Employment Relations Act Update
EMPLOYMENT RELATIONS ACT UPDATE
The Employment Relations Act 2000 (ERA) is now 18 months old.
There was an enormous amount of publicity heralding its arrival - some good, some bad. How accurate was it?
This
session will not summarise the ERA - that has been done in previous
sessions, in previous conferences. The purpose of today's session is to
look at what the introduction of the ERA and the changes it made has
actually meant both in case law (where we have had some) and in terms
of industrial trends.
Many employers will have found that there is little or no difference in how they operate now as opposed to a year ago.
So what has happened since 2 October 2000?
TRENDS IN INDUSTRIAL RELATIONS
The Institutions
The Employment Relations Service Info-line continues to receive thousands of calls.
The Labour Inspectorate has worked through more than 2000 applications and has taken part in seminars.
The Mediation Service received applications and had a less than 12 week turn-around in 80% of cases (generally 3-4 weeks).
The
Employment Relations Authority receives an average of 200 applications
a month, 60% of those are in Auckland. It takes about 10-12 weeks to
set a hearing and 2-4 weeks after that to get a determination.
There
are still a number of cases outstanding in the Employment Tribunal -
mainly in Auckland. The Tribunal continues with members holding
temporary warrants. In Wellington and Christchurch, the ERA has taken
over any old cases.Unions
There are 207 Unions registered. Many of them became Incorporated Societies after September 2000.
As
at 1 March 2001 (the latest available figures) Union membership
represented 22.1% of wage and salary earners and 17.7% of the total
employed labour force. This indicates that Union membership has
slightly increased. 28% of the Unions are enterprise-based. However, at
current figures their membership only makes up 1% of union membership.
Collective Agreements and Wage Rates
Collective Agreements must be registered with the Department of Labour.
This
means that we are able to find out that for all the panic over a return
to the Award System there are actually very few Multi-employer
collectives (MECA's) - only 7% of those registered.
Therefore most (93%) are single employer collectives and 74% of those collectives cover less than 100 people.
While
most people assumed that the ERA would result in a general increase in
wages compared to previous years, that might not be the case.
- 17% of employees covered have had an increase.
- 82% have had a nil payment movement, and
- 1% have had a decrease.
The majority of increases are between 2 and 4% p.a.Industrial Action
Work
stoppages have shown a downward trend over the past two decades,
declining from annual levels of over 400 in the late 1970s to relative
steady levels under 100 since the 1990s. from 1997 annual levels have
ranged below 50. For the December 2001 year the level was 42, remaining
under 50 as recorded over the previous four years, but it is double
that recorded in the December 2000 year (Source: Statistics NZ).
When
looking at industrial action - strikes and lockouts - it is important
to remember that under this Act many people are returning to the
bargaining table for the first time in a long time. Partly, perhaps
because they are now obliged to do so.
Previously, the parties could
refuse to meet, refuse to talk about issues and refuse to give reasons
or even consider what the other side had to say. Now, they are obliged
to act in good faith (a concept we will deal with later). This has
meant that they may be dealing with some things that have been building
up for a while. Further, the expectations of employees in general was
quite high as a result of the publicity surrounding the introduction of
the Act. (An element of "now it's our turn!") All of these factors
create conflict and may lead to increased volatility or action.
Having
said that, economics more than anything influences this area of
behaviour. With the global economy as it is and the Air New Zealand and
Telstra type situations, we may very well see a reluctance to lose
wages or production due to industrial action. Further, remember that an
employer can't hire in other staff to do the work of the employees that
are out (other than for health and safety reasons).
A substantial part of industrial action has been in the public sector.
As
already discussed, the ERA introduced some changes to the law. Some
more potentially far reaching than others. How have these changes been
interpreted by the Court and the Authority? What do things like good
faith in collective bargaining and fixed term agreements mean? How do
we deal with redundancy?
DEVELOPMENTS IN CASE LAW AND CLARIFICATION OF CONCEPTS
Fixed Term Agreements
As
you are all now aware, fixed term employment under the ERA is limited
to where there are genuine reasons based on reasonable grounds for
specifying that the employment is to end on a particular date, event or
conclusion of project. (s.66)
This alters the law that developed
under the ECA i.e. that the expiry of a fixed term contract would
terminate the employment relationship but not be a dismissal and
therefore couldn't give rise to a claim for unjustified dismissal.
(Hagg)
It takes us back to how the law was before the Hagg decision in 1997. Now key issues are
• Whether there was a legitimate operational reason for the relationship being fixed term; and
•
Whether that reason and the explanation of how and when employment will
end were adequately advised at the beginning of the relationship.
It
appears that this does not apply to contracts entered into before the
ERA. However, that has not been specifically determined by the Court as
yet. Ms Rankin's case unfortunately did not assist at all - focussing
mainly on the obligations under the State Sector Act.
Recent Cases Of Good Faith Bargaining And What That Means
Since
the ERA came into force on 2 October 2000 we have had relatively few
determined cases on bargaining. There have been many mediations on
bargaining - about 80 - 4% of the Mediation Service's business with,
presumably, most of those problems being able to be resolved between
the parties. Given that there is an ongoing relationship between the
parties and issues of good faith lie at the heart of that relationship,
it is certainly preferable for a situation not to have to be decided by
a third party. Having said that, with a new piece of legislation, it is
those decisions that give us guidance.
It is helpful to first look at the law that now applies to collective bargaining:
• Section 4 of the ERA:
"4 Parties to employment relationship to deal with each other in good faith
(1) The parties to an employment relationship specified in subsection (2)-
(a) must deal with each other in good faith; and
(b) without limiting paragraph (a), must not, whether directly or indirectly, do anything-
(i) to mislead or deceive each other; or
(ii) that is likely to mislead or deceive each other.
. . .
(4) The duty of good faith in subsection (1) applies to the following matters:
(a)
bargaining for a collective agreement or for a variation of a
collective agreement, including matters relating to the initiation of
the bargaining:
(b) any ....
(i) Communications or contacts
between a union and an employer relating to any secret ballots held for
the purposes of bargaining for a collective agreement.
• Sections 31-39 of the ERA and in particular:
"31 Object of this Part
The object of this Part is-
(a) to provide the core requirements of the duty of good faith in relation to collective bargaining; and
(b)
to provide for 1 or more codes of good faith to assist the parties to
understand what good faith means in collective bargaining; and
(c) to recognise the view of parties to collective bargaining as to what constitutes good faith; and
(d) to promote orderly collective bargaining; and
(e) to ensure that employees confirm proposed collective bargaining for a multi-party collective agreement.
Good faith
32 Good faith in bargaining for collective agreement
(1)
The duty of good faith in section 4 requires a union and an employer
bargaining for a collective agreement to do, at least, the following
things:
(a) the union and the employer must use their best
endeavours to enter into an arrangement, as soon as possible after the
initiation of bargaining, that sets out a process for conducting the
bargaining in an effective and efficient manner; and
(b) the union and the employer must meet each other, from time to time, for the purposes of the bargaining; and
(c) the union and employer must consider and respond to proposals made by each other; and
(d) the union and the employer-
(i) must recognise the role and authority of any person chosen by each to be its representative or advocate; and
(ii)
must not (whether directly or indirectly) bargain about matters
relating to terms and conditions of employment with persons whom the
representative or advocate are acting for, unless the union and
employer agree otherwise; and
(iii) must not undermine or do
anything that is likely to undermine the bargaining or the authority of
the other in the bargaining; and
(e) the union and employer must
provide to each other, on request and in accordance with section 34,
information that is reasonably necessary to support or substantiate
claims or responses to claims made for the purposes of the bargaining.
(2)
Subsection (1)(b) does not require a union and an employer to continue
to meet each other about proposals that have been considered and
responded to.
(3) The matters that are relevant to whether a union
and an employer bargaining for a collective agreement are dealing with
each other in good faith include-
(a) the provisions of a code of good faith that are relevant to the circumstances of the union and the employer; and
(b) the provisions of any agreement about good faith entered into by the union and the employer; and
(c) the proportion of the employer's employees who are members of the union and to whom the bargaining relates; and
(d)
any other matter considered relevant, including background
circumstances and the circumstances of the union and the employer.
(4) For the purposes of subsection (3)(d), circumstances, in relation to a union and an employer, include-
(a) to agree on any matter for inclusion in a collective agreement; or
(b) to enter into a collective agreement.
•
The Code of Good Faith - a copy of which is attached as Appendix 1 to
this paper. It is also available on the Department of Labour website.
The cases we will look at are:
• Ports of Auckland Limited v New Zealand Waterfront Workers Union AC 44/01 27 June 2001, Judge Travis.
•
NZ Amalgamated Engineering, Printing and Manufacturing Union v
Independent News Papers Limited and Ors. WA 51/01, 3 August 2001, G
Wood.
• National Distribution Union Inc v Carter Holt Harvey Ltd 3/12/01, Goddard CJ, Travis, Coljan JJ, AC 79/01.
We will deal with these in turn.
Ports of Auckland v NZ Waterfront Workers
The
question before the Court in this instance was whether a duty a good
faith which applies when the parties are in mediation, particularly in
accordance with section 92 of the Act (which deals with mediations when
an essential service has given strike notice), precludes the issue of
an otherwise lawful strike notice on an employer.
The Port
Company was asking the Court to require the union to comply with its
obligation to act in good faith and withdraw the strike notice. The
case was heard while the parties were still in mediation endeavouring
to conclude a new collective agreement. The strike was timed to take
place on the day following the hearing.
Facts
The parties had
five separate collective employment contracts that had expired and had
been negotiating since the 28th of February for a new collective
agreement. Meetings had been taking place on a regular basis. On the
24th of May the parties decided to appoint a mediator to assist them.
They had had a number of mediated negotiations.
On the 6th of
June the union withdrew from the negotiations and served a strike
notice. Their solicitor then contacted the Department of Labour and
requested mediation pursuant to section 92 of the Act. The parties
requested that their existing mediator provide those services. The
parties then continued to meet and mediate at this stage under section
92 of the Act which relates to mediation services being provided where
a strike notice has been issued for an essential service - other than
that the negotiations continued as before.
