defects in employment processes will cost more, and highlights the need for employers to understand their good faith obligations and to ensure a fair process is always followed. We can provide assistance with employment relations issues and guide you through disciplinary and performance management processes. Keep an eye out for our seminar series coming up in 2018, which will be a great opportunity for upskilling of business owners, senior managers and HR managers.

December 2017

The Employment Court has just released a full bench judgment ruling that two labour hire workers were actually employed by host company LSG Sky Chefs New Zealand Limited (LSG), after they sought a declaration of the same, in order to be entitled to minimum employment protections.

The employees were engaged by Solutions Personnel Limited (Solutions) as independent contractors, and LSG, which provides catering services to airlines, entered into an arrangement with Solutions whereby it provided labour for hire.

The real nature of the relationship
The Court looked at the “real nature of the relationship”, considering first the terms of the agreement between LSG and the workers, examining written documentation governing the arrangement between the three parties. There was no written agreement between LSG and the workers, but the arrangement between LSG and Solutions was documented.

The written agreements between the workers and Solutions were deemed to be deficient on the basis that neither worker understood what they had entered into, the agreements were poorly worded and Solutions had failed to explain the working arrangements, effectively “steam rolling” them into signing the agreements. The Court commented that the workers were particularly vulnerable as they had no real business experience, spoke English as a second language and had no understanding of the differing legal obligations towards employees and non-employees.

The Court then looked at how the relationship operated in practice. Solutions had little to do with the workers other than to take them through a screening process and to pay them wages for the work they carried out for LSG. The Court found that a number of factors firmly pointed towards an employment relationship given the level of control which was exerted over the workers by the host organisation.

In particular, LSG:

required the workers to comply with LSG’s policies and procedures;
required the workers to carry out tasks allocated by LSG employees, in the same way as its employees;
heavily supervised the workers;
set the roster without Solution’s input;
dealt with performance issues;
required that the workers wear LSG uniforms;
had the workers working almost exclusively for it; and
did not allow the workers to delegate their work, employ others, issue invoices, keep records or pay taxes.
What does this mean for you?
This case demonstrates that labour hire workers can be considered employees of the host organisation, which means that host organisations can be responsible for their minimum employment entitlements (including, for example, holidays and leave).

The Court emphasised that it is less likely that a labour hire worker will be considered an employee of the host organisation if the work is supplementary or temporary and the obligations and roles of each party are clearly documented, understood, and agreed.

Conversely, where documentation is not clear, and the work continues for a long period, with the workers being heavily supervised and controlled by the host organisation, then this is likely to point towards an employment relationship.

We anticipate that this decision will impact a number of businesses that rely on labour hire arrangements. Contact our team of specialists for advice and guidance.

December 2017

Case law on trial periods continues to evolve. In light of a recent Employment Court judgment, we have (again!) updated this article, which was previously issued in our InTouch newsletter.

Trial periods are available to all employers for new employees for the first 90 days of employment, and are a helpful tool because they allow employers to dismiss without recourse to a personal grievance claim for unjustified dismissal.

However, there are a number of requirements that must be met in order for the trial period to be safely relied upon to dismiss, and the Courts strictly interpret these requirements because they limit employee rights.

Requirements

The employment agreement must include a trial period provision which states:That the employer may dismiss the employee in the first 90 days of employment; and
In that case, there is no entitlement to bring a personal grievance for unjustified dismissal.
The date on which the trial period starts (usually the same as date as the date on which employment commences).
We recommend that a trial period clause also provides for a shorter notice period, and for the employee to be required to take garden leave during the notice period (because case law has determined that payment in lieu of notice is not acceptable where employment is terminated during a trial period – notice must actually be given).
The employee must be a new employee, and must not have done any 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 employees to sign new agreements is a low priority.
A 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!).
Employees must be told of the trial period when an offer, even a verbal offer, is made. 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, you must also inform 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.
Probationary periods
In light of the Employment Court’s recent decision Lewis v Immigration Guru, we recommend that employers don’t use probationary period clauses for new employees, and rely instead on trial period provisions (although employers may wish to include a probation period if the employee is not a new employee and cannot be subject to a trial period).

