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Employment Commentary HR KNOWHOW WHAT’S NEW JUNE 2010
In this edition:
- Statutory Holidays falling on Weekends - Parental Leave Payment Boost - Employers should seek Professional Advice - Health and Safety in Employment Act – Electrical Tools, Machinery and Appliances
Statutory Holidays and Mondays The question of Mondayising Anzac Day and Waitangi has reared its head again with the Engineering, Printing and Manufacturing Union looking to seek more pay for workers if statutory holidays fall on a weekend. When Anzac Day was declared a public holiday, it was specified that everything had to be shut, and in 1949 legislation was passed forbidding the Mondayising of the day. The notion was that it would be wrong to treat such a solemn occasion as just another holiday. If such were the case, it could lose some of its significance. The view persists in some quarters today. The Returned and Services Association National Executive has just revisited the issue, having noted that six of the eight Australian States except Tasmania and Victoria have Mondayised Anzac Day. Employees have benefited from a reasonably recent annual leave increase from 3 to 4 weeks at a considerable cost to employers. Moreover, the country is still feeling the effects of the recession with many businesses having exhausted their financial reserves. While we all would like the long weekends, it does not make sense to increase costs to employers at this time.
(as reported National Business Review June 9 Edition)
“Parental leave for families with new babies will be increased next month, says Minister of Labour Kate Wilkinson.
From July 1 the maximum parental leave payment will increase from $429.74 per week to $441.62 per week. The minimum payment for self-employed parents will increase from $125 to $127.50 per week.
“Any increase in financial support for new parents is helpful,” Ms Wilkinson says. “The number of New Zealand parents receiving parental leave payments continues to steadily increase, with well over 25,000 families getting assistance each year.”
The maximum rate of paid parental leave is adjusted every year to account for any increase in average weekly earnings.
Parents eligible for the scheme are entitled to up to 14 weeks paid leave at a rate calculated on the basis of their average weekly earnings”.
This payment is not a cost to the employer but is a Government subsidised benefit.
Seek Professional Advice on Employment Issues
Disciplinary action involving warnings or terminations requires a robust procedure which protects an employee from unlawful action by an employer. A good example of an employer getting it wrong is the case of GEOS New Zealand/David Page. David Page, who was head of a multi-national English language school in Auckland was awarded $190,000 after the Employment Authority dismissed claims he was used to being treated ‘the Japanese way’. Page was demoted from the position of Regional Director at a conference in 2008 and made head of the company’s Auckland language centre. In April last year, he was fired by email after being given "one last chance" to make the school profitable. The company claimed that Page "accepted understanding of the 'Japanese way' of doing business". They went on to say he was used to Kusunoki "ranting", "berating" and "humiliating" people "so this was nothing new". But the Employment Relations Authority said the company's failings were "fundamental and profound". Member Denis Asher said the final warning was "an unscrupulous exploitation of the earlier, unlawful demotion". Asher also said "an entirely unfair, unilateral process was applied" by the company in the decision to dismiss Page. Page was awarded $55,000 for loss of income, $21,000 for hurt and humiliation, and $31,849.99 for long service leave. The total amount, including superannuation, under-payment of salary, holiday pay and bonuses came to more than $190,000. We are very experienced in managing disciplinary matters and can assist employers who are concerned with either performance or behavior. The financial risks of getting it wrong are severe. If you need help please contact me on (09) 377 9891 or sw@knowhow.co.nz
Health and Safety in Employment Act – Electrical Tools, Machinery and Appliances The Health and Safety in Employment Act requires employers to provide and maintain a safe working environment for their employees. Employers are required to take ‘all practicable steps’ to ensure the health and safety of their employees and others while at work by taking practical and reasonable actions to eliminate, isolate or minimise hazards within the workplace. The Electrical Regulations 2010 states that tools can be considered safe where they have been “tag tested” or “the tool is supplied with electricity through a circuit protected by an electrically safe RCD (Residual Current Device) that provides protection from electric shock”. RCD’s are often known as “safety switches”. We have been advised that RCDs are more commonplace in new office buildings. The frequency of the testing varies across industries and environments. The frequency of testing for an office environment is every 5 years. A visible inspection of tools and equipment can also serve as a means of hazard inspection. In the event of an electrical tool causing harm to an employee, and the employer has not undertaken steps to ensure the safety of the equipment in the workplace, the employer may be in beach of The Health and Safety in Employment Act and may face penalties under the Act. Tag testing and visible inspection of tools and equipment are two ways employers can show they have taken practicable steps to maintain the safety of their employees and the workplace. If you do wish to tag test your electrical equipment please contact Beth or Kerry at KnowHow on 09 377 9891 for details of our preferred supplier.
Wood & Associates – Recruitment
Wood & Associates provide recruitment services on the same basis as our HR Knowhow services. In large part, we will rely on our knowledge of you and your business and we will work hard to find people who are the right fit.
We will provide you with fee estimates for an assignment and we provide a significantly longer guarantee than is the norm.
If you would like to know more about our recruitment services, how we operate and the fee structure please call me, or my recruitment business manager, James Cozens on 09 358 2838 or contact us at James@woodandassociates.co.nz.
Referrals
We are very grateful to our clients who provide us with referrals. If you know of an employer who needs support in managing employment matters or perhaps needs Employment Agreements brought up to date please pass on our contact details or let us know and we will contact them to outline what we do.
Please do let us know if there is more we can do to assist you with your HR matters.
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Employer’s Resource Employment Agreements, Company Policy and Procedures, Health and Safety Manuals/Systems Compliance, Restructuring, Redundancies, Managing Performance, Mediations, Dispute Resolution, Personal Grievances, Compliance, Termination Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem.
May 2010
In this edition: - Vacancies on the Up – will job hunting now begin? - 90 day Trial Period – Update - The Cost of Getting It Wrong - Personal Grievances on the Rise - Update on Bills before Parliament
Vacancies on the Up – will job hunting now begin?
The number of skilled jobs advertised has now risen for 10 consecutive months by 21.7 percent in total and by 8.5 percent in just the last three months.
"We're now seeing business confidence pick up post-recession and as a result
many employers are hiring again," says Paula Bennett, Minister for
Employment.
"These encouraging indicators when added to the drop in the official unemployment rate to six percent, signal a labour market slowly on the mend," says Paula Bennett.
This increase in jobs advertised, if it continues, is likely to take the lid off suppressed movement especially when we consider recent salary surveys showing a median pay increase of only 2.5% for the last 12 months ending February 2010 and other surveys indicating that many people have not changed jobs in the last 18 months owing to a lack of security.
Our concern is that there is a lot of potential change in the market and employers should now be looking at their remuneration structures and how to retain their key staff.
KnowHow can work with you to retain your key employees and ensure that you get the best out of your people. Please contact us on 09 377 9891.
We are now seeing the 90 day trial period as a ‘common’ term of an employment agreement. As we had expected, we are seeing that employers are making good use of the trial period legislation by providing employees with an opportunity and not necessarily hiring and firing ‘willy nilly’.
Termination During the Trial Period
To terminate an employee on a trial period it is essential that:
· The trial period has been agreed and recorded in the employment agreement
· That the trial period is 90 days or less, commencing from the start of the employment relationship (i.e. this could be less than 3 months).
· That the notice of termination is provided during or before the end of the 90 day trial period
· Your business has less than 20 employees (including fixed term and casuals)
If you are unsure of how to terminate during the trial period or if you can do so on solid grounds we are more than happy to talk this through with you. Please contact our team on 09 377 9891.
Recent awards to employees have included:
· $350,000 to a former deputy Managing Director for constructive dismissal and redundancy. Costs included; $193,333 in lost wages, $128,615.38 for redundancy compensation, $15,000 for hurt and humiliation and $6,344 for lost benefits.
· $30,000 to a café worker for an unjustified dismissal
· $3,000 to an allegedly ‘pot smoking’ employee for hurt feelings
And even when you win you lose….
A former Air New Zealand Accounts Clerk was ordered to pay $65,000 towards the airline's legal costs (of $88,878 actual) following her unsuccessful appeal in the Employment Court in 2009. The cost of winning the appeal for her employer was therefore over $23,000.
Personal Grievances on the Rise
The recent statistics on Personal Grievance Awards for 2009 show personal grievance claims have increased 11% compared with 2008. Compensation awarded to employees for hurt and humiliation has increased by 3% to $5,402, compared with 2008. These figures show that regardless of 2009 being a recession year and employers well justified in restructuring there is still a portion of the workforce (albeit a small one) that will take action against employers.
Update on Bills before Parliament
The Employment Relations (Rest Breaks & Meal Breaks) Amendment Bill
The Employment Relations (Rest Breaks & Meal Breaks) Amendment Bill passed its first reading on 29 April 2010.
The Bill amends the Employment Relations Act 2000 to implement government policy on relaxing rest break and meal break provisions for employees.
Under the Bill, there is a requirement for meal breaks and paid rest breaks or compensatory measures. Compensatory measures could include later start or earlier finish times, or time off in lieu. Parties will need to agree in good faith. However failing agreement, the employer can determine the times and duration of the breaks. Compensatory measures would be agreed between the parties and only where there is a reasonable restriction to taking the breaks.
While we agree that a practical and more flexible approach is needed in the legislation, we see that employers will be spending more time updating rosters, following up late starts, and administering time in lieu systems.
The Bill however does provide the employer with more control around the breaks and seeks to ensure that his/her service or production is not compromised.
The closing date for submissions is 11 June 2010, with the report due 29 October 2010.
Unsuccessful Bills:
There was intent to provide employees with statutory entitlements in the event of redundancy or dismissal. This Bill has failed.
A proposed Bill to provide differing levels of minimum wages for youth will also not proceed further.
We are following the Holidays Act review. It appears that this is sitting with the Review Committee who will be considering the submission and drafting legislation. We will advise you upon any further developments.
Wood & Associates - Recruitment
Wood & Associates provide recruitment services on the same basis as our HR Knowhow services. In large part, we will rely on our knowledge of you and your business and we will work hard to find people who are the right fit.
We will provide you with fee estimates for an assignment and we provide a significantly longer guarantee than is the norm.
If you would like to know more about our recruitment services, how we operate and the fee structure please call me, or my recruitment business manager, James Cozens on 09 358 2838 or contact us at James@woodandassociates.co.nz.
Referrals
We are very grateful to our clients who provide us with referrals. If you know of an employer who needs support in managing employment matters or perhaps needs Employment Agreements brought up to date please pass on our contact details or let us know and we will contact them to outline what we do.
