Posted on: Nov 13, 2017

On 8th November, Minister for Workplace Relations and Safety Iain Lees-Galloway introduced a Bill to Parliament extending paid parental leave to 26 weeks by 2020, saying it is a vitally important move to support working families with newborns and young children.

“Our Government’s commitment to families is underscored by this legislation, which is the first to be introduced by the new administration, and we’re doing so with urgency,” says Mr Lees-Galloway.

“We campaigned on giving children the best start in life, and we’re making good on our pledge to extend paid parental leave to 26 weeks in the first day of legislation in the 52nd Parliament.”

The Parental Leave and Employment Protection Amendment Bill proposes the increase to be phased in over three years and two stages:

“As well as the direct financial benefits to households and reducing stress on parents, extending paid parental leave has a range of positive impacts on child development and fostering parent-infant attachment.

“It also aligns with the World Health Organisation recommendation of exclusive breastfeeding up to six-months of age, all of which improves short-term and long-term child and society outcomes.

“This is just one of the measures in the Government’s Families Package which will better support families with children and reduce child poverty.

“Other measures include the Best Start scheme and boosting the Working for Families payments, targeting low and middle income families.

“The Government believes that every Kiwi child deserves the best start in life. The previous Government said it couldn’t be done, but we’re doing this now so I’m incredibly proud to be introducing this Bill to parliament today,” says Iain Lees-Galloway.

Source: www.beehive.govt.nz

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Oct 26, 2017

After nine years under a National Government, the employment landscape is about to be reshaped.  While Labour, New Zealand First and the Greens all had different policies and priorities coming into the 2017 election, they shared the commonality of being policies for the people.

One of the places where we are likely to see some significant changes from our new Government will be in the area of employment legislation.  While many policies are going to take some time to take shape, in this first term we need to prepare for the potential strengthening of employee rights, an uplifting of minimum entitlements (a significant increase in the Minimum Wage for 2018 is guaranteed) and further promotion of unionisation and collective bargaining.

The first steps – increasing the Minimum Wage

The first steps have already been taken with the announcement of the coalition agreement between Labour and New Zealand First on the 24th of October.  As outlined in this agreement, the Minimum Wage is set to be raised from $15.75 to $16.50 an hour in April 2018. This is the first step in progressively increasing the Minimum Wage to $20 per hour by 2020, with the final increase to take effect in April 2021.

While it’s important to understand where things are heading and give business owners some certainty so they can start planning for wage increases in the years to come, there are concerns that knowledge of the end goal could cause an artificial inflationary response.

The issue of wage relatively is going to be prominent.  For workers who are currently been paid slightly above the Minimum Wage or around the Living Wage, as the Minimum Wage is increased they will likely expect similar increases – to keep their wage rates relative.  Otherwise, employers who are paying above the Minimum Wage for low skilled jobs in order to attract, reward and retain good quality staff, may find their employees disincentivised.  It may become exponentially more difficult for many businesses to keep wages above the Minimum Wage in the years to come.

As commented by Robert Reid (First Union, General Secretary) “the era of 2% per year wage offers is over. Employers, especially those who employ minimum wage workers, will need to be looking at increases of around 8% per year to stay at or ahead of minimum wage rises.”

If other unions share this view we are likely to see claims for large increases being bargained for, with unions seeking progressive steps that will keep their member’s wages in line with the increases in the Minimum Wage.  The first Minimum Wage step for April 2018 is a 4.75% increase (compared to a 3.25% increase in 2017), significantly higher than most negotiated wage rates that we have been seeing in collective agreements of late.

We estimate that to reach $20 by 2021, the Minimum Wage may rise around the following amounts each year:

Date Minimum Wage $ Increase % Increase
1 Aril 2018 $16.50 $0.75 4.75%
1 April 2019 $17.50 $1.00 6.05%
1 April 2020 $18.75 $1.25 7.15%
1 April 2021 $20.00 $1.25 6.65%

For many employers, these increases will result in additional costs that can’t be absorbed without the need to put up their prices – and thus has the potential to inflate prices and increase costs to consumers as a result.  There will be some interesting and challenging wage negotiations and economic conditions ahead!

