We're not yet in countdown mode here at The People Place, but we’ve been amused by the not-small scattering of ‘weeks till Christmas’ posts popping up here and there! We’re looking at this in a positive light. It’s always useful to have a reminder of the way time feels like it speeds up, as we roll towards summer. Our plan is to keep a steady eye on the available working weeks, allowing space to review legislative updates and implement any necessary changes to policies and systems. We recommend you do the same, and end the year with everything tidy, and ready for a productive, successful 2025! We all deserve it.
That said, we are still in a bit of a holding pattern for many big ticket items, such as the Holidays Act. What employment law news will emerge in the last quarter? It will be interesting to see how things play out.
Employee dismissals: the importance of following fair process
An Employment Relations Authority case has resulted in the reinstatement of a formerly dismissed employee; a useful reminder of the importance of conducting a fair and impartial investigation where serious misconduct is alleged.
In this recent case an employee was dismissed from Fonterra’s Te Awamutu Distribution Centre in 2022 for committing serious misconduct. The employee then raised a personal grievance, the grounds being that Fonterra’s investigation into the matter was not fairly conducted, and could not reasonably have concluded he committed serious misconduct. He said Fonterra had taken complaints made about him at face value and did not consider any alternatives to dismissal.
During investigation, new information was disclosed by senior Fonterra employees, concerning this employee’s previous disciplinary history, a belief that he had “gang connections” and was known to be “associated with gangs”.
The Authority found that because the employee was not informed of Fonterra’s concerns about the alleged gang connection, and so could not respond, the employer failed to meet the statutory test of justification in its decision to dismiss the employee. Fonterra wasvordered to reinstate the employee, and pay lost wages with an additional sum as compensation for humiliation, loss of dignity and injury to feelings.
This serves as a good example of why an employee going through a dismissal process must be provided with all relevant information, and given opportunity to respond.
Keeping up with entitlements—and record keeping
In another August ruling, The Employment Relations Authority ordered a Taupo restaurant director to pay an employee more than $40,000 in wages arrears.
Following a complaint, a Labour Inspectorate investigation found many breaches in minimum employment standards, including missing pay for hours worked, incorrect entitlements paid for public holidays and payment for annual holidays when the employee left employment. As well the serious issue of unpaid leave and wages, the ruling made mention of the fact that the restaurant failed to keep wages and time records as required under s130 of the ERA 2000, and failed to keep holiday and leave records as required under s81 of the Holidays Act.
Note: The Inspectorate pursued the Director in his capacity as the sole director and shareholder as a person involved in the breaches, with the restaurant having been liquidated. Simon Humphries, Head of the Labour Inspectorate, said owners of businesses where vulnerable workers have been exploited should not expect to escape sanctions even if the business is no longer operating.
In another, similar case, a Hawke’s Bay company and its owner, who is banned from acting as a director or manager of any company, have been ordered to pay penalties of $48,000 by the Employment Relations Authority for breaching minimum employment standards. Again in this ruling, the company, and owner, were determined to have breached the Employment Relations Act 2000 and Holidays Act 2023 by not keeping sufficient records.
A big takeaway for employers can be found in the statement from the Labour Inspectorate:
“Record keeping is a fundamental requirement for all employers, and we take this failure to keep complete records seriously. As has happened in this case, employers who fail to keep complete records are liable for penalties.”
Uber loses landmark case: drivers are employees
In August, the Court of Appeal issued its long-awaited decision on the employment status of four Uber drivers. The court dismissed Uber’s appeal, backing the four drivers in their fight to be treated as employees—rather than contractors. As you know, employees are afforded benefits that contractors aren’t, i.e. leave entitlements, minimum wage, holiday pay, and recourse for unjustified dismissal.
While this decision does technically only apply to the drivers in this case, there is the possibility of broader ramifications for other contractors. Uber stated that wouldn’t change its New Zealand operations in response to the court ruling, as it planned to challenge it in the Supreme Court. Separately, the Ministry of Business, Innovation and Employment has just started a review of the law to better define employees and contractors.
For employers, this is a timely reminder to clarify and determine the employment status of your workers, considering contract terms, beyond the mere label of ‘contractor’ – which as ruled upon is not enough.
In case you missed it: Parental leave payments have increased
Parental leave payments increased by 6% from Monday 1 July 2024 to reflect the rise in average weekly earnings.
The increase is a legislated annual increase under the Parental Leave and Employment Protection Act 1987 and the increase is in line with increases to average weekly earnings. The minimum parental leave payment rate for self-employed parents will increase this year from $227 to $231.50 gross per week to reflect the minimum wage increase on 1 April this year.
Employers, make sure the relevant people in your business are fully informed about the updated rates and are prepared to assist employees in navigating these changes. As always, building a positive workplace with a good culture relies in part on excellent, clear communication, so timely and clear comms about important factors like payments, is essential.
Fresh Delays: no new news on the Holidays Act
Apologies if you are one of the many, waiting eagerly for updates on what on earth is going on with the Holidays Act... there is no update. As reported on RNZ, ‘the existing legislation is so unworkable that hundreds of thousands of employees have gone underpaid by billions of dollars across the public and private sectors for years.”
A new law was meant to be place years ago. However, MBIE has restarted the consultation period, again, and are now running late, again. The release of the draft of proposed amendments for targeted consultation had been scheduled for later this month. The consultation could result in further changes before the bill is introduced to Parliament.
Watch this space: Do NZ workers have a 'right to disconnect'?
In late August we saw a bit of press around the topic of the ‘right to disconnect’ following new laws coming into effect in Australia.The crux of the new legislation is that it gives workers a legal right to refuse to monitor, read or respond to contact, or attempted contact, from their employer unless refusing was unreasonable. People who earned over a high-income threshold would not be included and the rules would not take effect for small businesses until next year. Other countries such as France, Ireland and Canada already had similar laws.
Are we expecting to see something similar here in Aotearoa?
The word on the street is (for most part) no. Not because of a lack of desire for the benefits this ‘watershed’ moment is expected to bring, but instead, because New Zealand is already said to have the protections within our law, designed to prevent the kind of behaviour that the Australian legislation covers. However as always, there are arguments to both sides, with other parties saying that New Zealand’s protective systems are rudimentary, and we are lagging behind. We’ll be watching with interest for any developments.
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That’s all for this month’s Employment Bytes, which leave us with a few key features to check off in our own businesses: Are employee records up-to date? If you employ contractors, is this set up correctly? Have you incorporated and communicated the Parent Leave Payments update?