May 2018 Newsletter
There appears to be so much happening at the moment in Employment Relations with the Government beginning to implement changes that were only hinted at during the election. Two key aspects of being in business is keeping up with the changes and how they might affect you. We hope you enjoy reading our latest newsletter as we aim to keep you informed. If we can be of further assistance in answering your questions or sorting out issues you may currently be facing please do not hesitate to give us a ring.
Are you in the Hospitality Industry and struggling with Staff issues? Here’s how we can help you!
Recently, there has been a lot of noise in the media in relation to the vulnerability of people who work within the Hospitality Industry. Such people within the industry have come out to say that this vulnerability has been created due to a lack of Union presence within the industry.
One of this biggest challenges within the industry at the moment is the growth with the industry with more and more competition being created. This, in turn, creates another challenge for those within the Industry the finding and keeping of valued customers. So how do you as a business owner cope with these challenges? In short, you need good staff who have excellent customer service skills so your valued customers keep coming back and spending their discretionary dollars.
One of the major factors within the industry which can cause staff to have poor attitudes to their work and their customers, is their rate of pay. Most people who work within the Hospitality Industry receive minimum wage, or not far off minimum wage, with the rate of pay within the industry has been steadily decreasing since the 1980’s where back then, most people within the industry were earning around $27.00 per hour (figure has been adjusted to factor inflation). Given the Hospitality Industry is usually a stressful environment to work within, with food and drink needing to be prepared in a timely manner while still looking atheistically appeasing and tasting great.
You would have heard the common expression “I don’t get paid enough for this” and maybe that is what the problem is. Maybe staff within the Hospitality Industry are not being paid enough to care about the work that they do, given the high stress environment. So you could take Paula Bennetts view and implement a tipping based incentive system in your business in an effort to increase the quality of service, where “if you receive excellent service, you should tip.”
However, implementing a tipping system may not prompt your Employees to provide better service. Tipping is not common practice within the New Zealand culture when compared to countries such as the United States of America or the United Kingdom. As such, most customers probably would not know how to tip, or how much to tip. Then if you are using a communal tipping jar, a system has to be implemented in respect of how the tips will be shared between your staff, which could create even more drama in your workplace.
So you’re probably saying to yourself now, if tipping is going to create problems, maybe less problems will occur if the Union just comes in and sorts it out. Well actually, we would beg to differ on this point. Given the upcoming changes to employment legislation (see more articles about these changes on our website), it is clear that Unions will possess more power than Employers in terms of workplace access and bargaining power. So if the Union is involved in negotiating a change for your workplace after the employment law changes come into force, it is more likely that you will end up in a position that you are not 100 percent happy with.
This is where we step in. We are able to provide advice in respect of what policies and procedures you could implement in your workplace that may lift staff morale which in turn, may spark better service. We can also help you with updating your employment agreements, not only to ensure legal compliance, but in a manner that could lift staff performance and morale.
Don’t leave it to the Unions or tip jars to dictate how improvements could be made in your workplace, take the power back and call us so you can implement improvements that will be right for your business and your staff. Give one of the team a call on 07 838 0018, we look forward to hearing from you.
Unpaid work meetings are going to cost your business a pretty penny
The Employment Court ruled in favour of the Labour Inspectorate earlier this month when they ruled that the Smith City Group must pay their Employees for pre-work meetings, which Smith City Group claimed were optional.
Smith City is a large retail chain which operates 34 of its stores nation-wide and has about 400 Employees based in store. For about the previous 15 years, Smith City has held 15-minute morning meetings with their staff before opening their stores at 9:00am.
Smith City did not pay their Employees to attend such meetings, as they claim that they were optional. However, the Labour Inspectorate argued that the meetings were work, and the Employees must be paid accordingly.
The authorities were first made aware of the meetings occurring at Smith City when the Labour Inspectorate issued an improvement notice to Smith City in January 2016. The Labour Inspectorate was of the opinion that failure to pay Employees for their attendance at the pre-work meetings meant that they were not receiving the minimum wage for all hours worked.
Smith City objected the view of the Labour Inspectorate and lodged such objection with the Employment Relations Authority. Smith City argued that the meetings were not considered work time and therefore the minimum wage did not apply.
Initially, the Employment Relations Authority ruled in favour of Smith City. However, upon the Labour Inspectorate’s appeal to the Employment Court, the Court ruled in their favour and stated that the meetings were considered work time and so Employees must be paid accordingly. The Court also stated that Smith City could not use commissions or incentive based payments to make up for their non-compliance with the Wages Protections Act 1983.
