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EMPLOYMENT LAW

EMPLOYMENT LAW. Mary-Jane Thomas, Partner Riki Donnelly, Solicitor. You Cow – I was going to say that. MOO. Recent Legislative Changes . Minimum Wage Increased by 25 cents to $13.75 Implications for salaried workers who are in danger of working too much Starting Out Wage

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EMPLOYMENT LAW

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  1. EMPLOYMENT LAW Mary-Jane Thomas, Partner Riki Donnelly, Solicitor

  2. You Cow – I was going to say that MOO

  3. Recent Legislative Changes • Minimum Wage • Increased by 25 cents to $13.75 • Implications for salaried workers who are in danger of working too much • Starting Out Wage • 80% of minimum wage • 16 and 17 year olds for 6 months • 18 and 19 year olds for 6 months after at least 6 months on a benefit

  4. Kiwisaver • Minimum contribution increased from 2% to 3% • Employees still able to contribute 4% or 8% • Mondayisation • Anzac Day and Waitangi Day • Only applicable if employee does not ordinarily work on weekends

  5. STEP 1 – MINIMISE RISK WITH UP TO DATE AGREEMENTS • Individual Employment Agreements (IEA) • Trial Periods vs Probationary Periods • Job Description • Accommodation Deductions • Holidays • - Paying out holidays (1 week only) • Sick leave • Minimum Wage – no unders and overs • - Record keeping • No Agreement – Consequences

  6. STEP 2 – MINIMISE RISK BY KNOWING PROPER PROCEDURE • Termination • Misconduct • Performance • Illness/Accident • Redundancy

  7. GETTING IT RIGHT FROM THE START • Important - be organised and ready for new employees from the outset. • Provide unsigned copy of IEA to the employee when the job is offered. • Offer real opportunity for independent advice CASE: Blackmore v Honick Properties Limited. • FACTS: B offered and accepted job 10 October, began work Monday 7am 15 November 2011. Got IEA at 8am. • COURT: “Opportunity for consideration, advice and negotiation must be a real opportunity as opposed to a nominal or minimal opportunity”.

  8. Sign two copies and retain one each. From 1 April 2011 you were required by law to retain a copy. Anyone employed after 2 October 2000 must have a written employment agreement (you can’t force employees to sign, but you must offer).

  9. CASUAL / PERMANENT / FIXED TERM / INDEPENDENT CONTRACTOR • PERMANENT (FULL TIME AND PART TIME) • Permanent employees can be full time or part time. They accrue annual holidays; sick leave; parental leave. Employment has no end date. • CASUAL (PAY HOLIDAYS AS THEY GO) • Casual employees work is intermittent in nature and irregular – no pattern/roster. • FIXED TERM (PAY HOLIDAYS AS THEY GO) • Fixed term employees work for a set period of time, part or full time i.e. calf rearer employed for August to October.

  10. CASUAL / PERMANENT / FIXED TERM / INDEPENDENT CONTRACTOR • Someone employed to fill gap when employee on ACC. • Someone employed to fill parental leave position.

  11. INDEPENDENT CONTRACTOR • An independent contractor is not an employee. The relationship between an independent contractor and an owner is not governed by employment legislation. The parties can agree on their own terms and conditions, with some exceptions i.e. Variable Order Sharemilkers.

  12. EMPLOYMENT AGREEMENTS What do they have to have in them?

  13. EMPLOYMENT RELATIONS ACT 2000 Section 65 Terms and conditions of employment where no collective agreement applies (1) The individual employment agreement of an employee whose work is not covered by a collective agreement that binds his or her employer— (a) must be in writing; and (b) may contain such terms and conditions as the employee and employer think fit.

  14. (2) However, the individual employment agreement— (a) must include— (i) the names of the employee and employer concerned; and (ii) a description of the work to be performed by the employee; and (iii) an indication of where the employee is to perform the work; and (iv) an indication of the arrangements relating to the times the employee is to work; and (v) the wages or salary payable to the employee; and (vi) a plain language explanation of the services available for the resolution of employment relationship problems, including a reference to the period of 90 days in section 114 within which a personal grievance must be raised; and (b) must not contain anything— (i) contrary to law; or (ii) inconsistent with this Act.

