Employment Law Seminar - PARTICIPANT MATERIALS
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Employment Law Seminar PARTICIPANT MATERIALS NOVEMBER 2013 W W W . B E L L G U L L Y . C O M
Introducing our employment team
Rob Towner Rob leads the firm’s employment law practice. A litigation partner, he
PARTNER specialises in resolving employment issues and industrial disputes. He
advises on employment agreements, employment aspects of commercial
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transactions, dismissals, discrimination, redundancy, restraint of trade and
rob.towner@bellgully.com labour disputes. Rob is an internationally recognised employment lawyer,
a past chairman of the Employment and Industrial Relations Committee of
the International Bar Association and on the Executive Council of the
Global Employment Institute.
Tim Clarke Tim is an experienced litigator specialising in employment and commercial
PARTNER disputes. He advises some of New Zealand’s largest companies on all
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aspects of employment agreements and on a variety of investigations and
contentious issues, including disciplinary and termination procedures. Tim
tim.clarke@bellgully.com has a clear understanding of the issues employers face during corporate
restructurings and has advised clients on the processes and outcomes
related to redundancies – including negotiating compromise agreements for
senior management.
Rachael Brown Rachael is a skilled litigator with particular expertise in employment law
SENIO R ASSO CIATE and public and administrative law issues. She advises on all areas of
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employment law, including representing clients in contentious matters.
Rachael also has considerable experience advising clients in, and in
rachael.brown@bellgully.com relation to, the public sector.
Liz Coats Liz is a senior employment law litigator. She provides advice regarding a
SENIO R SOLI CITOR range of HR issues including personal grievances, restraints of trade,
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employee investigations and negotiated exits. She also advises on
employment issues arising from corporate restructurings. Liz is the co-
elizabeth.coats@bellgully.com author (with Rob Towner) of chapters on New Zealand employment law
for several international textbooks.
W W W . B E L L G U L L Y . C O M
Anna Holland Anna joined Bell Gully in 2010 and the employment team in 2012. She
has a background in commercial transactions and advises on all areas of
SOLICITOR
employment law, including issues that arise from corporate restructurings.
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Anna also advises on employment issues that arise out of the use of social
anna.holland@bellgully.com media, and has drafted a number of employers’ social media policies.
Dianny Wahyudhi Dianny joined the Wellington based employment team in 2012. She works
SOLICITOR closely with Rachael Brown, and advises on a range of employment areas,
DDI 64 4 915 6520
including workplace health and safety, privacy, employment agreements
and personal grievances. Dianny also advises clients in, and in relation to,
dianny.wahyudhi@bellgully.com the public sector.
Susannah Maxfield Susannah joined the Auckland based employment team in 2012 after
SOLICITOR completing her LLB at the University of Auckland in 2011. She advises
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on all areas of employment law, including on employment agreements,
personal grievances, restraints of trade and privacy. She has assisted in a
susannah.maxfield@bellgully.com number of Authority and Employment Court cases.
Grace Stacey-Jacobs Grace joined the Auckland based employment team in 2013 after
SOLICITOR completing her LLB/BA at the University of Auckland in 2012. Grace has
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assisted in a number of contentious matters, and been involved in advising
employers on a range of employment issues, including redundancy,
grace.stacey-jacobs@bellgully.com employment agreements and health and safety.
W W W . B E L L G U L L Y . C O M
Employment Law Seminar
November 2013
1
Introduction
• proposed changes to the ERA
• redundancy decisions under the microscope
• proposed health and safety reform
• practicalities of restraints of trade and garden reform
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2
Proposed changes to the ERA
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3
Employment Relations Amendment Bill
• 26 April 2013 – Bill announced by Minister of Labour
• June 2013 – introduced into Parliament
• referred to Transport and Industrial Relations SC
• 5 December 2013 – report back date
• Act into force 4 months after receiving Royal assent
• 2014
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4
Government policy behind the Bill
• increase flexibility and choice in collective bargaining
• reduce ineffective bargaining
• ensure a balance of fairness for employers and
employees
y
• reduce compliance costs – SMEs
• reduce unnecessary regulation
• create an environment where employers can grow
their business whilst ensuring rights of employees are
protected
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5
Collective bargaining
• duty of good faith does not require CA to be concluded
• Authority may determine bargaining has concluded
• removal of “first 30 days” rule; cf CA requirement
• employer (or union) can initiate bargaining 60 days
prior to expiry
• continuation of CA after expiry, regardless of who
initiates bargaining for new CA
• employer can opt out of MECA bargaining
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6
Strikes and lockouts (1)
• prior written notice of strike action, specifying:
– period of notice given
– nature of proposed strike, including whether continuous
– place or places strike will occur
– time and date strike will begin
– time and date strike will end
• strike notice can be withdrawn by notice at any time
• remedy? interim injunction? no penalties
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7
Strikes and lockouts (2)
• pay deduction for “partial” strike
• “partial strike” – less than full discontinuance of work,
• but excludes refusal to work OT, ban on call-out work
((if employee
y receives special payment)y )
• “specified pay deduction” – 10% of employee’s wages,
or
• calculated pursuant to formula– proportionate to time
on strike, based on “usual” hours
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8
Good faith: disclosure of information (1)
• in response to Massey University decision (2011)
• s4(1A) – requires employer to provide info to
employees relevant to a proposed decision with likely
adverse effect
• disclosure of private info, including interview notes,
may have a “chilling effect” because of employee
concerns that their comments may become public
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9
Good faith: disclosure of information (2)
• Bill: employer not required to provide information if
– about an identifiable person other than affected employee
– evaluative or opinion material compiled to make decision
on continued employment
– about the identify of the person who supplied the evaluative
or opinion material
– subject to statutory requirement to maintain confidentiality
– where necessary, for any other good reason, to maintain
confidentiality of the information.
