- An independently monitored Speak Up Line
- Education and embedding
- Preliminary investigations and confidential advice
- Anonymised reporting to our clients on themes, and statistics
- Expert investigative capacity – bullying and harassment, sexual harassment, fraud
If this sounds like something your organisation would benefit from, get in touch with one of our associates today.
The Employment Relations Authority (the Authority) have found that resignations resulting from concerns of personal safety in the workplace and a failure to address these concerns can result in constructive dismissal, paired with a hefty price tag.
In this case, a 17-year-old employee resigned after just 19 days of employment, stating they did not feel safe to return to work. The employee was also not provided with an employment agreement, despite requesting one. The Authority therefore considered what a reasonable notice period for the role is, given the absence of an employment agreement.
In their second week of work, the employee noticed a change in behaviour towards them. The employee described it as a ‘switch being flipped’, their boss began to rage at them, to the point that they would be terrified. They were physically intimidating and threatening.
When matters did not improve from the next week, the employee decided that they would resign for their safety. The employer tried to dissuade them, adding that they could show them how to do things the way their boss liked, and that they were just having a bad week. However, the employee believed things were too far gone.
The Authority applied the test of justification, considering whether the employer’s actions, and how they acted, were what a fair and reasonable employer could have done in all the circumstances at the time the incident occurred.
The Authority found that as the matter was brought to the attention of the employer, they had the opportunity to address the situation, however failed to do so. This breached the duty to provide a safe workplace environment.
It was determined that it is reasonably foreseeable that if concerns around personal safety were not being addressed, that the employee would not be prepared to work under those conditions.
Based on the above, the claim of unjustified and constructive dismissal was made out.
The employee was awarded compensation for humiliation, loss of dignity and injury to feelings of $16,000 – a significant amount. Loss of wages for no contract or notice period being given were also awarded along with other lost remuneration. The total payable amount to the employee was $25,035.
This case highlights the importance of providing a safe and healthy work environment for employees, and to address and act on situations that are brought to your attention as an employer, so as not to breach your duty of good faith.
It also shows the importance of ensuring you provide your employees with employment agreements and keep accurate records.
In this case, it wasn’t necessarily what the employer did, but what they did not do, which breached their duty of good faith.
Well, we are off to an interesting start to 2023, for those of us interested in minimum entitlements legislation.
An Employment Court decision has ruled that the owners of four alcohol retail stores are personally liable to pay five former employees wages and holiday pay, totalling $259,685. The owner of the businesses has also been banned from employing anyone for a year.
Employment Court cases can be lengthy. However, in this case, the Labour Inspectorate and the Respondents filed a joint memorandum and agreed a statement of facts in the Court, which Judge Kathryn Beck considered in making her orders.
Nikhil Himalaya and owners, Ravinder and Anuradha Arora, accepted the breaches of the Minimum Wage Act 1983 and the Holidays Act 2003. They failed to pay wages at no less than the minimum wage, incorrectly calculated holiday pay at termination, and failed to maintain holiday records.
As part of the consequence, the Judge also ordered a banning order against owner Ravinder Arora for 12 months, which means that he will not be able to employ or be involved in employing anyone for a year.
The Inspectorate said that, as there were no records, they relied on technology to verify the evidence provided by the former employees. This type of data analysis will be a method used by Labour Inspectorates in the future, where records are not maintained or cannot be produced.
What is interesting is that there were no penalties ordered against the Respondents. It is usual for the Inspectorate to seek penalties where breaches of minimum entitlements occur and the Inspectorate is reluctant to resolve matters, even in mediation, because of the penalties sought. It may have been that the banning order, together with the recovery of $259,685 in wages and holiday pay, was seen as a reasonable sanction for the breach or there may have been other mitigating factors considered by the Labour Inspectorate when agreeing on the joint memorandum.
Although, in this writers view, while most employers invest in processes and payroll systems to ensure their employees receive their minimum statutory entitlements, there still exists employers who, for whatever reason, breach minimum standards. The Courts provide a very strong incentive for compliance with financial sanctions and orders that prevent employers from employing staff, and this case highlights that.
Unfortunately, there are also good employers who believe they are complying, but just get it wrong. These employers fall into the same non-compliance category and can also face hefty penalty sanctions.
No employer should set and forget their payroll system. An annual check to ensure compliance with minimum statutory entitlements should be part of every wise employers plan to protect their business.
Three60 Consult’s payroll and minimum entitlement review service has been very busy with employers wanting a review to ensure that their payroll systems are calculating wages and holiday pay correctly and that the systems in place meet their legal obligations.
