Tag Archive for: Chapman ER

What to Say When #4

/in /by

Taking an Unauthorised day of leave.

We are open on the Tuesday between Nelson Anniversary on the Monday and Waitangi Day on the Wednesday. My employee has said he won’t be coming in on the Tuesday but I need him to work. He is a permanent employee who normally works on a Tuesday. What can I say?

Simply say– “No”, however a few extra words will be helpful if your employee still doesn’t come to work on the Tuesday. An explanation along the following lines will enable you to take action subsequently.

“You have not had leave approved for Tuesday so you are required to come to work. If you do not come to work it is likely to lead to disciplinary action which could result in a warning or dismissal. If you call in sick I will require you to visit a doctor and get a medical certificate. You need to be aware that a medical certificate will not necessarily be accepted as an adequate explanation for your absence if I suspect you were not genuinely ill.”

The key to this conversation is the employee understanding the potential consequences of not turning up to work.

We have just introduced a drug testing policy. A manager has told me she overheard an employee (John) say that if he gets tested he won’t pass. What do I say?

Your new Drug and Alcohol Policy will hopefully help you out here. If one of the circumstances for testing an employee is ‘reasonable cause’, the information the manager heard could be considered reasonable cause. Have a discussion with the manager and take a statement about what she overheard, then speak to the person who was having the conversation with John and take a statement. Then speak to John, providing him with the statements, and advising him on the basis of this information you believe you have reasonable cause to test him. Allow him the opportunity to respond to that proposal before confirming whether or not you will test. Then follow your policy in terms of steps to take for testing and consequences of a non negative result.

ERA Bill Passes into Law

/in /by

Changes to the Employment Relations Act

We reported on the Employment Relations Amendment Bill earlier in the year.   In summary, the amendments introduce greater union and employee rights, and the described aim of the changes was to increase fairness between employees and employers (see our previous article here, outlining details of the changes). 

The Bill proposed some significant employment law changes and has therefore taken some time to go through readings and Select Committee processes.  Following endorsement by the majority of the Education and Workforce Committee and then the Bill passing it’s third reading on 5 December 2018, we can now confirm that the proposed changes are going ahead. 

How might the changes impact our clients?

The changes reintroduce more rigid rest and meal break requirements, together with new calculations for how breaks are paid.  If you have applied flexibility to break times and frequency, this may be something you need to change.  Check what you have included in your employment agreements too.

If you have 20 or more staff, you will no longer be able to utilise a 90-day Trial Period for new employees.

Also, if your workplace has a collective employment agreement or union membership, there may be a number of changes that will be relevant to your workplace, such as union representative entering the workplace without consent, pay deductions can no longer be made for partial strikes and businesses must now enter into bargaining for multi-employer collective agreements, if asked to join by a union, for example.

When do the changes take effect?

Most changes take effect at two times: the day after Royal assent (expected the week of 10 December), and on 6 May 2019. 

Changes we are asked about frequently, including the changes to rest and meal break requirements and employers with 20 or more staff no longer being able to use a Trial Period, will be effective 6 May 2019.  

To see all of the specific changes effective on each of these dates, follow this link to MBIE’s employment website: https://www.employment.govt.nz/about/employment-law/employment-relations-amendment-bill-2018/ 

If you would like to discuss how any of these changes may potentially affect your business, policies, employment agreements or processes, please contact us on 03 545 0877 to speak to one of our team.

Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

Personal Grievances – When a Win is actually a Loss

/in , /by

A recent personal grievance case between Philipa Johnson and the National Business Review (NBR) resulted in a win for the employee, which actually ended in a financial loss for her when all was said and done. The Employment Relations Authority determined the employee was unjustifiably dismissed. However, the sting in the tail for the employee was that her legal costs were 10 times higher than the compensation she received.

As an employer, it can at times feel like the cards are stacked against you when dealing with a personal grievance. Frequently the better business decision can be to reach a settlement to resolve a dispute even when you have done nothing wrong. From a point of principle this may not feel particularly comfortable.