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10
Good faith: disclosure of information (3)
• “evaluative or opinion material” – cf. s29 Privacy Act
(agency may refuse to disclose personal information)
• i.e. what someone thinks about the affected employee,
but may exclude factual material
• applies to disciplinary procedures
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11
Part 6A – protected employees
• continuity of employment in sale or transfer situations
• numerous, detailed amendments (14 pages of Bill)
• an exemption for SMEs (19 or fewer employees):
– to employ
p y employees
p y affected byy restructuring,
g, or
– to meet their entitlements (e.g. accrued leave)
• outgoing employer required to provide incoming
employer with information on transferring employees
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12Part 6A – protected employees
• implied warranty by outgoing employer that it hasn’t
changed work arrangements or terms and conditions
• apportioning liabilities for service related entitlements
between employers
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13
Rest and meal breaks
• employer can place certain restrictions on breaks
where reasonable and necessary to do so having
regard to nature of employee’s work
• if employer and employee cannot agree, employer
may specify reasonable times and durations, having
regard to employer’s operational requirements and the
employee’s interests, to maintain continuity of service
or production
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14
Flexible working arrangements
• extends right to request flexible working arrangements
to all employees
• not just those with caring responsibilities, and from
beginning of employment
• removes limit on number of requests employee may
make over a 12 month period
• reduces time for employer to consider requests from
3 to 1 month
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15Speeding up Authority determinations
• at “conclusion” of investigation meeting Authority must:
– give its determination orally (and in writing within 3
months), or
– give an oral indication of its “preliminary findings” (and in
writing
iti within
ithi 3 months
th off meeting
ti or ffurther
th ““evidence
id or
information”)
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16
Labour’s “policy”
• minimum wage
• 90-day trial periods
• collective bargaining
• paid parental leave
• rest and meal breaks
• Employment Relations (Hours and Wages Protection)
Amendment Bill
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17
Redundancy decisions under the
microscope
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18Introduction
• justifying redundancy
– legislative and judicial context
– three key 2013 Employment Court decisions
– a new approach?
• when is an employee entitled to a preference to be
appointed to another position?
• selection criteria when downsizing
19
Judicial context – Hale
• Hale v Wellington Caretakers IUOW (1990)
• managerial prerogative
“A worker does not have a right to continued
employment if the business can be run more efficiently
without him”
“The only question to be asked is whether the employer
made the decision for genuine commercial reasons”
20
Legislative context – 2004/2011 Amendment
• s103A Employment Relations Act
• whether a dismissal or an action is justifiable:
“whether the employer’s actions, and how the employer
acted, were what a fair and reasonable employer
could have done in all the circumstances at the time the
dismissal or action occurred”
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21Simpson Farms v Aberhart (2006)
• considered Hale in light of s103A
• the statutory change was not intended to revisit long-
standing principles about substantive justification for
redundancy
• s103A only focused on procedure, not substance
22
Three key Employment Court decisions
• Totara Hills Farms v Davidson (March 2013)
• Brake v Grace Team Accounting Ltd (May 2013)
• Tan v Morningstar Institute of Education (May 2013)
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23
Totara Hills Farm (1)
• Colgan CJ clarifies his judgment in Simpson Farms
• insufficient for employer to say that it is a genuine
business decision, and that the Court cannot look into
the merits of it
• court will not simply accept employer’s assertion that
redundancy a genuine business decision
• s103A does affect previous law, but not to
fundamental extent of setting aside Hale
24Totara Hills Farm (2)
• employer told employees that restructure would reduce
wages bill by 10%
• suggested savings by staff rejected as only achieving
“minimal savings”
• invited Davidson to apply for junior shepherd role
25
Totara Hills Farm (3)
• Court held:
– restructure would have achieved 6% saving at most
– not enough for employer to show absence of any ulterior
purpose
– Davidson should have been offered junior shepherd role,
his skills and experience were more than adequate
– employer should have explained why proposal was
preferred over suggestions by staff
26
Grace Team Accounting (1)
• proposed to make 3 employees redundant on basis
that turnover was $200k short of expectation
• two resigned
• companyy still $100k short of projected
j turnover
• figures incorrect – instead of loss, company made
$60k profit
• employer: profit still not acceptable – redundancy
justified
27Grace Team Accounting (2)
• Court held:
– “genuine but mistaken redundancy”
– had GTA sought expert opinion, would not have hired
Brake in first place
– accounting practice – calculations should have been
accurate
– resignations provided GTA with sufficient saving -
rendered Brake’s immediate redundancy unnecessary
• GTA appealing decision
28
Morningstar Institute of Education
• employer said business in financial difficulty
• information provided did not show full picture
• factually incorrect and misled employee
• losses were historic
• director’s wife performed most of redundant position
• reduction of salary would have met situation
• modest saving wouldn’t have addressed forecasted
loss
29
A new approach to justification?
