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On 19 April 2017, the Government announced that it will introduce a temporary residency visa for a period of 12 months only. The purpose of introducing this visa is to assist a number of individuals who had settled in South Island long term to apply for residency. The Government has recognised that there are a number of long term workers who currently will not qualify for residency due to the role they perform.

Who qualifies for the visa?

The worker should:

Be 55 years or younger;
Meet standard health and character requirements;
Currently be on an Essential Skills work visa for a job in the South Island;
Have been employed on an Essential Skills work visa in the South Island for five years or more by 22 May 2017 (some North Island experience may be taken into account though for this five year qualifying period); and
Work for an employer who does not have a significant adverse employment record.
Applications for this visa opened on 22 May 2017 and will close on 22 May 2018. This visa is a two stage process. Initially, the worker will need to apply for a South Island Contribution Work Visa. Once they have been granted this visa, they will need to work for another two years before they will be able to apply for residency. A worker’s partner and dependent children will also be able to apply for residency.

If you would like to know more about South Island Contribution Visa or require assistance to apply for this visa before May 2018, 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.

June 2017

It has long been common for workers working in rural or isolated areas to be provided with accommodation during their employment, but we are also now seeing this type of arrangement increasingly being offered as a perk of the job in all types of occupations and locations.

Queenstown is one example of a town that is struggling to attract and retain staff due to a lack of accommodation available. We often see employers who offer accommodation neglect the Landlord / Tenant relationship, focussing purely on the employment relationship. However, employers have legal obligations as landlords to meet where they provide an employee with a property to live in during employment.

Service Tenancies

Landlord employers must provide the tenant, their employee, with a written tenancy agreement. This is called a Service Tenancy Agreement, and is covered by the Residential Tenancies Act 1986 (Act). It records all the terms and conditions of the tenancy and can form part of, or be separate to, the individual employment agreement.

The law governing tenancies apply per the Act, but service tenancies also have special rules allowing the parties to agree that the rent can be automatically deducted from the employee’s pay each pay period, where this is recorded in the employment agreement, avoiding unnecessary transferring of money between the parties. The value of the accommodation can then also form part of the employee’s total remuneration.

There are also special provisions in the Act for the notice period required to terminate a service tenancy, so that instead of the usual 90 days’ written notice to end a residential tenancy, when notice is given to terminate the employment relationship a minimum of 14 days’ written notice is generally required to terminate the service tenancy at the same time.

Although the service tenancy cannot be terminated before the employment relationship ends, a shorter notice period can be provided if the employer:

Believes on reasonable grounds that the tenant will substantially damage the premises if allowed to remain for 14 days; or
Needs to accommodate a replacement employee and no other suitable accommodation is available during that period.
The service tenancy agreement may also provide that where the employee is not receiving a wage or salary but remains in the accommodation (such as where they are on unpaid parental leave, extended time off work for an illness or whilst on ACC), they must pay rent.

For any tenancy commencing after 1 July 2016, information about insulation installed in the ceilings, floors, or walls together with details of the location, type, and condition of all insulation must be set out in the tenancy agreement

Reminder for our Clients

To ensure that both the employment relationship and landlord/tenant relationship run smoothly, care is needed in setting expectations from the very beginning.

Having a written Service Tenancy Agreement not only ensures that you comply with the law but is useful as it sets out clearly the obligations of all parties from the outset of the relationship. Please contact us for more advice on this issue.

June 2017

Parental Leave Payment

Prior to June 2017, if an employee was entitled to 18 weeks’ parental leave payment, the latest this payment could start was the day that the child was born. That meant if an employee was using up annual leave prior to baby arriving, and the baby came early, annual leave would stop and the parental leave payments would commence.

The law has now changed to allow employees to use up their leave entitlements prior to the parental leave payments starting, even if this takes them past the baby’s arrival. Leave entitlements include annual leave, alternative days, special leave or time off in lieu that accumulated during employment.

Pre-term Baby Parental Leave Payment

If a baby is born before the end of 36 weeks and the employee is eligible to parental leave payments, they could also get preterm baby payments.