Please do let us know if there is more we can do to assist you with your HR matters.
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Employer’s Resource Employment Agreements, Company Policy and Procedures, Health and Safety Manuals/Systems Compliance, Restructuring, Redundancies, Managing Performance, Mediations, Dispute Resolution, Personal Grievances, Compliance, Termination
Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem.
MARCH 2010
In this edition:
In January this year James Cozens joined the newly formed Wood & Associates as Recruitment Business Manager, a recruitment company which I have set up to provide recruitment services to our Knowhow clients. James brings to the Company a very strong specialisation in Accounting, IT and Professional Services and we will be offering our services in these sectors in addition to looking after our KnowHow clients.
James graduated in Law and then worked for several years in a major UK CA firm before moving into the recruitment industry. He has 25 years experience in Accounting, Legal, Technical and IT recruitment.
He has held senior management roles for leading financial and IT recruiters in the twelve years he has been in New Zealand.
James has recruited for international businesses and many small to medium sized organisations. James is a past President of the New Zealand Division and past Board Director of the Recruitment & Consulting Services Association (Australasia). He currently chairs the Advisory Board for the Department of Accounting & Finance at Unitec.
Over the coming months I will introduce you to James – we are aiming to provide recruitment services on the same basis as our HR Knowhow services. In large part, we will rely on our knowledge of you and your business and we will work hard to find people who are the right fit.
We will provide you with fee estimates for an assignment and we provide a significantly longer guarantee than is the norm.
For a number of years I have been encouraged by clients to take the step of setting up a recruitment arm. Feedback from clients in establishing Wood & Associates has been interesting – key is “meet the brief; don’t just throw CVs at us”.
If you would like to know more about our recruitment services, how we operate and the fee structure please call me or call James Cozens on 09 358 2838 or contact us at James@woodandassociates.co.nz or Sylvia@woodandassociates.co.nz;
Review of Part 9 Personal Grievances
Kate Wilkinson, the Minister of Labour has requested that the Department of Labour undertake a review of the personal grievance system. The objectives of the review are to
consider whether the personal grievance system:
In addition the Minister has requested information as to:
The discussion paper provided by the Department of Labour covers:
§ the operation of the personal grievance system § the cost of problem resolution § the balance of fairness § the varying quality of employment advocates (including Barristers, Solicitors, advocates and no win/no fee representatives) § access to justice § negative aspects of responsiveness and timeliness of services § the disproportionate impact of personal grievances on small to medium enterprises § possible means of regulation § eligibility – raising a personal grievance § the effectiveness of remedies. § assistance to resolve problems at an early stage
Possible options for consideration include:
§ the extension of the trial period beyond the current 90 days and extending this to employers with up to 49 employees (currently 19) § reducing the 90 day period for lodging a grievance § employees length of service (regardless of trial periods) being a factor in whether the employee could raise a grievance § regulation of costs and remedies which may allow greater focus on the substance of issues § removing reinstatement as a primary remedy § provision of non monetary remedies § increasing financial remedies available § extension of the mediation services available
I will be making a submission on the review of Part 9: Personal Grievances. The closing date for submissions is 31 March. I will keep you informed of progress of this review and if you want to offer any feedback for the submission please email me on sw@knowhow.co.nz.
A ministerial advisory group has completed a review of the Holidays Act. The recommendations include allowing employees to exchange one week of annual leave for cash and no change to the current number of Public Holidays.
We see the ability to exchange of one week’s annual leave as positive. It will protect the need for employees to take a decent amount of leave but will provide flexibility for employers.
The advisory group, which included business and union representatives, differed on many of the proposed changes including:
- how to calculate leave and sick leave entitlements - the cashing in of holidays - the transferring of Public Holidays
The union representatives in the group wanted Easter Sunday to become an official Public Holiday but this did not form part of the formal recommendations to the Minister.
We are still awaiting recommendations for the calculation of leave and sick leave entitlements – we would welcome a much simpler calculation.
We will keep you up to date on the outcome of the recommendations.
Review of Part 6A ERA - Continuity of employment if employer’s business restructured
A review is being undertaken of the provisions of Part 6A of the Employment Relations Act. These provisions relate to relationships where the work is independently contracted and if the independent contract changes, such a change could result in a redundancy or a restructure.
The industries affected include cleaning, food and laundry services where independent contractors are commonly used.
The review will include determining employee protection provisions that should be in the employment agreement and will therefore set out further requirements that an employer is required to follow in the event of a restructure.
East Occ Health – Occupational Health Services
We have formed an alliance with East Occ Health run by Alisa Leonard-Smith who is a Registered Nurse with 16 years experience in occupational health.
East Occ Health provides:
If you are interested in knowing more about these services please contact Jules Keery on 09 377 9891 or jules@knowhow.co.nz
From April 1 this year the minimum wage will increase by 25 cents from $12.50 to $12.75 an hour and the training and new entrance wage will increase from $10.00 to $10.20 an hour.
KnowHow’s Move Just a reminder of our new address;
HR Knowhow and Wood & Associates are located at:
Level 8 Old South British Building 3 – 13 Shortland Street CBD AUCKLAND
All other contact details remain the same.
Referrals We are very grateful to our clients who provide us with referrals and it is a key part of our business growth. If you know of a business owner or manager who needs expert HR advice we hope you will consider referring them to us.
Kind regards
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists We provide advice and hands on support for all your Human Resource management needs Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem
December 2009 In this edition:
- Proposed change to ‘serious harm’ definition
Proposed change to ‘Serious Harm’ definition under the Health and Safety in Employment Act
A proposal by the Minister of Labour Kate Wilkinson could see a change to the definition of ‘serious harm’ under the Health and Safety in Employment Act.
The proposed definition aims to provide more certainty around what constitutes serious harm and to ensure that employers do not spend excessive time dealing with minor issues.
Kate Wilkinson has said, “It is important to set a threshold for serious harm at an appropriate level.”
The definition will include physical injuries where an employee is unable to perform his/her duties for 10 or more calendar days, permanent injuries, specified events including electrocution or loss of consciousness, and diagnosed occupational illnesses.
The proposed definition will be introduced to Parliament in the New Year and we will keep you up to date with any amendments to the Act.
In a recent case, Wulff v Air New Zealand Ltd an Air New Zealand flight attendant, Randall Wulff, is to be reinstated after he was dismissed after the company said they could not rely on him to follow standard operating procedures.
Air New Zealand dismissed Mr Wulff last year after he sat down and fastened his seatbelt when the seatbelt light came on during a flight, instead of carrying on with his duties. He had also shown his intention to sit down on another occasion.
Mr Wulff said that cabin crew could take a seat when the light came on if they felt unsafe, but that he accepted that taking a seat whenever the light came on was unacceptable. He also said that any injury caused by turbulence would impact on his ability to take leave.
The Employment Relations Authority determined that Air New Zealand “did not have a sufficiently firm foundation for its conclusion that Mr Wulff could not be relied upon”. The Authority also said that the concerns of Air New Zealand were legitimate but that the concerns could be addressed while the employment relationship continued.
Air New Zealand was ordered to reinstate Mr Wulff and to pay him loss of earnings from the date of the determination until he was reinstated. Mr Wulff’s claim for hurt and humiliation compensation was declined.
Air New Zealand said it was appealing the decision.
Our concerns in this matter are that an Authority member is able to essentially override a company as to the importance of running his/her business in the most effective and efficient manner, having the right to require an employee to comply and being able to rely on that employee to comply.
It is very clear why Air New Zealand has chosen to appeal Yvonne Oldfield’s determination.
We are specialists in annual leave calculations and are happy to assist you with these calculations. If would like our assistance with annual leave calculations please call us on 09 377 9891 or email kh@knowhow.co.nz.
We will be closed for the Christmas and New Year period from 23 December with the office re-opening on Monday 11 January.
At KnowHow we have been fortunate to work with our clients during 2009, through a period which could be said delivered the most demanding business conditions we have faced as business owners.
Many times during the year we have had conversations with clients about making it through to December 2009 and that we should all feel pretty good if we make it.
2009 has seen all of us tighten things up, possibly become better business people and shown us how important our Kiwi resilience is.
I wish you all well and hope that 2010 is a great year for us all.
From Helen and Jo and from me, we wish a very happy Christmas and New Year to you and your families.
Thank you for all your support in 2009 and we look forward to working with you in 2010.
Kind regards
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists We provide advice and hands on support for all your Human Resource management needs Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem
November 2009 In this edition: - Leave – closedown, entitlement and calculations - Annual leave / closedown - template - Annual leave calculation / payment
Leave – closedown, entitlement and calculations With Christmas around the corner, employers need to be planning annual leave requirements for this period. Where an employer’s business is open over the Christmas period the employer needs to assess the staffing requirements based on the operational requirements of the business. Annual leave requests from employees who have a leave entitlement available will need to be accepted or declined accordingly. Where a Company or Organisation closes down over the Christmas period an employer can require employees to take annual leave at this time. Employers must give employees 14 days notice of this requirement in writing. We attach a template for the closedown advice.