• courts willing to scrutinise merits
• scope of enquiry wider
• may review financial record
• evidence of rationale may be required
30Preference
• procedural fairness
• duty to consider alternatives to redundancy
• redeploy, relocate, retrain
• required
q to offer available jjunior p
position
– Jinkinson (2010); Wang (2010); Totara Hills (2013)
• s103A is the guide
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31
Selection criteria
• clearly communicated to employees
• objectively measurable
• relevant, not irrelevant
• Transfield Services (2013)
• Grace Team Accounting (2013)
– “genuine but mistaken” dismissal
– inappropriate use of the “last on, first off” rule
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32
What this means in practice
• provide correct information
• be prepared to show why proposal is preferred over
employees’ suggestions
• must offer more jjunior positions to staff with sufficient
skills
• selection criteria – be wary of psychometric testing and
consider recent performance reviews as part of
process
33Proposed health and safety reform
A guide to corporate governance
34
Introduction
• directors’ duties under HSE Act
• IoD / MBIE best practice governance guideline
• proposed Health and Safety at Work Act
– directors, officers and senior managers
– new “due diligence” duty
– increased criminal penalties
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35
Directors’ duties under HSE Act
• “officers, directors or agents”
• secondary liability
• no express duty or defence
• participation in breach
• prosecutions rare
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36IoD / MBIE best practice guideline
• status of guideline
• voluntary
• impact on current statutory framework
• essential principles of H&S governance
• borrows concept of “due diligence” (Model Law)
• “baseline actions” & “recommended practice”
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37
Four key elements
• policy and planning
– health and safety vision and beliefs statement
– targets for tracking strategy and goals
– Board charter
– performance review process for CEO and managers
• deliver
– health and safety management system
– review management reports
– personal awareness of hazards and control systems
– sufficiently skilled staff/culture of reporting
– plant and equipment fit for purpose, maintained
– other resource issues – systems and budget
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38
Four key elements
• monitor
– reporting requirements and timeframes
– routine reports to Board
– review serious incident reports and adequacy of
response
– develop
d l iimprovementt goalsl / receive
i progress reports
t
• review
– formal review of Board charter
– input includes audits, system reviews, performance
results
– determine action plan and track progress
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39Proposed reform of H&S laws
• drivers for reform
• repeal HSE Act
• new Act based on Aus WHS Model Law
• intro Bill byy Dec 2013 – in force by
y Dec 2014
• new Crown agency “WorkSafe NZ” (~ Dec 2013)
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40
Duty-holders under proposed Act
• PCBU
– broad concept
– primary duty holder
• “upstream participants”
– designers, manufacturers, importers and suppliers
• persons with management or control
• multiple duty-holders with concurrent duties
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41
Directors, officers, senior managers
• directors
• persons
– who make or participate in decision making
– who have the capacity to affect financial standing
– who act on directors’
directors instructions or wishes
• wide potential scope
– possibly candidates: senior managers involved in
decisions
– e.g. MDs, CEOs, CFOs, COOs, General Counsel
• personal duty
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42Must exercise due diligence
• new “due diligence” duty
• to ensure PCBU complies with duty
• includes taking “reasonable steps” (six elements)
1. to acquire
q and keep
p up-to-date
p knowledgeg
2. to understand nature of ops, hazards and risks
3. to ensure PCBU has appropriate resources and
processes to eliminate or minimise risks
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43
Must exercise due diligence
• “six elements” [cont’d]
4. to ensure processes for receiving and considering
information
5. to have and implement processes for compliance
6. to verify the provision and use of resources for 3rd to 5th
elements
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44
What are “reasonable steps”?
• depends on circumstances, role and influence
• may rely on credible information from others
• must demonstrate reasonableness of reliance
– credible information or advice from appropriate people
(e.g. senior managers, subject matter experts,
supervisors)
• active and inquisitive role
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45Modified penalties structure
• new tiered liability regime (3 categories)
• overall significant increase in max penalties
• Aus penalties “appropriate” in NZ
cat type company individual prison
officers
1 reckless AU$3m AU$600k ≤ 5 yrs
2 serious harm AU$1.5m AU$300k
3 general AU$500k AU$100k
breach
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46
How do you comply?
• get involved – set strategy and monitor
• put in place good governance structure
• understand business and risks
• obtain knowledge before making decisions
• ask the right questions, understand the answers
• right people in right place, authorised
• follow good processes
• record decisions made
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47
Restraints of trade and garden leave
48Outline
• overview of restraints of trade and garden leave
• interplay between restraint and garden leave clauses
• drafting an employment agreement
• practical steps once employee resigns
• practical aspects to enforcement
• alternative action: when departed employee is not
bound by a restraint provision
49
Types of restraints of trade
• non-compete
• clients/customers
– non-dealing
– non-solicitation
• employees
p y
– non-poaching
• suppliers
– non-dealing
– non-solicitation
50
Public policy: what is fair restraint?
• prima facie void because contrary to public policy
• but a restraint that is reasonably necessary to protect
legitimate proprietary interest is enforceable
• onus on employer y to establish:
– legitimate proprietary interest
– restraint reasonable
51Garden leave
• operates during notice period
• requires the employee not to attend work
• employee still bound by employment duties
• employee still paid usual salary
• situations where garden leave clause useful
52
Interplay between ROT and GL clauses
• garden leave may impact reasonableness of restraint
of trade
• reasonableness of garden leave?
• can a period of g
garden leave be too long?
g
53
Drafting the employment agreement
• consider reasonableness of clause at start of
employment
• garden leave (notice period)
• payment
y in lieu of notice when employee
y resigns
g
• restraints of trade period
54Practical steps once employee resigns
• where are they going?
• consider garden leave
• react thoughtfully: avoid knee-jerk reaction
55
Practical aspects to enforcement
• letter seeking undertakings
• injunction?
• damages?
• act swiftly
56
Alternative action: Rooney (2009)
• employees did not have restraint in IEA
• fidelity:
– employee may take legitimate preparatory steps in spare
time to compete with employer after departure
– can use know-how and skills acquired in employment
– cannot use the confidential information or trade secrets
• good faith
• trust and confidence
• fiduciary
57Summary
• always tailor a restraint of trade clause
• take garden leave provision into account
• take time when employee resigns
• act swiftly when former employee breaches restraint
• where no restraint, consider alternative action
58
Employment Law Seminar
November 2013
59EMPLOYMENT GOVERNMENT TO OVERHAUL HEALTH
AND SAFET Y IN EMPLOYMENT ACT
A U GU ST 201 3
On 7 August the Government announced a Duty holders
reform package that will overhaul the The proposed legislation is intended to
current workplace health and safety allocate duties to those people in the best
legislative framework. It has been position to control risks to health and
Tim Clarke described by the Government as “the most safety, as appropriate to their role in the
PA RT N ER significant reform of New Zealand’s workplace.
workplace health and safety system in 20
years”. Significantly, the “Working Safer” As with the Model Law, the primary duty
package will involve repealing the Health holder under the intended Act will be a
and Safety in Employment Act (HSE Act). “person conducting a business or
It is intended that the HSE Act will be undertaking” (PCBU). Whether a person
Rachael Brown replaced by a new Health and Safety at conducts a business or undertaking is a
SEN I O R A SSO C I AT E
Work Act, which the Government intends to question of fact to be determined in the
introduce into the House by December circumstances of each case.
