The non-compliance with this Act has become a significant employment issue, with non compliant companies featuring in the news regularly. Employment Law is dynamic and many companies are not fully aware of their obligations under the current law.
MBIE had produced this guide to assist employers and employees to clearly understand their rights and obligations regarding wages, annual holidays and entitlements on finishing employment. You can download a copy of the guide here.
In October 2016 the Auckland Council and contractors were required to pay $255,000 over the death of a 19 year old refuse worker.
Refuse worker Jane Devonshire was killed in August last year when a rubbish truck, owned by Auckland Council contractor Onyx, went over a cliff in Birkenhead on the North Shore. Devonshire, of West Harbour, was in her fifth week on the job working as a rubbish runner. She was standing on the left side of the cab when the brakes failed, causing it to careen 120m down a hill and off a cliff. The North Shore District Court heard at sentencing today that Devonshire was thrown from the truck and was crushed when it landed on her.
Court findings
The truck was found to be overdue for a major service, brake issues had been identified but not rectified and the warning lights on the dashboard weren’t working.
Two weeks earlier, the same truck broke down on the side of the road and the mechanic identified the third axel break linings were low. A job card was filled but got missed in a pile of paperwork until after the incident.
The parties charged were: Auckland Council, Veolia ES Technical Solutions which was contracted to collect rubbish bags, N P Dobbe Maintenance Limited which was contracted to maintain the fleet, and Truck Leasing Limited, which owned the trucks.
They were all charged under the Health and Safety in Employment Act with failing to take all practical steps to ensure employees were not harmed.
It is imperative that you monitor and understand the safety standards of the companies you subcontract work to. Let HRtoolkit show you how.
Download our Health and Safety Toolkit and use our tools to request your contractors health and safety plans, standards, policies and procedures.
A human resources company leasing premises in a multi-tenanted office block has concerns about lift maintenance but who is legally responsible?
In this case, there is a shared duty of care for lift maintenance in a multi-tenanted office block. All businesses have a duty of care as a person conducting a business or undertaking to ensure the health and safety of their workers and clients visiting its offices.
At the same time, the building owner and property manager have duties as persons with management or control of the building to ensure people can safely enter and exit the building and that the building is safe and without risk to others.
A company contracted to maintain and repair lifts (maintenance contractor) has a duty to ensure that its workers and other persons are not put at risk from work carried out as part of its business.
Each of these duties is subject to what is reasonably practicable, so what is best practice?
Stage 1: Consultation
The human resources company consults the property manager to find out what arrangements are in place for the proper maintenance of plant such as air-conditioning systems and lifts.
Before maintenance is to be carried out on the lifts the property manager consults with the maintenance contractor, the tenants and the cleaning contractor so that all duty holders know of the work and what they each need to do to ensure the safety of persons in the building. This includes identifying the best time for the work to be done, how the work area will be barricaded and what information, if any, the finance company will need to give to its workers and clients.
As the work proceeds, the human resources company informs the property manager and the maintenance contractor of any concerns or incidents, to enable these to be considered and any changes made.
Stage two: Cooperation
The human resources company and other tenants cooperate with the maintenance contractor by complying with contractor’s safety procedures.
Stage three: Coordinating activities
The human resources company ensures that its workers and clients do not use the lifts during the maintenance work and that they have another safe means of entry and exit.
The maintenance contractor works with the property manager to schedule maintenance work so that it does not interfere with the safe movement of persons in the building, as far as is reasonably practicable.
One of the key challenges for businesses is the positive obligation to “consult,cooperate and coordinate” with other businesses including contractors.
This piece of legislation in the HSWAct 2015 has been introduced primarily to reduce the risk to workers arising when several businesses work together. As the number of parties involved increases, so do the risks to the health and safety of workers – arising from miscommunication between parties.
It is imperative that you monitor and understand the safety standards of the companies you work with. Let HRtoolkit show you how.
One of the key challenges in the new health and safety legislation is the positive obligation to ‘consult,cooperate and coordinate’ with other businesses including contractors.
This piece of legislation in the HSWAct 2015 has been introduced primarily to reduce the risk to workers arising when several businesses work together. As the number of parties involved increases, so do the risks to the health and safety of workers – arising from miscommunication between parties, or complete lack of communication.
Read more about how this can go wrong here
It is clear to see that communication and cooperation between parties is essential to worker safety. The law is also clear and failure to do so may result in penalties.
Examples of multiple PCBU workplaces include:
Consultation questions to consider when there are multiple PCBU’s on site are:
Cooperation
In short you need to show good faith, communicating and cooperating with other PCBU’s in a timely manner. This means any action or inaction on your part should not compromise the health and safety of others working around you.
