Welcome to Bartlett Law’s Crystal Ball. In this issue we spotlight some current trends in employment law and look ahead – what do we see for the future?
We also welcome our new senior associate, Charlotte Bates. Charlotte has extensive employment law experience and advises employers and employees on all areas of employment law. Charlotte provides pragmatic advice and works alongside clients to devise strategic solutions to employment law issues.
Changes to the Employment Relations Act 2000 are finally here!
The much talked about changes to the Employment Relations Act (ERA) came into force on 6 March 2013. We outlined the proposed changes when they were in Bill form, so this is just a reminder of the changes and how they may impact you.
Rest and meal breaks (Part 6D)
Contrary to media reports, employees will not lose their rights to breaks, rather the new law allows for more flexibility. Moving forward, an employer must still provide an employee with a “reasonable opportunity for rest, refreshment and attention to personal matters” and any restrictions to an employee’s entitlement to rest breaks must be “reasonable and necessary”, or agreed to by the employee.
The new law allows for greater flexibility as to when breaks are taken, if at all, which will be particularly useful for sole charge operations and industries where it was difficult to comply with the previous prescriptive requirements.
You may want to revisit your individual employment agreements and remove any references to breaks provided under the old sections of the Act.
Flexible working arrangements (Part 6AA)
All employees are now able to request a flexible working arrangement, not just those with caring responsibilities. Employees can make a request from the day they start work and there is no limit on the number of requests that can be made. Employers must respond in writing to an employee’s request within one month (compared to three months under the old law).
Good faith and the provision of information – section 4(1A)
The extensive disclosure and good faith obligations have been simplified a little under the new laws. Previously, employers were required to disclose everything but the kitchen sink when it was proposed to terminate an employee’s employment (following the Employment Court’s decision in Vice Chancellor of Massey University v Wrigley).
The changes mean that an employer will now be able to withhold confidential information if:
- it would involve the unwarranted disclosure of the affairs of another individual (section 4(1B)(a)); or
- there is a legal requirement to maintain confidentiality (section 4(1B)(b)); or
- there is another good reason to maintain the confidentiality of the information (e.g. avoiding prejudicing the employer’s commercial position (section 4(1B)(c)); or
- there is a mutual understanding (whether express or implied) of secrecy (section 4(1D)).
Despite these exceptions, the disclosure obligations under section 4(1A) are still far-reaching and all documents relating to an employee’s continued employment, including information about other employees, may need to be disclosed.
Strikes and Collective bargaining
A number of changes have been made in this area including:
- employees must now provide written notice of any strike action;
- employers can dock employees’ pay for partial strikes;
- parties bargaining for an new collective employment agreement are no longer required to reach agreement and can ask the Authority to declare that bargaining has ended;
- employers do not have to agree to multi-employer bargaining; and
- employers no longer have to automatically put new employees on the relevant collective employment agreement for the first 30 days of their employment.
If you have a collective employment agreement in your workplace, now is a good time to review your practices for new employees.
Continuity of employment provisions (Part 6A)
Changes have been made to make Part 6A more workable when transferring employees to a new employer. Businesses with fewer than 20 employees will now be exempt from the requirement to automatically take on “vulnerable workers” (cleaners, catering staff etc) affected by the work changing hands.
Time limit on Employment Relations Authority determinations
The Employment Relations Authority is now required to provide an oral determination or an oral indication of its preliminary findings at the conclusion of the investigation hearing. The written determination has to be provided within three months of the investigation meeting (or receipt of the submissions or the last information from the parties if later). This is good news for parties taking a case to the Authority as in some cases there have been lengthy delays in a receiving determination in the past.
ANZAC Day 2015 to be Mondayised
When Waitangi Day or ANZAC Day fall on a weekend, the following Monday will be the official public holiday. The first time this happens is with ANZAC Day this year so Monday, 27 April 2015 will be a public holiday.
Don’t forget that Saturday, 25 April 2015 is still a public holiday so employees who work on this day are also entitled to time and a half for all hours worked and an alternative day’s holiday if the day was otherwise a working day for them.
Increases to paid parental leave and minimum wage
A reminder that from 1 April 2015 paid parental leave increased to 16 weeks from 14 weeks. (This is paid by the government, not the employer.)
The adult minimum wage increased to $14.75 an hour on 1 April 2015. The starting out and training hourly minimum wage increased to $11.80 (80% of the adult minimum wage).