Smith City has been ordered to audit the past six (6) years of wage records, including records of Employees who no longer work within the Company, determine what it owed, and then pay any arrears owing to all affected Employees.
So what does a determination like this mean for you as an Employer? To ensure that you are complying with the Wages Protection Act, pay for your Employees’ attendance at all staff meetings whether they occur inside or out of normal working hours.
If you request an Employee’s attendance at a meeting, or that they show up 10 – 15 minutes before their scheduled start time, your Employee must be paid for this time. If such an activity is considered to be integral to the Employee’s role, and there is an expectation to attend the activity, then this is work and Employees should be paid for it as Employers should not pass the cost of doing business onto their Employees says Labour Inspectorate Regional Manager, Loua Ward.
If you do not wish to pay additional wages to your Employees for their attendance at a particular activity, such as pre-work meetings, then you should be scheduling such meetings during normal working hours to avoid paying additional costs.
If you have any questions about anything in this article, or wish to seek advice in respect of your businesses compliance with the Wages Protection Act, feel free to give one of the team at Russell Drake Consulting a call. We would be more than happy to help – 07 838 0018.
Have you varied your Employee’s Terms and Conditions of employment lately?
Often Employers are accused of ‘unilaterally’ changing an Employee’s Terms and Conditions of Employment without the Employee’s consent.
The Employment Relations Act 2000 is established on the principles of Good Faith whereby the parties to the employment relationship must not seek to mislead or deceive each other, or do anything that has the potential to mislead or deceive. Therefore, in the case of the Employee’s Terms and Conditions of employment, which should be recorded in writing (although there may be verbal understandings or implied conditions that also need to be considered), any change to the status quo must be through the mutual agreement of the parties.
Obviously where a substantial change to an Employee’s Terms and Conditions is to occur, this would be recorded within a new employment agreement being signed by the parties. However, there are a number of occasions when change to an Employee’s Terms and Conditions may be required. This may include: a remuneration increase; a change to the Employee’s hours of work; or a change to an Employee’s role duties and responsibilities. In such case, change should not occur unless this is with the Employee’s prior consent (ideally their consent would be recorded in writing).
A recent Employment Relations Authority case Anderson v Blue Star Taxis reinforced the obligations to ensure that any variation recorded in writing and agreed between the parties, prior to any changes being implemented. Blue Star wished to change the hours of work of Anderson and discussed this with her within a meeting. Although discussed verbally, no agreement was recorded in writing, however Blue Star formed the belief that the change had been verbally agreed. Anderson disputed that she had agreed to a change of hours and reinforced her belief that the hours of work clause in her employment agreement was still applicable. Although Anderson offered some compromise, this was not accepted by Blue Star who continued to state their belief that Anderson had verbally agreed to the variation, and as such advised her of the date her new hours were to take effect.
In reviewing the process engaged by Blue Star, the Authority noted that a ‘proper’ consultation should have occurred including providing a written outline of the proposed changes. Anderson should have been given the opportunity to consider this outline, seek advice, and then discuss this further with the Employer. The Authority concluded that Blue Star’s actions were unfair and ‘did not meet the necessary standard’ and that Blue Star had failed to have a written record of the variation as required under Anderson’s employment agreement – which reinforced that there was no new agreement in place.
The Authority determined that Blue Star had breached Anderson’s employment agreement and caused her to suffer an unjustified disadvantage in her employment. Anderson was awarded $15,000.00 in compensation, and Blue Star were ordered to uphold Anderson’s original hours of work provisions unless agreed otherwise in writing.
This case reinforces the importance of ensuring that any variation to an Employee’s Terms and Conditions is only made ‘with the Employee’s consent’ regardless of what that change might be.
For assistance in implementing or documenting any variation process please feel free to give us a call.
Case Study: Claiming Back Employee Overpayments
It has long been an issue for Employers who have inadvertently made an overpayment to seek recovery of this – a recent ERA Determination however reinforces the Employer’s right to seek such recovery, and the costs associated with seeking repayment.
Many employment agreements contain standardised wording to allow an Employer to deduct monies reasonably believed to be owed to the Employer at the conclusion of the Employee’s employment. In such case the Employer may do this after consultation with the Employee when calculating the final pay.
However, two situations may arise where it becomes more problematic for an Employer to seek recovery of wage payments where an overpayment has been made in error.
