Welcome to Bartlett Law’s Crystal Ball for December 2012. In this issue we spotlight some current trends in employment law and look ahead – what do we see for the future?
The Employment Relations Amendment Act 2010 cast a shadow over employment law in the past year. Coming into force on 1 April 2011, three changes in particular have generated a lot of legal activity:
Extension of the 90 day no-fault trial period to all employers
A flurry of cases came before the Employment Relations Authority, largely in situations where employers had failed to adequately document the inclusion of a no-fault trial period in the employee’s agreement, and then attempted to invoke it.
It is crystal-clear from these cases that accurate drafting is essential – it must be explicit that the trial provision is a no-fault one, under the relevant section of the Employment Relations Act 2000. Timing is also critical – the Employment Relations Authority declined to uphold trial periods inserted after the commencement of employment.
Removal of reinstatement as a primary remedy
This has led to awards of financial damages and a reluctance to reinstate employees in situations where reinstatement may have been awarded in the past. It remains to be seen whether the pendulum has swung too far away from the use of reinstatement as a remedy.
The new test for justification
An employer will defeat a personal grievance if its actions are found to be justified (or justifiable). The test applied for justification has recently changed from what a reasonable employer “would” do in all the circumstances to what a reasonable employer “could” do.
A change from the objective “would” to the subjective “could” has arguably given employers slightly more latitude in justifying their actions and decisions. The impact has been most felt in cases that may otherwise have been marginal under the “would” test. The safest course of action remains to seek our advice in order to ensure that decisions are justifiable.
Areas to watch in the coming months are:
Legislation to Mondayise public holidays
If the legislation to Mondayise the ANZAC and Waitangi Day public holidays which would otherwise fall on a weekend becomes law it may bring some unintended consequences. This change would have an impact upon part time and casual staff in particular and employers will need to think carefully about how they allocate shifts and rosters which include those dates.
Change to “Vulnerable Worker” law
Under Part 6A of the Employment Relations Act 2000, certain classes of workers (such as cleaners) are protected from having their pay and conditions reduced for the same job if their company is sold, or if the work is outsourced to independent contractors. As a result of its review of the Act, the Government plans to limit these protections to workplaces with more than 20 employees. A Bill to amend the Act is intended to be introduced this year.
The provision of information
A major decision in the middle of 2011, Wrigley v Massey University, set out wide-ranging requirements for the provision of information to employees potentially affected by adverse decisions (such as redundancy). Because of the potentially onerous obligations imposed by this duty, the Government intends to narrow its scope. This will also be covered in the Bill referred to above. If you have any doubts or concerns about the disclosure of information, please contact us for advice.
Damages for breaches of restraint of trade
The Rooney Earthmoving Ltd v McTague case resulted in a $4.29 million award against employees who were found to have set up a competing business in breach of a restraint of trade clause. This may signal a move by the courts to make more substantial awards for breach of restraint of trade. For such a claim to be successful it is necessary to clearly document and justify claimed losses. Getting legal advice at an early stage may increase the chances of obtaining an award.
Orders for investigation costs
The Restaurant Brands Ltd v Bond case decided early in 2012 resulted in the employer successfully recouping from the employee the costs of investigation of that employee’s theft. This may herald an increase in employers claiming these expenses. In our view the importance of this case has been understated and it could represent a major shift in the approach of the courts to employee theft. If you are tired of writing off the costs of investigating dishonest employees, we can help you maximise your chances of recovering those expenses.
Social media and technology
Cases involving social media and employee use of the internet have been rare so far. The existing law fits uncomfortably with the expansive, fast moving nature of social media. Because of the difficulty of “translating” laws designed for an ink and paper based world to the digital realm some issues relating to privacy, defamation and ownership of intellectual property arise. Watch for further controversy as the courts attempt to keep social media within the bounds of the existing legal framework.
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 email Craig at .