Health and Safety Reform Bill
The Health and Safety Reform Bill is slowly making its way through the legislative process. The Bill is currently before parliament and the new select committee is required to report back by 29 May 2015. Indications are that the Bill is set to become law in the second half of 2015.
As we have previously outlined (see our April 2014 Crystal Ball), the Bill introduces a new concept of a “person conducting a business or undertaking” (PCBU) who will have the primary duty of care to ensure the health and safety of workers employed or engaged by the business or undertaking. The Bill also imposes new duties on officers and directors.
It is important that employers understand their new obligations as the penalties under the new Act will be greater, including higher monetary penalties and potential jail time for breaches. While there will be a grace period of several months to allow employers to get up to speed with the new laws, we recommend reviewing your health and safety practices, policies and documentation now so you are ready when the law comes into force.
Increased scrutiny of restructures
Recently the Court of Appeal (in Grace Team Accounting Ltd v Brake) confirmed that the courts will now look behind an employer’s decision to make a position redundant and that section 103A of the Employment Relations Act means an employer must have genuine business reasons for the redundancy and act as a fair and reasonable employer.
Previously, the courts would not question an employer’s decision to make an employee redundant provided there were genuine business reasons for the decision and it was not based on ulterior motives (for example, for poor performance or incompatibility).
Ms Brake left a position at KPMG to join GTA on the assurance that her role would be a long term one. However, six months after joining GTA, she was advised that due to an unexpected downturn in the company’s performance and financial position, her role (along with two other roles) would be disestablished.
It transpired that the financial projections GTA had relied on as justification for the disestablishment of Ms Brake’s role were wrong and GTA had in fact generated a profit at the time of Ms Brake’s redundancy. The Employment Court held that Ms Brake had been unjustifiably dismissed as the reason GTA relied on to make her redundant (ie, the financial downturn) was not genuine.
Court of Appeal decision
The Court of Appeal upheld the Employment Court’s decision. It held that GTA did not act as a fair and reasonable employer as it “acted precipitously and did not exercise proper care in its evaluation of its business situation and it made its decision about Ms Brake’s redundancy on a false premise”.
Ms Brake was awarded $65,000 for lost earnings and $20,000 for humiliation, loss of dignity and injury to feelings.
What does this mean for businesses wanting to restructure?
If an employer wants to disestablish a position it must have a thorough and accurate business case to support its decision. It will not be enough to merely say “we are proposing redundancies due to a need to cut costs”; information needs to be provided to employees about the level of savings that need to be made, and how the disestablishment of certain positions and not others, will achieve those required savings.
As always, a fair process must be followed including meaningful consultation, the provision of relevant information, allowing employees a reasonable time to comment on the proposed changes and looking for redeployment options before making an employee redundancy.
Strengthening employment standards
The government has indicated it has approved a package of measures to strengthen enforcement of employment standards including tougher sanctions, clearer record keeping requirements, increased tools for Labour inspectors and changes to the Employment Relations Authority’s approach to employment standards cases.
An Employment Standards Bill will be introduced this year. We will update you when the Bill is introduced.
Social media and conduct outside work
Social media and conduct outside work continue to overlap with employment issues and dominate the news headlines. It is now well established that conduct outside work hours, including activity on social media sites such as Facebook and Twitter, can lead to disciplinary action when such conduct brings the employer into disrepute.
In this digital age where every aspect of life is recorded and online within seconds, it is increasingly difficult to keep private and work life separate – many employees are learning this the hard way and losing their jobs.
Employees have to be careful too as the recent “cake case” in the Human Rights Tribunal (HRT) demonstrates. After resigning from NZ Credit Union Baywide (NZCU), Ms Hammond made a cake with derogatory comments about NZCU and took it to a small private party. A guest at the party, who also worked at NZCU, posted a photo of the cake on her private Facebook page which she was forced to share with her boss at NZCU. NZCU then sent the photo to local recruitment agencies and Ms Hammond’s new employer, calling for her to be fired.
Ms Hammond was awarded damages totalling $168,070.88 for a breach of her privacy. This was an expensive lesson for NZCU and while Ms Hammond “won” the case, it appears her reputation has also been compromised due to what she thought would be private actions.
We urge you to be careful and not engage in high-jinks over the long weekend; think before you post anything on social media regardless of your privacy settings; and if you find out one of your employees has not acted appropriately, keep it confidential and follow a proper process!