The union, in the
midst of these negotiations/mediation issued a second strike notice and
then a third strike notice. The union then withdrew the third strike
notice but issued a fourth one. The strikes were due to take place on
the 21st of June, 28th of June, 11th of July (which was withdrawn) and
the 9th of July. A strike did take place on the 21st of June. This
hearing took place just before the second strike would have taken place.
The
company relied in particular on the Code of Good Faith (4.3-4.7) in
saying that parties should attempt to reach an agreed settlement of any
differences arising from the collective bargaining. To assist this
process the parties should not behave in a way that undermined the
bargaining for their collective agreement. Essentially, what the
company was saying was that by issuing the strike notices the union was
undermining the bargaining for the collective agreement.
The
union's view was that the union had continued to attend mediation and
had not in fact undermined the bargaining process. It further contended
that the extent of good faith obligations in relation to strike action,
were that they had to be lawful under the provisions of the Employment
Relations Act and the Act contemplated the fact that industrial action
might take place.
Held
The Court held that there had in fact
been no undermining of the bargaining especially since the parties had
continued to meet and mediate.
He also held that Section 80 of the
Act recognised that even though parties to an employment relationship
are required to deal with each other in good faith, the use of
industrial action by way of strikes and lockouts is not precluded as
being unlawful.
NZ Engineering Printing & Manufacturing Union v Independent Newspapers Limited and Others
Facts
The
Union claimed that the Newspapers had breached their duty of good faith
towards it in a number of ways after the initiation by it of bargaining
for a Multi-Employer Collective Agreement (MECA). The most fundamental
of the concerns was that the union believed that the Newspapers had by
bargaining only on the issue of whether they should be parties to such
an agreement, failed to consider and respond to the union's proposals
for a MECA.
The union represented about 25% of the approximately
3,000 full and part-time employees of INL. Supported by its members, it
wanted to organise a MECA for all of the Newspapers. The objective was
to negotiate a MECA that covered each of INL operations throughout New
Zealand, by way of a core set of provisions relating to all union
members throughout the country and a separate schedule for each
separate respondent company/Newspaper. The union held a secret ballot
of its members to see whether they wanted to have a MECA. The ballots
supported that concept.
The company was given notice under
section 42 to initiate bargaining and was told the results of the
ballots. Overall the ballots showed that two-thirds of the members
supported the initiation for a MECA. Bargaining was initiated on the
1st of February. Representatives met in order to enter into an
arrangement that sets out the process for conducting the bargaining in
an efficient and effective manner (as directed by the Code of Good
Faith).
While there were a number of matters agreed at the
meeting there was a disagreement over where the bargaining should be
conducted and the communication with staff over bargaining. The union
wanted it in Wellington, the company wanted it in Christchurch,
Hamilton or Nelson. In the end talks took place in Masterton. The union
wanted a MECA. The company throughout, stated its clear preference for
company by company collective bargaining. In one instance the
Christchurch Press had already purported to initiate collective
bargaining with the union on a company by company basis. The union
rejected that initiation.
The parties exchanged their claims on
the 22nd of March 2001. The INL companies made only one claim and that
was that there ought to be separate site agreements for each of the
companies. By contrast, the union's claims were comprehensive,
comprising 21 typed pages of core claims, with separate schedules for
each of the respondent companies. The company forwarded these claims to
each of its respective Newspapers and asked them to respond to all of
the points, both the core claims and their individual claims. Some
responded in full, Christchurch and Southland simply emphasised their
case against MECA and no written responses were received from two
others.
At this point a major miscommunication occurred. The
parties had a mediator to assist them with their negotiations. The
mediator was dealing separately by phone with the representatives. The
union's view was that given that only two days had been set down,
future dates and venues should be sorted out first and followed by
discussion of the employer's claim namely for site by site collective
bargaining and that any time remaining could be used by the union to
address its own claim. The mediator left a message saying that the
order of the agenda was that the company's claim would be dealt with
first. This left the union with the view that the three items for
discussion would be the company's claim, future venues and dates for
negotiation and the union's claims. However, the company's telephone
discussions with the mediator had left them with a different impression
which was that there were only two topics on the agenda namely the
venue and location of further talks and whether there would be a MECA
or local agreement. The Authority member accepted that both parties had
a genuine view of what they were expecting to happen.
There was
a hiccup on the transport arrangements provided by INL for the union
bargaining team which meant the bargaining started late. This did not
help.
What then followed was miscommunication in its extreme.
The INL companies, because they believed that the union was there to
further its claim for a MECA expected the union to lead off. Because
the union saw the first matter to be addressed as the company's claim,
they thought by the company asking the union to go first they (INL)
were foregoing their right to set out their position first as the ones
putting forward a claim which is of course normal practice in
bargaining. The union then saw itself as responding to the employer's
claim which had been provided by way of a letter and responded to the
points one by one by way of a whiteboard presentation. The company
objected because they wanted the union to put forward positive reasons
why it wanted a MECA not why it did not want site by site bargaining.
The effect of this was that fairly early on the parties were at a point
of stand off.
The parties took a break to try and resolve the impasse. The atmosphere was described by the Authority member as "testy".
It
was agreed that the union would then make a presentation as to why it
wanted a MECA and respond to the company's claim for site by site
bargaining. The company would then be given an opportunity to ask
questions and respond to the issues. This is what took place. The
company then made their presentation with the union responding with
various questions and statements in support of the MECA and it was up
to the employers to respond.
There was then a dispute over what
time they would be able to respond the next morning. It ended up that
they were late and nobody bothered to tell the union which of course
made everything worse.
The company then responded to the issues
put before them in support of the MECA. Their conclusion was that they
rejected the proposal for a multi employer agreement. The union
attempted to have the company respond to the core claims and how they
would apply to each site. It then also went on to ask how many
collective agreements would be sought on each site and a matter in
relation to coverage. The company's response was that it was up to
local management to determine how negotiations would be conducted on a
local level and that the companies would discuss those issues with the
union at the local level. Bargaining ended at that point.
The
companies were only prepared to meet the union to discuss who the
parties to a collective agreement should be and not all the claims
filed on the MECA.
The Law
The Authority made the following comments:
•
There is no comprehensive definition of good faith in the Act, but it
is clear that it is not limited to actions that are misleading or
likely to mislead or deceive others. The duty to enter into bargaining
in good faith must be measured on a subjective standard.
• While
failure to act in good faith is not behaviour that is easy to describe,
it cannot simply be defined as bad faith. He went on to say that the
average person knows such behaviour when they see it.
"Thus in
this area of good faith behaviour, as in much of Employment Law, I hold
that little, if any certainty can be provided by way of direction or
even guidelines, but instead each case must be determined on its own
merits."
Held
The Authority member went through a number of
factors when looking at whether or not the INL companies had in the
overall scheme of bargaining dealt with the union in good faith. There
were a number of detail findings however the essential ones are as
follows:
• The refusal to bargain in Wellington was found to be a
breach of good faith in the circumstances that was held that the
company was in breach of their duty of good faith by not using the best
endeavours to enter into an agreement that set out a process for
conducting a bargaining in an effective and efficient manner with
respect to the venue for bargaining.
• Two of the Newspapers
approached the bargaining at Masterton with a closed mind. Others
showed that they were amenable to listening to reasons why they should
change their preference and good faith requires no more than that in
respect of keeping an open mind. However, a closed mind, as held by two
of the Newspapers was not consistent with good faith bargaining.
• The parties are not required to agree on any matter or enter into any collective agreement.
•
The INL companies were entitled to treat the issue of whether or not
they should be parties to a MECA as a valid issue on which they could
bargain. Even although there had been a ballot of the members that was
a matter between the union and its members. The issue of a multi
employer agreement itself was still a matter for negotiation between
the union and the employer.
• As already stated above, with the
exception of one Newspaper, the employer parties did not approach
bargaining at Masterton with a closed mind. They had a clear preference
not to conclude a MECA. That was permissible. They had not been
persuaded otherwise yet. That was also permissible. However, it was
clear from their rejection of a MECA combined with its subsequent
actions that they had no intention of bargaining with the union on
other than the single issue that they had bargained on at Masterton.
Therefore while they had agreed to continue to meet with the union they
had effectively refused to consider and respond to all of its proposals
or intended to do so in only a very limited way. This behaviour was in
breach of their good faith obligations.
His reason for reaching
this conclusion is that until the substance of all of the parties'
proposals have been considered and responded to, the type and structure
of the collective agreement cannot be properly determined. Such a
process may well also result in clarification of whether various
proposals will work, etc and if this were to be the case then the INL
companies might have changed their position on the desirability of a
MECA. If not, then the union might have changed its position on the
desirability of separate collective agreements with each party.
The
Authority member held that an impasse over one issue, even a
fundamental one does equate to an impasse of the hold of the
bargaining. Therefore, the effective intention of the INL companies to
refuse to consider and respond to the substance of the union's
proposals for a multi employer collective agreement was in breach of
their good faith obligations under s32.
You may be of the view
that he was merely requiring the people to go through the motions of
bargaining when the outcome was obvious to anyone. However, he made the
point that, as with procedural fairness it is wrong in principal to
second guess what might have happened if matters have been dealt with
differently in terms of proper procedure. Therefore, while the parties
might appear to have fixed and unalterable determination about the
issue, by discussions held in good faith they may suffer a change. Good
faith bargaining requires such discussions.
By Section 20 of the Employment Relations Authority, Representatives can enter workplaces for purposes relating to:-
(a) the employment of the union's members; and/or
(b) Union business.
The
section also specifies examples of these purposes. Purposes relating to
the employment of members includes participating in bargaining,
including participating in bargaining, dealing with health and safety
matters, monitoring compliance with a collective agreement or
legislation and other matters. Purposes relating to union business
include discussing union business, recruiting members and providing
information on the union to any employee on the premises.
National Distribution Union Inc v Carter Holt Harvey Ltd
In
this case, officials of the union attempted to exercise access rights
during a strike to ascertain whether s 97 ERA was being complied with.
Access to the plant area was refused, and the officials were arrested
by the police and charged with trespass. Access was denied for "safety
reasons" and was confined to a meeting with employees in the boardroom.
In proceedings by the union the Court held that s 21(2)(c) is not a ground for refusing entry.