The gender pay gap

In addition to this coalition agreement, is the Labour and Greens confidence and supply agreement in which the Green Party agrees to provide confidence and supply support to the Labour-led Government.  The Green Party supports a transformative Government which implements the United Nations’ 17 Sustainable Development Goals. In this parliamentary term, the Green Party has a number of priorities which the Labour-led Government shares and will support.

One of these priorities is to eliminate the gender pay gap within the core public sector with substantial progress within this Parliamentary term, and work to ensure the wider public sector and private sector is on a similar pathway.  We should therefore expect to see some progress or changes being made in this area.

What is yet to come?

To set the scene of how the employment landscape made further evolve in the years to come, let’s take a brief look at what some of the other policies were, going into the election, from our now governing parties.

Labour

New Zealand First

Greens

We can help

We will be watching closely to see what changes our new Government seeks to implement, and will keep you updated as and when these start to take shape.  In the meantime, talk to us about your bargaining strategy before going into your next round of collective negotiations.  We can help you determine a sustainable plan for your business as the Minimum Wage increases.

 

 

 

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Oct 17, 2017

This is the first case in which section 67D of the Employment Relations Act (regarding availability provisions) has been considered by the Employment Court.

The case concerned two Mc Donald’s employees who sought a declaration that their individual employment agreements contained an availability clause in terms of the new provisions in the Act, and that the availability clause was not in accordance with the Act, in that it did not provide for reasonable compensation for employee availability.

The Court set out the relevant sections in the Act and noted that an availability provision is a provision in an employment agreement under which an employee’s performance of work is conditional on an employer making work available to that employee, and under which the employee is required to be available to accept any such work.

Context to case

The employees’ guaranteed hours are calculated on a quarterly basis and set at 80% of the average of the previous quarter.  For example, if an employee worked an average of 20 hours in a quarter, their guaranteed hours for the next quarter would be 16 hours.

The clause in the employment agreements

From time to time you may be requested to work hours in addition to [your] work schedule.

Following the posting of your schedule by Tuesday, if your schedule includes hours over and above your security of hours number, you have 24 hours from the posting of your schedule to advise you are not able to work these additional hours. If you are unable to work these additional hours, we may either reduce these additional hours or reissue your schedule at our discretion. We will continue to ensure that your security of hours conditions are met and that all shifts offered meet with your pre-agreed availability.

The principal issue in the case

The employees position

The Plaintiffs were saying that Mc Donald’s had created a right for itself to require an employee to accept any work scheduled and that the rostering scheme forced workers to take on employment beyond guaranteed hours.

Council for the plaintiff submitted that employees had to write down their availability and their contracts provided for high availability and low hours, which was a disproportionate advantage to the employer.  However, the defendants argued that employees write down when they are available and are rostered between those times of availability. The hours of work and additional hours are not imposed on employees through a unilateral decision made by the employer. If it was, then an availability provision would be required.

Employees have flexibility, and can swap shifts etc with other employees.  It was established by witness evidence that when employees were offered extra work they could turn it down without being penalised.  There was a mutuality of obligations which is what this section wanted to achieve after zero hour contracts were banned (flexibility being a two-way street).

Employees argued that the provisions were unlawful because it meant that they were required to be available to accept any work the employer made available that was additional to their guaranteed hours because the words “requested” in standard terms means contractually “required”.

Counsel for plaintiffs also argued that for the employer to “re-issue your schedule at our discretion” means that any variation requested by the employee because they are unable to work will be declined and the hours will be given to another employee. This forces employees to take on employment beyond their guaranteed hours and therefore suits the employer’s needs without making payments to the employees for their availability.

The employees also claimed they were compelled to work additional hours because of the operational provisions, which provided that employees’ guaranteed hours would be 80% of their average hours worked in the previous quarter. The employees argued they would need to work 20% more than their guaranteed hours in order to keep their guaranteed hours the same for the next quarter, which introduced an element of compulsion.

What did the court say?

“You may be requested”

The Court found that employees who were offered extra work above their stated minimum hours were not penalised if they turned down extra work.

The Court found that the word requested in the clause meant that employees could be asked but not compelled to be available for the hours rostered beyond their guaranteed minimum hours (compared with the word “required”).

“Reduce those additional hours”

The Courts found that this meant where the employees were unable to work the additional hours the employer could reduce those additional hours which were over and above the guaranteed minimum hours.