2013, and come into force by December The term PCBU is a broad concept that is
2014. intended to capture all types of modern
The “Working Safer” package is part of the working arrangements, covering all
Dianny Wahyudhi Government’s response to the relationships between those in control and
SO LI C I TO R
recommendations made by the Independent those who are affected by that control. For
Taskforce on Workplace Health and Safety. example, duties will extend to contractors,
It is also intended to deliver on the subcontractors, employees and volunteers.
Government goal of reducing New Each PCBU will be required to supervise
Zealand’s workplace injury and death toll and monitor the health and safety
by 25% by 2020. performance of the parties beneath them in
the chain. Under the proposed Act, the
The proposed Act will be based on the PCBU also owes a duty to other people
recently developed Australian Model Work affected by the work being done.
Health and Safety Law (Model Law).
Some of the major changes that the There may be multiple businesses or
proposed law will introduce are summarised undertakings, and therefore multiple
below. PCBUs, involved in work at the same
location or on the same project. In
addition, the proposed Act will extend
W W W . B E L L G U L L Y . C O M EMPLO YMEN T A U GU ST 201 3 1duties to upstream participants in the supply exercises due diligence, he or she cannot
Government to issue chain, such as PCBUs that are designers, be held personally liable regardless of the
guidance on H&S for EPBs manufacturers, importers and suppliers. conduct of the PCBU or other officers.
On 7 August the Government announced its Failure to comply with a due diligence duty
earthquake-prone buildings policy. In “Reasonably practicable” could result in the duty-holder facing
particular, earthquake-prone buildings will test prosecution, and exposure to a fine and
be identified through assessments within The “all practicable steps” test in the current imprisonment upon conviction. The
five years of Building Act Amendments HSE Act will be replaced by the Model maximum level of the penalty would be
taking effect later this year and building Law’s “reasonably practicable” test. determined by whether or not the officer’s
owners will have 15 years to carry out failure or recklessness exposed a person to
In the Model Law, the term “reasonably
strengthening work or have buildings risk of death or serious injury.
practicable” means that which is or was at a
demolished. Buildings must be strengthened
particular time, reasonably able to be done,
to 34% of the new building standard (NBS).
taking into account and weighing up all Modified penalties
As part of its announcement, the relevant matters, including the matters structure
Government advised that MBIE is preparing specified in the Model Law. As in the Model Law, there will be a new
some guidance for building owners and tiered liability regime under the proposed
employers on their responsibilities where the Directors’ due diligence Act. There will also be an overall
requirements of the Building Act and the duty significant increase in the maximum
HSE Act overlap. This guidance is due to The proposed Act will introduce a new due penalty levels. The Minister of Labour has
be made available in October. stated that he considers the penalty levels
diligence duty, which means that those
persons in governance roles must that apply in the Model Law would also be
appropriate in the New Zealand context.
proactively manage workplace health and
safety. The due diligence duty will be owed In order to illustrate the potential penalties
by directors, chief executives and others in that might apply in the proposed law, we
governance roles, but will exclude anyone set out below the Model Law’s penalty
acting on a voluntary basis. regime:
The due diligence duty will be defined to • for category 1 offences (reckless
match the governance role of officers. For conduct), the maximum penalty for an
example, it will include a requirement that individual is $600,000 or five years’
the officer takes reasonable steps to: imprisonment, or both. For a body
• gain an understanding of the nature of corporate, it is $3 million;
the operations of the PCBU and the • for category 2 offences (failure to
hazards and risks associated with those comply with health and safety duties
operations; and exposing an individual to serious risk),
• ensure the PCBU has, and implements, the maximum fine for an individual is
processes for complying with its duties. $300,000 and for a body corporate is
$1.5 million; and
Under the current HSE Act, directors,
• for category 3 offences (general failure
officers and agents are only exposed to
to comply with health and safety
potential secondary liability if they have
duties), the maximum fine for an
participated in, contributed to, or acquiesced
individual is $100,000 and for a body
in any failure of the company to comply
corporate is $500,000.
with the HSE Act. In contrast, under the
proposed Act the due diligence duty will be In contrast, under the current HSE Act, an
individual to the officer. If an officer offence broadly equivalent to category 1
W W W . B E L L G U L L Y . C O M EMPLO YMEN T A U GU ST 201 3 2To view all our publications or update your details carries a maximum fine of $500,000 and 2
please visit our website: www.bellgully.com years’ imprisonment or both, while conduct
For further information, please contact your usual that contravenes categories 2 or 3 carries a
Bell Gully adviser or: maximum fine of $250,000. These fines
Rob Towner apply to both individuals and bodies
64 9 916 8902
rob.towner@bellgully.com corporate.
Tim Clarke The Minister of Justice is considering the
64 9 916 8347
tim.clarke@bellgully.com Independent Taskforce’s recommendation
to extend the corporate manslaughter
Rachael Brown
64 4 915 6882 offence and the general corporate liability
rachael.brown@bellgully.com
framework.
Liz Coats
64 9 916 8732 In addition to the above, the proposed Act
liz.coats@bellgully.com
will confer on courts new powers, such as
Anna Holland an ability to make adverse publicity orders,
64 9 916 8723
anna.holland@bellgully.com and will increase the range of compliance
Susannah Maxfield
and regulatory tools available to regulators.