It
is a requirement that any exercise of the right to enter must comply
with existing reasonable procedures and requirements applying in
respect of the workplace. The requirement that union officials should
meet employees only in the boardroom was neither an existing health,
safety, or security procedure nor a reasonable one. The Court held that
this is not a valid ground for refusing entry to union officials under
the ERA, and to hold otherwise would be to allow reasons that seem
subjectively good to a particular employer, to defeat statutory rights
that are limited only by demonstrable objective and classified reasons.
The
Court also found that there had been breaches of good faith by the
employer in having the police arrest the trespassers, for misleading
conduct in refusing access, and in refusing or failing to disclose the
true reasons for denying access. However, conduct on the picket line
was also in breach of the employees' obligation of good faith to their
employer. The Court held that "good faith" has in part developed from,
and is an aspect of, the implied mutual obligations of trust,
confidence, and fair dealing between employers and employees. Such
standards had to be observed between employers and employees (both
individually and collectively through their unions) during strikes and
lockouts: Unkovich v Air NZ Ltd [1992] 1 ERNZ 526.
Where does all of this leave us with good faith collective bargaining?
1.
There is no requirement to reach an agreement on particular issues or
even to reach an agreement at all. Therefore coverage clauses, multi
employer agreements, and even the parties to an agreement are open for
negotiation.
2. It is not a breach of good faith to undertake negotiations that might come into force at some later date.
3. An employer must balance its good faith obligations to all parties - no one party has primacy.
4.
Taking lawful strike action during negotiations for a collective does
not necessarily undermine the negotiations and is not necessarily a
breach of good faith.
5. A breach of good faith is not limited to
actions that are misleading or likely to mislead others. It is
subjective test and each case will need to be determined on its own
merits.
6. Good faith requires that you attend negotiations with an
open mind and in accordance with the code of good faith i.e.
considering and responding to claims put forward by the other party.
This means that even where there is an impasse on a point (no matter
how fundamental) the parties should continue to meet, discuss and
respond to all issues as it may result in a change of view.
7. The
good faith requirements under the Code of Good Faith only apply when
the parties are bargaining for a collective under the Act. Otherwise,
the other more general obligations apply.
Redundancy and Restructuring
The
Employment Relations Act 2000 has changed the law of employment as it
relates to redundancy. The Act emphasises a wider concept of an
employment relationship and is no longer confined to the wording of the
contract.
The Act contains two key provisions in sections 3 and 4.
Section 3 includes:
"3 Object of this Act
The object of this Act is-
(a)
to build productive employment relationships through the promotion of
mutual trust and confidence in all aspects of the employment
environment and of the employment relationship-
(i) by recognising that employment relationships must be built on good faith behaviour; and
(ii) by acknowledging and addressing the inherent inequality of bargaining power in employment relationships; and ..."
Section 4 includes:
Good Faith Employment Relations
4 Parties to employment relationship to deal with each other in good faith
(1) The parties to an employment relationship specified in subsection (2)-
(a) must deal with each other in good faith; and
(b) without limiting paragraph (a) must not, whether directly or indirectly, do anything-
(i) to mislead or deceive each other; or
(ii) that is likely to mislead or deceive each other...
(4) The duty of good faith in subjection (1) applies to the following matters:....
(c)
consultation (whether or not under a collective agreement) between an
employer and its employees, including any union representing the
employees, about the employees' collective employment interests,
including the effect on employees of changes to the employer's business;
(d)
a proposal by an employer that might impact on the employer's
employees, including a proposal to contract out work otherwise done by
the employees or to sell or transfer all or part of the employer's
business:
(e) making employees redundant...
(5) The matters specified in subsection (4) are examples and do not limit subsection (1).
Last
year the full bench of the Employment Court considered the extent to
which the law has changed (Baguley). The Court recognised that the ERA
is markedly different to the ECA and that the emphasis on the supremacy
of the contract no longer applies. The Court specifically identified
the previous leading Court of Appeal decision of Aoraki Corporation Ltd
v McGavin as a case restricted to the Employment Contracts Act and no
longer applicable.
The Court of Appeal issued its decision in
Baguley v Coutts Cars Limited just before Christmas 2001. Mr Baguley
was a car-groomer on an individual employment agreement who had no
express entitlement to redundancy compensation. Coutts Cars Limited
contracted out some work and made redundant two of its four
car-groomers, Mr Baguley claimed unjustified dismissal and was
unsuccessful in the Employment Relations Authority.
The
Employment Court found that Mr Baguley had been unjustifiably
dismissed. The Court said that the Employment Relations Act 2000 good
faith provisions required higher standards of conduct from employers
and suggested the approach taken by Court of Appeal in Aoraki
Corporation Ltd v McGavin (under the Employment Contracts Act 1991) no
longer applied. Mr Baguley was awarded $10,000 compensation for hurt
and humiliation, and a further three months wages ($5,570) because the
stress of the redundancy impeded his ability to look for other work.
The
Court of Appeal criticised the Employment Court for making negative
findings against Coutts Cars that were not based on the evidence.
However
the Court of Appeal criticised the employer for not providing enough
information to Mr Baguely and not consulting him properly about the
redundancy proposal.
Mr Baguley and his lawyer had attended a
meeting with the company before he was declared redundant. At this
meeting, the company refused to let Mr Baguley know the criteria for
selecting which car-groomers would be laid off.
The Court of Appeal
stated that selection criteria should be provided when requested. This
was clearly required under the Employment Relations Act's emphasis on
access to information in resolving employment relationship problems.
The Court said that in most cases the employer will be well advised to
be open about the selection criteria that are to be used.
The
ERA s4 requires that employers and employees deal with one another in
good faith. The Court of Appeal said these new statutory obligations
were not significantly different from the obligations of mutual trust,
confidence and fair dealing that the courts have already recognised in
employment contracts over recent years.
The Court of Appeal
found that the Employment Court was wrong to award Mr Baguley three
months lost wages in addition to the month's notice he was paid by the
company. The Employment Court had accepted that reinstatement was not
appropriate as Mr Baguley was likely to have been selected for
redundancy anyway if a fair process had been followed by the company.
This meant he could not have expected the wages if the grievance had
not occurred.
The Court of Appeal reduced the compensation award
in the Employment Court from $10,000 to $5,000.00. It said that the
Employment Court had not distinguished between the hurt from the manner
of handling the dismissal and the hurt suffered in any event from loss
of employment.
In redundancy situations, it will be prudent to
have prompt consultation with affected employees. Employees should be
given adequate information about the redundancy proposals and selection
criteria. However, consultation is not "an absolute requirement" in
situations where it may be impractical, such as mass redundancies or
immediate business closures.
The Act requires a new approach to
the question as to whether a particular employer acted in a fair and
reasonable manner. It is not enough for an employer merely to assert
that a dismissal is for redundancy. A termination must be for genuine
reasons of redundancy and the selection of employees must be fair.
The
mere fact that some positions will no longer exist is not a general
warrant for singling out employees who are unpopular with their
managers. A fair procedure must be followed. The situation must be
handled sensitively.
It is a question of fact and degree in each case. It requires a commonsense assessment of the situation bearing in mind:
•
The employer's business requirements - if the employer wants to make a
commercial decision, cannot postpone it indefinitely but can reasonably
be expected to postpone it for a short time, long enough to accommodate
the other factors.
• The employee's right to relevant information
- will usually require some real dialogue with the employee starting
with the provision, in all good faith, of accurate information. The
employer needs to find out what will cause the greatest havoc to the
employee in order to try to avoid it, what will injure him the least in
order to try and achieve it, whether the employee can be used in
another position though his or her current position may be redundant,
and which employees should be selected for redundancy if there is a
choice to be made. It is convenient to call this dialogue consultation
but that term does not imply that the employer has to seek the
employees' concurrence in the commercial decision, although sometimes
employers may have found other solutions as a result of the employees'
input. The timely provision of useful information will often be
decisive of the justness or lack of it of the employer's actions.
•
The employer's ability to mitigate the blow to the employee - speaks
for itself but, as with factor (ii), the answer may not be obvious
without a contribution to it from the affected employee.
• The
nature of the employment relationship is one calling for good faith -
involves recognising the employee's worth as a human being even if no
longer valued or required as an employee.
Good faith is a
flexible concept and would depend on the particular relationship and
the particular circumstances. There are no set rules.
In some
situations a decision may be made without allowing an employee the
opportunity to comment, but in redundancy these are relative few. The
initial opportunity to comment in a redundancy is often referred to as
consultation. The redundancy process can be broadly broken down into
four different elements; consultation regarding a proposal, selection
criteria if applicable, alternatives to termination and termination
itself.
While these are identified separately they do not
necessarily need to be implemented separately. A proposal that may
result in a redundancy may be put to an employee at the same time as
the proposed selection criteria and any alternatives to termination. An
employer should ensure that these are couched in terms of a proposal
rather than a decision that has already been made. Alternatives to
termination may also be offered before, at the same time of or during
notice of termination.
The timing of each element will depend on the circumstances.
Within
consultation generally, in addition to any discussion about the
proposal itself, or once a decision has been made, an employer is also
expected to discuss with the employee and consider "what will injure
the employee the most and try and avoid it and what will injure the
employee the least and try and achieve it".
The Selection
Process is important where only some of a number of identical positions
are surplus. The question then becomes how does an employer select
which employees to terminate or, conversely, which employees to keep.
There is wide scope for employer discretion. An employer can
effectively decide on any criteria as long as it is lawful and
relevant. This may include performance even where there are no existing
performance issues or warnings. It is not a disciplinary matter, an
employer is not identifying poor performance but is trying to identify
and keep the best performers.
Whatever selection criteria are
considered they should be relevant to the employment relationship and
particularly the employment functions. They should be as objective as
possible although many selection decisions will involve subjective
elements.
Consultation should also occur in relation to the
selection criteria. The selection criteria should be communicated to
employees as proposed criteria and employees should be given the
opportunity to comment on their relevance.
Once the selection
criteria are decided and assessments are being made these assessments
should also be communicated to the employee for the employee's comment
before a final decision is made. The reasoning for this is, again,
natural justice. An assessment may include comments that are
detrimental to the employee. The employee should be given the
opportunity to comment on and correct any assessment before the
employer relies upon it.