The 24-hour notice period for rejecting additional hours was not unreasonable as the employer needs to arrange alternative employees to perform the work.

The arrangement where employees guaranteed hours would be 80% of their average hours for the previous quarter may incentivise employees to work additional hours however it did not require them to work additional hours.

The Court’s conclusion

The Court concluded that under these circumstances, the employment agreements did not include an availability provision and declined to make the declaration sought by the Plaintiffs.

Lessons from this case

This serves as a reminder that employers need to understand an employee’s right to turn down any hours of work that fall outside their guaranteed hours – unless the employee’s employment agreement contains an availability provision that meet the s67D requirements.

This case shows that an employer may ask an employee to work additional hours from time to time and may even incentivise the employee to accept those additional hours. However, employers must not treat employees adversely if they turn down additional work offered.

Employers who operate irregular and variable rostering systems may wish to consider whether there is a fair balance in the way their system operates.  In this case, the Court acknowledged mutual benefit to both employer and employee in flexible rostering system.

The Court made a clear distinction between the words “requested” and “required”.  Employers should be aware of the importance of wording in employment agreements. Employment agreements that require additional hours of work must meet the stringent availability provision requirements including compensation for the employee’s availability to work those additional hours.

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Oct 16, 2017

The EMA has released its annual analysis of personal grievance cases heard at the Employment Relations Authority, and again it was a sorry story for employers with employees’ winning 72% of cases.

The average national award for hurt and humiliation has increased to just over $7,000 compared to $6,334 in the previous year.  Hurt and humiliation awards for constructive dismissal claims were reported to be higher with an average national award of nearly $8,000.  At the lower end of the scale the average national award for disadvantage claims was $4,797.

On average, it will cost employers around $50,000 to lose a personal grievance case in the Authority.  This includes the awards to the employee, a contribution to the employee’s legal costs and the employer’s own legal costs.  Even if the employer wins the case, it still costs around $12,000 for legal fees and expenses (after the employee has paid a contribution towards the employer’s costs).

In light of this, we thought it would be worthwhile highlighting the benefits of mediation, and provide a summary into how the process works.

 

 

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Oct 16, 2017

When an employment dispute or personal grievance arises it can be very stressful for everyone involved. With work being a big part of most people’s lives, it’s understandable that when there’s an employment relationship problem in the workplace, it is important that they are dealt with efficiently, respectfully, and in a way that creates the best possible chance that parties will be able to move on. It’s unlikely that both parties are going to be ecstatic about the outcomes of a mediation, however the aim is to achieve a settlement that both parties can live with.

In accordance with the Employment Relations Act 2000 (the “Act”), mediation is intended to be the first port of call for attempting to resolve disputes in the employment context. If proceedings are filed with the Employment Relations Authority (ERA) before mediation has occurred, the Authority Member will usually direct the parties to attend mediation before any hearing takes place. Mediation is considerably more efficient and cost-effective than a full hearing, with a good proportion of disputes being resolved at this level.

The purpose of mediation is to provide an informal opportunity for the parties to reach an agreement they can live with and move forward. In reality, a high percentage of mediations result in some kind of settlement between the parties, often with an agreed mutual parting of the ways or a resignation, and some form of monetary compensation paid to the employee. Mediation can be used in employment to help resolve a wide range of disputes including personal grievances for unjustified dismissal or disadvantage, restructuring, bullying, workplace stress issues or issues arising out of the interpretation of an employment agreement.

What happens at mediation?

Mediation is basically a facilitated meeting between the parties to an employment dispute. If using a mediator from the Ministry of Business, Innovation and Employment (previously known as the Department of Labour) the service is free. At the onset of the mediation, the mediator lays down the ground rules for both sides to put their version of the facts forward and to then discuss a settlement or way forward. Basically, each party is to have a turn giving their version of the events, without interruptions from the other.

Often, the mediator will ask both parties questions to help clarify things, in order for the mediator to assess each parties risks if the dispute does not settle and goes on to the ERA. Once the issues have been thoroughly explored and discussed, the parties move into separate, smaller break out rooms, in order for negotiations to begin. The mediator then goes between the two rooms assisting the parties to reach an agreement where possible. However, there is no set order of proceedings and each mediation plays out differently. Sometimes the parties may meet again to further discuss matters, or negotiate a settlement agreement via mail correspondence, emails or phone discussions.