64 9 916 8699
susannah.maxfield@bellgully.com
Regulations, ACOPs,
Dianny Wahyudhi
64 4 915 6520 standards and guidance
dianny.wahyudhi@bellgully.com
The overhaul of the HSE Act will mean that
new regulations, guidance and Approved
Codes of Practice (ACOPs) will need to be
developed to assist PCBUs and workers to
understand how the law and regulations will
apply to them. The Government has
indicated that the creation of regulations,
ACOPs, standards and guidance will be a
phased process, based on priority.
The Government has also said that risk
areas will be the target of the regulator
body, WorkSafe New Zealand, which is
expected to be operational from December
2013.
Disclaimer: This publication is necessarily brief and
general in nature. You should seek professional advice
before taking any further action in relation to the matters
dealt with in this publication.
All rights reserved © Bell Gully 2013
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W W W . B E L L G U L L Y . C O M T EL 64 9 91 6 8 8 00 F A X 64 9 91 6 8 8 01 TEL 64 4 91 5 68 00 FAX 64 4 91 5 68 1 0EMPLOYMENT SELECT COMMITTEE RECOMMENDS
CHANGES T O BILL RELAT ING TO
EMPLOYMENT IN THE STATE SECTOR
J UN E 201 3
The Finance and Expenditure Committee states that it is generally accepted that
released its report on the State Sector and public servants should not be entitled to
Public Finance Reform Bill on compensation in cases of technical
23 May 2013. The bill is substantial. It redundancy.
Rachael Brown contains proposed amendments to three
SEN I O R A SSO C I AT E The State Sector Act 1988 deals with
Acts and addresses a range of matters in
restructuring in two parts of the Act
order to implement aspects of the
(sections 30A to 30L which deal with
government’s Better Public Services
reorganisation in the public service, and
programme, including in relation to
sections 61A and 61B which deal with the
employment. Those amendments were
power to transfer employees); however, the
discussed in our newsletter entitled
bill addresses all restructuring issues in one
Proposed Amendments to Law Governing
place. In relation to these proposed
Employment in the State Sector dated
changes, the Select Committee report
September 2012.
states: “This aspect of the bill provoked
Having reviewed the bill and considered the most concern and we have examined it at
1,349 submissions from interested groups length”.
and individuals, the Select Committee has
The Committee has recommended some
issued a detailed report in which it
changes to this part of the bill:
recommends that a number of changes be
made to the bill. Many of these changes • The Committee has recommended the
relate to the proposed amendments affecting inclusion of a transitional provision so
employment in the state sector. This that the existing law regarding the
newsletter outlines some of the Committee’s entitlement to redundancy payments
key recommendations in this area. will continue to apply for three years
after the legislation is enacted. This is
Redundancy on the basis that it will avoid any
retrospective application of the new
The bill includes some changes to the
provisions to individual or collective
provisions which address redundancy
agreements which have already been
payments for employees who are made
negotiated. It will also allow for
redundant but are offered another position
current agreements to be renewed or
in the sector. The Select Committee report
W W W . B E L L G U L L Y . C O M EMPLO YMEN T J U N E 2013 1renegotiated during that period. another position in the State services, which retain and strengthen transfer
• Section 61A as amended by the bill and employees who are offered an mechanisms for staff. They consider that
provides that a public service alternative position. Most of the changing the test for technical
employee who has received a notice of requirements are the same for both but redundancies from “equivalent
redundancy is not entitled to a the “alternative position” test also employment” to the offer of a job that has
redundancy payment if, before the includes: “terms and conditions no less favourable”
employee’s employment has ended, the - is a position with comparable duties removes 25 years of legal interpretation
employee either: and responsibilities to those of the and that the new provisions relating to
- is offered and accepts another employee’s current position; and redundancy “will have a chilling effect on
position in the State services - is in substantially the same general career progress throughout the public
(either in the employee’s current locality or a locality within sector”.
department or elsewhere in the reasonable commuting distance. This aspect of the bill therefore remains
State services); or In relation to these changes the report states: contentious.
- is offered an alternative position in
the State services (either in the
We note that ultimately, as in all employment
Government workforce
matters, the interpretation of an alternative
employee’s current department or policy
position would be one for employers and
elsewhere in the State services). Another aspect of the bill which has
employees to discuss in good faith, case by
The State Sector Act uses the test of received attention from the Committee is
case, taking into account the circumstances
“equivalent employment” rather than the introduction of Government workforce
of the individual employee, and employing
“alternative position” for determining policy. The Committee has recommended
mechanisms under the Employment
whether any redundancy payment a number of changes in this area:
Relations Act 2000 to manage any dispute.
should be made in the case of sector
• The bill as introduced provided for
reorganisations. The Select Committee Accordingly, the Committee acknowledges
Government Workforce Policy Orders
report states that the Committee has that while the intent of the amendments is
to be approved by Order in Council.
examined the implications of this new clear, the extent to which these provisions,
The Committee has recommended that
“alternative position” test carefully, if and when enacted, have a practical impact
these be renamed “Government
and has explored other ways in which remains to be seen.