In relation to selection, and in some case
the redundancy overall, it may be appropriate to ask for volunteers
although there is no obligation to do so.
Of course, an employer must always comply with the terms of any employment agreement or policy that is in place.
As
a general rule the longer the process, the more information that is
shared and time taken to consider each step the more likely that the
redundancy process will be difficult to challenge. The more compressed
the time frames, and the more restricted the information provided, then
the more likely the redundancy process can be challenged. Redundancy
processes are not complicated, an employer acting openly and honestly
will have little to fear.
Take your time!Union Registration and Cross-Examination
20
unions were registered under the Act before 2 October. A recent Court
of Appeal Decision held that their registration was invalid and
accordingly
- collective agreements entered into were not valid
- industrial action and other acts based on their registration were unlawful.
This
had enormous implications, and as a result the Employment Relations
(Validation of Union Registration and Other Matters) Amendment Bill was
passed.
It has had the effect of validating the registration and
otherwise lawful actions taken by such unions in the belief that they
were validly registered.
The Bill also included a provision to
override the decision of the Employment Court that requires the ERA to
allow cross examination in cases before it. The amendment put this
decision squarely in the discretion of the Authority member at the time.
Independent Contractors
Under
the Employment Contracts Act 1991, essentially, the clearly expressed
contractual intentions of the parties prevailed over all other
considerations where there was a question of whether a particular
person was an employee or an independent contractor. i.e. what did the
contract say?
In the absence of a written document, the focus
was on an inquiry into circumstances of the relationship as a whole to
make a finding whether the relationship was employment or not.
The ERA made significant amendments to the definition of an "employee".
"6 Meaning of employee
(1) In this Act, unless the context otherwise requires, employee-
(a) means any person of any age employed by an employer to do any work for hire or reward under a contract of service; and
(b) includes-
(i) a homeworker; or
(ii) a person intending to work; but
(c) excludes a volunteer who-
(i) does not expect to be rewarded for work to be performed as a volunteer; and
(ii) receives no reward for work performed as a volunteer.
(2)
In deciding for the purposes of subsection (1)(a) whether a person is
employed by another person under a contract of service, the Court or
the Authority (as the case may be) must determine the real nature of
the relationship between them.
(3) For the purposes of subsection (2), the Court or the Authority -
(a) must consider all relevant matters, including any matters that indicate the intention of the persons; and
(b) is not to treat as a determining matter any statement by the persons that describes the nature of their relationship..."
The
essential determination to be made under the ERA in defining an
employee is what is the real nature of the relationship. There is some
guidance to this determination provided in the Act itself in section
6(3). A critical change from the ECA is that any written agreement
clearly expressing the intention of the parties is no longer paramount.
Any written document remains relevant. However, what the document says
about the status of the relationship is not decisive.
Under section
6(3) the determination of whether a person is an employee, is based on
all relevant matters. The intention of the parties is specifically
referred to as one relevant matter. As already referred to above, the
written document (if one) is also relevant. However, neither of these
two factors has any greater importance than other factors.
What are the relevant factors?
There
is no exhaustive list and it has been observed by the Courts that
perhaps no exhaustive list can be compiled. Having said that, we can
extract from various cases a fairly good list of relevant factors.
The relevant factors that have emerged over the years include:
• The intention of the parties;
• What any written document between the parties says about the relationship;
• The level of control exercised over the person;
• Whether the person was carrying on business for themselves;
• The level of integration of the person into the business/organisation.The intention of the parties
A
primary source for ascertaining the intention of the parties will be
any written documents. The written document will in its contents read
in the light of the surrounding circumstances at the time of its being
signed signal what the intention of the parties was. In particular a
clause in any document expressly stating what the intention of the
parties was, can be used to evidence intention.
In the majority
of cases however there is no detailed written contract in existence and
therefore intention of the parties is established in a variety of ways
including evidence of any oral declaration of their intention, evidence
of their conduct and the context of the commercial environment in which
the contract is made.
Written Document
If there is a
written contract between the parties it can be referred to for the
purpose of ascertaining the true interpretation of the document and the
effect of the written terms contained in it.
In considering the
written document, it is important to remember that what is intended,
may not happen in practice. If the relationship is conducted in a
different manner to how it is expressed in a written document, the
focus will be on how the parties actually conduct themselves.
Level of Control
The
higher the level of control over the person's work the more likely the
relationship might be one of employment. If the degree of control and
supervision of the particular person's work exceeds the degree
necessary for the efficient and profitable conduct of their business
then that level of control is likely to be more consistent with a
relationship of employment. Matters such as a requirement to work a
certain number of hours, direct supervision in the day to day
performance of the work would extend the degree of control beyond what
is probably necessary in a contract situation.
However, the
courts will look at the commercial reality as to what is appropriate in
the circumstances.Whether the person is carrying on their own business
There
are some plainly obvious aspects of a relationship that are strongly
suggestive of a person being in business on their own account as an
independent contractor. The matters to be considered here include:
• Whether the person provides their own equipment or tools, i.e. vehicle, computer, mobile phone, etc;
• Responsibility for expenses incurred;
•
Whether they have the ability to hire their own helpers or are
responsible for hiring and paying a replacement should they be absent
on leave or through illness;
• Whether they may have paid a capital sum by way of goodwill or to purchase the right to carry on the work;
•
Whether they have any control over any financial aspects of the
relationship as a result of which they assume some financial risk;
• Whether they have an opportunity of profiting from the sound management of their task
•
Whether free to carry out other work elsewhere can be relevant -
although bear in mind that this can also be consistent with employment;
•
How they organise their taxation/insurance affairs i.e. paying own
ACC/Tax/Public liability insurance/Professional indemnity
insurance;Integration
A person is likely to be an integral part of an organisation and more likely to be an employee if they are:
• Performing a role that is part and parcel of the organisation;
• They are paid set fee - Regular payment of a fixed amount;
• The person works from the organisation's premises and uses its equipment and tools. Do they have a business card?
If
the person carries out work at an office external to the organisation
and utilises their own equipment, it will be difficult to consider them
to be an integral part of the business/entity engaging them.
Summary
The
reality is that the employee/independent contractor interface has not
changed a great deal under the ERA 2000. The pivotal change is that
clearly expressed contractual intentions do not prevail over all other
considerations. It is very much a case of assessing all relevant
factors, with no greater weight being placed on any particular factor
as opposed to other factors. As stated in a recent Employment Court
decision, it then becomes a question of weighing those factors that are
indicative of an employment relationship against those indicative of an
independent contractor relationship to determine the "real nature" of
the relationship.
OTHER THINGS WE NEED TO BEAR IN MIND
Recruitment and Good Faith
The
requirements set out above in regard to what must be in an employment
agreement - such as a job description - do have an impact on hiring and
recruitment in general. As do all the other requirements set out above.
What this will mean is that some organisations will have to take a more
structured approach to their hiring procedures. As it could cost them
time and money down the track if they don't.
As already stated,
under the Act, parties to an employment relationship must deal with
each other in good faith. We have already discussed above what that
means in general terms. It applies even when you are at the recruitment
stage. It means that neither party can mislead or deceive the other
(directly or indirectly). For example, an employer can not mislead a
prospective employee about the nature of the position, possibility of
promotion or ability to earn. Likewise, an employee can not mislead a
prospective employer about experience, qualifications, criminal record,
why they left their previous job or (if relevant) physical condition.
The law didn't previously allow this behaviour if it was deliberate,
however the obligations are now stronger because of the wording of the
Act and the reference to indirect deception. People are unlikely to get
away with lying by omission now.
The Human Rights Act already
prevents employers discriminating against an individual on the grounds
of gender, marital status, religious belief, ethical belief, colour,
race, ethnic or national origins, disability (physical, intellectual,
psychiatric, presence in the body of organisms causing illness), age,
political opinion, employment status, family status or sexual
orientation. However, discrimination or undue influence on any of these
grounds would in all likelihood also be a breach of good faith because
it would harm the mutual relationship of trust and confidence between
the parties. Questions asked and decisions made on the basis of these
areas during recruitment are only lawful if they relate to genuine
occupational requirements of the job and/or a candidate's ability to
perform that job. Having said that, issues of stress within the
workplace will need to be specifically addressed. A person's ability
and manner of dealing with stress will need to become a factor of you
selection process.
In a recruitment situation, good faith means
that the same obligations of fair dealing and the duty not to act in a
manner that destroys mutual trust and confidence will apply. The
requirements to notify people of their right to get independent advice
before signing an agreement and have time to do so or to join the
Union, form part of those obligations - as does the prohibition against
unfair bargaining. They are there to prevent one party taking unfair
advantage of the other and to ensure (in so far as they can) that
everyone understands what the are getting. The obligations are mutual -
they work both ways.
Performance Management
The way in which
performance is managed under the new Act is no different than under the
previous legislation. Employers have always been required to act in a
fair and reasonable manner in managing their staff. The only difference
now is that the requirement to be far and reasonable and to act in
accordance with the obligation of mutual trust and confidence is
actually specifically stated in the Act.
As before, in brief, this requires that:
• employees have clear performance standards that they are required to meet;
• such standards be reasonable in the circumstances;
• they are given reasonable assistance and support to achieve those standards;
•
if it is considered that they are not meeting such standards, then they
are notified of the problem/s and given a chance to explain;
• an
assessment should be made of what reasonable, if any,
assistance/training/guidance needs to be given to help them achieve the
standard or address the problem/s;
• such assistance should be given and the employee given a reasonable time to improve;
• performance should then be monitored and feedback should be given regularly.
The
above process should be followed (maybe frequently) before disciplinary
action is considered so as to ensure that everyone is clear on what is
expected and the employee has been given a full and fair opportunity to
correct any problems. An effective performance appraisal system can go
a long to way to addressing these issues before they become a
disciplinary matter. Disciplinary Action
Again, the way in which
disciplinary matters are handled under the new Act is no different than
under the previous legislation. Employers have always been required to
act in a fair and reasonable manner in managing or taking disciplinary
action against their staff. The only difference now is that the
requirement to be far and reasonable and to act in accordance with the
obligation of mutual trust and confidence is actually specifically
stated in the Act.