Unlike a court, in mediation there is no third party deciding the outcome of the case. The only enforceable outcomes are those that are mutually agreed, signed off by each party and the mediator, and recorded in a section 149 settlement document (which the mediator provides on the day). Where the parties agree to particular terms of settlement, these will be legally binding and enforceable. Parties are now also able to agree in writing that a mediator make a recommendation under section 149A of the Act that, unless objected to within an agreed timeframe, will be final and binding.

Recommendations are having some great success since their introduction on 1 April 2011.  They assist in resolving a dispute where the parties are close to agreement but just can’t quite get there, or even where they are poles apart. Having a third party recommendation by the mediator takes some of the emotion out of the equation, and often helps the parties to accept what a fair and reasonable resolution would be. Alternatively, under section 150 of the Act the parties also have the option of agreeing to request that the mediator be empowered to make a decision that will be binding on both parties, however since the introduction of section 149A recommendations this option has become less appealing.

It’s important to note that in accordance with section 148 of the Act, mediation is entirely confidential. This means that parties can be frank and honest about their positions, which creates the best possible platform for settlement to be reached. Statements made in the context of mediation are not admissible in court and this means parties can admit fault or take responsibility in the interests of reaching agreement.

Preparing for mediation

When preparing for mediation it helps to write things down. First prepare a mediation summary which outlines the key points you want to address on the day – your version of the events. Next, think about your desired outcome, which should be realistic and fair to both parties. You should also consider what are bottom lines for you on which you cannot shift beyond a certain point, whether monetary or otherwise. This means that when the time comes to discuss the possibility of a settlement, you will have an idea of what is important for you to achieve, and also of anything you are not prepared to let go of.
It is also helpful to have an opening offer in mind prior to mediation as this will save time during the process itself. Good advice is important here as it can assist with what might be unrealistic expectations for settlement; therefore always talk to one of the team at Paul Diver Associates first. We can help you prepare an appropriate mediation strategy.

Conclusions

Mediation can be a highly effective way to solve employment relationship problems. Properly utilised, it can mean real savings in time and legal fees, and helps avoid the stresses and disadvantages involved in escalating the dispute through to the ERA. Further, whereas Authority and Court cases tend towards a “winner takes all” type of outcome, mediation generally allows both parties to come away with upsides if a settlement can be reached, and it allows for more flexible and creative resolutions. It also might help to know that in the ERA, employers only win appropriately 1/3 of the grievance cases, so settlement at mediation is usually preferred!

If you have an employment relationship problem or dispute on your hands, give us a call and we can help you through it. One of the Senior Associates in our Conflict Resolution can give you a risk analysis, assist you with a mediation strategy, and can even attend the mediation with you when the time comes. We’re here to help you with as much or as little assistance as you need.

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Sep 18, 2017

Section 162 of the Electoral Act 1993 provides that employers are required to allow all their employees who are electors and who have not had a reasonable opportunity to vote on Election Day before starting work, to leave their work for the purpose of voting, no later than 3pm for the remainder of the day. An Employer cannot make deductions from the Employee’s remuneration for the time taken off.

However, where any employee is required to work after 3 o’clock in the afternoon of polling day for the purpose of carrying on any essential work or service, employer is obliged to allow the Employee to leave his or her work for a reasonable time not exceeding 2 hours for the purpose of voting.

Election Day falls on Saturday, 23rd September 2017.

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Jul 24, 2017

This case highlights the heavy consequences and financial implications of knowingly breaching minimum employment standards.

BBS is a horticultural company which contracts services to horticultural growers, particularly asparagus producers in the Waikato.  Upon a Labour Inspector visit in 2013, it was discovered the employees were not provided with individual employment agreements, there were no time and wage records, no payments being made for annual and public holidays, and serveral of the employees were working in breach of their visitor visa conditions.  BBS were subsequently issed with an Improvement Notice, which was initially complied with.

However, upon a second follow-up audit in 2016, the Labour Inspector found that one employee was working in breach of her visitor visa conditions, there ten other immigrant employees, and all 11 employees had not been given individual employment agreements or completed timesheets.