Workforce Policy Statements” and that
the test could be formulated. Having Both the Labour and Green members of the they be published on an internet site
done this, the Committee has Committee have addressed this aspect of the maintained by or on behalf of the State
recommended two changes to the test, bill in minority view statements included in Services Commissioner, rather than
namely: the Select Committee’s report. The New having the force of Orders in Council,
- removal of the word “overall” Zealand Labour Party minority view states so that they are disseminated without
from the phrase “terms and that while they will be supporting the bill implying that they have the force of
conditions ... that are no less overall, they do so with significant regulations.
favourable overall” on the basis reservations. In particular, they express • The legislation should contain a clear
that it adds nothing; and concern that restricting redundancy statement of the purpose of
- inclusion of a requirement that the payments where employees are offered an Government workforce policy. The
new position “begins before, on, or alternative position would remove existing Committee considered whether this
immediately after the date on rights contained in collective agreements should include a reference to “fairness”
which the employee’s current “and would ignore the fact that the State but decided against that on the basis
employment ends”. Sector Act established agencies as separate that the terms were intended to be
• In addition to these specific changes to organisations”. impartial objectives. The Committee
the test, the Committee has has therefore recommended the
The Green Party of Aotearoa/New Zealand
recommended that the bill set out the following wording:
minority view states that they cannot
full requirements in relation to both
support the bill in the absence of provisions
employees who are offered and accept
W W W . B E L L G U L L Y . C O M EMPLO YMEN T J U N E 2013 2To view all our publications or update your details Government workforce policy must Next steps
please visit our website: www.bellgully.com
relate to workforce (including
As outlined in our September 2012
For further information, please contact your usual employment and workplace) matters
newsletter, the amendments contained in
Bell Gully adviser or:
for the purpose of fostering a
the bill are part of the Government’s
Rob Towner consistent, efficient and effective
64 9 916 8902 response to the Better Public Services
rob.towner@bellgully.com approach to such matters across the Advisory Group’s recommendations. The
Tim Clarke State sector.
Government is continuing to demonstrate
64 9 916 8347
Workforce matters may, without its clear intention to make sector wide
tim.clarke@bellgully.com
limitation, address (in relation to the changes. Significantly, the Labour Party
Rachael Brown
64 4 915 6882 affected agency or agencies) – has confirmed that it supports “the general
rachael.brown@bellgully.com
a) the Government’s expectations policy intent to reduce or remove barriers
Liz Coats about the negotiation of to closer co-operation and alignment of
64 9 916 8732
liz.coats@bellgully.com collective agreements and agencies within the State sector”. Change
individual employment in this area is, therefore, inevitable.
Anna Holland
64 9 916 8723 agreements in the State Services
anna.holland@bellgully.com However, the changes impacting on
(being expectations that do not
employees in the sector have received
Susannah Maxfield determine pay or conditions); and
64 9 916 8699 close attention from the full Select
susannah.maxfield@bellgully.com b) the development of workforce
Committee and the recommendation to
Dianny Wahyudhi strategy.
delay any amendment to the redundancy
64 4 915 6520
dianny.wahyudhi@bellgully.com
• The Committee has also recommended provisions for three years from enactment
that, in addition to consulting with is a significant change from the bill as
affected agencies regarding the draft introduced.
Government workforce policy, the State
Services Commissioner should consult The bill is now awaiting its second reading.
with “any other parties that the
Commissioner considers appropriate”.
• The bill as introduced lacked clarity
regarding the interplay between the
duty of chief executives to act
independently and the application of a
Government Workforce Policy Order.
The Committee has recommended that
the references to the independence of
chief executives be removed on the
basis that they are unnecessary;
Government Workforce Policy
Statements will concern the
Government’s overarching policy
position regarding the State services
and individual employment decisions
will remain the responsibility of chief
executives.
Disclaimer: This publication is necessarily brief and general
in nature. You should seek professional advice before taking
any further action in relation to the matters dealt with in this
publication.
All rights reserved © Bell Gully 2013
W W W . B E L L G U L L Y . C O M EMPLO YMEN T J U N E 2013 3EMPLOYMENT HEALTH CHECK FOR DOCTOR S’
CERTIFICATES BRINGS RELIEF T O
EMPLOYERS
J UN E 201 3
Doctors may be asked to disclose a sick • a new standard will be introduced that
employee’s diagnosis to that person’s requires a doctor ensure that medical
employer, under tighter standards being certificates meet the standards outlined
considered for medical certificates. in any relevant legislation; and
Tim Clarke
They will also be asked to make a • where a diagnosis relates to ill health
PA RT N ER
judgement on what duties a sick employee that arose in the workplace, a doctor
can still undertake for an employer if will be required to set out in an
they’re unable to carry out their usual employee’s medical certificate both the
workplace duties due to illness. diagnosis and the workplace factors
that have contributed to the employee’s
The changes being considered have been illness (the employee’s consent will be
Anna Holland disclosed in a recent New Zealand Medical
SO LI C I TO R required).
Council report called Writing Medical
The changes will please employers
Certificates: a review of the standards for
concerned that doctors may have
doctors (May 2013). It outlines a number of
inappropriately issued medical certificates
proposed changes to the Council’s
to employees.
Statement on Medical Certification, which
sets out a doctor’s responsibilities when If implemented, they would not only
preparing a medical certificate. ensure that an employer understands the
nature of an employee’s illness, but that an
The proposals: employee who is able to carry out some
tasks must still attend work (even if that is
• a doctor will be required to outline any
on a part-time basis). Doctors will have to
duties an employee is fit for;
record in a medical certificate whether an
• employers and others will be advised on
employee is fit for some, if not all, duties.
how to find out more information about
The report also proposes that an employer
an employee’s illness to support their
should be able to seek clarification of an
(employment-related) decision making;
employee’s health status from the
• a doctor will be required to include employee’s doctor.
particular information in a medical
certificate (this is a shift in focus from Taken together, the changes will minimise
the current standard, which restricts the need for employers to create their own
doctors in how much information they policies in relation to proving an
can provide to an employer); employee’s illness.