However, despite best intentions an agreement might not be reached, or you may decide the principle is more important. As a client goes through the decision process to determine which strategy to adopt, we take you through the risks of each pathway and the potential costs of both winning and losing a grievance in the Employment Relations Authority.

At the same time we analyse the risk for the employee and likely value of any compensation award, and this helps inform the decision on how  much to consider offering to reach a settlement if this is the preferred option. There are times the employee is either too greedy or poorly advised and their expectations of a settlement amount are unrealistic.

Affecting the level of the award Johnson received was the Authority’s determination that she breached her employment agreement when she took and distributed confidential information from the employer when she left their employment.

Johnson was awarded $1,666.67 in lost wages and $8,000 in compensation for the unjustified  dismissal. She had claimed $50,000. However, she was ordered to pay a $9,000 penalty for breaching her Employment Agreement, of which $6,750 was to be paid to the NBR and the balance to the Authority. Johnson paid a staggering $96,000 in legal fees.

The winning party ordinarily is awarded $4,500 in costs for a one day hearing in the Authority.  With this in mind, even without the penalty awarded against her, Johnson was always going to be on the losing side financially, as she claimed $50,000. This case demonstrates how principle can override common sense, and some people cannot be negotiated with.

What to Say When

/in /by

Below is the first in our series of one liners we use in response to challenging behaviours. We hope they come in handy for your own work situations. If you have any of your own that work please email them in and we can include them.

Passive Aggressive Colleagues

We have a passive aggressive person on our team who constantly moans to his colleagues but won’t say anything to me. The team want him to stop. What can they say to him?

Next time he corners them in the tea room and he his being negative about the latest thing, get his colleague to say : “That sounds really important to you, let’s go and tell the manager.”

Crying

What do I say to the employee who always cries when I raise something with them. Firstly accept crying as being okay, not something to be intimidated by. Acknowledge they are upset, but don’t be put off from discussing what you intended, or hearing what they have to say. A response to tears can be as simple as passing over some tissues and saying: “I can see this is upsetting for you, I will give you a couple of minutes.” Just sit there. Say nothing. It is more likely than not they will start talking again. The key is to not allow the tears to bring the discussion to an end. It may temporarily put it on hold, but always come back to it.

Blaming

Next time someone simply blames others e.g. says, ‘but I couldn’t do it because John did/didn’t do that thing’, respond with “I’m interested in what you could do differently next time so that we still get the necessary outcome”. For example: Ted hasn’t completed the report he was supposed to do for you. It was John’s fault (according to Ted) because he didn’t get the information to Ted to complete the report. What could have been done differently? Ted could have chased John for the information, communicated to John a timeline, told you before the report was due that there was possibly a delay, or completed other parts of the report while he waited for the other information. All things Ted could have done. Place the responsibility back on to Ted. i.e. the person who blames others.

What is work?

/in /by

There will be significant implications for many employers following a recent Employment Court Case. If your employees attend training, meetings, work functions or travel for work purposes you may need to reconsider how you pay them.

The case involved the Smiths City Group. Every morning prior to opening, the sales manager at each of their 29 locations holds a 15 minute morning meeting to discuss issues and talk about sales promotions and targets. The employees were not paid for their attendance.

In January 2016 a Labour Inspector issued an improvement notice to Smiths City that required the organisation to undertake an audit to identify where wages had been paid below the statutory minimum. The audit was for all employees who attended the 15-minute morning meeting who was on, or close to, the minimum wage rate and it applied across all 29 stores. The audit had to cover all current and previous employees for the last six years. The company was to calculate the arrears of pay below the minimum wage and reimburse those arrears accordingly.

Smiths City objected to the improvement notice claiming the 15 minute meeting was not work. In addition, Smith City was claiming the commissions and bonuses paid to employees ensured they were paid above the minimum wage even when the hourly base rate was at the minimum wage and the 15 minute meeting was deemed to be work. The matter went to the Employment Relations Authority and the Authority agreed with Smith City, rescinding the notice. The Labour Inspector appealed, and the case was heard by a full bench of the Employment Court.

The Employment Court looked at the Idea Services case (known as the Sleepover case) as the basis for determining whether the 15-minute meeting was “work” for the purposes of the Minimum Wages Act.