Annual leave calculation / payment during closedown For the purposes of clarification annual leave is accrued throughout the year, but the entitlement to take that leave does not occur until the employee has completed 12 months of employment. Calculation of pay for annual leave when employee has annual leave entitlement Where an employee is entitled to and takes annual leave, the employer must calculate annual leave pay;
For those employees who do not have annual leave entitlement at the time of the closedown there are two options for the employer for the treatment of leave during this period: 1. Payment of 8% of the employee’s gross earnings and re-setting the employee’s anniversary date, OR 2. Leave in advance or unpaid leave 1. Payment of 8% of an employee’s gross earnings and re-setting the employee’s anniversary date Where an employer closes down in December 2009 and an employee has not worked the first full 12 months of continuous employment, an option for the employer is to pay the employee 8% of his/her gross earnings, less any annual leave taken in advance since the commencement of employment until the commencement of the closedown. The date of the closedown, or the date nominated by the employer reasonably proximate to the closedown date, becomes the new annual leave anniversary date. The employee would then, at the next closedown in December 2010, be entitled to annual leave of 4 weeks (less any annual leave taken in advance during the year). The balance of the period of the closedown is taken as unpaid leave. 2. Leave in advance or unpaid leave
For the remaining period of the closedown the employer and employee may agree that the employee is to take the balance of the period as either:
Calculation of paid annual leave if taken in advance If an employee takes paid annual leave in advance the employer is to calculate the agreed portion of paid annual leave as follows;
(a) the 12 months immediately before the end of the last pay period before the annual leave if the employee has worked for the employer for not less than 12 months; OR (b) the period of employment before the end of the last pay period before the annual leave if the employee has worked for the employer for less than 12 months
If Public Holidays fall during a period an employee is on annual leave and on a day the employee would otherwise have worked, the Public Holidays are to be treated as paid Public Holidays, and not taken as an annual leave day. Where an employee is not required to work on a Public Holiday that would have otherwise been a normal working day, that employee is paid at the ordinary time rate for that day. Where an employee is required to work on a Public Holiday that would have otherwise been a working day for the employee, the employee shall receive time and one half for time actually worked and also becomes entitled to an alternative holiday. Payment for a Public Holiday is to be calculated using the relevant daily pay for that employee. Because Boxing Day and 2 January fall on a Saturday over this Christmas period, these Public Holidays will be observed:
Casual employees are treated differently under the Act because holiday pay is paid as an identifiable component of the wages or at the conclusion of the casual engagement. Entitlement to a Public Holiday only occurs if the Public Holiday falls on a day that would have otherwise been a working day for that employee. This would apply only if the casual employee’s usual work pattern or roster, or where a casual employee is employed for a period of casual employment, would have required that employee to have otherwise worked on the day the Public Holiday falls. If you require assistance with annual leave calculations, or have any queries relating to the matters outlined in our Newsletter please call us on 09 377 9891 or email kh@knowhow.co.nz.
Referrals We are very grateful to our clients who provide us with referrals and it is a key part of our business growth. If you know of a business owner or manager who needs expert HR advice we hope you will consider referring them to us.
Kind regards
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists We provide advice and hands on support for all your Human Resource management needs Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem
29 October 2009 In this edition: - Meal & Rest Breaks – proposed legislation change - Proposed Redundancy Entitlements
Meal & Rest Breaks – proposed legislation change The Employment Relations (Rest Breaks and Meal Breaks) Amendment Bill was introduced to Parliament yesterday by Labour Minister Kate Wilkinson. The proposed legislation will seek to provide more flexibility with meal and rest break provisions than the current prescribed legislation. Under the Bill, there will be a requirement for meal breaks and paid rest breaks or compensatory measures. Compensatory measures could include later start or earlier finish times, or time off in lieu. The parties will be required to agree in good faith around the arrangements, but failing agreement between the parties the employer can determine the times and duration of the breaks. Compensatory measures would be agreed between the parties and only where there is a reasonable restriction to taking the breaks. Compensatory measures could raise issues for employers - including continually reviewing staff rosters to ensure sufficient resource is available. Unauthorised late starts may start to seep in as employees could feel they have the right to be 10 minutes late because they did not have their rest break the day before. For businesses that do not operate time in lieu systems there will be further administration requirements to monitor and record the time lieu. Small businesses may struggle to cope with employees being absent as all hands are required to be on deck. Employers would need to ensure that the policy around compensatory measures is clearly communicated and managed. The Bill however does provide the employer with more control around the breaks and seeks to ensure that his/her service or production is not compromised.
As the 90 day trial period has been in effect for over 7 months now, we have outlined below an update on what we are seeing in regards to this legislation. The 90 day trial period takes effect from the date the employment relationship commences. This will be the date the employment relationship commences in the agreement, or the date the employee starts work, whichever is earlier. A fishhook that has emerged from the trial period is that employers are recording the trial period as 3 months from the commencement of the relationship, instead of 90 days. If an employer was to terminate within the 3 months but after 90 days, the employer would be exposed if a personal grievance was raised. For businesses with fewer than 20 employees, use of the trial period is becoming more and more common, and while the trial period has to be agreed between the parties, we see it becoming a norm. The trial period should be agreed in good faith and we suggest that during the interview stage you include a question regarding the trial period. An example of this could be: “If we were to offer you a job with the Company/Organisation it would be on the condition that a 90 day trial period would apply and your employment could be terminated within this period if we felt you were not working out. If you were offered the job would you agree to this condition?”
Proposed Redundancy Entitlements The Employment Relations (Minimum Redundancy Entitlements) Amendment Bill is currently before parliament. The Bill proposes minimum redundancy entitlements including: - No less than four weeks notice of termination; and - Four weeks compensation for the first full year of the employee’s continuous employment with the employer, and a further two weeks pay for each subsequent full or partial year of continuous employment, up to a maximum entitlement of 26 weeks remuneration The only proposed criteria to be eligible for a redundancy entitlement is that the employee must be in continuous employment with the employer for at least 12 months prior to the redundancy. In comparison to other countries, the proposed entitlements are very generous. In the UK there is a cap on the week’s remuneration of 240 pounds and Australia has a maximum entitlement of 12 weeks. The potential issues with the proposed Bill include: - Who will be paying for the added costs? The draft Bill does not clearly state who will be paying the extra costs even though it appears it is the employers. - How a week’s remuneration will be calculated. This Bill has not stated a calculation or considered how a week could be calculated where an employee works irregular hours. - What will happen if the employer goes into receivership? Will the employer still have to pay the minimum entitlement? This Bill is surprising in that is specifies a formula more commonly used in government, local government and corporates rather than in the many small to medium sized businesses in New Zealand. In looking at the additional costs employers have incurred in recent years we have: - An additional weeks holiday - 2% employer contributions to KiwiSaver - The impending increase in ACC levies To burden businesses with a redundancy provision of 26 weeks is simply not realistic. We are operating in financially constrained times and it is critical we create an environment where businesses can continue to operate without draconian provisions imposed by government. We note this Bill has been introduced by a Labour MP. We are not holding our breath on this one as it is highly unlikely that National will support the Bill for redundancy compensation to become legislation.
Personal Grievance Claims – Government Review John Key has asked the Minister of Labour to review the process for personal grievance claims required by employers. We understand that the main concern for review is about employers not being penalised where the employer has had a genuine to reason to dismiss an employee but have not followed the legal process perfectly. Currently employers are required to follow a stringent legal process throughout disciplinary and restructuring matters. We see that the legislation will still require an employer to follow a fair and reasonable process, however the Courts may be more lenient with employers on how the process was undertaken. We see that this could be in contrast to the legislation amended in 2004, which now requires employers to undertake the legal process in accordance with what a fair and reasonable employer would do, meaning all ‘t’s’ must be crossed and all “i’s” dotted.
We are currently digesting the ACC changes and will comment on the proposed changes and implications for employers in the next couple of weeks.
The IRD mileage rate for reimbursement for employees who use a personal vehicle for business purposes is 70 cents per kilometre. This reimbursement is exempt from income tax, is for petrol or diesel and the rate is irrespective of engine size. The rate only applies to motor vehicles and does not apply to motorcycles. No mileage rate has been set by IRD for motorcycles as this mode of transport is not commonly used for business purposes.
From 1 November 2009 it will be illegal to drive while talking on a mobile phone without using a hands-free device, and to text / pixt while driving. Please let us know if you would like us to update your Policy and Procedures Manual to reflect such change by calling us on 09 377 9891 or emailing kh@knowhow.co.nz.
Referrals We are very grateful to our clients who provide us with referrals and it is a key part of our business growth. If you know of a business owner or manager who needs expert HR advice we hope you will consider referring them to us.
Kind regards
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists We provide advice and hands on support for all your Human Resource management needs Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem
October 2009 In this edition:
- Suspension – Employer obligations / Case Law
Suspension – Employer obligations
Two recent cases held before the Employment Relations Authority have set out the employer’s obligations when suspending an employee.
Employers must have substantive justification to suspend an employee and must also follow due process. It is not merely enough for an employer to decide that he/she does not want an employee present at work throughout an investigation.
For example, if you are alleging an act of dishonesty with an employee and have sound reason to question his/her honesty then you may be able to argue that you can not have the employee on the Company’s premises until the investigation is complete. On the other hand, if you are raising poor performance with an employee, it would be highly unlikely that there would be any good reason for the employee to not be at work during the investigation. Careful consideration must be undertaken to ensure that your reasoning for suspending an employee can be justified.
If an employer has established a good reason to suspend an employee, then the employer must follow due process when suspending. The suspension must be an action that meets the requirement of being a fair and reasonable employer.
An employer must notify the employee that the employer is considering applying the suspension provision in the employee’s employment agreement and the reason why the employer is considering possible suspension. The employer must provide the employee with the opportunity to provide any information he/she wishes to put forward before the employer makes a decision to suspend the employee. The employer should discuss the terms of the suspension, which would usually be on full pay and for the period of the investigation.
If an employment agreement does not specify suspension, an employer should exercise caution as the employer may not be able to suspend. Suspension without pay would only be in the case where it is specifically recorded in the employment agreement. An unpaid suspension clause in an agreement could be considered “harsh” and “oppressive”.
All employment agreements prepared and/or updated by HR KnowHow have included a suspension clause in the agreement.
In Chia Cheng vs Base Projects Ltd (BPL), BPL had tried to discuss with Chia her $89.50 car grooming bill and why she had charged her Company Credit Card for her lunch with her boyfriend. The Authority had ruled that both parties had carried out an email war, with Chia telling her employer to “get over it” and then emailing her friends and saying her manager is “such a f****wit”. We understand that the employer tried to talk to the employee about the matter and that she refused to talk because she said she was too busy. The employee was then “told to go home and think about your attitude”.
The Courts determined that a fair and reasonable employer would have discussed with the employee the possible suspension and on the terms it would occur before deciding that she was suspended. The Authority believed that the employer acted “rashly in sending her home without a reasonable discussion”, and that the reason to suspend was not justified.
While the Courts agreed that Chia had a legitimate grievance, no compensation was awarded to her on the basis of her significant contribution to the dispute.
In Dennis Kavanagh vs Ascot Aluminum Ltd, the employee said to his employer that he might have to seek work elsewhere because of a mistake he had made on a job. Mr Kavanagh tried to rectify the situation and confirmed to the employer that he did not want to leave, contrary to the employer’s position. Again – a series of emails were sent between the parties. The employee requested mediation which was denied by the employer. The employer advised the employee that he had resigned and that his salary would be ceasing upon the notice provision. We understand the employer placed the employee on garden leave (defined below), which the Authority determined was actually a suspension. The Authority further determined that the suspension was without substantive justification and without due process. The final determination was that the employee was unjustifiably dismissed, and no fair process was undertaken. The employee was awarded $58,840 in lost wages, $15,000 for hurt and humiliation, and unpaid leave owing, plus interest. The employer was fined $2,000 for breaching the Wages Protection Act.