  15. (4) An employer who fails to comply with this section is liable, in an action brought by a Labour Inspector, to a penalty imposed by the Authority. EXAMPLE: Clark v The Swedish Sauna Co Ltd [2012] NZERA Auckland 39 at [38] • “No written agreement was provided to Mr Clark when the agreement was being negotiated, contrary to s 63A. No reason was provided for the failure to do so. A penalty is warranted.  • [39] TSSCL is ordered to pay a penalty of $500 for the breach of s 63A.”

  16. TRIAL PERIODS / PROBATIONARY PERIODS • Trial periods under the Employment Relations Act 2000 with specific legislative requirements and benefits. • COMPARE TO • Probationary periods that may be agreed upon in any employment agreement. Mary-Jane Thoas, Partner

  17. BENEFITS OF TRIAL PERIOD • An employee cannot bring a personal grievance for termination at the end of a trial period unless for reasons such as racial or sexual discrimination etc. • No required procedure for bringing trial period to end.

  18. TRIAL PERIOD – SECTIONS 67A AND 67B ERA 2000 67A When employment agreement may contain provision for trial period for 90 days or less (1) An employment agreement containing a trial provision, as defined in subsection (2), may be entered into by an employee, as defined in subsection (3), and an employer. (2) Trial provision means a written provision in an employment agreement that states, or is to the effect, that— (a) for a specified period (not exceeding 90 days), starting at the beginning of the employee's employment, the employee is to serve a trial period; and (b) during that period the employer may dismiss the employee; and (c) if the employer does so, the employee is not entitled to bring a personal grievance or other legal proceedings in respect of the dismissal. (3) Employee means an employee who has not been previously employed by the employer. Effect of trial provision under section 67A (1) This section applies if an employer terminates an employment agreement containing a trial provision under section 67A by giving the employee notice of the termination before the end of the trial period, whether the termination takes effect before, at, or after the end of the trial period. (2) An employee whose employment agreement is terminated in accordance with subsection (1) may not bring a personal grievance or legal proceedings in respect of the dismissal. (3) Neither this section nor a trial provision prevents an employee from bringing a personal grievance or legal proceedings on any of the grounds specified in section 103(1)(b) to (g). (4) An employee whose employment agreement contains a trial provision is, in all other respects (including access to mediation services), to be treated no differently from an employee whose employment agreement contains no trial provision or contains a trial provision that has ceased to have effect. (5) Subsection (4) applies subject to the following provisions: (a) in observing the obligation in section 4 of dealing in good faith with the employee, the employer is not required to comply with section 4(1A)(c) in making a decision whether to terminate an employment agreement under this section; and (b) the employer is not required to comply with a request under section 120 that relates to terminating an employment agreement under this section

  19. TRIAL PERIODS – VITALLY IMPORTANT • It must be agreed in writing prior to employment commencing, otherwise it will be unenforceable. • The best way to ensure a Trial Period is valid would be to give the preferred applicant your letter of offer of employment and the intended agreement, with the Trial Period in it and give them time to take advice before they accept the position and sign the agreement.

  20. Case: Blackmore v Honick Properties Limited Facts: B. offered and accepted job 10 October, began work Monday 7am 15 November 2011. Got his IEA at 8am that morning. B. dismissed on 31 January 2011 before 90 day period expired.

  21. TRIAL PERIOD contd Employment Court: B.’s dismissal was considered an unjustified dismissal as the trial period was invalid. Court considered that B. was already employee when he received his IEA with Trial Period in it, as he became an employee when he was offered and accepted the position back on 10 October, as an “Employee” includes a person intending to work under the Act.

  22. TRIAL PERIOD contd Can only be used if the employee has never previously been employed by the employer. Can a casual employee be employed to a permanent position on a trial period? • No

  23. TRIAL PERIOD contd • Cannot be any longer than 90 calendar days, but can be less. • Notice must be given, even if the dismissal does not occur until the end of the period.

