Welcome to Bartlett Law’s Crystal Ball for July 2013.  In this issue we spotlight some current trends in employment law and look ahead – what do we see in the future?

Current trends

Pre-employment assessments

An unpaid test to assess a prospective employee’s suitability backfired badly for the employer in the highly publicised case of Howe-Thornley v The Salad Bowl Ltd. In finding that the claimant was unjustifiably dismissed after just four and half hours of work, the Employment Relations Authority noted that all the necessary elements of an employment relationship were present and therefore the “applicant” was actually an employee.

Subsequent cases based on slightly different facts have resulted in unpaid trials being found not to result in an employment relationship. These conflicting decisions have led to a great deal of confusion, because so much seems to hinge on the facts of each case. The Salad Bowl decision has been appealed by the employer and hopefully that appeal will bring some clarity to this issue.

If you are considering conducting pre-employment assessments, trial periods or dismissals, the safest course of action is to seek our advice first.

Employment Relations Authority biased in favour of employees?

Recent analysis by an employers group purports to show that employees “won” 67% of the 366 personal grievance cases brought before the Employment Relations Authority in 2012.  The employers group argues that further changes to employment law are required to “level the playing field”.

We believe that no bias exists and that the “success rate” needs to be viewed in its proper context. The legal test for justification was changed in April 2011 from what a reasonable employer “would” do in all the circumstances to what a reasonable employer “could” do.  As a result, employees are now unlikely to proceed to the ERA unless they believe they have a good chance of winning under the new (more stringent) test, with “weaker” cases being abandoned (or settled).

Tele-commuting in the spotlight

In the face of comments from Yahoo! boss Marissa Mayer banning tele-commuting at Yahoo!, flexible working arrangements have come under close scrutiny.  A growing proportion of the New Zealand workforce engage in telework, and seem to enjoy clear benefits from doing so.

When employees work from home, existing policies will need to be modified to remain effective. New issues, such as secure storage of documents, whether the home office complies with health and safety requirements, flexible hours of work and what is “acceptable use” of the work/home computer all need to be considered.

Employee behaviour outside work

In two high profile cases, the Employment Relations Authority has upheld dismissals for employee misconduct outside work.  A senior Forsyth Barr employee was dismissed after a conviction for inflicting grievous bodily harm in an out of hours road rage incident.  The Authority noted that the intense media interest meant that the investment firm was in danger of being brought into disrepute.

In the other decision the Authority upheld the dismissal of an office manager who taped a zip across her mouth at a public Council meeting, as part of a “Save the Rail” media stunt. The Authority agreed that the employee’s behaviour could potentially damage the employer’s business relationship with the Council.

While such dismissals are rare, they do serve to illustrate that the boundaries between work and personal conduct are not as clear-cut as they may first appear.

Employment Relations Amendment Bill 2013

The Employment Relations Amendment Bill had its first reading on 5 June. A Select Committee report is due back to the House of Representatives by 5 December 2013.

Future predictions

Areas to watch in the coming months are:

Business case for redundancy

In the recent Employment Court case of Totara Hills Farm v Davidson, it was confirmed that judicial bodies can (and should) assess the employer’s business decision behind a redundancy to determine whether the redundancy was what a fair and reasonable employer could have done in all the circumstances.

This means that the judicial body will enquire into the merits of a restructuring decision, rather than allowing the employer to assert the decision was for genuine business reasons. This reinforces the need for businesses to have a sound business case before implementing a restructure.

Changes to medical certificates

The Medical Council is proposing changes to medical certificates to permit more information to be provided on the certificates and (if applicable) to require doctors to specify the duties an employee is fit for.  While this change may catch the occasional “sickie”, its greatest impact may be in situations where employers are required to make decisions about medical incapacity. It may also close the “hangover/sickness” loophole Craig has highlighted in previous articles.

Taking social media seriously

As the proportion of technologically literate employees grows, employers are increasingly faced with novel and unexpected issues. Who could have anticipated that the Employment Relations Authority would be grappling with the health and safety implications of the “Harlem Shake” social media craze? Every month seems to provide another example of misbehaving employees having their social media “trail” used as a source of evidence against them. Employers can no longer dismiss social media as a fad that can be safely ignored. As the uptake of consumer IT reaches a tipping point, it is time for employers to take social media policies seriously.

If you need advice, contact our expert in this area, Craig Mundy-Smith. See our website www.bartlettlaw.co.nz for his contact details or e-mail Craig at .

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