In this case there were breaches under 7 separate heads, potentially resulting in a maximum penalty for BBS of up to $940,000:

  1. Failure to retain employment agreements for to 16 employees. The maximum penalty is $320,000 (16 x $20,000)
  2. Failure to keep a wage and time record for 16 employees. The maximum penalty is $320,000 (16 x $20,000)
  3. Failure to keep a holiday and leave record for five employees. The maximum penalty is $100,000 (5 x $20,000)
  4. Failure to pay one employee minimum wages. The maximum penalty is $20,000
  5. Failure to pay annual holidays to five employees. The maximum penalty is $100,000 (5 x $20,000)
  6. Failure to pay two employees public holiday pay. The maximum penalty is $40,000 (2 x $20,000)
  7. Failure to provide two employees with an alternative day for working a public holiday (or to pay an alternative day on termination). The maximum penalty is $40,000 (2 x $20,000)

The factors the Court must have in regard to determining the appropriate penalty under s 133A of the Act have been summarised in the recent Employment Court case of Lumsden v SkyCity Management Limited as including:

In this case, BBS had previously been subject to an Improvement Notice and had appropriate systems in place. Employers in New Zealand are expected, especially in this case where BBS was made aware of the compliance requirements by a Labour Inspector, to know the minimum legal requirements in respect of their employees and adhere to them. Ignorance of the law is no defence.

The  Authority found that BBS’s failures to maintain correct records in respect of employment agreements, wage and time records and holiday and leave records was deliberate.

Balancing the need to avoid setting the level of penalty at such a level that there would be a significant risk of non-payment by BBS against the public interest to impose a penalty which acts a deterrent to others who may contemplate engaging in such behaviour, the Authority considered in all the circumstances that applying a penalty of $57,120 was appropriate.

To read the full Authority decision click here

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Jul 07, 2017

We’re in expansion mode and are looking for Senior Associate – Collective Bargaining Expert to join our team.  The role involves collective bargaining, employment relations conflict resolution (including facilitating mediations), undertaking employment investigations, and representing our clients at Employment Institutions.

Applications will close once we find the right person so get in quick!  Apply via Seek with your covering letter and CV, or email [email protected] for more information or to request a job description.

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Jul 07, 2017

A vineyard labour contractor has been penalised $25,000 by the Employment Relations Authority (ERA) after a labour inspector found they failed to meet their obligation to keep employment records for a second time.

This penalty follows on from an earlier determination by the ERA on 18 November 2015, where KRSVP Limited was ordered to pay $7,500 for failing to provide employees with a written individual employment agreement, or time or wage records.

“Keeping employment records is important for proving employees are being provided with all their entitlements, such as the minimum wage,” says Labour Inspectorate regional manager Kevin Finnegan.

“Following on from the initial ERA determination KRSVP Limited would’ve been well aware of their obligations, so it’s extraordinarily disappointing to have to take them to the ERA a second time.

“It seems to suggest some vineyard owners aren’t seeking any assurance from their contractors, even from an employer such as KRSVP whose poor compliance had already been exposed.

“Without seeking such assurances vineyard owners won’t know whether those picking and pruning their vines are receiving their entitlements, putting the reputation of the industry at risk.”

The Labour Inspectorate first requested the employment records of vineyard labour contractor KRSVP Limited on 20 July 2016.

Despite numerous attempts to contact KRSVP Limited and its sole director and shareholder Sanjhe Prasad, it took seven months for Mr Prasad to provide what turned out to be wholly inadequate wage and time records that did not comply with the law.

The ERA also found in their determination that the employment agreements given to the workers by Mr Prasad failed to give any meaningful description of the work to be carried out, adding to the raft of breaches committed by Mr Prasad in relation to his duties as an employer.

In addition to the penalty, KRSVP Limited will be on an 18 month stand down period from recruiting migrant labour.

MBIE encourages anyone concerned about their employment situation, or the situation of someone they know, to call its contact centre on 0800 20 90 20, where their concerns will be handled in a safe environment.

Source: MBIE, 22 June 2017

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Posted on: Jun 19, 2017

There are two main changes to parental leave payments that have taken effect as of 1 June 2017:

Source: MBIE – for more information parental leave payments for pre term babies click here

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.