Tasneem Begum and I are both ex MBIE Labour Inspectors and in undertaking these reviews, we usually find areas of non-compliance, even where reliable payroll systems are being used. Because the reality is they do not accurately account for the different types of working patterns. We are then able to assist the employer in remedying the breach and ensuring their processes are compliant. So, when the Labour Inspector comes knocking, you can rest assured you have got things right.
If this is an area you need assistance with, get in touch with our Minimum Entitlements team today.
Lynn Booker, Senior Associate
Last December the Fair Pay Agreements Act come into force. This Act enables unions to negotiate the employment terms and conditions for whole industries or roles across multiple industries at once.
Many businesses across New Zealand don’t realise the wide reaching implications this will have for them. Businesses that have little or no union involvement, or consider they are paying their staff well above minimum rates often think an FPA will have little effect on them. This is unlikely to be true and if you are a business owner, manager, or HR professional, it’s probably time to reconsider and prepare.
Why should you care?
FPAs are not just about wage rates – they cover multiple aspects of pay. There are minimum conditions that are required to be discussed during bargaining and conditions that must be included in an agreement. Mandatory conditions are:
- Date it comes into force
- Coverage of work or type of work
- Wages and when they apply, including:
- Minimum base rate
- Overtime rate
- Penal rate
- Training and development arrangements
- Leave entitlements
- Variation requirements
- Expiry date
The only parties at the negotiating table will be the unions and any employer associations that seek to be part of the negotiations. No individual employers will have a seat at the table, but the outcome of the negotiations will become the minimum requirements that apply to every employer across New Zealand who has an employee covered.
Many employers will not even know if they have employees covered because the coverage clauses are likely to be broad and the system of notification is full of holes. Nevertheless, you will be in breach of legislation if you’re found not to be complying. There is a risk that Labour Inspectors will come knocking and once you’re found in breach, the backpay and fines will likely roll in.
The FPA process is likely to be difficult because it is essentially forcing competitors to work together. All employers that fall within the relevant industry or occupations will, as a minimum, have the same terms and conditions applied to them, regardless of size, location, and demographics.
Moreover, if you are not involved in any of the FPA process, you won’t have a say in what these rates are.
It’s time to be preparing. There are decisions to be made about the level of involvement you want in the process and how your interests will be best looked after as you don’t get a direct seat at the table. Without doing this, larger businesses or competitors could be effectively making decisions that you will have to live with.
Four applications have currently been made, covering industries such as hospitality, bus/coach transport, and supermarkets. These applications can cover many different roles. One of the difficulties with FPAs is the definition of what is included within a particular industry. For example, receptionists are part of the coverage claimed under the hospitality FPA application. The definition of receptionist broadly refers to someone who meets and greets guests. Do you have a receptionist? You may just be covered! Staying aware of what roles in your organisation may be covered is important so you can consider your next move.
How can we help?
We are across all the FPA details and are assisting our clients to understand the potential impacts for them, build strategies to best protect their interests in this process, and representing their views to an appropriate Employer Association. We have a team of highly experienced and skilled negotiators who regularly bargain and engage with unions.
If you would like to know more or seek advice on your particular situation, give us a call.
A recent case by the Authority has warned against a rushed summary dismissal process even if the conduct or behaviour by an employee is serious misconduct.
An employee working at a Club was “instantly dismissed” after the Employer became aware of the employee retaining a club members’ food and drinks voucher and used it to purchase food and drinks for his own personal consumption as well as taking an opened bottle of wine from the club premises.
While neither party disputes that the conduct of the Employee was inappropriate, the Authority was tasked with considering whether or not the summary dismissal was justified and procedurally fair.
The Authority heard how the employer invited the employee to meet to discuss “a couple of incidences” that had come to their attention, and how during the meeting CCTV images of the conduct was shown. After asking for, and hearing, an explanation from the employee, the employer told the employee that they needed to have a meeting the next day and that the employee should bring their uniform as they would more than likely be dismissed.
The parties dispute the events at the second meeting, although it was found more likely than not the Employer had considered dismissal was the only option and that this was conveyed during the meeting in some way or manner. The day after this meeting, a letter was provided to the employee affirming that there would be a summary dismissal for misconduct and that the conduct was found to be wilful or deliberate, dishonest.
As the allegation was one of dishonesty, the Authority commented that they would’ve expected a very careful and well document investigation to proceed and that in this case, the investigation ‘fell at the first hurdle’ by the employer not providing information about the allegations and evidence in their written invitation.