  24. TRIAL PERIOD cont. • Case law suggests that if somebody asks why they have been terminated you should tell them. CASE: Smith v Stokes Valley Pharmacy. Employment Court: Employer refused to give S. reasons why dismissed during 90 day trial period. Employernot entitled in law to refuse to give an explanation for such a significant decision.

  25. EXAMPLE OF TRIAL PERIOD CLAUSE • Trial Period (90 days) • Where the employer has not employed the employee before, they shall employ the employee subject to a trial period of not more than 90 days. • If during that 90 day period the employer finds that the employee is not suitable for employment they may give the employee notice of termination. That notice period shall be three days. • Where such notice of termination is given the employee shall not be entitled to bring legal proceedings in respect of the dismissal (including a personal grievance action against the employer for unjustified dismissal) except on the grounds described by the Employment Relations Act 2000.

  26. PROBATIONARY PERIODS • Employers who re-employ an employee can use probationary periods, but termination must follow the correct procedure. • The written employment agreement must state that the employment is subject to a probationary period. • Specify the following: • Duration (cannot be indefinite). • How will trial period be judged? • Reviews? • Warnings and opportunities to improve. • Extensions?

  27. EMPLOYMENT AGREEMENTS • Federated Farmers IEA contain both Trial and Probationary period clauses. • You MUST indicate which one applies, otherwise neither clause will apply.

  28. JOB DESCRIPTIONS • Always attach a job description to the IEA. • Set out your expectations from the beginning. • Can be used for performance management. • Annual reviews (Do not put it in there if you are not going to do it!). • Job Description should include: - Description of the tasks. - How frequently it must done – i.e. daily, weekly etc.

  29. ACCOMMODATION • Ensure you have a ‘Service Tenancy’ which links accommodation to the employee being employed – otherwise you will be liable to give 90 days notice, as opposed to 14 days notice under a Service Tenancy. • Walk through together, have it ready and clean. Take photographs before occupation commences then there can be no argument. • Make a note of any issues to be remedied together – this can negate issues about damages later.

  30. DEDUCTIONS • If you want to be able to deduct for accommodation, cleaning etc at the end of the employment make sure you have a clause that specifically states this: “The Employee authorises the Employer to deduct from any monies owing by the Employer to the Employee including from wages, salary, or annual holiday or holiday pay entitlement, such sum or sums as are then owing by the Employee to the Employer. This will include any costs to the Employer if accommodation has to be cleaned/tidied or repaired at the end of this agreement or at any stage during the term of the agreement.” • No deductions clause = no right to take money from final pay or holiday pay.

  31. ROSTERS • Discuss and have ready at the same time as the employment agreement. • Indicate when annual leave will not be agreed to. For example that annual leave cannot be taken during calving etc. The Employee acknowledges that they shall arrange to take the bulk of their annual leave entitlement during the winter months. If no mutual agreement is reached then the Employer shall give the Employee at least fourteen (14) days notice of the requirement to take this leave. OR The Employee shall take two weeks annual leave in the winter, one week’s annual leave at Christmas-New Year and the fourth week’s annual leave at a time mutually agreed by the Employer and Employee.

  32. AN EMPLOYEE MAY CASH UP THEIR FOURTH WEEK’S ANNUAL LEAVE IF THE EMPLOYER AGREES Holidays Act 2003 28A Employee may request portion of annual holidays be paid out (1) An employee may request that his or her employer pay out a portion of the employee's entitlement to annual holidays. (2) A request under subsection (1)— (a) must be in writing; and (b) may be made on 1 or more separate occasions until a maximum of 1 week of the employee's annual holidays is paid out in each entitlement year.

  33. HOLIDAYScontd (3) If an employee makes a request under subsection (1), an employer must— (a) consider the request within a reasonable time; and (b) advise the employee in writing as to whether the employer agrees to the request; and (c) if the employer agrees to the request, comply with section 28B. (4) An employer— (a) may decline an employee's request; and (b) is not required to provide the employee with a reason for declining the request. (5) In this section, entitlement year— (a) means a period of 12 months continuous employment beginning on the anniversary of the employee's employment; and (b) includes a period of 12 months continuous employment described in section 16(2).