Coordination
You need to think about organising and planning activities to ensure that measures put in place work effectively to control the risk. The duty to coordinate is ongoing. Where work is not effectively coordinated, PCBUs should consult further to determine what should be changed.
Non-compliance
It is an offence under the HSWA for a PCBU to fail or refuse to comply with its duty to consult, cooperate or coordinate with other PCBUs. An offending PCBU is at risk of a conviction and be liable to a fine not exceeding $20,000 in the case of an individual PCBU, or for any other PCBU a fine not exceeding $100,000.
It is imperative that you monitor and understand the safety standards of the companies you work with. Let HRtoolkit show you how.
“Direct employment is too difficult, I’ll just put them on an independent contractor agreement”.
This assertion is one I hear frequently in the Salon industry, but it is a belief that is fraught with danger for two major reasons:
Sadly, in both cases, an employer will not realise they have a problem until there is already a significant financial liability accrued against them.
The claim that they are an employee
Whilst everyone is happy and getting along the chances of this type of claim arising are minimal.
However, in a recent case I dealt with, the employee had been on the wrong agreement for 10 years, but she was happy with the flexibility it afforded her. Out of the blue she got a call from her boss saying “clear your desk, you’re out”. After the initial shock she, unsurprisingly, decided to get her own back. Item 1 on her claim was 10 years of back holiday pay… she won.
When the IRD wants to be paid
Death and taxes are the only two certainties in life, and whether we like it or not the IRD likes to get paid. So if it gets to the end of the year and “employee/contractor” gets a tax demand from the IRD which they can’t pay, there is a significant risk to employers that they take the line that “I thought my employer had been paying my tax”.
Admittedly, it is certainly not so simple that the IRD will immediately turn to the employer for the tax payment. The employee/contractor and the IRD both have an onus of proof, but if they can prove the case then the employer will be liable for the tax, and this will generally be calculated on the basis that what has been paid to the “employee/contractor” is NETT and therefore the tax liability is the grossed up amount of that value.
Myth Buster about Employee status
The tax rules are such that, if you get more than 80% of your revenue from one source then you pay tax based on the lower “Company” tax rates, you pay the same tax as the “employee” rates. However, this does NOT mean the person is automatically an employee just because they do more than 80% for one company, the ONLY automatic change is to their tax status.
How do I protect myself?
Firstly, you need to review the current situation, and take action as necessary:
How to rectify the situation?
If you are in any doubt about the peoples understanding of their status then open discussions with them, and keep notes of those discussions.
If their response is “no, totally happy and fully understand that I am a contractor”, then make sure you have a written agreement in place, and ensure that you have, in writing (e-mail or in the cover letter of an agreement) that they have acknowledged their understanding of the status. In the event of things going badly, this will be a very important piece of your defence if they try to say they genuinely believed they were an employee.
If their response is one of shock or uncertainty about the implications of being a contractor or employee, then give us a call on 0800 HRTOOLKIT (0800 47 86 65) to discuss how to proceed. Often it can be resolved quite readily when everyone is talking but can cause huge issues if it comes up in a dispute.
Help is available
Call the HRtoolkit team on 0800 HRTOOLKIT (0800 47 86 65) for more help and advice, NB we don’t charge for the 10-minute issues, and in the vast majority of cases, 10 minutes is all it will take our specialists to solve the issue with you.
NB, we also have a Salon specific H&S Kit to ensure you are compliant with the new H&S legislation
NB this article is equally applicable to employees and Independent Contractors
Restraints of trade definitely have a bad reputation as being unenforceable, and I have heard many horror stories of salon operatives setting up shop in the immediate vicinity and nobbling your client base. However, the good news is that they can be made to be enforceable.
What you can and can’t restrain
Legally you are allowed to restrict someone from stealing your clients. However, you CAN’T prevent someone from earning a living.
Why do Restraint of Trades fail?
The most common mistake with Restraint of trade is putting in an unreasonable restraint such as “you shall not undertake work in competition within a 50 Km radius of the salon”.
Basically, this would restrict someone from earning a living in the same city as they are currently working. This is considered unreasonable. Unfortunately, if a restraint clause is found to be unreasonable then the whole restraint is found to be unenforceable, so you would not have a claim against them for setting up next door.
How do you make restraints enforceable?
For Salons a geographic restraint probably makes the best sense, so think about the area you want to limit. For example:
“You shall not undertake work in the suburb in which the salon is based, nor in the immediate surrounding suburbs”
This would be appropriate for a Grey Lynn, Auckland salon as this would restrict someone from setting up in Ponsonby, but they could still set up in Parnell. So, arguably, you are not limiting them from earning a living.