W W W . B E L L G U L L Y . C O MTo view all our publications or update your details Providing employers with
please visit our website: www.bellgully.com
necessary information
For further information, please contact your usual
Bell Gully adviser or:
The Medical Council has identified a
number of employers’ concerns with the
Rob Towner
64 9 916 8902 existing system in its report. Statistics
rob.towner@bellgully.com
compiled from the Employers and
Tim Clarke Manufacturers Association (Northern) show
64 9 916 8347
tim.clarke@bellgully.com that 70% of employers are not satisfied with
the medical certificates they receive from
Rachael Brown
64 4 915 6882 employees taking sick leave. A number of
rachael.brown@bellgully.com
employers are concerned that doctors are
Liz Coats issuing medical certificates:
64 9 916 8732
liz.coats@bellgully.com
• without medical cause;
Anna Holland • retrospectively, without having seen
64 9 916 8723
anna.holland@bellgully.com any evidence of illness; and
Susannah Maxfield • lacking in specific information
64 9 916 8699
susannah.maxfield@bellgully.com
(particularly where an employee alleges
that their illness arose from work-
Dianny Wahyudhi
64 4 915 6520 related activity).
dianny.wahyudhi@bellgully.com The Statement was first drafted in 2001. No
amendments were made when it was last
reviewed in 2007. The Medical Council has
invited feedback on the report by Friday 5
July 2013
Special thanks to Natalie Manning of
Victoria University Wellington for her
contribution to this publication.
Disclaimer: This publication is necessarily brief and
general in nature. You should seek professional advice
before taking any further action in relation to the matters
dealt with in this publication.
All rights reserved © Bell Gully 2013
AUCKLAND VERO CENTRE 48 SHORTLAND STREET WELLINGTON 171 FEATHERSTON STREET
PO BOX 4199, AUCKLAND 1140, NEW ZEALAND, DX CP20509 PO BOX 1291, WELLINGTON 6140, NEW ZEALAND, DX SX11164
T EL 64 9 91 6 8 8 00 F A X 64 9 91 6 8 8 01 TEL 64 4 91 5 68 00 FAX 64 4 91 5 68 1 0EMPLOYMENT DIRECTOR S SHOULD HEED BEST
PRACTICE HEALTH AND SAFETY
GUIDELINE
J UN E 201 3
Following the final report of the Royal While the Guideline is voluntary, directors
Commission on the Pike River Coal Mine should be familiar with it as it provides
Tragedy, the Institute of Directors (IoD) and useful best practice advice and practical
the Ministry of Business, Innovation and tools for directors to better influence an
Tim Clarke Employment (MBIE) have issued a organisation’s health and safety systems
PA RT N ER guideline entitled Good Governance through their leadership, strategic decision-
Practices Guideline for Managing Health making and allocation of resources.
and Safety Risks (the Guideline). Compliance with the Guideline will
increase the likelihood that an organisation
What is the status of the and its directors will be seen to have
Guideline and who does it complied with the HSE Act.
Dianny Wahyudhi apply to? The Guideline is targeted at, but not
SO LI C I TO R
One of the recommendations of the Royal limited to, directors, trustees and
Commission was for the health and safety councillors of organisations with 20 or
sector to issue an approved code of practice more employees.
to guide directors on how good governance
practices can be used to manage health and Does the Guideline change
safety. While the Guideline was intended to the current liability of
address that recommendation, MBIE has directors?
stopped short of amending the Health and
As stated above, the Guideline does not
Safety in Employment Act 1992 (HSE Act)
affect the current statutory framework
or issuing a document with statutory force.
under the HSE Act.
If the Guideline had been issued as a “code
In a previous update (see link later in this
of practice” under the HSE Act, failure to
article regarding the Pike River Coal Mine
comply with the Guideline would be
Tragedy) we set out the current position of
considered by a Court to be evidence of a
directors under the HSE Act. In summary,
breach of the HSE Act. In its current form,
directors have secondary liability for
however, a Court may (but is not compelled
breaches of the HSE Act, meaning that
to) take the Guideline into account when
directors can only be liable where the
considering the liability of directors for
company (which has primary liability) is in
health and safety breaches.
W W W . B E L L G U L L Y . C O M EMPLO YMEN T J U N E 2013 1breach of the HSE Act and is liable for an Role of directors in the • Review management reports on
offence. The HSE Act does not impose an governance of health and reviews and audits of systems and
express duty on the board of directors, or safety control plans.
on individual directors. • Become personally aware of the
The Guideline’s recommendations are set
A director will face potential criminal out in terms of four “key elements”. For organisation’s hazards and control
liability where it is clear the director each element, the Guideline divides actions systems. Review risk registers.
directed, authorised, assented to, into “baseline actions” (minimum • Ensure that management have staffed
acquiesced or participated in the requirements) and “recommended practice” the organisation with sufficient
company’s failure to comply with a for directors. We set out some of the personnel with the right skill mix,
provision of the HSE Act. In practical recommended actions below. supported by specialists as required, to
terms, a director may face liability where operate the business safely.
he or she had clear knowledge that the Policy and Planning • Ensure that plant and equipment is
situation was unsafe or otherwise contrary • Develop, approve, and publish a safety provided by management that is fit for
to the HSE Act. vision and beliefs statement that will purpose, well maintained and
express the organisation’s commitment supported by training and safe
The recommendations outlined in the
to heath and safety. operating procedures.
Guideline reflect the position that directors
should have a positive and ongoing duty to • Establish targets for tracking the • Provide sufficient funds for effective
ensure health and safety compliance. The organisation’s effectiveness in implementation and maintenance of
Guideline borrows the concept of “due implementing the board’s health and the health and safety management
diligence”, which was introduced by safety strategy and goals. Directors system and for improvement
Australia’s Model Work Health and Safety may wish to include both lead and lag programmes.