A Garden Leave clause allows an employer to require the employee to not attend work during his/her notice period. A garden leave clause is useful to prevent a senior employee from immediately working for a competitor, and if the employer does not want the employee in the workplace where he/she will continue to have access to clients and commercially sensitive information.
Tony Alexander commented in the BNZ confidence survey released yesterday
“A net 50% of respondents expect the economy will get better over the coming year. While this is down slightly from 56% in the early September survey the result is the second highest in five years and in conjunction with the many other business surveys released recently suggest it is reasonable to expect near 3% growth in the NZ economy over the coming year.”
It is good to hear such definitive commentary. However we are still seeing a steady run of restructuring and expect it to continue for some time yet.
The NZ Herald reported that 16.6% of employers in Auckland still expect to lay off staff while the figures in Wellington were around 4%.
There has been commentary from recruitment firms saying that when things improve there will be a mass exodus of good staff because employees are resentful about employers taking advantage of the recession. I doubt that this is based on anything substantial. What we are seeing are employees who are aware that the business environment is very tough and employers are doing everything they can to manage through these times. What they may not see clearly is how stressful and draining this year has been for many business owners.
We have spoken often and at length in our newsletters about our experience in restructuring. We know the law and we work hard to conduct restructures with professionalism and compassion. We have worked with over 240 companies to conduct restructuring in the past twelve months. We are very seldom challenged and if we are we have an enviable track record in successfully defending our client’s position. If you do need to restructure over the coming months and need help please contact us for assistance.
Minister of Labour Kate Wilkinson has raised her concerns about the number of injuries in New Zealand workplaces compared with other countries, at the New Zealand Chemical Industry Council’s annual meeting. The NZCIC was established to train and promote Responsible Care - a programme aimed at assisting employers comply with health & safety obligations. Barry Dyer, CEO of the NZCIC has acknowledged the New Zealand Government has put in place first-class chemical handling legislation, but unfortunately it has been largely ignored, with 300 to 800 people being seriously injured a year.
Ms Wilkinson had said that “in tough economic times, such as we face now, safety initiatives can almost be overlooked or ignored due to perceived or real compliance costs. If a business is struggling they might look for short cuts or simply let something pass that they wouldn’t normally. Compliance costs are an issue on many fronts but the cost of a workplace accident is far greater. The consequences can be huge for a business; its reputation, the morale and its productivity are all potentially vulnerable”.
NZCIC advise that employers with chemical substances should choose their approved handlers with care and ensure that employees receive the product-specific training to minimise risk and achieve the preferred result.
The Department of Labour’s statistics for breach of the Heath & Safety in Employment Act until 30 June 2007 recorded that the highest fine was $225,000 and on average the penalty was $6,920.
The Department of Labour states that under Health and Safety Regulations, employers are required to provide basic First Aid Kits in the workplace. Where there are more than 50 employees, an additional kit should be provided and for every 50 employees thereafter, another additional kit. There should be at least one kit on each floor of a multi-level place of work.
Company Vehicles are also required to be equipped with a basic First Aid Kit.
We are fortunate to have access to Nexcare 3M First Aid Kits, which are at the top end of the market and are competitively priced. Attached are details of the Nexcare 3M First Aid Kits for your information. If you need a First Aid Kit for your workplace please contact us.
If you have any queries relating to the matters outlined in our Newsletter please call us on 09 377 9891 or email kh@knowhow.co.nz.
We are very grateful to our clients who provide us with referrals and it is a key part of our business growth. If you know of a business owner or manager who needs expert HR advice we hope you will consider referring them to us.
Kind regards
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists We provide advice and hands on support for all your Human Resource management needs Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem
SEPTEMBER 09
In this edition: - Memo re Closedown / Annual Leave Calculations
From 1 November 2009 it will be illegal to drive while talking on a mobile phone without using a hands-free device, and to text / pixt while driving. Infringements for non compliance will be an $80 fine and 20 demerit points.
We will be contacting our clients who we have prepared policies on motor vehicle use to ascertain if they would like us to update their policy.
The Meal and Rest Breaks legislation that came into effect 1 April 2009 may be amended to allow flexibility around breaks. Labour Minister Kate Wilkinson has said that the new legislation may cause disruptions for airlines with airport control towers closing down to take breaks, which in turn may cause cancellation of flights. Pharmacies, schools, meatworks and sole attendant operators have also raised concerns over the new legislation and its prescribed requirements. We will keep you up to date if an amendment is introduced regarding the meal and rest breaks.
With Christmas approaching, there is a need to start planning annual leave and advising staff of the requirement to take annual leave over the Christmas/New Year closedown. Where a Company closes down over the Christmas period an employer can require employees to take annual leave at this time. Employers must give employees 14 days notice of such requirement and we advise that this should be in writing.
For those employees who do not have an annual leave entitlement at the time of the closedown (i.e. have not worked for a continuous period of 12 months) the employer must pay the employee 8% of his/her gross earnings since the commencement of the employee’s employment, or may advance the employee annual leave at it’s discretion.
Please note that where Public Holidays fall during an annual closedown they are treated as paid Public Holidays.
Memo re Closedown / Annual Leave Calculations
We can assist you with your obligations re notifying staff of the closedown, and we can help you with annual leave calculations.
If you have any queries relating to the matters outlined in our Newsletter, or would like assistance with preparation of a Closedown Memo, annual leave calculations or a Policy and Procedures Manual please call us on 09 377 9891 or email kh@knowhow.co.nz.
Referrals We are very grateful to our clients who provide us with referrals and it is a key part of our business growth. If you know of a business owner or manager who needs expert HR advice we hope you will consider referring them to us.
Kind regards
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists We provide advice and hands on support for all your Human Resource management needs Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem
JULY 2009 In this edition: - Inappropriate Internet Use - Internet Policy
An employee of Safe Air (a subsidiary of Air New Zealand) was dismissed earlier this year for sending 425 personal emails to colleagues and family members from March to September 08. The employer deemed that the emails were “emails of concern” and included graphic depictions of lewdness, nudity and/or sex acts. On the other hand, the employee said that the “content was not likely to offend and was banter between colleagues”. The Employment Relations Authority has ruled in the employee’s favour, with the employee being reinstated and receiving $1000 compensation for loss of dignity and injury to his feelings. The Authority concluded that the employee was not alone in the inappropriate use of emails, however believed that the employee was “not clear about the standards expected". The recent Air New Zealand case has again highlighted the need for employers to: - have in place a strong Internet / Computer use Policy - ensure that employees are aware of the Internet Policy and the employers expectations on internet / computer use - ensure consistency in managing issues between employees i.e. are employees treated in the same way? - ensure that the issue does warrant the level of disciplinary action (if any) i.e. a warning vs termination of employment Employers may wish to consider issuing or reissuing their Internet / Computer Policy to all employees to ensure that they are aware of the requirements, which could also been seen as a way to “draw a line in the sand”. Please contact HR KnowHow on 09 377 9891 or kh@knowhow.co.nz if you need an Internet / Computer Use Policy or if would like us to review your current Policy.
Employers are not living with non performance We are seeing employers address non performance relatively quickly. They are no longer willing to wear the cost of non performance. Employers want productivity rates up and waste/write offs down. Given all costs are being scrutinized; it makes good business sense to keep a close eye on performance and productivity levels.
We all know that lifting productivity is essential – the question is how easy is it to do this and where are the best places to look? A lot of the work we do with clients has a direct bearing on productivity. Much is this is pure HR but we have built up considerable expertise in defining operating processes and systems, managing client relationships and measuring client satisfaction. A few of the areas in which we work with clients are: Job clarity Fundamental to getting the right things done in the right way - good job descriptions with measurable results identified. Tracking performance - “if it matters measure it” - Performance against targets - business performance/ revenue targets / profit targets - Write offs or waste - Productivity levels for each employee Where tracking against targets shows a deficit – get your people to identify the strategies, options or solutions to improve results. Gaining efficiencies This is critical to improving productivity – if you can gain time or material savings when doing a job you are increasing your output at no greater (and possibly) less cost. Systemise your business Charting your operating processes, monitoring them for ongoing improvement will support increased efficiency and productivity. It will mean new staff can become productive more quickly and you can build a culture where all employees are looking to streamline and improve processes. Bonuses attached to profit and performance The rule of thumb is that employees need to generate 3x their salary. It is very important that the calculation of bonuses is on profit generated over and above the 3x return. Address non performance As we said earlier – employers are no longer living with employees in cruise mode or with non performers. It is important however to make sure any disciplinary process is managed according to the legal requirements as there is not a skerrick of efficiency or productivity in a personal grievance. If you are interested in discussing any of these productivity areas with us or have concerns about an employee’s performance, please contact HR KnowHow on 09 377 98 91 or email kh@knowhow.co.nz.
It is essential that the 90 day trial period is agreed prior to the commencement of employment and recorded in the employment agreement. Where an employer does terminate during the 90 days and has not agreed and/or recorded the trial period in writing there is a risk of an unjustified dismissal claim. If you are considering terminating the employment relationship during the trial period please contact HR KnowHow on 09 377 9891 to minimise any exposure.
We are looking to run restructuring seminars to provide employers with the tools to undertake their own restructure to reduce cost. Restructuring is governed by the requirement to act in good faith and prescriptive rules apply to the process undertaken. Failure to act in good faith and apply the required process can result in a claim of unjustified dismissal if redundancies are the outcome. Such claims of personal grievance carry significant financial penalties if the employer is found to be at fault. If you would be interested in attending our restructuring seminars please contact HR KnowHow on 09 377 9891 or email kh@knowhow.co.nz.
Referrals We are very grateful to our clients who provide us with referrals and it is a key part of our business growth. If you know of a business owner or manager who needs expert HR advice we hope you will consider referring them to us. If you have any queries relating to the matters outlined in our Newsletter please call us on 09 377 9891 or email kh@knowhow.co.nz.
Kind regards
Sylvia Wood Director
22 June 2009
In this edition:
Update - H1N1 Influenza
Since our recent newsletter 16 June – there has been increased commentary regarding whether or not an employer is required to pay staff where they are well and sent home or the business shuts down.
The change on the Government’s part to one of management rather than containment / isolation looks as though it will result in those people who are absent from work will only be those people who are sick.
Therefore the absence from work because of H1N1 influenza would be treated the same way one would treat any absence on the grounds of sickness during the winter months.
The shift to a management strategy should make it less likely that the Government will direct the closure of workplaces.