Again, prior to June 2017, if the employee returned to work after the preterm baby payments or parental leave payments started, they forfeited any further payments. The change now allows employees to return to work for a period of time (e.g., to do some tidying up of files) and then go back on leave, continuing parental leave payments. The only condition is that the employee must return to parental leave no later than their original expected date of delivery had the baby not be born prematurely. If the employee does return to work and is being paid the preterm payments, these will come to an end. If the employee is being paid parental leave payments, these will simply be suspended, and recommence when leave is resumed.

Questions?

If you have a question about parental leave entitlements, please contact us.

June 2017

All businesses need to consider their contractor management processes and planning, to meet the requirements of the new Health and Safety at Work Act 2015 (Act). Our team has been delivering seminars nationwide on best practice contractor management, and this article discusses what is required.

Section 36 of the Act sets out a primary duty to any person conducting a business or undertaking (PCBU) to “ensure, so far as reasonably practical, the health and safety of workers whose activities in carrying out work are influenced or directed by the PCBU, while the workers are carrying out the work”. For the purposes of the Act, the term workers includes employees and contractors, including employees and contractors of subcontractors.

Multiple PCBUs
Where there are multiple PCBUs carrying out works on the same premises the Act creates obligations on each PCBUs to work together by consulting, co-operating and co-ordinating with each other to ensure the health and safety of workers, contractors and each other.

For example, where construction work is occurring, the PCBUs involved are likely to need to:

Complete JSAs together
Determine what each PCBU is doing
Discuss the hazards and risks each PCBU poses
Discuss timeframes, and requirements for each job and how they can work together
Discussing emergency procedures for the worksite
Decide who will bring the first aid kit/s, where it/they will be found and ensuring together that sufficient first aiders are available
Have tool box meetings together
Prequalification, induction and monitoring are crucial contractor management best practice steps to ensure you are consulting, co-operating and co-ordinating.

Prequalification
Liability risk can’t be avoided by “passing on” the responsibility for health and safety to a contractor – prequalification is a necessary step, and just as important in terms of contractor engagement as discussing cost and billing.

Prequalification is measured dependant on the business and the task that is to be done, so that risky work would clearly require more significant prequalification. PCBUs must determine appropriate prequalification for their contracting needs – ways of assessing prequalification can be as simple as:

Determining that the contractor takes health and safety seriously, by asking appropriate questions and reviewing information relating to their health and safety planning and history – including for example, their history of injury/incident reporting and management
Ensuring contractors are trained, qualified, experienced and have current certification
Assessing the suitability of the contractor for the work (taking into account the risks associated with the same).
Induction
Providing inductions to contractors into the worksite should become standard practice for businesses. With full health and safety support, consultation and co-operation, this simple step can practically reduce the risks relating to the contractor’s work. A good plan for induction will ensure contractors are advised of workplace hazards and risks including no go areas. . Providing a copy of the risk register and going through it with contractors is one best practice step that will apply across the board.

Other things that should be covered are:

Informing contractors what to do in an emergency
Advising how incidents and accidents are to be reported
Site sign in/out processes
Any rules and/or policies contractors need to follow while in the workplace, such as drug and alcohol policies or noise restrictions
Having contractors advise what hazards they are bringing into the workplace and how these are to be managed
Discussing what contractors require to work safely, such as an isolated area or the power off.
Monitoring
Finally, monitoring contractors to ensure they are meeting health and safety requirements is a crucial best practice step. This doesn’t necessarily mean closely supervising contractors, but carrying out steps such as workplace audits, reviewing the JSA to ensure it is being followed, are key.

Where issues are identified, these should be addressed with the contractor immediately for rectification, or other action taken as appropriate.

What action a PCBU takes in contractor management will of course depend on their industry, business make up, and the nature of the contractors work, amongst other things. All PCBUs must plan for contractor management that fits their needs. If you would like advice regarding contractor management best practice, please contact us.

A recent decision by the Court of Appeal (CoA) upheld the rules of private international law by determining that the Employment Relations Act 2000 (ERA) will not apply to New Zealand based employees, where both parties have a legal employment agreement to be bound by a foreign country’s employment law.

Case summary
Cathay Pacific, a company based in Hong Kong, entered into contracts of employment with two New Zealand based pilots in 2002. These contracts stated that Hong Kong law would apply to the conditions of service and also, that the pilots were therefore required to retire from service at the age of 55 years old.