You also need to think about how long the restraint is for. 3 months may be too short a time period when you consider the cycle of your clients. However, 12 months would probably be too long a restraint. So, consider how often your clients visit you and base the restraint length on that.
Poaching Clients
The law is clear that you are not allowed to steal clients from an employer. This is a matter of good faith and therefore a fundamental principle of employment and contract law.
As such I recommend that, in addition to the Restraint of Trade, you have a Non-competition clause, for example:
It is an important term of this contract that you must refer all business during the term of this contract that may relate to the business of the company, to the company and that after the termination of your contract, you will not for a period of six months from the date of termination approach or solicit business from any client, customer or contact of the company for the purpose of selling products or services in competition with the company.
In summary
Think carefully about what you want to restrict, and be reasonable in your restrictions, and put in place a non-competition clause.
Help is at hand
Call the HRtoolkit team on 0800 HRTOOLKIT (0800 47 86 65) for more help and advice, NB we don’t charge for the 10 minute issues, and in the vast majority of cases 10 minutes is all it will take our specialists to solve the issue with you.
The following guidance is copied from the Employment New Zealand Website
If a natural disaster or other serious event happens, the health, safety, and security of people should be the main concern of all employers and staff. This comes before thinking about the interests of the business or organization. Employers and employees should remember to keep in regular contact and deal with each other in good faith.
After a disaster:
Following an earthquake or a significant aftershock:
There are different reasons why an employee doesn’t work in this situation. These can include:
Employers and employees can’t assume that time away from work in these circumstances would be either paid or unpaid without looking at the employment agreement, workplace policies and the specific circumstances. The employer and employee should look at their employment agreement to see if this type of situation is covered. If it’s not in the agreement, then it is up to both parties to talk about it in good faith and agree what the time away from work will be classed as.
If the employee’s partner or dependent family member isn’t injured or sick but he or she requires care, eg because their child’s school is closed, the employee can’t take sick leave. In some cases, employees may be able to continue to work while caring for their family, if the employer and employee agree to this arrangement. If it’s not appropriate or possible for staff to continue working, employees and employers will need to agree on what basis the employee is off work.
Whichever option the employer and employee agree on may depend upon the circumstances, including the nature and extent of the disaster and how long it lasts for. Once all leave entitlements under the Holidays Act 2003 and any negotiated additional leave or any anticipated leave entitlements run out, employees and their employers will need to consider further options in good faith (and consider the impact these options will have on business recovery later).
There are special rules for shift workers relating to the cancellation or early ending of a shift.
If an employee is a shift worker and is willing and able to carry out their agreed hours of work, but their employer either
this is considered a cancellation of the employee’s shift.
Whether an employee is entitled to compensation from their employer for ‘cancelling’ these agreed shifts or ending a current shift early will depend on the terms of their employment agreement, the date of their employment agreement, and the specific circumstances of the cancellation.
If the date of an employee’s employment agreement was April 1 2016 or later, their employment agreement and employer must comply with the shift cancellation requirements of the Employment Relations Act 2000.
This means their employer can’t cancel one or more of their shifts unless:
If the employment agreement doesn’t have a valid shift cancellation provision and the employer cancels a shift anyway, the employer must pay the employee what they would have been paid if they had worked the shift.
Employers must also pay employees what they would have been paid if they had worked the shift if:
In this situation, the remuneration the employee gets when the shift is cancelled is included in their ordinary weekly pay and relevant daily pay.
If the employer doesn’t comply with the law in relation to providing reasonable notice or reasonable compensation for shift cancellation, then the employee may be able to raise a personal grievance.
If an employee’s employment agreement is dated before 1 April 2016, their employer has until 1 April 2017 to comply with the shift cancellation provisions of the Employment Relations Act 2000. Employees may still be able to claim compensation, depending on what their employment agreement says. Employees, who are unsure of whether their employer is required to compensate them, should seek further advice.
If an employee is not entitled to compensation for shift cancellation their employment agreement may have other options relating to a disaster that apply to their situation. If none of these apply, they can still discuss options for leave and holidays with their employer in good faith. This may also apply when the current roster ends if the employer and employees have not agreed to a new roster
Hours of workhas more information.
If it’s not safe to be at work, employees can stop work because of health and safety concerns under the Health and Safety at Work Act 2015. Alternatively, they may be able to take strike action under the Employment Relations Act 2000. If the employee and employer have made reasonable efforts but still haven’t been able to resolve the issue, they can use the problem solving framework under the Employment Relations Act 2000 or ask WorkSafe New Zealand(external link) for help.
An employee has the right to stop work, or refuse to carry out work if they think that doing the work would expose them, or anyone else, to a serious risk to health or safety from an immediate or imminent hazard. A trained health and safety representative may also direct employees to stop unsafe work.