We understand that most people with the H1N1 Influenza are unwell for 2 – 4 days. This does put in perspective the amount of time off people may need.
What is clear is that employees who are sick can take sick leave and may elect to use annual leave if they have exhausted their sick leave. Such request for the sick leave to be treated as annual leave should be recorded in writing.
Going forward – we have prepared a clause for inclusion in all written employment agreements that specifies that the employer is not obligated to pay staff where they shut down or send people home in a pandemic or situation beyond the employer’s control.
If you need employment agreements (contracts) or the pandemic clause re no obligation for payment to be included in your current employment agreements we can assist. Call us on 09 377 9891 or email kh@knowhow.co.nz
As the information and advice on H1N1 Influenza is constantly changing we strongly advise that you contact us on 09 377 98 91 to discuss any queries that you may have regarding your obligations as an employer.
Kind regards
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists We provide advice and hands on support for all your Human Resource management needs Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem
16 June 2009
In this edition
- When is an agreement an Employment Agreement?
The H1N1 virus is now at the highest phase of a pandemic, meaning there is a global spread of the disease. In New Zealand as at 15 June there were a total of 86 confirmed cases by the Ministry of Health with 66 people being treated in isolation. However it is thought that the numbers have increased to over 100 today.
Planning for a Pandemic
We suggest that employers consider how their operations would be affected if employee/s were quarantined or refused to come to work for health & safety reasons during the pandemic. Considerations extend to:
§ Would any, part or all of the operations be able to be undertaken remotely? § Does the Company have remote access set up? § What confidential information would you allow to be transferred to an employee’s residential address?
We suggest that you plan for 50% staff absences for periods of about two weeks at the height of a severe pandemic wave and lower levels of staff absence for a few weeks either side of the peak. Overall a pandemic wave may last about 8 weeks.
Payment
Sick leave entitlements will apply and employees may elect to use annual leave if they have exhausted their sick leave. We recommend that you require employees to put this request to use annual leave for sick leave purposes in writing.
If leave entitlements have been used there is no obligation to pay the employee if he or she is absent because of a pandemic.
The Engineers Union is espousing payment by employers where employees are required to stay at home because of illness or isolation requirements. Where economically viable this would be a generous response. However in these times expecting the employer to shoulder additional costs where their revenue may be significantly reduced in a pandemic seems unreasonable. It is hard to predict the end of the issues around the H1N1 pandemic with no vaccine developed let alone brought to market.
The sensible thing will be to advise your employees what you intend to do regarding payment if any of them become ill or are put in isolation. You can require an employee to stay home if sick because this condition would make your workplace unsafe for others.
Ministry of Health Advice
The signs and symptoms of influenza include fever, cough, sore throat, stuffy nose, body aches, headaches, chills, fatigue and sometimes diarrhea and vomiting.
The Ministry of Health advises:
§ If you become sick, to keep from infecting others you should stay at home for 7 days after your first sign of illness or wait until you have no symptoms for 24 hours, which ever is longer.
§ If you become sick and you require medical advice, call either Healthline 0800 611 116 or your GP. By not visiting a hospital or medical centre first you will be limiting the spread the virus.
§ If you are caring for someone with the flu, be alert to their symptoms, especially if there are underlying health problems. If the person starts to have difficulty breathing, has chest pain, blueness around the lips, is unable to keep fluid down, becomes less alert or develops confusion; seek medical advice.
§ Make sure you are able to be self-sufficient for an extended period. This includes having enough food, water, medical supplies including paracetamol or ibuprofen, other medications, nappies for babies, cleaning products, tissues and bathroom supplies.
§ Ensure you are taking extra precautions with personal hygiene, especially with washing your hands.
Not enough Tamiflu
If this pandemic becomes large scale in New Zealand and not everyone affected is able to be treated with Tamiflu, the recovery time may turn into a much longer period for some people. It is best to be as prepared as possible, ensuring your employees know what may be required of them, how their pay will be treated and whether they will be able to work from home.
If you would like more advice regarding the H1N1 influenza please contact us on 09 377 9891 or email kh@knowhow.co.nz.
The Holidays Act is currently under review with the appointed working group specifically reviewing:
At long last may we see a much easier Holidays Act for employers to administer and understand.
The report of the Review will be finalised by December 2009. We will keep you up to date on the Review.
When is an agreement an Employment Agreement?
A recent case in Canterbury, Anna Wilding (employee) vs Jim and Maxine Marron (employer), involved an employee claiming she was unjustifiably dismissed after an offer of employment had been made and subsequently withdrawn.
Ms Wilding claimed Mr & Mrs Marron offered her permanent employment at the cinema, and was then advised that she was no longer needed. Ms Wilding had not worked at all at the cinema. While Mr & Mrs Marron denied offering Ms Wilding permanent employment, the Authority found that they had emailed Ms Wilding stating how excited they were that she was joining them at the cinema and that they would soon prepare a roster for her hours of work.
The Employment Relations Authority found that Ms Wilding had been unjustifiably dismissed and ordered Mr & Mrs Marron to pay her $5,225.00.
The Employment Relations Act, Section 6, specifies that the meaning of an employee includes a person who is intending to work.
This case shows that once the offer of employment has been made, it is legally binding and the employee has full rights and entitlements.
If you would like advice regarding offering employment please contact us on 09 377 9891 or email kh@knowhow.co.nz.
Referrals
We are very grateful to our clients who provide us with referrals and it is a key part of our business growth. If you know of a business owner or manager who needs expert HR advice I hope you will consider referring them to us.
If you have any queries relating to the matters outlined in our Newsletter please call us on 09 377 9891.
Kind regards
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists We provide advice and hands on support for all your Human Resource management needs Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem
June 2009
- Strategies for the Recession
What has become more and more evident during the first 6 months of this year is the creativity and tenacity of business owners. We know the recession and its effects won’t be all over in 2009 but there is a toughness about getting through, and a realism about how we all need to operate in the next one to two years. While businesses continue to restructure and make staff redundant there is a strong focus on preparing for the end of the recession – taking a clear sighted look at the business and finding ways to put the effort into the most valuable places. We are seeing businesses focus on the areas set out below to increase their productivity and profitability:
The 80/20 rule Putting the most effort into the most profitable work or the areas for development that produce the best results.
Removal of waste Ceasing to do those things that we can live without, monitoring the productivity of employees - where is time going – can “unproductive time” be redirected to get additional business, improve skills, knowledge or coach others?
Controls Not losing sight of the control points – in a restructure it is easy to loosen the controls in a business. This is particularly dangerous with financial controls. There have been a number of reports about increased employee fraud – a by product of the recession.
Systems Businesses that are not at a point where staff redundancies are needed but nevertheless staff have time on their hands –using this time to improve and document operating systems which will enhance productivity.
Productivity Tools We are working on a series of tools to help employers identify areas where they can improve productivity and will provide more detail on this in our next newsletter.
We are still very busy with restructuring. Many of our clients are working to preserve jobs but reduce remuneration and hours of work to reduce costs. Some who ventured into the 3 and 4 day week have reverted to a 5 day week because the reality of the shorter week did not provide the service needed for clients. The other by-product was that people found work for the day/days they were not working and when the primary employer needed additional hours the employees were not available. While fortunately our record with restructuring holds good (4 challenges – successfully defended- from 282 company restructures in the past 2 years) Mediation Services tells us that they are very busy with challenges to restructures. It is a process which needs careful management and a thorough knowledge of the law and its procedural requirements. Employers should choose experienced advisors who are well versed in the technical areas of restructuring. Having over 20 years experience of managing restructures I still talk through some of the issues with our Barrister. This is why we don’t issue guidelines or templates of letters. It is not a process where you can safely conduct a “paint by numbers” approach. Predictions are that unemployment will increase from the current recorded 5% to around 9%. This will see considerably more restructuring however the 5% seems understated for those of us at the coal face. If you know of any business owners who need help to look at restructuring please let us know or ask them to contact us on ph 09 377 9891 or email us at kh@knowhow.co.nz.
This is one of the last pieces of legislation from the Labour Government - let’s hope the National Government will refrain from introducing legislation that organizes us to this extent. The Employment Relations (Breaks and Infant Feeding) Amendment Bill came into effect 1 April 2009. The purpose of this Act is to require employers to provide employees with meal and rest breaks, and breaks for employees who wish to breastfeed in the workplace. Previously there have been no legislative requirements for meal and rest breaks. Under the provisions in the amendment, employees are entitled to: For part time employees
For full time employees
The timing of the breaks is to be agreed between the parties, however failing agreement there are specific parameters set down. The entitlements are a minimum. Where the parties have meal / rest breaks in place that provide in addition to the Act, the employer will be required to honour such agreement.
Breastfeeding Facilities / Breaks Where reasonable and practicable employers will be required to provide appropriate facilities and breaks in the workplace for an employee who is breastfeeding if the employee requests such breaks. The term ‘circumstances’ includes the employer’s operational environment and the employers’ resources. Breastfeeding breaks are in addition to meal/rest breaks; however employees could take the breastfeeding break under the employee’s meal / rest breaks. There is no obligation for the employer to pay for the time taken with breastfeeding breaks.
We were all set to send a long and detailed newsletter on H1N1 to you but then it faded somewhat. While the hype has come to very little at this stage there are a number of cases in Australia of H1N1 which has brought this back into the news. Let’s hope it remains a non event for NZ however as employers it is necessary to know what would be needed if a pandemic occurred. What follows is the general advice re pandemics. If an H1N1 pandemic becomes reality we will provide more specific information as it comes to hand. If a pandemic occurred businesses would need to plan for up to 50% staff absences for periods of about two weeks at the height of a severe pandemic wave and lower levels of staff absence for a few weeks either side of the peak. Overall a pandemic wave may last about 8 weeks.
Health & Safety in Employment Act – implications of a pandemic Under the Health and Safety in Employment Act 1992, you as an employer have the responsibility for the health and safety of employees and others in the workplace, and to ensure that employee’s actions or inactions do not cause harm to others. Therefore you will have to take all practicable steps to mitigate the risks and protect employees from pandemic influenza such as: · Eliminating the hazard (removing the hazard or hazardous work practice) · Isolating the hazard (reducing potential for contamination through changing work practices to achieve a greater degree of social distancing or installing screens etc) · Where impracticable to eliminate or isolate, minimizing the hazard (use of protective clothing, and with employee consent, monitoring of their health) Under the Act, employees have the right to refuse to perform work if they believe (on reasonable grounds) it is likely to lead to their suffering serious harm and if they have attempted to resolve the matter with their employer before refusing.