Both pilots reached the age of retirement in 2015, but argued that because New Zealand law governed their employment, they couldn’t be forced to retire. Cathay Pacific argued that the law of Hong Kong applies in this case where there are no laws prohibiting an employee from being terminated due to their age. Cathay Pacific deferred its decision to dismiss them due to retirement until this case was determined.

The matter was first considered by the New Zealand Employment Court (Court), which held that New Zealand law applied as the pilots were based in New Zealand. Further, that Cathay Pacific could not contract out of the ERA, and could not force the employees to retire.

This decision was then challenged in the CoA, which considered the following relevant principles of private international law:

Which country’s legal system is the ‘seat’ of the legal relationship? i.e. where the person is based or what the contract states?
What is the issue? i.e. contract law, family law.
If the issue is to be governed by a foreign country’s law, are there any mandatory rules or public policy grounds which may override the law.
The CoA determined that the contracts of employment expressly stated that Hong Kong law would govern their conditions of service, and that the ERA was not intended to override the principles of private international law.

The CoA then considered whether forcing a person to retire at 55 years of age would “shock the conscience of a reasonable New Zealander, be contrary to a New Zealander’s view of basic morality or violate an essential principle of justice or moral interests”. It held that imposing a retirement age would not meet this threshold. Therefore, the pilots could be forced to retire at 55 in accordance with their contract of employment.

However, the CoA did state that this decision would be different if the parties had minimal connections to the legal system chosen or it provided limited benefits to the employee, noting the tax benefits these pilots enjoyed by virtue of Hong Kong law.

What impact could this decision have on you?
If you are an overseas employer you need to ensure that the law governing your employment agreement is clearly written in the employment agreement, so that if an issue arises, both parties are clear about their employment rights.

If you would like to know more about how this decision may affect you or your employees, please contact us.

Using the right type of individual employment agreement (IEA) is key to managing the risk of misunderstandings, mismatched expectations, and personal grievance claims. But which one do you choose?

Seeking specialist advice on your IEAs will ensure your specific business needs are addressed, and can help to avoid messy disputes where things go wrong.

Permanent/ongoing? Most employees are engaged on a permanent or ongoing basis, even where they work part time. Permanent employees are entitled to annual holidays, to sick and bereavement leave after six months, and their employment can only be brought to an end with good reason and after following a fair process, or for resignation.

Fixed term? A fixed term IEA can be used where an employer has a genuine reason, based on reasonable grounds, for defining the period of employment, for example, covering for maternity leave or to complete a specific project.

Where an employee is engaged on a fixed term basis, at the end of the term, employment terminates. If the fixed term IEA is not correctly drafted, or if the employee is given the expectation of continuing work after the fixed term, the employment relationship becomes permanent or “ongoing” and can only be ended accordingly. The employer may also have additional obligations to the employee in terms of holidays and leave.

Casual? Casual employment is where an employee works on an “as and when required” basis only – that is, there is no expectation on either party that work will be provided, or performed. Casual IEAs are essentially very short fixed term IEAs, and must reflect that work is for short periods of engagement as the parties may agree from time to time. The terms of those engagements, including the reasons for the same, should also be recorded on each occasion that the employee is engaged to work.

Significant risk exists where an employee is labelled “casual”, but actually works on a regular or continuous basis, because they are permanent employees, entitled to holidays and leave, yet are often not paid for these. Employers also cannot simply stop offering work to an employee who has been working in this way, or otherwise face possible personal grievance action.

Contractor? Where workers are engaged on a contract basis, the relationship is essentially commercial, and minimum employment rights do not apply. However, the contract alone is not determinative of the relationship, and can be challenged by the contractor, on the basis that they should have been treated as employees and allowed minimum rights accordingly.

Need more information? The Copeland Ashcroft Law team will be delivering free seminars nationwide on ‘Getting it right from the start’ – employment agreement and onboarding tips you need to know to safely employ staff” in June and July 2017, see https://www.copelandashcroft.co.nz/training-events for details and to sign up.