If you have stopped work because of health and safety reasons:
Worksafe New Zealand(external link) has more information about your rights and obligations.
Employees can take lawful strike action or employers can lock out employees, if they’ve reasonable grounds for believing that it’s justified for safety or health reasons.
Strikes and lockouts has more information.
Hiring people in a tight labor market is more work for managers than it used to be. Whilst a focus on looking after your staff, particularly your great performers, is a priority you also need to find workers to replace those who leave and bring in new staff for your growing business.
The HRtoolkit Quick Guide to Recruitment outlines a variety of channels to communicate your vacancy. These channels can complement the traditional internet job sites and media. An often-overlooked avenue is asking current staff if they know anyone suitable. Several companies we work with, run a very successful “refer a friend” programme which provide financial incentive for staff who find a good candidate. Other less formal advertising channels to consider are local clubs, church groups, student job search, chamber of commerce or sports clubs.
It’s important to follow a recruitment process thoroughly:
Once you have decided on a candidate, ensure you use the correct employment contract by going to the HRtoolkit Employment Contracts section of the document library.
After you have recruited, induction is the next step.
Inducting your staff well makes a great first impression: It speaks volumes to a new staff member when you show them you are prepared and ready for their arrival. You want your new employee to feel welcome and see that you have prepared for their arrival. Most of us has experienced a poor induction. For example, arriving to your new job to find no desk or computer set up, or arriving to find your manager is away and the office junior gives a quick tour around the premises as the “induction.”
This does not make for a good first impression of the business, nor does it inspire the your employee. Those first 90 days are crucial to how your new employee will fit into the company and the HRtoolkit New Employee Checklist gives you a great outline for welcoming and successfully inducting your new staff
Here are some of the common pitfalls we come across, with companies not preparing well for their new employee. Sadly, we often hear about these situations too late – during the exit interview of an excellent employee.
Never exit a person on day 89 of the 90 day trial – it is high risk and unnecessary stress. If you are following the above pointers, and you will be able to constructively manage the successful performance of your new employee. It is important to check your 90 day trial clause is valid.
Finally…Performance and goal setting is a discipline that should continue throughout your employee’s time with you. You may think you cannot afford the time to coach staff, however if staff leave, the cost to the business is conservatively $25,000 often more.
Coming into winter people catch colds or worse, the flu. When someone calls in sick, it can be stressful managing without that extra worker. You may think you need that employee at work, but do you really want staff showing up full of the flu, only to spread it through the whole department? At the other end of the spectrum you may have staff who appear to be demonstrating patterns of non-genuine sick leave. For example someone who has a pattern of not showing up on a Monday, or someone who regularly fails to show up for work the day after pay day. Or the case where you recognise a staff member seems to be taking an excessive amount of sick leave.
‘Pulling sickies’ is often a knock-on effect from not addressing repetitive, low-level skiving. If issues such as talking too much on your phone during work time, showing up to work late repeatedly or having long lunches are addressed early the employment relationship, it sends a signal of laxness that can lead to a more serious form of ‘skivitis’ – non-genuine sick leave. Take a look at our quick guide to sick leave issues it’s a great tool to assist you when you are looking at framing up a sick leave policy
Non-genuine sick leave is a tricky area to navigate. As employers you want to think the best of your workers – because let’s face it – they are the back bone of your business. Yet you know at its essence it is disrespectful and damaging behaviour. However, if you have workers with patterns of absence it is important that you deal with it – and promptly. Start with downloading the HRtoolkit sick leave policy, which outlines:
Then communicate the policy with your staff.
I was recently discussing this very issue of poor productivity due to low level skiving and suspected non-genuine sick leave with the director of a Tech company. I advised him to implement a code of conduct and a sick leave policy and discuss it with the staff. The owner felt uncomfortable and said he didn’t want to come across as an ogre or a suspicious person. He was surprised to know this is actually a reasonably common response from Kiwi business owners – Kiwi’s on the whole, are culturally averse to having the ‘courageous conversation’.
Framing your conversation around what you want to see, and the potential impacts on co-workers who may have to pick up the extra work, rather than focusing on the negatives, should assist the conversational flow. For example:
“We all want the business to succeed and I want to be able to trust my workers to perform their role well, and not worry about unexplained absence, people showing up late, or phoning in sick two hours after start time. We are all professionals. I am implementing some simple guidelines and company protocols to assist us all and clarify the expectations of the business around workplace performance….”
All companies should have a clear policy on sick leave and absenteeism. Please download HRtoolkit’s sick leave policy to assist you.
When you have established the boundaries for sick leave and reporting in sick, you also need to address your internal communications, including:
Good communication in conjunction with good company policies ensures your company manages the winter chills and ills more effectively.