Any disciplinary procedure must be carried
out in a fair and reasonable manner having regard to the principles of
natural justice. That is all very well but what does it mean? An
employer must follow the procedure set out in the employment agreement
or policy manual (if there is one). If there is no specified procedure
then, in brief, the employer must:
• Fully inform the employee of
the allegations against them (e.g. Repeated poor performance, an
incident of misconduct) and why it is unacceptable (e.g. breach of
policy/duty/agreement). They should be given sufficient detail so that
they can prepare a response to the allegations. If there are specific
statements or witness accounts, these should be given to them.
• Advise the employee of the potential consequences of the allegations being proven i.e warning or dismissal.
• Give the employee a reasonable time to prepare their response - set a meeting time.
• Advise the employee of their right to have a representative present at the meeting.
•
Meet with the employee to discuss the allegations and give them an
opportunity to respond. All allegations should be put to the employee
and the employee should be given a chance to explain, respond or
comment as well as provide their own evidence (if they wish);
•
Take time to fully and fairly consider the response with an open mind
and, if necessary, investigate further, before making up their mind.
•
Any new evidence should be put to the employee for their response and
or comment, which should be considered. This process might need to be
repeated a few times depending on the nature of the allegations and the
complexity of the circumstances.
• Inform the employee of the
finding as to whether or not the allegation has been proved i.e whether
there has been misconduct. Ask if there is anything further they wish
to say.
• If the finding is that the misconduct has been proved,
then consider any statements made by the employee (for example by way
of explanation or apology) and consider the appropriate action to be
taken in the circumstances.
• Inform the employee of the action that will be taken and the reasons for it.
The issue of whether misconduct is serious or not will depend on the circumstances of each case.
Notes should be taken throughout the process. Any warning or dismissal should be recorded in writing.
Where
there is a dismissal, the reasons should be set out in a letter. In any
case, reasons for dismissal must be given to the employee if the
employee asks for them. An employee has up to 60 days to make that
request. The employer must reply within 14 days.
Where there is
a warning, it should clearly record what it is for, a time limit (how
long it will sit on the file) and the consequences of a further breach.
A copy should be kept on the employee's personal file and a copy given
to them. Personal
Grievances/Problem Solving
If problems do
arise in the employment relationship, it is preferable for employers
and employees to try to solve the problem themselves without having to
resort to an outside party. This can be done through open or
confidential discussions either directly between the individuals
concerned or through a supervisor, HR person or some other appropriate
person. Everyone should try to be as clear as possible about the facts
of a situation before raising it. It is sometimes helpful to discuss or
get advice on the matter from a friend or family member, or, if it is
considered necessary, the union, employers' association, advocate or a
lawyer.
If the problem is not resolved, the parties have the
option to get help from the Employment Relations Service which is set
up to provide free assistance for employment relationship problems.
Mediation services are provided free of charge. Traditionally 80% of
personal grievances/disputes were resolved by mediation. The current
service provides a speedy professional service and is having a marked
effect on the amount of cases going to the Authority. If mediation is
unsuccessful then parties can apply to the Employment Relations
Authority for a determination. The parties also have the option of
going to the Employment Court if they are not satisfied with the
decision from the Authority.
The law on personal grievances has
remained the same except for an extension and clarification of the
grievance relating to union activity and a mirroring of the Human
Rights Act in relation to racial and sexual harassment. An employee can
still pursue a grievance for any of the following:
• Unjustifiable dismissal
• Unjustifiable action which disadvantages the employee
• Discrimination
• Sexual harassment
• Racial harassment
• Duress over membership of a union or other employee organisation
The Institutions that deal with grievances have changed but not so as to make any difference to the grievances themselves.
THE LATEST ON OCCUPATIONAL HEALTH AND SAFETY
Introduction
This
paper is intended to "update" developments and changes in Occupational
Health and Safety Law over the past year. To that extent, the paper
will not go into all of the employer's duties under the statute. The
paper will proceed on the basis the main concepts of the legislation
are familiar to everyone.
We will examine proposed changes to
OSH legislation, in this area and examine some of the implications for
compliance and the inferences that can be drawn from recent court
decisions.
One of the most important things to recognise about OSH,
especially in recent years, is that there is an increasing focus on
"health" - what is a healthy and safe workplace? We need to think about
this in its broadest terms. It is not just about taping over cords or
wearing a hard hat, it is also about minimising or eliminating stress,
fatigue, harassment, etc.
Legislative Changes
The paper does not deal with the changes already made, and proposed, to the ACC regime.
We
will deal with the likely changes that will arise from the Health and
Safety in Employment Act (HASIE) Amendment Bill, and the Crown
Organisations (Criminal liability) Bill.OSH Legislation
The HASIE
and the Health and Safety in Employment Regulations 1995 ("the
Regulations) impose duties and obligations on a wide range of people
including employers, employees, occupiers, principals of contracts,
contractors and subcontractors, and persons in control of workplaces.
In
the years since its inception, few changes have been made to the scope
of HASIE. For the most part employers' responsibilities under OSH
Legislation remained as they were. The Courts continued to refine them
for us.
Employment Relations Act 2000
A few key points in regard to the ERA should be highlighted, relevant to an OSH debate.
The
definition of "employment relationship problem" is not restricted to
personal grievances (dismissals and disadvantages) and disputes. It now
includes "any other problem relating to or arising out of an employment
relationship."
It does not take any imagination or fanciful
speculation to predict that a proactive employee discontented with the
health or safety of a workplace could bring a claim under ERA as an
alternative to a HASIE complaint. Employees have 6 years in which to
bring proceedings (other than personal grievances) and can get
penalties/compliance etc if the obligations of HASIE are part of the
employment agreement and are breached.
The new ERA has included
racial harassment along with sexual harassment as something an employer
has to prevent, and if it occurs, ensure it doesn't happen again.
The
ERA definition of "racial" includes "the race colour or ethnic or
national origins" of the employee. That could include the Irish, the
Ozzie bloke, may even include the blonde. It will include jokes, abuse,
language, graffiti, posters, literature, threats and probably even
passive shunning.
To have a safe and healthy workplace there
will need to be no toleration of harassment of any kind. However,
combining this definition with the widened ambit of employment
relationship problem, is likely to produce more proactive health and
safety challenges under ERA as an alternative to the Human Rights
Commission. Not only will employers need appropriate policies - they
will need appropriate enforcement and publicity.The Health and Safety
in Employment Amendment Bill 2002
This Bill has had its first
reading and is currently before the Select Committee. Submissions
closed last week. The report date has been extended and is now due on
25 June. It is still due to come into force in September 2002.
The Bill proposes amendments that fall under three headings. There are also other various matters:
•
Improving the coverage of the HASIE Act - to ensure that all employer
and other people who are in workplaces are covered by a consistent set
of health and safety laws:
- Amend the Act to make it clear that it covers mobile workers.
-
Amend the Act to make it clear that it covers "on loan" workers,
volunteers in a workplace and recreational users (other than non fee
paying in rural areas).
- Amend the Act to provide coverage to
railway and maritime workers and NZ Air crew (whether in local or
international air space).
- Amend the Act to place duties on those
who sell or supply plant or equipment for use in workplaces to ensure
it is safe for its intended use.
• Encouraging a greater sense of
partnership between the employers and employees - to ensure effective
communication on health and safety matters:
- Amend the Act to place
a duty on employers to ensure that employees have reasonable
opportunities to participate effectively in the ongoing management of
OSH in the workplace.
- Require all parties to co-operate in good faith to develop and maintain an employee participation system.
-
Amend the Act to provide for the election of Health and Safety
representatives in workplaces that want one or the establishment of a
committee.
- Provide for time off for training of Health and Safety representatives.
- Allow trained Health and Safety representatives to issue Hazard Notices.
- Codify the right of employees to refuse to do work which is likely to cause serious harm.
• Effective enforcement - to provide greater incentives for compliance.
-
Prosecution is a severe and expensive means of ensuring compliance -
therefore, introduce the option of infringement notices for Inspectors
to use in the case of minor offences (maximum $5,000.00).
- Increase
the level of fines from 100,000 to 500,000 and possible imprisonment
from 1 year to 2 years (s49) and from 50,000 to 250,000 with possible
imprisonment of 3 months (s50).
- Remove OSH's monopoly on prosecutions i.e. allow private prosecutions.
- Make the 6 month period more flexible by:
* take 6 months from when the actual harm was discovered.
* make provision for applications to the Court to extend the time to take a prosecution.
* Various other issues.
-
The definition of "harm" and "hazard" will be extended to confirm that
they cover mental or physical harm caused by work related stress.
- It will be unlawful to insure against fines (but insurance to cover costs will be allowed to continue).
- An employer will be required to provide health and safety equipment and ensure its use.
How does the Department of Labour define "stress"?:
Stress
"strain, burden, anxiety, worry, distress, pain, grief, suffering, anguish, pressure tenseness, tension"
Stress
"reactions
of the body to forces of a deleterious nature, infections and various
abnormal states that tend to disturb its normal physiologic equilibrium"
Stressors
"events or circumstances which may lead to the perception that physical or psychological demands are about to be exceeded"
Stress
"the awareness of not being able to cope and that awareness being of concern"
Physical and/or
mental fatigue
"the
temporary inability, or decrease in ability or strong disinclination to
respond to a situation"At present, it is intended that the amended Act
will come into force on September 2002.The Right To Sue
Bottrill
In
New Zealand, the reason we do not have a lot of personal injury cases
is because we have ACC. ACC prevents you suing someone for lost
earnings or pain and suffering no matter how negligent they were. The
Act does not, however, prevent you from suing to recover a third type
of damages called "exemplary" or punitive damages. These are more like
a fine. They are not meant to compensate, they are meant to punish. The
test as to whether they should be paid is very high.
The Court of
Appeal recently looked at the issue of exemplary damages again, when
considering an Appeal by Dr Bottrill against a decision of Justice
Young to order a new trial of the case of Mrs A.