  34. An employer CANNOT require an employee to cash up the fourth week.

  35. HOLIDAYScontd Holidays Act 2003 – 28C Requirement to request payout prohibited (1) A requirement that an employee must make a request under section 28A for a portion of his or her annual holidays entitlement to be paid out must not be a term or condition of the employee's employment (whether contained in an employment agreement or otherwise).

  36. TIME AND WAGE RECORDS Employment Relations Act 2000 Section 130 Wages and time record (1) Every employer must at all times keep a record (called the wages and time record) showing, in the case of each employee employed by that employer,— (a) the name of the employee: (b) the employee's age, if under 20 years of age: (c) the employee's postal address: (d) the kind of work on which the employee is usually employed: (e) whether the employee is employed under an individual employment agreement or a collective agreement: (f) in the case of an employee employed under a collective agreement, the title and expiry date of the agreement, and the employee's classification under it:

  37. TIME AND WAGE RECORDS (g) where necessary for the purpose of calculating the employee's pay, the hours between which the employee is employed on each day, and the days of the employee's employment during each pay period: (h) the wages paid to the employee each pay period and the method of calculation: (i) details of any employment relations education leave taken under Part 7: (j) such other particulars as may be prescribed. (2) Every employer must, upon request by an employee or by a person authorised under section 236 to represent an employee, provide that employee or person immediately with access to or a copy of or an extract from any part or all of the wages and time record relating to the employment of the employee by the employer at any time in the preceding 6 years at which the employer was obliged to keep such a record

  38. TIME AND WAGE RECORDS Every employer who fails to comply with any requirement of this section is liable to a penalty imposed by the Authority.

  39. MINIMUM WAGE Beware of the minimum wage requirements and how it can “bite you” over the busy months.

  40. MINIMUM WAGE • Salary (even though you do not have to) – keep time records – no unders and overs – only protection is to keep records!! Especially for those on lower salary range. • Minimum wage is $13.75 and the law is that in every “pay period” for the hours worked an employee must be paid at least $13.75.

  41. Example: Pay period is a fortnight. During calving A. works 70 hours a week. A. is on $30,000.00 p.a. Minimum wage is $13.75. $30,000.00 / 26 pay periods = $1,153.85 per pay. $1,153.85 / $13.75 = 83.91 hours a fortnight. 140 hours – 83.91 hours = 56.09 hours owed to A. at $13.75 = $771.24 extra for that pay period. The fact that A. worked 40 hours per pay period in the winter equating to an hourly rate of $28.84 per hour DOES NOT MATTER.

  42. “I must discuss my conditions with the boss…”

  43. DO NOT • Do not draft IEAs yourself from the internet. • Do not use an IEA that you have been using for “years” – the law changes. • Do not give your employees an IEA that you have not sat down, read through entirely and understood every clause.

  44. PART TWO : DISMISSAL/TERMINATION

  45. RESTRUCTURING Restructuring Substantive Justification Procedural Fairness Redundancy is not a way to dismiss for poor performance and cannot be a “charade” Consultation (Prior to decision) Notice Need to show that financialsituation justified redundancy References Need to offer any alternative position to “redundant” employee JobInterviews

  46. Recent Restructuring Cases

  47. Totara Hills Farm v Davidson [2013] NZEmpC39 • Employment Relations Authority found for employee • Employer appealed • Court look at whether redundancy a charade (as it had in the past) • Went on to look at whether it was justified • Employer didn’t provide evidence of 10% savings (Court found it could be no more than 6%)

  48. Totara Hills Farm v Davidson [2013] NZEmpC39 • Employee should have been offered the new role (this is an obligation on all employers, even if new role requires some training) • Court found dismissal was not justified • Employee awarded $4,000 compensation and $3,000 in lost wages

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