Smiths City argued that the employees were not compelled to attend the meetings, that the meetings didn’t put a significant degree of constraint on the employees, and there was no responsibility on the sales staff during the meetings, and they argued that the meetings were not critical to the business.

The Employment Court found that staff were required to attend the meetings, and that while there were different expectations of behaviour in the meetings compared to when they were in the store, that it did not alter the fact that their personal freedom during those 15 minutes was constrained by the employer.

The Court rejected Smiths City’s claim that there was no responsibility on the employee during the meetings, but rather like a training course, the employees were expected to sit, listen and learn the information being presented by the Sales Manager so they could apply it during the day.

The Court also rejected Smiths City’s claim that both the employer and the employee benefited from attending the morning meeting, by earning higher commissions.

Accordingly, the Court found that the sales employees who attended the morning meetings were working during those 15 minutes.

That left the Court to consider whether Smiths City had breached the Minimum Wage Act. Smiths City contended that when the sales commission was taken into account, all of their sales staff earned more than the minimum wage. The method of payment was justified by the company because wages, and commission, were earned over the whole pay period which it considered to be the correct interval for the calculation of minimum wage.

The Court accepted that the commission does form part of wages, but said it didn’t satisfy s 6 of the Minimum Wage Act. The Court found that commission and incentive payments were not earned for attendance at the meetings and were not connected to hourly rates of pay generally. They were achieved against targets specified by the company. The commission payments were deemed to be additional income earned over and above the contractual hourly rate, and not a substitution for it.

The Court stated that Smiths City’s method of calculation did not satisfy the Minimum Wage Act. The Court reinstated the Labour Inspector’s Improvement Notice. This means Smith City will be required to backpay, for a six year period, any hourly paid employee who attended the morning meetings.

If you have concerns about how your remuneration is structured and whether you are inadvertently failing to meet minimum wage requirements, please contact our team.

Chapman ER News – Employer Successful in Constructive Dismissal Case

/in /by

We have seen an increased occurrence of employees resigning and then raising a PG, stating that their resignation was constructive dismissal and unjustified.  In many instances they haven’t previously raised their concerns with their employer or the issues raised appeared minor with the employer believing each was addressed at the time as no further concern was raised by the employee.  However, post-resignation, the employee might list all of the minor issues trying to prove that a trend existed. They may even claim an illness that they believe resulted from issues in their employment.

It is reassuring to see the Employment Relations Authority reject a recent claim of constructive and unjustified dismissal by Kathryn Gifkins that she was forced to resign from her position at Marinoto Rest Home in Taranaki.

The claim followed two incidents; one regarding a false accusation of Gifkins dragging a resident and the other about her being stalked by a dementia patient.  Gifkins​ claimed her manager did nothing about either incident and so felt she had no option but to resign i.e. her resignation was constructive dismissal and was unjustified.

Gifkins was employed as a healthcare assistant at Marinoto Rest Home in July 2016. Two issues arose, shortly after she started which she said were of “significant concern for her”.

She soon realised that she was expected to dispense medication to patients which was something she felt uncomfortable doing in case she made a mistake and also felt it was a a registered nurse duty.

Her manager, Barbara Kay, said Gifkins did not convey her concerns about making a mistake and commented that Gifkins was “very competent” at providing medication and had no concerns about her confidence.

The Authority was satisfied the dispensing of blister pack medications was a reasonable activity for Gifkin’s position.

The second issue Gifkins had was with a dementia patient who became “infatuated” with her.

The patient told her he wanted to marry her and proposed to her. He continuously sought her out, giving gifts, making phone calls to her home and following her to the car park.

Despite complaining to Kay about feeling harassed, she said her concerns were never addressed.

However, Kay argued she told Gifkins she did not have to go to the area of the rest home where the patient was living, she did not have to care for him or communicate with him.

Gifkins said it was difficult to distance herself from him due to the size of the rest home.

The Authority member said it was clear Gifkins received unwanted attention from the resident, but she could not apportion blame to the rest home as options were given to her by management to reduce the interaction.