Published in the Bay of Plenty Business News May/June 2017 issue [pg.25] – here

The Government has recently announced a $2 billion dollar package to combat the issue of gender pay inequity in the aged care sector in an historic settlement. “Pay equity” essentially means that gender doesn’t affect what people are paid, and that women should receive the same as men for doing the same work, or different work but of equal value.

The Settlement
The settlement follows the Court of Appeal’s consideration of a claim under the Equal Pay Act 1972 (Act) where aged care worker Kristine Bartlett claimed her employer was underpaying staff because of the high percentage of female employees. The Court of Appeal confirmed in its decision that women in industries that are typically female dominated could make a claim for pay under the Act, triggering the Government’s appointment of a Joint Working Group on Pay Equity Principles.

The Government accepted recommendations by the Working Group for a process by which pay equity claims could be filed with employers directly, rather than through the Courts as we discussed here.

The settlement reached in relation to this case and industry claims will see 55,000 aged care workers (in which the workforce is predominantly female and also generally on or close to minimum wage) receive a substantial increase in pay over the next five years. From 1 July 2017, aged care employees on minimum wage will have their pay increased to at least $19.00 per hour. Within five years, the rate could be up to $27.00 per hour, depending on the worker’s experience and qualifications. The settlement is funded by an increase of $1.856 billion to Vote Health and $192 million to ACC.

What this means for you
The settlement signals a significant step towards addressing issues of pay inequality in New Zealand. Dr Jonathan Coleman has stated that: “To ensure the pay rises happen in the agreed manner, I will be introducing legislation to Parliament shortly.”

The settlement is expected to have a flow on effect for other similar industries and is therefore especially relevant for employers in workforces where employees are typically female, 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.

The Supreme Court in ASG v Harlene Hayne, Vice-Chancellor of the University of Otago has confirmed an employer may have the right to know details of charges or offences regardless of any non-publication or suppression orders that may be in place.

Case Summary
ASG, a Campus Watch security guard for the University, was charged with two offences, wilful damage and assault, for conduct occurring outside of work. He pleaded guilty to the charges and was discharged without conviction, including because he was “extremely likely” to lose his job otherwise. An order was made for the suppression of his name and all details relating to the offending. The order specifically prevented “publication” of these details.

ASG had not mentioned the charges to his employer; however the University’s Deputy Proctor had been tipped off and was sitting in the public gallery during the court hearing. The Deputy Proctor then informed the Vice Chancellor of the University.

ASG was subsequently suspended from his workplace while an investigation was carried out. He received a final written warning in relation to the matter, and then raised two personal grievances in relation to the suspension and final written warning. He claimed the details of his offending were suppressed and his employer could not, therefore rely on those.

The issue of whether the University had breached the suppression order was originally heard in the Employment Court, before it was challenged in the Court of Appeal. Both Courts found in favour of the University. The Court of Appeal commented that the University had a “genuine interest” in the information and that ASG had breached his duty of good faith by not disclosing the charges. ASG appealed this decision to the Supreme Court.

The Supreme Court confirmed that the suppression order applied to communications made verbally, including by “word of mouth”, as well as those in writing. However, the Supreme Court held that the order did not prohibit the dissemination of the information to persons with a “genuine need to know”, or “a genuine interest in knowing”, and that the genuine need or interest is to be assessed objectively.

Applying this test to the facts, the Supreme Court held that given ASG’s role included protecting students on campus, the University had a genuine interest in knowing he had pled guilty to an offence of violence against his spouse. Therefore the outcome was that there was no breach of the suppression order.

What this means for you
This case confirms the employer may have right to know details of charges or offences regardless of any suppression orders that may in place. Further, that the duty of good faith extends to requiring an employee to disclose charges against them to their employer. Importantly, there must be a link between the charges and the employee’s employment..

If you have a question about the implications of this decision, please contact us

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.
May 2017

The Employment Relations (Restoring Kiwis’ Right to a Break at Work) Amendment Bill (Bill) which proposes to reinstate workers’ rights to meal and rest breaks (breaks) at work was introduced to Parliament by Labour List MP Sue Moroney on 11 May 2017.

Current Law
The Employment Relations Act 2000 (Act) provides, in summary, for reasonable rest and meal breaks, to give employees an opportunity for rest, refreshment and to attend to personal matters, taking into account the employee’s work period. Breaks must be at times and for durations agreed between the parties, or failing agreement, as determined by the employer.