Although it was reasonable to categorise the conduct as “potential dishonesty” when the employer first became aware of the conduct, the Authority found that the employer did not approach the matter with an informed and open mind. The Authority found that a fair and reasonable employer could have approached this issue with more caution and the decision to dismiss was unnecessarily rushed, which meant there was not a procedurally fair process.
It found that the summary dismissal of the employee was substantively justified on the grounds that he engaged in serious misconduct involving the repeated, deliberate and calculated use of what was not his property. However, as the procedural deficiencies had “robbed” the employee of the opportunity to seek legal advice and reflect on his actions, it was found that the dismissal was unjustifiable and the employee was entitled to remedies.
It was a case from thirty five years ago (BW Bellis Ltd (t/a The Coachman Inn) v Canterbury Hotel etc IUOW) which found that a dismissal could be found to be a lawful exercise of an employer’s right but “unjustifiable” by virtue of the way in which the matter was handled.
This case is a good reminder that employers must ensure that any investigative/disciplinary process is procedurally fair and substantively justified before making a decision such as summary dismissal or taking any other forms of disciplinary action.
As we are coming into Summer and the holiday period, organisations are having their Christmas and social functions, and colleagues may be catching up after work for a few drinks. ‘Tis the season to be jolly…But is it also the season of sexual harassment?
A recent report came out this year showing that 30% of workers have experienced sexual harassment in the past five years (Human Rights Commission). The Human Rights Act 1993 defines sexual harassment as ‘any unwelcome or offensive sexual behaviour that is repeated or is serious enough to have a harmful effect. The law defines sexual harassment to include many different behaviours.
Sexual Harassment in Summer
Sexual harassment seems to be particularly prevalent in Summer and several factors have been suggested as causing seasonal victimization. This includes holidays, change in attire, weather change, and the increase in daylight hours. Sunshine increases serotonin levels, which may cause your coworkers to feel somewhat friskier than usual.
Our Senior Associate, Maureen Glassey, comments on the seasonality of crime and sexual harassment from her experience as a former investigator in the Police.
She states that most cops will tell you that crime is both situational and seasonal – night shifts with a full moon always seem busier and in summer, the incidents of sexual offending seem to peak. “Moving away from policing and into employment relations, I notice that there seems to be a similar trend with harassment cases. Maybe it is the longer days, warmer weather, or perhaps the increase in social events. It is not always related to the weather, but perhaps the fact that that summer collides with the end of the year, the ‘zero-tolerance’ of these behaviours is reduced and people start to get away with more because it has been a long, hard year.” Thus, not only do behaviours in the workplace start to slip, but these behaviours also make appearances during work functions.
Sexual Harassment in Work-Functions
Noting the spike in harassment during this season in particular, it is important for employers to remember that their duty of care and obligations to provide a safe and healthy environment extend to work-related events and functions.
In preparation for work-related events and functions, employers should be taking the time to evaluate the risks involved and communicate behavioural expectations to staff prior to the function taking place. They should also consider any pre-existing policies and whether they are applicable in the instance that any incidents occur during the function.
Addressing and/or acting on these issues requires robust policies and processes. Now is a great time to either update or implement policies for such events outlining standards of behaviour, especially around health & safety, bullying & harassment, and drugs and alcohol at work.
While sexual harassment cases often occur, especially around this time of the year, employees are less likely to raise a complaint, or even identify the scenario as sexual harassment, where there is a high prevalence – a culture that fosters these kinds of behaviours, deeming it ‘normal’. It may also be an underlying culture within the organisation that the employer is not aware of.
Sexual Harassment and Culture
Employers must be mindful of their wider culture and make appropriate assessment as to whether their organisation has the systems and protections in place that allow employees to feel safe to report harassment and for it to be investigated.
This means having in place robust policies, but also ensuring the organisation has active processes and practices that are supported from the top down, which will help employees to view them as effective and feel more comfortable in speaking up. Propensity to name is typically higher when employees perceive that their HR department supports a climate of naming.
For most harassment and bullying allegations however, a complaints process and pathway for responding to these allegations is not enough. It usually places the burden on the victim to come forward and as mentioned above, people are unlikely to do so where a prevalence of sexual harassment within the culture exists. Many workers have said they wanted better support, preferably from someone independent looking into workplace culture and policies.
At Three60 Consult, we conduct independent investigations and pulse checks to help identify where any issues lie and provide tailored recommendations. We can also create or review policies and processes. If this is something your organisation needs assistance with, get in touch with one of our associates today.
By Kayla Neems