In May 2017, Gifkins resigned. This followed an incident which Gifkins described as “the final straw”.

Gifkins claimed that earlier that day Kay falsely accused her of dragging a patient when she and another carer were trying to lift a patient off the floor into a chair.

Gifkins claimed Kay yelled “Are you dragging him or lifting him?”. Kay admitted she said those words, but denied she yelled them, or directed them solely at Gifkins.

Gifkins said she was unhappy with the way she had been treated and felt distressed that Kay had not listened to her or been responsive.

The Authority member noted that Kay’s manner, along with the words used at the time of the incident, may have been “insensitive and unhelpful in the moment” and added “I accept, however, that Ms Gifkins was unhappy and resentful as a consequence, but I am not at all persuaded that the interaction could be regarded as a breach of Ms Gifkins’ employment, let alone one that could be fairly characterised as dismissive or repudiatory conduct that would make it reasonably forseeable Ms Gifkins would resign, an employer is under no contractual obligation to behave sensitively towards its employees.”

A constructive dismissal occurs where an employee resigns from employment but really the resignation was forced or initiated by the action(s) of the employer.

The Authority assessed whether a substantial risk of resignation was reasonably foreseeable and found that it was not in this case.

Employment Relations Amendment Bill

/in /by

The first wave of changes to legislation in the employment arena were announced last week. There was nothing unexpected, except for possibly the usefulness of NZ First to act as a hand brake for more widespread changes.

One of Labour’s flagship policies was the abolition of the 90 day trial period. The great news for SME’s is that if you have 19 or less employees, the trial period will still be available to you. An unexpected turn of events and a moved that has disappointed unions. Unions however did get a number of changes they were seeking.

The purpose of this Bill is to implement the Government’s post-election commitments to restore key minimum standards and protections for employees, and a suite of changes to promote and strengthen collective bargaining and union rights in the workplace. Read here a summary of the changes, and over the next few weeks we will detail how the changes may affect how you operate your business.

Proposed Amendments

Restoring Key Minimum Standards and Protections for Employees
  • Removing the exemption for employers with fewer than 20 employees from the current rules about business transfers, which will allow vulnerable workers of these employers to elect to transfer to an incoming employer
  • Extending the time frame for vulnerable workers to elect to transfer to an incoming employer and placing information and notification requirements on employers in respect of their employees’ personal information
  • Reinstating the right to prescribed rest and meal breaks, as applied previously regarding number and length of breaks within specified work time, with limited exceptions for essential services where certain conditions exist
  • Restoring reinstatement as the primary remedy in unjustified dismissal cases, where the employee requests it and where reinstatement is practicable and reasonable
  • Limiting trial periods to employers with fewer than 20 employees
Collective Bargaining and Unions

The proposed amendments include:

  • Removing the requirement for a union representative to gain consent from an employer before entering a workplace
  • Requiring employers to allow union delegates reasonable time during working hours to perform their duties in respect of the employees of that employer.
  • Reinstating that the parties are required to conclude a collective agreement, and repealing the provisions that enable the ERA can determine that bargaining has concluded
  • Reinstating the ability of unions to initiate collective bargaining 20 days before an employer
  • Repealing sections 44A to 44C that allow employers to opt out of multi-employer collective bargaining once bargaining has been initiated
  • Requiring that collective agreements must contain rates of pay and that rates of pay must be agreed during collective bargaining
  • Repealing the ability of employers to deduct pay as a response to partial strikes
  • Requiring that new employees are afforded the same terms and conditions as the applicable collective agreement relating to their work for the first 30 days of employment
  • Restoring key minimum standards and protections for employees
  • Requiring employers to provide the applicable collective agreement and union contact details and the option to join the union at the same time as they provide an intended individual employment agreement to an employee
  • Requiring that employers provide information about the role and functions of the applicable union when the intended employment agreement is given to prospective employees
  • Encouraging an active choice by a new employee on whether to join the union, and whether to object to the employee’s employer providing the employee’s name and notice of the employee’s choice to the relevant union
  • Extending the grounds for discrimination to include an employee’s union membership
  • Extending the time frame under section 107 for which an employee’s union activities may be considered to contribute to an employer’s discriminatory behaviour from 12 months to 18 months

Personal Liability for Employment Breaches

/in /by

Most business owners, directors, managers and employees are unaware that they can be personally liable for penalties and the payment of legislative entitlements. A person who incites, instigates, aids, or abets any breach of an employment agreement is personally liable for a penalty of $10,000 for each breach.