Suspension of business In the event that you decide or you are required to suspend business it is important that the employment conditions during the business suspension are discussed with and made clear to employees. Such discussions may include the use of annual leave. Early planning should include good general hygiene practices and workplace cleaning habits such as: · Wash hands well · Use tissues when needed and throw away immediately · Thoroughly clean surfaces and utensils (influenza viruses may live up to 2 days on surfaces) We will continue to keep you informed about employment issues relating to the H1N1 influenza virus if the possibility of a pandemic becomes a reality in New Zealand.
Case Law – Unjustified Dismissal
James Jesudhass v Just Hotel Ltd Mr Jesudhass was employed on a two year Fixed Term Agreement as the General Manager of a hotel in Wellington. In just under 6 months into his Fixed Term employment, Mr Jesudhass was demoted to a marketing role, by way of a memo. As a result of his demotion, Mr Jesudhass allowed a union representative to speak to members of staff at the hotel. This then resulted in Mr Jesudhass being suspended, because he had not informed management of the session with the union representative. No consultation was undertaken to suspend him. At this time, Just Hotel showed predetermination in their decision to dismiss by changing the locks on Mr Jesudhass’ office, canceling his phone contract and requiring his car keys to be returned. Mediation was held less than two weeks later which proved to be unsuccessful and on the same day as the mediation, Mr Jesudhass was dismissed. Just Hotel Ltd gave Mr Jesudhass no notice and no opportunity to comment on the proposed dismissal. The Employment Court found Mr Jesudhass' suspension and dismissal to be unjustified and that regardless of having a one month’s notice period in his Agreement, Mr Jesudhass would have worked out the rest of his Fixed Term had the unjustified dismissal not taken place. The Court determined that Just Hotel Ltd had to pay Mr Jesudhass just under $120,000 for loss of salary, compensation, holiday pay and injury to feelings. When dealing with Fixed Term Agreements, although there may be a provision to terminate, an employer needs to follow due process and have cause for termination.
Airwork New Zealand v Todd Curtis Airwork New Zealand is a helicopter maintenance company that dismissed an employee after he refused to wear trousers provided by the Company. The employee alleged that he had a skin condition, which the uniform aggravated. The Company provided alternative shirts but maintained the requirement for the employee to wear the trousers. The employee continued to wear shorts, and a formal disciplinary meeting was held. It was then agreed between both parties that the employee would wear the trousers after they had been washed. The following day the employee did not wear the trousers and he was dismissed for a “loss of trust and confidence”. The Employment Relations Authority ordered the Company to reinstate the employee as it was considered a minor issue which did not justify a dismissal. It is important that an appropriate level of disciplinary action and due process is followed. Reinstatement is the primary remedy of the Court where this remedy is sought by the employee. We recommend that in any disciplinary matters you seek advice prior to taking action. If we can help you with performance or behavioural issues please contact us on 09 377 9891 or email kh@knowhow.co.nz
From Monday 27 April the Job Scheme includes medium-sized business with 50 to 100 employees. Initially the Scheme was only available for businesses with 100 or more employees. The Job Support Scheme involves a 9 day fortnight where the Government will pay employers $12.50 an hour per worker, for up to five hours a fortnight for a period of up to 6 months provided the employer agrees not to make any participating employee redundant during the time the scheme is in place. It is important that employers consider whether or not they wish to sign up to the job protection element of this scheme for up to a six month period in these uncertain times. The Scheme does not apply businesses with fewer then 50 employees however work is currently underway on measures to help smaller firms and we will let you know of any further developments.
7 City Road Our move to Level 15 7 City Road went smoothly and we are very grateful to all our clients who did not call us that day. Your support was greatly appreciated!
Referrals We are very grateful to our clients who provide us with referrals and it is a key part of our business growth. If you know of a business owner or manager who needs expert HR I hope you will consider referring them to us. And finally one of my favourite pieces of feedback recently received from a client where we were dealing with a particularly vexatious employee: “Do we get to charge you for all the entertainment we are providing?”
If you have any queries relating to the matters outlined in our Newsletter please call us on 09 377 9891.
Kind regards
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists We provide advice and hands on support for all your Human Resource management needs Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem
March 2009
In this edition:
§ KiwiSaver Total Remuneration § Cashing up the 4th week of annual leave
What our clients are telling us:
What we are seeing from the legal point of view
Key points re restructuring
I ponder the toll of restructuring on my clients most days. Many of our clients are people who have worked hard to build businesses and have borne the financial pain of reduced dividends and reduced earnings. Because of the emotional drain they feel in a restructure the fact that these employers are keeping business viable (and therefore many jobs in place) is sometimes lost. Add to that the demands of the process - it’s not easy. There are those who say you can never get it right.
Whatever you do it is hard on everyone involved and there is no easy way to do it. However it is critical that around all these judgment calls employers meet the legal requirements of restructuring. Call us if you need help – we are very experienced and can help you through this. Ph; 09 377 9891 or email kh@knowhow.co.nz
KiwiSaver Total Remuneration – Changes The KiwiSaver Act does now provide for an employer and employee to agree on a total remuneration approach in some circumstances and provided the Employment Agreement includes specific requirements. The Compulsory Employer Contribution is required to be paid in addition to the employee’s gross wages/salary, unless the parties agree to a total remuneration approach. All agreements and negotiations are required to be undertaken in good faith.
New employee: Total
remuneration can be agreed, provided a new employee’s Employment Agreement
specifies the Compulsory Employer Contribution and where 1 or more of the
following applies: (b) the employee has given the employer a KiwiSaver deduction notice: (c) the Commissioner has given the employer a notice requiring the deduction of contributions from the employee’s salary or wages. The Employment Agreement would need to specify what the total remuneration would be where the employee is a KiwiSaver member vs non KiwiSaver member.
Existing employee – KiwiSaver member: The parties can agree on a total remuneration approach at the time where the employee is in a new position (promotion) or at the time of a salary negotiation. It seems that under this situation there would be no requirement to specify the Compulsory Employer Contribution because (a) – (c) above would not apply.
Existing employee – non KiwiSaver member: Where an existing employee is not a KiwiSaver member on commencing employment but later wishes to join KiwiSaver, the Compulsory Employer Contribution would need to be in addition to the employee’s wages/salary and this could only be offset at the time of a salary negotiation or possibly new position. We are exploring a redrafting of the remuneration provisions of the Employment Agreement in such a way it would be defined as total remuneration plus benefits rather than gross pay. If you are considering a total remuneration approach please call us on 09 377 9891 or email kh@knowhow.co.nz to ensure that you are complying with the legislative requirements.
Employment Agreements / 90 day clause – in writing The trial period for employees in businesses with less than 20 employees is now in effect. It is important that employers understand that this will not apply if the condition is not in writing and agreed between the parties. We foresee employers thinking it is now law therefore it will apply and getting stung by unjustified dismissal claims which, if they haven’t complied with the legal requirements, will have “legs”. Employment agreements (contracts) which are in written form are mandatory and have been for all new employees since the Employment Relations Act was passed October 2000. Penalties of $3000.00 have been levied by the Employment Relations Authority where employers have not had written employment agreements in place. We have prepared a 90 day clause for inclusion in all written employment agreements. If you need employment agreements (contracts) or the 90 day clause to include in your current employment agreements we can assist. Call us on 09 377 9891 or email kh@knowhow.co.nz
Cashing up Week 4 of annual leave Kate Wilkinson, Minister of Labour, has confirmed National’s election campaign proposal to give employees the option to cash up the 4th week. Helen Kelly (CTU) and Andrew Little ( EPMU – or perhaps a man of many talents and responsibilities) continue the tired old line that employees must be saved from themselves and essentially can’t be trusted to make good decisions about their own circumstances. With the current climate and many facing shorter hours the cashing up of 1 week could be a godsend for some. Isn’t it refreshing to be treated as an adult with a brain. We will keep you posted on details with this and will provide updates for employment agreements when it is passed into law.
Employers who need HR support We are very grateful to our clients, colleagues and people we have business alliances with who put us in touch with other employers who need advice or support. If you know of an employer who needs support in managing restructuring, performance management, personal grievance management or compliance in employment matters please pass on our contact details or let us know and we will contact them to outline what we do. Please do let us know if there is more we can do to assist you with your HR matters.
Kind regards
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists Employment Agreements, Company Policy and Procedures, Health and Safety Manuals/Systems Compliance, Restructuring, Redundancies, Managing Performance, Mediations, Dispute Resolution, Personal Grievances, Compliance, Termination Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem.
10 FEBRUARY 2009
Happy New Year – may it be kind to all those running a business in 2009
In this edition:
§ Increase to Minimum Wage – 1 April 09
§ Commentators Expectations on Unemployment
§ Downward pressure on salaries
Increase to Minimum Wage – 1 April 09
From 1 April 2009, the adult minimum wage shall increase from $12.00 to $12.50 per hour. The training and new entrants’ minimum wage will also increase from $9.60 to $10.00 per hour. Minister of Labour Kate Wilkinson made an odd comment about the need for fair pay – we assume this was a media stumble. We understand John Key has said that such increase is a reasonable reaction to inflation.
Employment Agreements / 90 day clause – in writing
The trial period for employees in businesses with less than 20 employees takes effect from 1 March 2009.
It is important that employers understand that this will not apply if the condition is not in writing and agreed between the parties.
We foresee employers thinking it is now law therefore it will apply and getting stung by unjustified dismissal claims which, if they haven’t complied with the legal requirements, will have “legs”.
Employment agreements (contracts) which are in written form are mandatory and have been for all new employees since the Employment Relations Act was passed October 2000. Penalties of $3000.00 have been levied by the Employment Relations Authority where employers have not had written employment agreements in place.
We have prepared a 90 day clause for inclusion in all written employment agreements.
If you need employment agreements (contracts) or the 90 day clause to include in your current employment agreements we can assist. Call us on 09 377 9891 or email kh@knowhow.co.nz
At the risk of sounding repetitive, if you are considering restructuring it is essential you get good advice and comply with the procedural requirements.
There are risks attached to restructuring - but it doesn’t need to be frightening or stacked against the employer. Restructuring needs to be done in good faith, with sound reasons and within the procedural requirements.
What we are picking up – having managed restructuring for 82 Companies in the past 6 months - is that since September employees have a much greater understanding of the realities of the current economy.