When Mrs A had
first brought her case against Dr Bottrill for exemplary damages
arising from his gross negligence in reading and reporting on her 4
tests which resulted in delay in diagnoses and the consequent need for
a radical hysterectomy and radiotherapy. In the initial hearing, while
the Judge had found that Dr Bottrill was negligent in the case of Mrs
A, there was no evidence that Dr Bottrill was persistently and
incompetently wrong in his reporting. His Honour then went on to decide
(by a narrow margin) that the case did not fall into that very limited
category of negligence cases which would warrant an award of exemplary
damages.
This finding was clearly made before the extent of Dr
Bottrill's errors had become known. As we are all now aware, a number
of Dr Bottrill's cases were sent to Sydney for an independent analysis
and it was found that an inordinately large amount had been read
inaccurately. As a result of this new information Mrs A applied to have
a retrial on the basis of new evidence that was not available to her at
the time of her hearing.
When considering the issue of whether
to grant a retrial on the basis of new evidence the Court must look at
3 factors. Firstly, whether the evidence could have been obtained with
reasonable diligence for use of the trial. Secondly, whether it would
have an important influence on the result of the case and thirdly it
must be apparently creditable, although it need not be
incontrovertible. For the purposes of Mrs A's case, it was the second
issue that was of concern to both Justice Young and the Court of Appeal
i.e. whether this new evidence would have an impact on the result of
the case. Now remembering that Mrs A's case was only about exemplary
damages, this caused both Justice Young and the Court of Appeal to
revisit the issue of exemplary damages and in what circumstances they
would be available. There are 63 pages of Judgment issued by the Court
of Appeal on this point. The outcome of the majority Judgment (Justice
Thomas dissented) is that exemplary damages in negligence cases would
be available only where the defendant is subjectively aware of the risk
to which his or her conduct exposes the Plaintiff i.e. this excludes a
situation where a person is inadvertently guilty of negligence no
matter how careless their actions are. The Court of Appeal held that
exemplary damages applies to acts or omissions which are deliberate and
indicate a lack of conscious regard.
The effect of this case is to substantially narrow the situations where exemplary damages are available to a plaintiff.
This
will not preclude other victims from issuing proceedings against Dr
Bottrill or the Crown, as to a large extent this decision was centered
around the evidence that had been before Justice Young at the time and
the specific evidence that was sought to be introduced in a new
hearing. However, the decision may well discourage future litigants as
they will be required prove that Dr Bottrill was actually aware of the
risk and continued to practice in the manner that he did in any case.
It
is clear from recent cases that the provisions of the Health &
Safety in Employment Act 1992 will apply to ensure that an employer
protects the safety of an employee from both physical and mental
injury. The amendments reinforce this further.
Mental illness such
as stress is an identifiable hazard from which employees must be
protected under section 6 of the Act. Given the difficulties of
eliminating stress from the workplace an employer should concentrate on
their duty to minimise the hazard causing emotional harm under section
10 of the Act.
It will be difficult to assess the degree of
mental injury an employee has suffered. Careful consultation with the
affected employee will help to determine the extent to which they feel
impaired, however, a medical assessment may be required. Further
information on the assessment of stress in the workplace is available
to all employers in the OSH publication: Stress and Fatigue: The impact
on health and safety in the workplace.
Under s25 of the Act an
employer is required to inform OSH of serious harm which occurs to an
employee. The Act's definition of serious harm does not explicitly
cover mental injury. Whether you will need to inform OSH will depend on
the seriousness of the mental injury. OSH has advised that they would
expect to informed if an employee is not capable of performing their
tasks due to a mental injury, and as a result that employee has to take
time off, or perform light duties, for more than a week.
Attorney General v Gilbert
A recent case which gained a lot of attention was the Gilbert decision - the probation officer.
When
looking at the proposed amendments to the Health and Safety in
Employment Act, where the definition of "hazard" is to be extended to
include stress and fatigue. The recent Court of Appeal decision in
Attorney General v Gilbert is highly relevant. The decision, released
in March of this year, largely confirmed the earlier decision of the
Employment Court that awarded Mr Gilbert significant damages as a
result of stress related conditions (cardiac disease and vital
exhaustion or "burnout") caused by breaches of his employment contract.
The situation that faced Mr Gilbert was one of inadequate staffing
levels, excessive workload, breach of their own guidelines, grossly
deficient management, and a failure to provide support resources and
supervision. Mr Gilbert raised his concerns with his employer, but they
did nothing. He took significant levels of sick leave, underwent
operations and yet when he returned, the pressure increased. The Court
found that Mr Gilbert had been exposed to an excessive and stressful
workload and environment and that the employer had failed to monitor
his health in relation to that hazard.
The Court rejected the
employer's submissions that the exhaustion was a result of a depressive
illness or that the breakdown in Mr Gilbert's health was a result of a
pre-existing cardiac condition, exacerbated by smoking. It was held
that a plaintiff of this type of case must show that breaches of
contract were a material factor in the loss suffered by the individual,
although not necessarily the sole cause. In this case, Mr Gilbert had
managed to call sufficient evidence to link his medical condition to
the actions and/or inaction of his employer.
Mr Gilbert was awarded:
• 14 years lost income;
• $75,000 compensation for humiliation etc;
• $4,000 medical expenses.Employer's requirements in light of recent cases
Following Gilbert and a number of other recent cases, the following guidelines assist in ensuring a "safe system of work":
•
The nature of all tasks that may cause stress must be clearly
identified as a "significant hazard" in accordance with the Health
& Safety in Employment Act 1992;
• Clear management and
organisational policies must be put in place to identify, reduce and
manage stress and its related symptoms and the employer must
consistently follow those;
• A counselling system should be initiated for those employee's who have been identified as working in stress inducing areas;
•
A clear process for processing and responding to complaints and
concerns from employees must be in place (this must include stress or
work overload); and
• Any employee who requires sick leave for
stress related illnesses should be given restricted duties upon their
return to work.
• Where an accident occurs once, the obligations
to proactively eliminate, minimise, isolate hazards/sources of harm are
increased [if that concept is possible]. Certainly penalties for
subsequent breach where identified remedial steps were not taken
earlier will be significantly higher.
• Familiarity has a habit of breeding contempt or at least a false sense of security. Constant vigilance is essential.
•
HASIE prosecution is but one likely consequence of workplace accidents
or unwellness. Breach of contract action, breach of statutory duty
action for civil damages and police prosecution (and soon private
prosecution) and Employment Relations Authority proceedings are other
possibilities, if not inevitabilities.
A good place to start is
managing the taking of leave, ie encourage or require people to use
their leave.Crown Organisations (Criminal Liability) Bill 2001
The
general policy of this Bill is to implement the recommendation in Judge
Nobles' report in to the Cave Creek tragedy that the Crowns' exemption
from prosecution for offences under the Building Act 1991 and the
Health and Safety in Employment Act 1992 be removed.
This Bill
would have the effect that Crown entities can be prosecuted like any
other entity under these particular Acts and that they would be treated
substantially the same as private sector corporate bodies for that
purpose.
This is consistent with some of the other proposed changes to the Health and Safety legislationFuture
The
legal health and safety areas that I think will develop in the
foreseeable future are claims/litigation for compensation and damages
for OOS or OOS-related injuries; stress and stress-related unsafe
workplaces; and the consequences of various forms of harassment, be
they sexual or other forms of harassment, in the workplace,
particularly but not exclusively due to electronic technology, based on
breach of contract and/or breach of statutory duties. It is also
possible sick building cases might recur, and other occupational health
damages claims. When the HASIE laws change litigation will increase -
criminal and civil.
SMOKE FREE ENVIRONMENTS (ENHANCED PROTECTION) BILL 1999
As
you can see this Bill has been around for some time, however, as you
will be aware it has only just recently gained notoriety. This is
partly because of the recent Australian "Secondhand smoke" case but
also because it is now moving through the select committee process.
The
Bill's stated purpose is to "intensify further the community's battle
against smoking". The Bill extends prohibition on smoking and tobacco
products already set out in the Smoke Free Environments Act 1990 and
increases the protections for non smokers in workplaces, schools and
shops.
The Bill
Inserts 3 new definitions into the Act
relating respectively to common airspace, designated smoking area and
educational institution. The term workplace is amended to exclude
educational institutions which will be subject to a total smoking ban
under the Bill.
It amends the purpose of the Act.
It will
prohibit smoking where 2 or more persons work in common airspace. This
includes situations where air is shared by way of air-conditioning
systems. A limited exception to the ban on smoking will remain with
respect to designated smoking areas.
It sets out duties of an employer to ensure that a copy of a written policy on smoking is available at any reasonable time.
It
imposes a new and total prohibition on smoking at educational
institutions which are defined to include childcare facilities and all
educational institutions other than tertiary institutions. Smoking will
not be permitted at any time at these institutions, or on any of the
premises. They will also be required to display prominent notices about
the smoking ban
There are other changes brought about by the
Bill, however those set out above are relevant to Health and Safety in
the workplace. Why is this relevant to Health and Safety in the
workplace?
Because of the recent decision of the New South Wales
Supreme Court in the case of Sharp v Stephen Guinery trading as Port
Kembla Hotel and Port Kembla RSL Club where Ms Sharp was awarded
AUS$446,000.00 (NZ$548,000.00) in damages by way of compensation for
the harm she suffered (the contraction of throat cancer). The Court
found that this harm was suffered as a result of her employer's
negligence in exposing her to second hand smoke and failing to provide
adequate ventilation and/or failing to take any adequate precautions
for her safety while she was engaged in her work and/or requiring her
to work in enclosed areas where the smoke and other carcinogenic agents
were concentrated. Ms Sharp made a claim of negligence and breach of
statutory duty. The level of damages, which related to lost past and
future earnings, was decided by a jury.
Unlike other personal
injury, disease or injury relating to inhalation of second hand smoke
is not covered by ACC. Therefore, there is the potential in New Zealand
for employers to be sued in a similar fashion to that of the Port
Kembla RSL. Further, if the above Bill becomes law, to fail to
implement the statutory obligations could exacerbate any claims
relating to the contraction of lung or throat cancer.
Of course
it will still be up to the Plaintiff to prove that it is more likely
than not that they contracted the disease as a result of the second
hand smoke. Having said that, no one can now say with any credibility
that the possibility of secondhand smoke causing harm was not
foreseeable.