Employer Owes $2.4 Million To Employees

/in , /by

In a recent investigation into wage payment irregularities at SOE Landcorp, the Labour Inspector found significant issues. The Inspector determined that over the last seven years Landcorp had been incorrectly calculating the entitlements of approximately 1,400 employees.

There appear to be two main areas where Landcorp incorrectly calculated the entitlements:

a) Landcorp did not include the employee’s accommodation allowance into the calculation of gross earnings. This had a flow on impact to the calculation for sick, annual, bereavement and public holiday leave.

b) Landcorp breached the minimum wage for employees who were on salary, but worked long hours during peak season.

The amount owed to 1,400 former and current employees is approximately $2.4 million.

Employers can take several lessons from this decision.

Firstly, even if the employer uses a payroll system to calculate entitlements, it is up to the employer to ensure that the payroll system is calculating this correctly. In Landcorp’s case the payroll system incorrectly excluded the accommodation allowance from the gross salary calculation. MBIE have stated that at the end of June 2017 it has 140 cases which it categorised as payroll audits. Of those 118 had been investigated which led to 53 enforceable undertakings, 29 improvement notices and 2 cases lodged with the ERA.

Secondly, where employers have salaried employees on lower salary levels (less than $55,000 at present) and those employees are working long hours over a peak period of work, the employer must calculate the weekly/fortnightly pay ensure that employee is paid above the minimum wage for every hour they work in that week/fortnight.

“Confrontational” Parking Warden Ordered to Pay $11,500

/in , /by

The Employment Relations Authority (ERA) ordered Yoon Cheol Hong to pay Auckland Transport (AT) $11,500 following a determination that found Mr Hong was not unjustifiably dismissed from his job as an Auckland Transport parking officer, neither was he unjustifiably disadvantaged before his dismissal.

Mr Hong worked as a parking officer, patrolling Auckland city streets and issuing infringement notices for vehicles parked illegally.

AT required, and trained, its officers in various ‘de-escalation’ techniques to manage members of the public who abused or threatened parking officers. The primary technique was described as ‘detach and walk away’.

AT held concerns because Mr Hong made comments which confirmed AT’s fears that Mr Hong would, while on patrol in the streets, sometimes challenge abusive members of the public rather than ‘detach and walk away’.

The incident that triggered the dismissal process was when a man swore at Mr Hong and threatened to break his neck after getting a parking ticket. Mr Hong called for Police assistance during the incident. AT’s concern was that Mr Hong had refused to follow lawful and reasonable instructions issued by them which placed his own health, safety and welfare together with some of the wider parking team at considerable risk which was completely unacceptable to them.

Mr Hong had told AT when he reached a ‘trigger point’ he would not observe de-escalation methods due to his own views on what was and was not tolerable. AT were concerned that Mr Hong was likely to respond in ways that made inflammatory or potentially inflammatory situations worse. This meant AT had lost trust and confidence in Mr Hong.

The Authority said that it was within the range of reasonable responses for AT to conclude what Mr Hong deliberately did, and would likely continue to sometimes do, was contrary to instructions and was serious misconduct.

Auckland Transport sought $36,500 from Mr Hong to pay back what it had spent to defend itself in the unjustified dismissal case; $35,000 for a two-day investigation meeting and $1500 in costs to oppose the interim reinstatement application.

Auckland Transport’s actual legal costs were said to total $55,868.

Over the course of the employment dispute, Auckland Transport had offered Mr Hong two settlement offers prior to the case being heard by the Authority. Both offers, one for $12,500 and another of $15,000 were not accepted.

The authority ruled Mr Hong’s refusal of these settlement offers were cause for a “steely” approach in awarding costs, hence the award to AT of $11,500.