There are still employees and dare I say it, even the odd business owner, who seems to be in denial about what is here and what is coming our way, but the issues of restructuring unsettling staff are less pronounced than 6 – 12 months ago. This would seem to be, in part; a much more constrained job market but also people’s understanding that businesses have to be prudent and make some hard calls to remain viable.
If you are considering restructuring we recommend you consider;
- Whether the proposed changes will provide the necessary cost savings, efficiencies for the business for a reasonable period of time or will you need to make further changes within months – there is a danger, because it is a very stressful and demanding time, to make cost reductions at the lesser end of the scale and find the need to make further changes within a short time frame
- Alternatively a phased restructure may work for you – each 3 months, depending on business conditions – this requires very careful management of core and critically important staff as they may be concerned about the viability of the business with frequent phased changes
- Holiday pay liabilities – employees are entitled to their holiday pay immediately upon termination. The notice payment can be paid in the normal pay cycle. However we are seeing holiday pay requirements causing considerable financial pressure on some businesses
- Beware of business advisors with little or no expertise or experience in the area of restructuring who see this as a market opportunity – this is a high risk gambit and no one needs more pressure in these times.
- The demand for Mediations is high – employer’s have said to us they believe the Courts will be more lenient because of economic conditions. We don’t necessarily agree with this view. While there may be little debate about the reasons / substance for a restructure the procedural requirements are held to be dear by the Courts and the exposure to penalties /cost for employers is real
Commentators Expectations re Unemployment
Unemployment data released in February shows an increase from 4.2% in the September quarter to 4.6% in the December quarter. The projections are around 6.5% by end 2009. This projection is still lower than unemployment during the Asian crisis which reached around 7.3%
The point has been made that the data is weird in that it shows a 0.09% increase in employment in December. This may be older people going back into the workforce because of economic conditions or an increase in part time work. Either way the expectation is a downward adjustment in the March quarter. A third of businesses expect to lay off staff according to the reports in the media and we are consistently busy with restructuring work so this data does seem to belie the reality.
The changes in the job market mean costs of salaries for new employees and the extent of salary increases are not subject to upward pressure. This does not address the salary/wages gap with Australia but it does provide some breathing space for business. Employers appear to have considerably more confidence in saying “this is the figure” rather than be open to pressure.
Employers are looking more closely at the fundamentals of remuneration including commission structures and whether they are affordable or stack up in business terms in these times.
We are working with a significant number of Companies to restructure remuneration terms to protect profitability within businesses. Call us on 09 377 9891 if you want more detail on this area.
Many of you will have worked with Helen Ewan who as of 2 February has been promoted to the position of HR Consultancy Manager of KnowHow Limited.
Helen will manage all advisory and support services for our KnowHow package clients. In her new role she will manage our HR staff and contractor support.
Helen’s career path with the Company has been a constantly climbing trajectory – she cares passionately about delivering the right advice and service to our clients and she works extremely hard. I know she will do a fine job in managing the team to continue to provide our very best service to our clients.
My role will continue to be consulting on the complex and larger project work with our clients. We are looking to expand our consultancy services during 2009 and this will be a primary area for me. We will keep you posted on developments in this area
Employers who need HR support
We are very grateful to our clients, colleagues and people we have business alliances with who put us in touch with other employers who need advice or support.
If you know of an employer who needs support in managing restructuring, performance management, personal grievance management or compliance in employment matters please pass on our contact details or let us know and we will contact them to outline what we do. Please do let us know if there is more we can do to assist you with your HR matters.
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists Employment Agreements, Company Policy and Procedures, Health and Safety Manuals/Systems Compliance, Restructuring, Redundancies, Managing Performance, Mediations, Dispute Resolution, Personal Grievances, Compliance, Termination Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem.
15 DECEMBER 2008
One more edition for 08
Redundancy ReStart Scheme
The Government has announced its Redundancy Scheme – ReStart, aimed at helping low and moderate income families with children, and people with high housing costs, who have been made redundant to get through the tough time and essentially get back on their feet.
To qualify for ReStart, people need to have worked for the last 6 months, which includes self employment or where people have changed jobs during that period. People are required to actively seek work during this period.
ReStart comprises three components:
• ReCover - a payment for families with children and who are no longer eligible for the In Work Tax Credit, of $60 a week for families with up to three children and $15 a week for each extra child
• RePlace - available for those who qualify for the maximum Accommodation Supplement after they have been made redundant. RePlace increases the amount by up to $100 a week.
• ReConnect - employment and job services.
The assistance will be available for up to 16 weeks or until the person has a new job.
People made redundant between 8 November and 15 December 2008 will have until 15 January to apply for ReStart. From 16 December 2008 people made redundant will have 20 working days to apply from the date their position is disestablished.
Payments will be made from 1 January 2009 and where applicable will be backdated from the election date (8 November 2008).
We understand that ReStart is in addition to the Unemployment Benefit and that the three components of ReStart are available separately, meaning a person may be eligible for ReCover but not RePlace.
If you would like further information on ReStart, please contact their helpline on 0800 559 000, or if you would like to discuss this with us contact HR KnowHow on 09 377 9891.
KnowHow Closedown
We will be closed for the Christmas period from 24 December to 4 January, with the office re-opening on Monday 12 January. We will however be clearing messages from Wednesday 7 January for clients who have urgent requirements through this period.
Thank you for your support in 2008. We look forward to working with you in 2009.
We wish you all a very Merry Christmas and a Happy New Year.
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists Employment Agreements, Company Policy and Procedures, Health and Safety Manuals/Systems Compliance, Restructuring, Redundancies, Managing Performance, Mediations, Dispute Resolution, Personal Grievances, Compliance, Termination Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem.
15 DECEMBER 2008
In this edition:
Further to our recent newsletter on the 90 Day Trial Period, we confirm that the Bill was passed on Friday 12 December. The amendment to the Employment Relations Act will be effective from 1 March 2009 – one month earlier than the proposed date in the Bill.
To recap on the 90 days:
· employers with 20 or less employees can agree with new employees a trial period of 90 days or less · either party can terminate employment within 90 days without the risk of a personal grievance, or other legal proceedings in respect of termination. · trial period must be agreed at the beginning of the employment relationship and must be writing and recorded in the Employment Agreement. The size of the business will be relevant to the time that the employee is hired. · employers will not be allowed to terminate and rehire, which will remove the ability to employ an employee on a ‘rolling’ trial period. · during the trial period, employees’ rights relating to discrimination and sexual harassment will continue to apply. · where employers wish to terminate employment during the trial period, notice must be given before the end of the trial period, despite that the employee’s final day could be after the 90 days · employers are not required to give a reason for the termination, even if this is requested by the employee. Although the notice of termination does not need to be made in writing, we suggest that the employer does record this is writing with the employee.
We are currently drafting a trial period clause to go into our Employment Agreements. All our HR Support Package clients’ Employment Agreements will be updated to include the new clause from 1 March 2009, and the clause is also available to our adhoc clients.
We understand that the main changes to the KiwiSaver legislation are:
From 1 April 2009:
· compulsory employer contributions will be capped at 2% · employer tax credit will be discontinued · minimum member contribution rate will reduce from 4% to 2%, and 2% will be the default contribution rate for new employee members · member’s fee subsidy of $40 per annum will be discontinued
Issues around total remuneration are as yet unclear and we will provide further comment on KiwiSaver amendments upon Parliament passing the Act.
If you would like to discuss any of the matters raised, or need assistance, please contact HR KnowHow on 377 9891 or at kh@knowhow.co.nz.
KnowHow Closedown
We will be closed for the Christmas period from 24 December to 4 January, with the office re-opening on Monday 12 January. We will however be clearing messages from Wednesday 7 January for clients who have urgent requirements through this period.
Thank you for your support in 2008. We look forward to working with you in 2009.
We wish you all a very Merry Christmas and a Happy New Year.
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists Employment Agreements, Company Policy and Procedures, Health and Safety Manuals/Systems Compliance, Restructuring, Redundancies, Managing Performance, Mediations, Dispute Resolution, Personal Grievances, Compliance, Termination Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem.
12 DECEMBER
In this edition:
- Case Law - dismissals relating to pregnancy
At last some good news for the employer.
The Bill that is currently before parliament proposes from 1 April 2009, employers with 20 or less employees can agree with new employees a trial period of 90 days or less. Such change in legislation will allow either party to terminate employment within 90 days without the risk of a personal grievance, or other legal proceedings in respect of termination.
The trial period must be agreed at the beginning of the employment relationship and must be writing and recorded in the Employment Agreement. The size of the business will be relevant to the time that the employee is hired.
Employers will not be allowed to terminate and rehire, which will remove the ability to employ an employee on a ‘rolling’ trial period.
During the trial period, employees’ rights relating to discrimination and sexual harassment will continue to apply.
Where employers wish to terminate employment during the trial period, notice must be given before the end of the trial period, despite that the employee’s final day could be after the 90 days. More importantly, employers are not required to give a reason for the termination, even if this is requested by the employee. Although the notice of termination does not need to be made in writing, we suggest that the employer does record this is writing with the employee.
The 90 day period will give the smaller employer more confidence to hire, especially during these tough economic times when the risk of hiring the wrong person can be removed. It will provide new workers, long-term unemployed, young people and others who struggled to get work the opportunity to be given a chance. There might be the odd employer who uses it amiss but any reasonable employer would not want to be training new employees every three months.
We expect that this Bill will be passed any day and we are currently drafting a trial period clause to go into our Employment Agreements. All our HR Support Package clients’ Employment Agreements will be updated to include the new clause, and the clause is also available to our adhoc clients.
If you would like to discuss any of the matters raised, or need assistance, please contact HR KnowHow on 377 9891 or at kh@knowhow.co.nz.
Case Law – dismissals relating to pregnancy
Two employees have been awarded substantial amounts for their termination of employment.
In the first case Ms Chiu v New Deli & Café Ltd, Ms Chiu was dismissed just days after informing her employer that she was pregnant. The parties disputed the employee’s actual start date and the employer claimed termination was based on the employee failing to provide proof of entitlement to work. Following an extensive search, the Authority ruled that the employee did commence employment months earlier than the employer stated and that the employer had failed to pay PAYE to the IRD. When the employee was to apply for maternity pay, the failure to pay PAYE would have be revealed and seems that this was the basis for the employer to terminate the employee’s employment. The employer’s creditability was also comprised by it’s main witness lying about the employee’s start date, which did impact on the conclusion of the case.