Act (WHS Act). indicators in targets and ensure that they
do not create perverse incentives. Monitor
To meet their duty of due diligence under
• Determine a board charter that will • Specify clear requirements regarding
the WHS Act, directors should take
describe the board’s own role and that reporting and timeframes for
reasonable steps to:
of individual directors in leading health significant events in the board’s
a) have a personal knowledge and and safety in the organisation. The charter.
understanding of: board charter may include detailed • Review serious incidents, including
- health and safety matters in the structures and processes to be used to serious non-compliance and near
workplace; and plan, deliver, monitor and review misses, and be personally satisfied
- the operations of the company and leadership of health and safety. with the adequacy of management
hazards and risks associated with • Apply a performance review process to actions in response.
those operations. the CEO role, which includes health • Ensure that improvement goals are
b) ensure and verify their company and safety responsibilities and developed annually by management
has: accountabilities, and ensure that a and that regular progress reports are
- resources and processes to similar process applies to other received by the board.
eliminate or minimise risks to management.
health and safety;
- appropriate processes for receiving Deliver
and considering health and safety • Ensure that management develops,
information and responding to it in implements, audits and regularly
a timely way; and reviews and updates an effective
- appropriate processes for management system consistent with
complying with all the duties and accepted standards.
obligations contained in the WHS
Act.
EMPLO YMEN T J U N E 2013 2
W W W . B E L L G U L L Y . C O MReview To view all our publications or update your details
MBIE's inspector's powers: please visit our website: www.bellgully.com
• Specify arrangements for the formal
Utumapu v Bull overturned For further information, please contact your usual
review of health and safety in the
by Court of Appeal Bell Gully adviser or:
board’s charter including frequency,
On appeal the Court of Appeal has Rob Towner
who is involved, and how and what 64 9 916 8902
overturned the High Court decision in rob.towner@bellgully.com
input is required.
Utumapu v Bull (2011). The earlier High
• Ensure that input into the formal review Tim Clarke
Court decision had interpreted the HSE 64 9 916 8347
includes audits (internal and external), tim.clarke@bellgully.com
Act in a way that limited MBIE’s
system reviews, performance results,
inspector’s powers to compel a company Rachael Brown
significant incidents, organisational 64 4 915 6882
to provide an employee to attend an rachael.brown@bellgully.com
changes and benchmark data.
interview, narrowed the scope of Liz Coats
• Determine an action plan and track 64 9 916 8732
questions that could be asked of the
progress as an outcome for the review. liz.coats@bellgully.com
interviewee and required an inspector to
Anna Holland
provide advance warning of the intended The recommendations listed above are only 64 9 916 8723
topics for questioning. The Court of some of what is outlined in the Guideline. anna.holland@bellgully.com
Appeal confirmed the coercive nature of A series of diagnostic questions in the Susannah Maxfield
an inspector’s powers (subject to the 64 9 916 8699
Guideline provide directors with an
susannah.maxfield@bellgully.com
privilege against self-incrimination) and additional tool to determine whether the
Dianny Wahyudhi
that a corporate employer can be required organisation’s practices are consistent with 64 4 915 6520
to answer questions and make a the board’s values, goals and approved dianny.wahyudhi@bellgully.com
statement. Also, the Court recorded its systems.
disagreement with the High Court’s
For more information on the key findings
conclusion that an inspector is bound to
and recommendations of the final report of
provide an indication of the purpose of
the Royal Commission on the Pike River
the interview and the type of allegations
Coal Mine Tragedy, see our earlier update
which might be made.
of 23 November 2012 entitled Pike River
Commission proposes health and safety
reform to improve corporate governance.
See also our earlier update of 21 May 2013
entitled Independent Taskforce recommends
urgent and sweeping changes of current
workplace health and safety system.
Disclaimer: This publication is necessarily brief and
general in nature. You should seek professional advice
before taking any further action in relation to the matters
dealt with in this publication.
All rights reserved © Bell Gully 2013
W W W . B E L L G U L L Y . C O M EMPLO YMEN T J U N E 2013 3HEALTH & SAFET Y INDEPENDENT TASKFORCE RECOMMENDS
URGENT AND SWEEPING CHANGES OF
CURRENT WORKPLACE HE ALTH AND
SAFET Y SYSTEM
MA Y 201 3
Introduction 25 percent reduction in the rate of fatalities
and serious workplace injuries by 2020 can
After a 10-month inquiry process, the
easily be met if the full package of
Independent Taskforce on Workplace
recommendations is implemented.
Rob Towner Health and Safety issued its findings last
PA RT N ER However, the Taskforce has set its own
month. It recommends urgent and sweeping
ambitious target for New Zealand to be to
changes to the current system which it has
be among the safest place in the world to
described as “not fit for purpose”.
work by at least 2023.
The report identifies major and systemic
Chairman of the Taskforce, Rob Jager, has
weaknesses that contribute to New
said that this vision is achievable but it will
Zealand’s poor workplace health and safety
Anna Holland require an “urgent, board-based step-
SO LI C I TO R record under the current legislative
change in approach and a seismic shift in
framework. The Taskforce has made wide-
attitude”. “It will also require strong
ranging recommendations, which, if
leadership, with business, workers, unions,
implemented, could result in a complete
industry organisation and the Government
overhaul of the system. Two
all having vital and shared roles to play in
recommendations that are of particular
achieving this vision.”
Grace Stacey-Jacobs interest to employers are the extension of
LA W C LERK
criminal manslaughter to corporations and Government, employers and unions agree
enabling judges to make adverse publicity on the need for change given New
orders against businesses that have breached Zealand’s comparatively poor rates of
health and safety laws. work related fatalities and injuries. The
Government welcomes the report and has
It remains to be seen whether all
recognised the need for a renewed
recommendations will be adopted, but the
approach. Labour Minister Simon Bridges
Government has strongly signalled systemic
has said that the report provides “a solid
change, having already accepted the
foundation and constructive
Taskforce’s early recommendation for a
recommendations for system-wide
new stand-alone health and safety agency. It
changes” which the government will
will respond to all other recommendations
consider carefully. Council of Trade
in July.
Unions President Helen Kelly has called
The Taskforce considers that the for the recommendations to be adopted in
Government’s “modest” target of a full.
W W W . B E L L G U L L Y . C O M HEA LT H & SA F ET Y MA Y 2013 1You can also read
