Recent Items – Employment

Posted on 12 May, 2015

Much Stronger Employment Law Penalties Coming

The Minister of Workplace Relations and Safety announced in late March 2015 the government has approved a number of measures to increase enforcement of employment standards.  The measures will be put to Parliament later this year in the Employment Standards Bill, and includes –

  • Increased penalties
  • Clearer record-keeping requirements
  • Increased powers for labour inspectors
  • Removing mediation in employment standards cases.

The Minister’s announcement can be read at https://www.beehive.govt.nz/release/govt-moves-strengthen-employment-standards.  More details are given below.

Increased Penalties

  • Maximum penalties for serious breaches, such as exploitation, will be $50,000 for a person and the greater of $100,000 or three times the financial gain obtained, for a company.  Such cases will be heard by the Employment Court.
  • Employers who breach minimum standards will be publicly named.
  • Individuals can be banned from employing staff.
  • Individuals, including Board members and legal advisors can be held accountable if knowingly and intentionally involved in a breach.  The collapse of a company does not affect this liability.

Clearer record keeping requirements

  • Requirements for wages-, time-, holidays- and leave records will be made consistent.
  • Employers can decide what format to use.

Increased powers for labour inspectors

  • Infringement notices of between $1,000 and $20,000 will be introduced for clear cut breaches.
  • Government departments will share information to identify and investigate breaches.
  • Labour inspectors will be able to request documents from employers, including financial records or bank statements.

Employment Standards Cases

  • Intentional and serious and systematic breaches of employment standards will not be automatically mediated, although the Authority may still direct parties to mediation in certain circumstances.
  • Employees will be able to seek penalties for any minimum entitlement breach.

Comment

Clarifying what employment records must be kept is long overdue and to be welcomed.  If you are unsure about the adequacy of your records, a good template is available at –

http://www.dol.govt.nz/er/pay/recordkeeping/Employment%20records.pdf.

90 day trial woes

An interesting case before the Employment Relations Authority highlights some important points about 90 day terminations.  The case is interesting and worth a read.  .

The main point is that notice of termination must be given before the end of the trial period.  The employer told the employee verbally that he was dismissed under the trial period clause, on day 89, and confirmed that in writing four days later, in other words three days after the end of the trial period.

The employment agreement’s trial clause allowed either notice or payment in lieu thereof.  The employer chose to pay notice pay in lieu, and was no doubt startled when the Authority pointed out that the law ‘does not provide an alternative in the form of payment of money instead of notice…’  In other words, a trial clause cannot offer payment in lieu as an alternative to notice.

Had the employer given written notice on the day it told the employee his employment was ending (day 89), the issue would not have arisen at all.  The flaw in the trial clause (giving the employer a choice of either giving notice or paying in lieu), would then not have had any effect.

Provided that written notice is given in time, agreement that the employee not attend work during his notice period, seems acceptable.  It is suggested that you call the RVA employment helpline for advice on adding a sentence to that effect to the trial clause in your employment agreements, if you choose this option.

Full case details (they are worth a read) can be found at http://www.dol.govt.nz/workplace/determinations/FullSummary.aspx?ID=47392459

When the pressure is on

Those who have been to mediation know the pressure that builds up during exit negotiations, and the feeling of relief when settlement is reached.  While you’re savouring the relief, your attention slips.

An employer recently advised an employee of impending disciplinary action, prompting a resignation, and settlement discussions.  While the discussions were taking place, the regular pay day (the 15th of the month) arrived and the employee was paid a full month’s pay, as usual.

The parties finally settled on the basis that the employee would paid all wages and holiday pay up to the termination date, which was the 25th of the month.  The settlement agreement said that ‘except as set out in the settlement agreement, no other money whatsoever … is due or owing from either party to the other’.

Spot the snag?

When the company prepared the employee’s final pay, they deducted the overpayment for the period the 26th and the month end.  The employee balked and went to the Employment Relations Authority, who agreed with him.  One has to pity the losing party – we all slip, sometimes.

Let me question the complainant

A long time bus driver of Waka Pacific in Auckland, was dismissed after he drove into a car as while pulling out of a bus stop.  Following an altercation, the driver of the car complained to the bus company about the damage to his car, and said that the bus driver had threatened him by nudging the bus forward when he had stood in front of it, to prevent the bus from driving off.

The two versions of the incident offered by the complainant and driver differed quite a lot, but after checking the bus’ GPS records, the company preferred the complainant’s version, and the driver was dismissed.

In the subsequent grievance the bus driver claimed that the company refused to let him question the complainant.  The Authority denied the request, after finding that the company had conducted a full and fair enquiry, interviewed the complainant, and given that information to the bus driver in the course of the disciplinary process.  In these circumstances, the company could fairly and reasonably refuse to subject the complainant to questioning by the employee.

Fraudulent behaviour backfires

Bay Enterprises Ltd, a Bay of Plenty Kiwifruit contractor, has been fined for failing to comply with an improvement notice issued by a labour inspector.  The company had failed to provide two of its employee with written employment agreements, and when the inspector brought a case before the Employment Relations Authority under section 65 of the Employment Relations Act, the company defended itself by offering two employment agreements, which turned out to be false.

The Authority was not impressed and increased the fine to $5,000.