Ms Chiu was awarded over $22,000, being lost wages, compensation for hurt and humiliation and compensation for loss of chance to apply for maternity pay.
In the second case, Ms Melrose v Weka Group Ltd (trading as The Vulcan), Ms Melrose was employed as the General Manager, and after one week of informing her employer that she was pregnant, she was told that a new General Manager had been appointed. Her job was then to be Assistant General Manager. The employer’s reasons for termination were related to falsifying timesheets, however the Authority ruled that Ms Melrose was dismissed because she was pregnant.
Ms Melrose was awarded six months of lost pay (including notice) and $9,000 compensation for hurt and humiliation.
We are getting a significant number of queries about whether employers need to go “through the process” if making employees redundant. The answer is yes. We understand there are over 50 cases awaiting urgent mediation at the Auckland Mediation Service re challenges to redundancies. The financial risks are too great to take chances in this area. Call us for assistance.
We will be closed for the Christmas period from 24 December to 4 January, with the office re-opening on Monday 12 January. We will however be clearing messages from Wednesday 7 January for clients who have urgent requirements through this period.
Thank you for your support in 2008. We look forward to working with you in 2009.
We wish you all a very Merry Christmas and a Happy New Year.
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists Employment Agreements, Company Policy and Procedures, Health and Safety Manuals/Systems Compliance, Restructuring, Redundancies, Managing Performance, Mediations, Dispute Resolution, Personal Grievances, Compliance, Termination Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem.
DECEMBER 2008
In this edition:
Restructuring – Abrupt change in September/October 08
What appears to be different to the recession of the early 1990’s is the suddenness of the recession biting.
We have all been aware during past months that businesses need to cut costs and that the recession will be a long one.
The Construction and Finance sectors have been facing the tough times since early this year and many have acted to cut costs.
Since September the reality has hit home for a much wider swathe of businesses.
Prior to May 08 the restructuring work we did was focused more on lack of work to do, efficiencies, changes in skill requirements and cost reduction.
Since May 08 it is all about cost reduction.
Those jobs which do not generate revenue or have been established to free up business owners or managers from administration or business support activities are going. We are seeing overtime and night shifts being cut and in some cases senior managers are taking salary cuts.
Since June this year we have worked with 61 Companies to restructure parts of their business. Demand has risen dramatically in the past two months. Some of our client’s tell us they were in denial prior to this – knowing it was coming but recognizing that now it is here. Clients also anticipate March / April 09 will be very tough.
Good reason + flawed or no process = direct hit on the bottom line
There is a lot of activity in our sector where employees have been made redundant by employers simply calling them in and telling them they are terminated.
This is dangerous and costly.
It is essential a thorough consultation process is carried out in good faith.
At a time when all expenses must be contained the financial risks attached to restructuring are more important than ever.
Protecting the bottom line
Manage the risk – sound substance and process protects you from unjustified dismissal claims which can run to many thousands.
Reinstatement is becoming more common as a claim, representation costs range from $2500 – $5000 for Mediation and $14,000 – 20,000 + in the Employment Relations Authority.
Hurt and humiliation payments are averaging $6500 - $8000. Add loss of wages for a case the employer loses and you face costs in the thousands of dollars.
There is no return and no value. It is a direct hit on the bottom line and this cost may well be the last straw for many businesses in these times.
Outsourcing / Employment Protection Provision
The use of contractors is on the rise giving business owners more control over costs which can be directly recovered by revenue generated.
However the recent Pulp & Paper Industry Council of the Manufacturing and Construction Workers’ Union v Norske Skog Tasman Limited case has prevented the employer from outsourcing their wood processing operation because they do not have an employment protection provision in their agreements. We understand the employer is appealing the Authority’s decision.
All KnowHow prepared employment agreements include Employment Protection provisions. If you have any doubts about your employment agreements or the implications of this injunction call us for more information.
The need for experienced advisors
I am aware that many business advisors who have little or no experience in restructuring can see a market and are now offering restructuring services. Good for them for being nimble and adaptable – but are they able to deliver?
Be careful when choosing your advisor. Check out track records and ask for referees. Talk to employers who have used these advisors for restructuring.
On paper the restructuring process looks relatively straightforward – it is not. If all goes smoothly it can look relatively easy to get right in the hands of an experienced professional. There are however areas which new players may have insufficient knowledge or experience to deal with, increasing the financial risks for employers.
If advisors are talking about the number of redundancies they have done – and it sounds impressive – check whether they are talking about the number of people made redundant or the number of Companies they have worked with to restructure the business.
Our track record is robust. We have worked in the area of restructuring since the late 1980’s in large medium and small scale restructures.
In the past 2 years we have undertaken restructuring for over 200 companies. We have extracted around $12 million in costs and have been challenged on less than 2% of the restructures we have managed. Where challenged we have successfully defended our client’s process and substance at Mediation.
The only restructures we have managed that have resulted in litigation in the lower Court were one case in the Tribunal in 1998 and one in the Authority in 2002. Both clients won the cases and were awarded costs. We have had no cases in the Employment Court.
Key tips when considering restructuring:
Consider the impact of a reduction in jobs:
The next step is to map out a reasonably detailed proposal of the changes you are considering. The cost savings can then be identified.
Unless there is provision for redundancy compensation in the employment agreement there is no statutory requirement to pay redundancy.
Consultation
Where positions would be disestablished if you went ahead with the proposal, you must undertake a consultation process with all employees who hold such positions.
Consultation is a critical part of restructuring – if you are considering reducing jobs call us to discuss the rules around consultation.
Communication
“Good” restructuring processes make big efforts around communication – with those people who may be made redundant and with all staff. Make sure people get the real information – if you do not give it to them they will make it up and it is likely to be far more worrying than the facts.
Call us
If you are considering restructuring call us to discuss protecting your business from unnecessary risk. Call Sylvia Wood or Helen Ewan on 09 377 9891
Sick Leave / Annual – no double dipping
A recent case has highlighted a grey area between sick leave and annual leave, and how leave is treated when an employee has exhausted his/her sick leave entitlement.
If an employee has exhausted all his/her sick leave entitlement and becomes or remains sick or injured, additional leave, if requested by the employee, may be treated as annual leave. An employer may agree to this request but may not require the employee to take any leave as annual leave.
In such case we recommend that the employer records that the employee has requested that the additional sick leave is to be treated as annual leave. Because of the recency of this case we have amended our Leave Request form to include this provision. This has been sent to our HR Support Package clients but if you would like a further updated copy please let us know.
Employers should be aware that if an employee does not request the additional sick leave to be treated as annual leave, the employer may be liable to pay the leave. The employer may also be liable to pay the leave in the event the paper trail fails to explain what was agreed between the parties.
If you would like to discuss any of the matters raised, or need assistance, please contact HR KnowHow on 377 9891 or at kh@knowhow.co.nz.
KnowHow Closedown
We will be closed for the Christmas period from 24 December to 4 January, with the office re-opening on Monday 12 January. We will however be clearing messages from Wednesday 7 January for clients who have urgent requirements through this period.
Thank you for your support in 2008. We look forward to working with you in 2009.
We wish you all a very Merry Christmas and a Happy New Year.
Sylvia Wood Director
HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists Employment Agreements, Company Policy and Procedures, Health and Safety Manuals/Systems Compliance, Restructuring, Redundancies, Managing Performance, Mediations, Dispute Resolution, Personal Grievances, Compliance, Termination Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem.
11 NOVEMBER
In this edition:
With Christmas approaching, there is a need to start planning annual leave and advising staff of the requirement to take annual leave over the Christmas/New Year closedown. Where a Company closes down over the Christmas period an employer can require employees with sufficient annual leave entitlement to take annual leave at this time. Employers must give employees 14 days notice of such requirement and we advise that this should be in writing. For those employees who do not have annual leave entitlement at the time of the closedown there are a couple of options for the treatment of leave during this period. If you would like to clarify the best practice for your employees in this instance, please contact HR KnowHow on 377 9891 or at kh@knowhow.co.nz Please note that where Public Holidays fall during an annual closedown they are treated as paid Public Holidays. To assist you with your obligations re notifying staff of the closedown, HR KnowHow can prepare a Leave Memo to your staff. If you would like us to prepare a Leave Memo for you, please contact HR KnowHow on 377 9891 or at kh@knowhow.co.nz.
To help make things a little bit easier for you – let us carry the strain of having to calculate annual leave. Or if you just need to check that you are on the right track, our team of HR Advisors can provide such guidance.
Please find attached the HR KnowHow Leave Request form. A leave form is not only needed for administration and planning purposes, but also to ensure that employers comply with the Holidays Act re record keeping.
The silly season is upon us – and many employees (maybe employers?) are looking forward to letting their hair down, however it is important that employers apply the “Host Responsibility’ at Christmas parties. Alcohol Advisory Council of New Zealand (ALAC) recommends that the ‘Host Responsibility’ policy includes the following: - Provide low and non-alcoholic alternatives - Provide food - Do not serve alcohol to minors - Stop serving alcohol to an intoxicated person - Arrange safe transport options When hosting a staff party at a restaurant, the liability for Host Responsibility is with the licensed premises, however employers are still required to take a role in the safety of their staff.
If you would like to discuss any of the matters raised, or need assistance, please contact HR KnowHow on 377 9891 or at kh@knowhow.co.nz.
Sylvia Wood Director HR KnowHow – (09) 377 9891 www.hrknowhow.co.nz The Human Resources Specialists Employment Agreements, Company Policy and Procedures, Health and Safety Manuals/Systems Compliance, Restructuring, Redundancies, Managing Performance, Mediations, Dispute Resolution, Personal Grievances, Compliance, Termination Information contained herein does not constitute a definitive or complete statement of the law. ‘What’s New’ is designed to provide accurate and authoritative information on employment matters. ‘What’s New’ is not rendering legal, accounting or other expert advice. Because employment related matters must be dealt with on a case by case basis the information provided herein is not intended to supplant professional legal and other expert advice being sought in regard to a specific problem.
3 November 2008 In this edition: - Redundancy relief - National & Labour - initiatives - Labour and National Employment Relations Policies – Election 08 National’s relief package for those made redundant: This is a time-limited package of assistance for people who have been made redundant and who have been in the same job for at least six months.
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A Working for Families
top-up equivalent to the in-work tax credit, for those families that were - An increase of $100 in the maximum weekly accommodation supplement.
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This assistance will be
available until they get another job and their circumstances improve, or - National's transitional relief package is targeted and based on existing entitlements
Labour’s relief package for those made redundant: - |