PARENTAL LEAVE
The legislation
New
Zealand is often seen as innovative, as leading the way, in terms of
its labour laws. But until last year, New Zealand (along with its
trading partners, the United States and Australia) was dilatory in
providing paid parental leave.
However, New Zealand has now
caught up with some of its other OECD neighbours and paid parental
leave is to commence in New Zealand on 1 July 2002.
The timing for the introduction of paid parental leave appeared to be right. Various trends coincided:
•
a significant number of multinational businesses operating in New
Zealand operate global paid parental leave policies anyway, to attract
and retain qualified staff;
• there has been increasing pressure
domestically, in recent times, from the trade union movement and
certain political parties to introduce some form of paid parental leave.
The
legislation is called the Parental Leave and Employment Protection
(Paid Parental Leave) Amendment Act 2001. I trust Ms Harre will forgive
me for referring to it as the Paid Parental Leave Act.
The
change to New Zealand's parental leave provisions has taken place in a
peculiarly New Zealand way: instead of employers being required to pay
for parental leave, parental leave will be funded, at a low level, out
of general taxation.
The Government estimates that up to 20,000
working women a year will qualify for 12 weeks' paid parental leave.
While the scheme has been welcomed by many as a significant social
policy advance it has been criticised by some unions, on the one hand,
for not going far enough, and by some employers, on the other hand, for
adding compliance costs to New Zealand businesses.
Today we will
outline some of the key features of the new scheme and consider its
impact on existing laws regarding parental leave. Who is eligible for
paid parental leave?
Women whose babies are due on or after 1
July 2002 (or who are adopting babies on or after this date) will be
eligible to receive paid parental leave if they have worked for the
same employer for at least 10 hours per week for 12 months prior to the
expected date of delivery. The eligibility criteria are based on
existing criteria contained in the current legislation, the Parental
Leave and Employment Protection Act 1987.
In order to be
eligible to receive leave, women will need to work until the final six
weeks of pregnancy. There will be exceptions to this for medical
reasons.
The baby's mother is the only person entitled to claim
leave (refer attached Form 1). The mother can choose to transfer the
leave to the baby's father, or to a female partner (as long as these
people are also eligible for parental leave) (refer attached Form 2).
At present the scheme does not cover single men adopting a child, or
men whose partners die in childbirth. The Government has indicated that
it will examine these potential loopholes.
Women who are
expecting babies who have changed employers in the 12 months prior to
the delivery date will not be eligible for the paid leave. The
Government has indicated that it will review this aspect of the scheme
after the first 12 months of operation.
One of the most
controversial aspects of the scheme is the exclusion of self-employed
women. It is estimated that this could affect up to 8,000 women per
annum. The Government has indicated that difficulties in measuring what
many self-employed women earn, and whether they will actually be taking
leave, has led to the exclusion of self-employed women from the scheme
at this stage. Once again, however, the Government has indicated that
it will review this aspect of the scheme after 12 months. How much will
the mother receive?
Eligible women will receive a maximum
payment of $325 (gross) per week. This is the equivalent of 53% of New
Zealand's male and female average weekly earnings. This equates to a
net figure of $256.75 (based on a 21% tax rate). Women who earn less
than $325 per week will be paid 100% of their normal wages/salary.
The
amount is seen as a compromise between Alliance's original policy of 12
weeks' paid leave, funded by an employer levy, at 80% of the average
workers' wage (capped at the average male weekly wage), and Labour's
original policy of six weeks' leave, taxpayer funded and paid at
benefit level. Who pays?
The scheme will be taxpayer funded and
it is estimated that it will cost about $57 million per year (including
implementation costs). The Government has indicated it will retain the
parental tax credit. This is a scheme which gives lower and middle
income families up to $150 per week for eight weeks when they have a
baby, regardless of whether either parent is working. Those eligible
will be able to access paid parental leave or the parental tax credit,
but not both.
The Department of Labour, as the agency
responsible for delivery of the scheme, will be contracting with IRD to
process the payments. The Department of Labour will be responsible for
public information on the scheme, and questions regarding eligibility.
If
you have any questions regarding paid parental leave you are able to
ring the Employment Relations Information Line (0800 800 863) or look
at their website (www.ers.dol.govt.nz). This site has an online system
that enables you to work out a parental leave entitlement as well as
the application and transfer form.How does the scheme fit with existing
arrangements?
The other provisions of the Parental Leave and
Employment Protection Act apply in regard to maternity leave and
extended leave. The same rules and timeframes apply to applying for
leave from the employer and to the employer's obligation to respond.
The requirement to hold the job open unless it is a key position also
remains in force.
Employees who take paid parental leave are not
required to return to work at the end of the 12 week period. In other
words, employees will continue to be eligible to take extended leave of
up to 52 weeks following the birth or adoption of a child.
In cases
where an employee wishes to return to work earlier than 12 weeks after
the birth, the employee will be entitled to receive the paid leave up
until he or she returns to work.
The Government has indicated
that it will not require persons to pay the money back if they decide
not to return to work after taking paid parental leave. This aspect of
the scheme has attracted criticism from a number of employers who have
voiced concerns that this will lead to employees claiming leave where
they have no intention of returning to work and, consequently, to
employers having to keep jobs open or employ temporary staff
unnecessarily.
The Government has indicated that private or
voluntary arrangements between employers and employees are still
strongly encouraged. Given the current level of the payment, it is
anticipated that a number of employers who currently provide paid
parental leave at 100% of a worker's earnings will "top up" the leave
provided by the Government scheme. How does New Zealand's scheme
compare with other countries' schemes?
The Government has
published a comparison of the proposed paid parental leave scheme with
the benefits provided by a number of other OECD countries.
COUNTRY
DURATION
PAYMENT RATE
MAXIMUM "WEEKLY" RATE IN NZ$
Canada
15 weeks
55% of income to
C$413/week
$639
France
16 weeks
100% to FRF469.66/day
$775
Germany
14 weeks
100% funded by insurance to DEM25/day (plus employer
top-up)
100% of earnings
Sweden
450 days
80% to SEK273,000/annum
$1205
Britain
18 weeks
weeks @ 90% and 12
weeks @ £75 (or all at
£75/week)
$265
New Zealand
12 weeks
100% to $325/week
$325
Australia
No paid leave
USA
No paid leave
The
relevant ILO Convention, ILO Maternity Protection Convention 183,
obliges countries which ratify the Convention, to provide a minimum of
14 weeks' paid parental leave. Recommendation 19 encourages members to
extend the leave period to at least 18 weeks.
The Government has
indicated that the paid parental leave scheme will be reviewed 12
months after its implementation. This review will include an evaluation
of the scheme's longer term funding options and possible extensions to
entitlements, including the period of leave and the level of
payment.How does this affect you?
Employers who currently have
paid parental leave schemes in place will no doubt wish to keep a close
eye on legislative developments and review existing parental leave
policies accordingly.
A number of employers have been waiting
for the details of the scheme to be announced before introducing their
own paid parental leave schemes. Once again, once the new legislative
framework is clear, these employers may wish to introduce complementary
policies regarding paid parental leave.
This may result in more
people electing to apply for parental leave where they might otherwise
have resigned when leaving work to have a child. It is important to
remember that all the procedural requirements around parental leave
still exist - make sure you do it right. Make it easy for yourself and
your staff.
The Government has approved 12 weeks paid parental
leave for female employees. This will operate by way of an allowance
that will be managed by the IRD. The amount will be $325.00 per week or
the greater of 100% of the employee's ordinary pay or average weekly
earnings in the week before going on leave. It will commence on 1 July
2002. It will not be retrospective.
At this stage, the law does
not require that employers pay employees for parental leave. An
employee may negotiate and enter into an agreement with an employer as
to his or her entitlement to paid parental leave. PPL will be
additional to anything an individual may be able to negotiate for
themselves. It is paid out of public funds.
Entitlement to PPL
is set out in an amendment to the Parental Leave and Employment
Protection Act. Some provisions of the Act are amended to include same
sex couples. The provisions of this Act are very precise and it is
important that you get them right. You must still apply for leave in
the same way.Who is not entitled to parental leave or a parental leave
payment?
Someone will not be entitled to leave or payment if they are:
• Self employed
• Not in paid employment
• Fail the eligibility test of 12 months employment at an average of 10 hours per week.
Parental Tax Credit
If
an individual is not entitled to PPL, they may be entitled to other
forms of family assistance such as the Parental Tax Credit. Information
on the Parental Tax Credit can be obtained from Inland Revenue. It is a
family assistance payment made through Inland Revenue to parents. The
number of children in the family and the family's level of income are
used to calculate whether the family is entitled to a payment.
Pamphlets on all forms of family assistance are available from Inland
Revenue or the Employment Relations Service.
It is not possible
to receive both PPL and the Parental Tax credit. Further, an individual
cannot receive PPL if their spouse or partner has received any parental
tax credit payment in respect of the same child. When parents have
decided what entitlement they will receive, their decision is final and
cannot be changed. While in many circumstances PPL will be more
beneficial than the tax credit, this may not always be the case and it
is advisable to check. There is only one leave (PPL) entitlement
regardless of the number of children born at one time. Therefore, in
the case of multiple births, it is sometimes better to consider
applying for the Parental Tax Credit. Again, for advice an individual
can call the IRD free on 0800 377 777.
HOLIDAYS ACT
Introduction
Successive
governments have, for some time, considered changing the Holidays Act.
Despite possible changes being in the wind for a number of years,
change appears to have proved too difficult or too low on governmental
agenda to become a reality. As the Holidays Act now moves into its 20th
year it seems likely that the talk of change will become a reality. At
the beginning of February the Minister of Labour unveiled a package of
changes the Government proposes to make to the Holidays Act. Although
the there has not been any legislation introduced to Parliament, all
indications are that a Bill will be introduced and changes enacted by
the end of this year.
History of the current legislation
The
Holidays Act was passed almost 20 years ago. It was passed in the
context of a different labour market than we have today, when most
employees worked an eight hour day in a Monday to Friday working week.
There were restrictions on businesses opening on Sundays and although
businesses were allowed to open on Saturdays many chose not to.