In that case, the employer had both a probationary period and trial period clause in the employment agreement, which were to operate for the same timeframe. The probationary period clause required the employer to support the employee and address performance issues as and when they arose. The Court held that the employer was bound by those obligations and couldn’t elect to instead rely on the trial period clause to dismiss.

Probationary period clauses don’t provide any of the dismissal protection for employers that trial periods do, as during a probationary period employers are still required to meet all obligations to act fairly and reasonably in taking disciplinary action, including by following fair process. For more information disciplinary process tips, see our article.

Dismissing during a trial period
If you are concerned about an employee’s performance or conduct, and their employment is subject to a trial period, we recommend that you first check that you have adhered to the above requirements. To terminate in reliance on a trial period, you need to prepare a letter for the employee explaining this and giving notice, before the 90 day timeframe has expired. You should give this letter to them at a meeting where you explain the decision.

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.

Remember, all other employment obligations apply during the trial period and an employee is not prevented from bringing any other kind of claim, for example, regarding discrimination.

If in doubt, call us for help – the trial period provides a great opportunity for flexibility, but only where used in strict compliance with the legal requirements.

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 guidance from your lawyer for any questions specific to your workplace.

December 2017

Paying for public holidays
The Christmas period can be a challenging time of year for employers trying to manage the minefield that is the Holidays Act 2003 (Act), but it pays to get it right (or risk a penalty award and backpay for up to six years)!

Who is entitled to payment for public holidays?
An employee is entitled to be paid for a public holiday even if they don’t work, if the day on which the public holidays falls would “otherwise be a working day” for them.

If employees work on a public holiday they are entitled to be paid their normal pay (relevant or average daily pay), plus half that amount again for hours actually worked. If the public holiday falls on a day an employee would otherwise have worked, they will also be entitled to an alternative holiday.

In summary, alternative holidays can either be used, by agreement or at the employer’s direction, or may be cashed out by agreement, when 12 months has passed since accrual.

Transfer of public holidays
Some public holidays that fall at the weekend (Christmas day, Boxing day, New Year’s day, 2 January) are automatically transferred to the Monday (if the day falls on Saturday) or Tuesday (if the day falls on Sunday) immediately following the weekend, where the weekend day is not one that an employee would otherwise have worked. Waitangi day and ANZAC day automatically transfer to the Monday if the day falls on either a Saturday or Sunday. If the employee would otherwise have worked on the day the public holiday falls there is no transfer.

Using Christmas Day 2016 as an example, which fell on a Sunday. For employees who work Sundays, that was the public holiday. For everyone who doesn’t work Sundays, the public holiday was recognised on Tuesday. The holiday is only recognised once – employees who work both Sundays and Tuesdays can’t “double dip” and claim two public holidays.

Public holidays can also be transferred to another day by agreement in writing. In that case, the agreement must specify which public holiday is being transferred and the date it is being transferred to. The new date can’t be another public holiday and must be a day the employee would otherwise have worked.

Determining whether a day would “otherwise be working day”
Not sure if your employee would have otherwise been working? The Act lists a number of factors to consider, including what the employment agreement states, what the work patterns are, any rosters or systems in place, whether the employee works only when work is available, and the reasonable expectations of the parties.

In a recent Employment Relations Authority case, fast food chain Wendy’s was held to be in breach of the Act for its handling of public holiday payments. In the determination, Wendy’s was criticised for its method of determining whether a public day was a day its employees would otherwise have worked. Wendy’s did this by analysing whether the employee had worked the same day in the preceding three weeks. If the answer was yes, it concluded the day was a day the employee would otherwise have worked and paid them for the holiday, or, if they were working, allowed them an alternative holiday. If the answer was no, they did not receive this entitlement.

It was argued that Wendy’s was manipulating and organising the roster leading up to a public holiday to ensure the three week test was not met, and no entitlement to an alternative holiday arose.

The Authority confirmed the “three week test” was unlawful, and set out that each assessment should have been made on a case by case basis, considering all the factors listed above, not just the previous roster pattern.

If you would like advice regarding public holidays, please contact our team.

December 2017