In 2014 the Act was changed to improve flexibility for parties to an employment relationship, where previously the law on breaks was more prescriptive. The Act also currently provides that an employer can impose reasonable restrictions on an employee’s breaks where necessary, for example, specifying where breaks are to be taken, and if an employee needs to remain aware of or perform some work duties during their breaks. Rest breaks are to be paid, and meal breaks may be unpaid.

Proposed changes
The Bill seeks to reinstate the Labour Party’s prescriptive minimum standards approach to breaks. If enacted into law, employers would need to provide the stipulated breaks at times agreed by the parties, or if no agreement could be reached, as follows:

If an employer failed to provided breaks as set out above, a penalty could be awarded against them.

What does this mean for you?
If the Bill is passed into law, some businesses will find it difficult to meet the prescriptive requirements. It was due to challenges with the prescriptive requirements that the Act was changed to its current form. For example, employers reported struggling to provide breaks for employees who work alone, and for whom cover cannot be provided.

If you would like advice regarding meal and rest breaks, please contact us.

Dispute outcomes negotiated by agreement are commonly and prudently recorded in a Record of Settlement (ROS), signed by a mediator pursuant to s149 of the Employment Relations Act 2000, giving the ROS final and binding status. ROS’s executed in this way are also non-reviewable, and cannot be brought before the Employment Relations Authority or Employment Court except for enforcement purposes.

Case Summary
In the recent Employment Court decision of Lumsden v SkyCity Management Ltd, Mr Lumsden was a former employee of a SkyCity restaurant and claimed that SkyCity had breached the parties’ agreed ROS. The ROS provided that Mr Lumsden would end his employment with SkyCity by resignation, that the parties would not disparage each other, and that Mr Lumsden was welcome to apply for any future employment opportunities within SkyCity.

Mr Lumsden claimed that SkyCity had disparaged him when his former manager wrote in the company’s computer system that she would not re-employ him, noting “outstanding performance issues, staff and customer complaints. Not a team player, major attitude change, became very difficult to manage as he wouldn’t follow management’s directions.”

SkyCity argued that these comments were not in breach of the ROS as they were not disparaging and had not been made publically. However, the Court found these comments were in breach, including because they had been available to prospective internal SkyCity employers or stakeholders for two years. It emerged during the Court hearing that SkyCity initially omitted the note from its evidence resulting in the Judge commenting that “the failure to refer to the detail of the form reflected an attempt by SkyCity to mask the full extent of its breach”.

SkyCity also argued that the clause in the ROS regarding the rehiring of Mr Lumsden simply meant that he was welcome to apply for future positions by filling in an application form, but that he was not promised employment. The Court held that such a literal interpretation would render the clause meaningless, as though it simply meant Mr Lumsden could send in an application which SkyCity could immediately put through the shredder. Mr Lumsden had unsuccessfully applied for four positions with SkyCity demonstrating that the notations made on the file were intended to and did have an impact on recruitment decisions.

The Court held that SkyCity should not have agreed to the inclusion of the clause that he was welcome to apply for any future employment opportunities if they had no intent on rehiring him. The Court found that the negative notations meant that Mr Lumsden’s applications were doomed from the start and were not fairly considered and treated on their own merits.

The decision
The Court held that SkyCity had failed to treat all matters as fully and finally settled because of the notations and the way Mr Lumsden’s job applications were dealt with. SkyCity was ordered to pay a penalty of $7500, with 75 percent going to Mr Lumsden, and the remainder to be paid to the Crown, the second largest penalty in a breach of settlement case in the past two years.

What this means for you
Agreed settlements offer employers and employees the opportunity to bring finality and closure to an employment relationship problem. It is important that the terms of settlement reflect your intentions as a poorly drafted agreement can create new problems, and sometimes lead to further issues and litigation.

A number of recent decisions clearly demonstrate that settlements will be enforced, including by award of penalties against the party in breach.

For more information about negotiating resolution to an employment relationship problem, drafting a record of settlement, or to discuss concerns about any breach of settlement including options for enforcement, please contact us