Today,
trading hours have increased in excess of eight hours a day and many
businesses are open for trade all seven days of the week. We now have a
far more flexible labour market with part time, temporary and casual
workers making up a large proportion of the labour force. This Act was
not written for today's workplace and has not been changed to keep pace.
In
addition to the Act becoming outdated, employers and employment lawyers
alike have found the provisions of the Act difficult to apply and
understand. The provisions are complicated and subject to various
exceptions and conditions. Another difficulty faced when people attempt
to determine employer obligations or employee entitlements is that the
legislation does not in itself provide an answer to every situation.
There are a number of decisions in cases which supplement the
provisions of the Act to outline obligations but which are not obvious
on reading the legislation. Issues such as whether an employee who is
on-call on a public holiday is entitled to a day in lieu are not dealt
with in the Act itself.Will it change?
An advisory group comprising
representatives from employer and union groups has been reviewing the
current law to identify possible policy options for amending the Act.
The group has provided the Minister of Labour with two reports on its
review of the Act. These reports, and the recommendations made form the
background to the proposed changes announced by the Minister of Labour.
The
advisory group first reported to the Minister in early May 2001. The
group addressed 51 separate issues and delivered 15 joint policy
recommendations while the employer and union members of the group put
forward separate positions on the remaining 36 issues. A second report
was provided by the advisory group in September 2001. Of the same 51
issues addressed in the first report, the advisory group was able to
make 31 joint policy recommendations, although five of these were
subject to qualifications. Many of the issues and recommendations in
the two reports are very detailed in their nature addressing the
mechanics of how the Act should work. The more detailed aspects of how
the Act should work have not been discussed by the Minister in her
announcement, however these will be reflected in any draft legislation
to be introduced later this year.
Current Entitlement
Currently,
all employees are entitled to three weeks' paid annual leave after one
year's continuous employment with the same employer. The Act sets out
how the payment for this is calculated. There are also rules as to when
an employee is entitled to take that leave and how much they are
entitled to take within the first 6 months.
The following are public holidays:
Christmas Day and Boxing Day
New Year's Day and the day after
Waitangi Day
Good Friday and Easter Monday
Anzac Day
Queen's Birthday
Labour Day
The anniversary of your province
An
employee is entitled to have a paid day off on these 11 public holidays
if they fall on days on which they would normally work. An employment
agreement can provide for alternate days and the requirement to work.
If an employee works on a public holiday (other than Waitangi Day or
Anzac Day) they are entitled to another paid day off in lieu, as well
as to whatever pay has been agreed for working on the public holiday.
There is no requirement to pay penal rates. If an employee works on
Anzac day or Waitangi day and if they get more than ordinary pay for
working it, then there is no entitlement to a paid day in lieu.
After
6 month's employment with an employer, an employee is entitled to 5
days special leave on pay during the next 12 months of employment.
Special Leave can be taken:
If the employee is sick
If the employee's spouse is sick
If a dependent child or dependent parent of the employee of their spouse is sick
On
the death of the employee's spouse, parent, child, brother, sister,
grandparent, father-in-law, mother-in-law or any occasion when the
employer accepts that by reason of the death of any person you have
suffered a bereavement.
Special leave is paid at the ordinary rate
of pay. There is no statutory entitlement to carry over or accumulate
unused special leave.
The Holidays Act can be very complicated and there are specific provisions for Factories.Proposals For New Holidays Act
The
Government's proposals aim to simplify what has been a complex and
difficult area of employment law. They also include a number of changes
to entitlements including the requirement that all employees who agree
to work on any of the 11 statutory public holidays receive payment at
the rate of time and a half for their work, as well as a day in lieu.
Margaret
Wilson has said "The objectives of public holidays are to provide for
the common observance of days of national, religious or cultural
significance."
The new legislation introduced to Parliament will
retain the current provision for three weeks annual leave. The Alliance
has said it will move an amendment to the legislation providing for
four weeks annual leave.
Under the current proposals the ability for
annual leave entitlements to be provided on a "pay as you go" basis
will be applied to employment agreements of less than 12 months, where
the employee has specifically agreed to such a provision and the
holiday pay is clearly identified in the wages.
"Special leave"
entitlements will also be strengthened in order to provide support when
employees are unable to work because they are sick, someone who depends
upon them is sick, or they have suffered a bereavement; There would be
separate entitlements for sick and domestic leave and bereavement leave.
It
is proposed that there would be provision for five days sick and
domestic leave which may be accumulated to a maximum of 15 days. There
will be a two tiered entitlement to bereavement leave of three days for
a close relative and of one day where the employer accepts that the
employee has suffered a bereavement.
Measures such as removing
the separate framework for factories and undertakings, and providing
that payment and day in lieu entitlements for all statutory holidays
will be treated in the same way, are being proposed with a view to
giving greater certainty in the legislation.
It is proposed that
breaches of the new legislation will incur increased maximum penalties
of $5,000 for an individual and $10,000 for a company or corporation,
with the maximum penalty for a continuing offence increasing to $1,000
for every day that the offence continued.
The Government is
inviting Business New Zealand and the Council of Trade Unions, both
members of the joint union-employer advisory group, to meet with
Department of Labour officials in order to discuss the detail of the
new Act.
The key objectives of the new Holidays Act are for:
• annual holidays to provide paid time off to employees for rest and recreation;
• public holidays to provide for the common observance of days of national, religious or cultural significance; and
•
special leave to provide "insurance" when employees are unable to work
because they, or someone in their immediate family, is sick or injured,
or they have suffered a bereavement.
The Government has made key decisions around each of these objectives:
Annual Holidays
•
3 weeks annual holidays upon the completion of 12 months continuous
employment (no change). (NB: the Alliance intends to move an amendment
that this entitlement be 4 weeks).
• At least 2 weeks of an employee's annual holidays should be taken in one uninterrupted period (no change).
•
The entitlement to annual holidays remains in force until they are
taken and the onus should remain on the employer to ensure that an
employee takes annual holidays (clarification).
• In the first instance, timing of annual holidays should be by agreement between an employer and an employee (clarification).
•
To continue the current provisions that allow an employer to closedown
its business and require employees to take annual holidays at that
time, but only for one closedown a year (clarification).
• The calculation of annual holiday pay should be simplified (clarification).
•
"Pay as you go" annual holiday pay (where an employee receives a
payment for annual holiday pay with each salary or wages payment)
should only be permitted where the employee's employment agreement is
for a period of less than 12 months and the employee has agreed to this
in writing, and where the holiday pay is an identifiable component of
the wages (clarification/change).Public Holidays
• All employees should continue to get 11 public holidays if they are days they normally work (no change).
•
All employees should be paid rate and a half for working on a public
holiday (an employment agreement cannot provide for a lower rate of
pay), as well as a day in lieu (change).
• The separate provisions
for rate of pay for working on a public holiday in factories and
undertakings should be removed (change).
• An employee cannot be
compelled to work on a public holiday unless it is a term of their
employment agreement (clarification/no change).
• Payment and day
in lieu entitlements for Waitangi and ANZAC Days should be consistent
with the other public holidays (change).
• Where Christmas and New
Year public holidays fall on or over a weekend, they should be
transferred based on the working week of the employee (i.e. transferred
for employees who do not normally work on the weekend, and observed
where they fall for employees who do normally work on the weekend)
(change).Special Leave
• Special leave should be split into two
separate entitlements, one to sick and domestic leave, and the other to
bereavement leave (change).
• An employee should be entitled to
all types of special leave upon the completion of 6 months continuous
employment (no change).
• The entitlement to sick and domestic
leave should be 5 days per year and may be accumulated to a maximum of
15 days (change).
• The entitlement to bereavement leave applies per bereavement and should be a two-tiered entitlement of:
•
3 days upon the death of an employee's spouse/partner, parent, child,
sibling, grandparent, grandchild or spouse/partner's parent; and
•
1 day on any other occasion where the employer accepts the employee has
suffered a bereavement and taking into account cultural requirements
(change).Enforcement
• The current level of penalties should be
increased to a maximum of $5,000 for an individual and $10,000 for a
company or corporation (change).
• The penalty for a continuing
offence should be increased to a maximum of $1,000 for every day that
the offence continues (change).THE FUTURE
There are a number of
areas that are currently being looked at by Advisory groups set up by
this Government in terms of minimum standards in the work place. The
purpose is to consolidate work place law. In addition to what has
already been discussed, these are in the areas of:
• Equal Employment Opportunities - to enhance rights of people in work or looking for a job.
•
Transfer of Undertakings - to consider whether additional protections
need to be put in place for workers where a business is sold or
transferred.
Both of these groups have released reports to the
Minister and they are now available on the Department of Labour
Website. It is not clear what Parliament will do with them although we
are aware that the Minister wishes to introduce reforms in the latter
part of this year or the new year.
In terms of the Transfer of
Undertakings report it makes the submission that there is a need to
provide further protection for workers in the form of introducing
legislation that guarantees the continuation of work through the
process of contracting out or the sale or transfer of a business. The
report acknowledges that this view is completely opposed by employer
parties and notes that further technical assessment would need to be
undertaken before anything could be taken further.
The group has now been asked to:
• Consider the options proposed by the CTU;
• Undertake technical development of options;
• Assess their likely impact;
• Report its recommendations by the end of September.
The
Draft Transfer Clause of the CTU is attached as Appendix 2. The group
has also been looking at the practise in overseas jurisdictions. Their
latest report is available on the website.
The EEO group made
recommendations in 4 Key areas. Some of these recommendations have been
implemented for example the appointment of an EEO commissioner.
However, it is not clear as yet what other matters will be adopted.
The
Minister of Labour announced earlier this month that the employers and
Unions have been unable to agree on rules for the protection of
employees' working conditions when a business changes hands or their
work is contracted. A report to the Minister by the joint working party
showed a "lack of consensus" between employer and employee
representatives. Laila Harre said she believed the issue had to be
dealt with by legislation, but that would be unlikely before the next
election.
CONCLUSION
Clearly there are substantial changes
ahead. Their impact on each workplace will vary depending on cultural
and historical factors, the current relationships and how the parties
handle the future relationship. It is important to recognise the
changes, and deal with them as you would any other change in your
business environment. Assess it, plan for it, then take appropriate
action. Don't Panic.