Section 6 of the Wages Protection Act 1983 allows an Employer who has inadvertently made an overpayment to the Employee to seek full recovery, without the Employee’s consent, provided that the Employee is advised of the overpayment error on or before the next day on which the Employee is due to be paid, and the payment is then recovered not later than two (2) months after the date that this notice was provided. No additional consent is required in such circumstances since the deduction is in accordance with the provisions of the Act, however the principles of Good Faith would dictate that any recovery is made in a manner that does not cause undue hardship to the Employee through the making of the repayment i.e. regular instalments payments rather than one lump sum that may create a financial disadvantage for the Employee on any particular week.
The issue however becomes increasingly harder when the overpayment occurs in the final pay, or after the final date of the Employee’s employment.
In Higgins Coatings v Waters, due to a payroll error, Mr Water’s continued to receive his full salary payment for the two-month period after his final day of employment. Despite numerous attempts to contact Mr Waters about the overpayment he failed to respond to the Employer. Higgin’s was therefore left with no option but to file a claim in The Employment Relations Authority seeking an order requiring Mr Water’s to repay the money. Mr Water’s failed to attend the Authority Hearing and as such the Authority issued an order requiring him to repay the full $8,596 within 28 days, adding a further $2,250 to the outstanding debt to compensate the Employer for costs associated with attending the ERA Hearing. This 25% uplift in total costs to Mr Water’s demonstrates that an early agreement to repay money that he was not entitled to, even if he had agreed to enter a time-based repayment plan, would have been more beneficial for him rather than putting his head in the sand and hoping the Employer’s claim went away.
Based on this case, and the provisions of Section 6 of the Wages Protection Act 1983, Employer’s should not be afraid of pursuing Employees who have been overpaid and who show a reluctance to rectify the problem on a voluntary basis.
Russell Drake Consulting Ltd represented Higgins Coatings in the ERA with respect to the above matter.
EMA - Employment Relations Conference | 7 - 8 June 2018
On behalf of the EMA we would like to give you the opportunity to attend the following EMA event:
Employment Relations Act 2000 and its Amendments
Know your legal obligations to your Employees.
This introductory to intermediate one-day workshop is designed for people new to HR as well as managers, HR advisors and business partners in need of a refresher. Certain employer obligations are essential under the Act and this workshop provides the working knowledge you need.
- An overview of employer obligations under the Act emphasising the principles of good faith in employment relationships
- Review of amendments to the Act from 2004 to 2016
- The correct consultation process for personal grievances and dispute
- Differing legal obligations for fixed term agreements and independent contractors.
What you’ll learn:
Arguably the cornerstone of NZ employment law, several amendments from 2004 to 2016 have added to the complexity of the Employment Relations Act 2000. This popular one-day workshop provides employers and HR professionals with an invaluable overview of this lengthy and complex legislation. It will help you ensure compliance across employment agreements and workplace policies.
When: Tuesday, 12 June 2018 - From 9:00am to 4:00pm
Where: EMA Waikato Office, 103 Tristram Street, Hamilton
Cost: NZ$ 790.00 + GST (EMA Members)
NZ$ 790.00 + GST (Non-Members at Member rates until 30 June 2018)
Promotion: Book and attend 2 courses by 30 June 2018 and have one free to use by 31 December 2018.
If you would like to attend, please confirm your attendance by emailing us at firstname.lastname@example.org
ERA 2000 Course | 12 June 2018 | Hamilton
The storm of employment law changes is looming and will hit business at the negotiation table this winter. How employers strike the deal and avoid potential action will need some serious work.
At the core, the proposed new legislation focuses on restoring greater protections to workers and strengthening the role of collective bargaining in workplaces across New Zealand.
Those changes threaten resetting minimum standards, limiting the use of the 90-day trial and attaching a secondary employer to a personal grievance (PG).
The programme will cover all the biggest employment law issues of 2018 including:
- Triangular relationships and mitigating secondary employer personal grievance (PG) mechanisms,
- Transparency – minimum wage vs living wage to remuneration structures and progression rates,
- Cash vs non-cash requests – deal breakers for a forward-looking NZ,
- 2019 and beyond: Breaking holiday pay into one calculation,
- Case study: Air New Zealand’s workplace and union partnership – the future of ER,
- Pre-bargaining – how to leverage the negotiations before you get in the room,
- Case study: Ports of Auckland – industry facing change and technology induced restructures,
- Critical timelines for opting out of collective agreements, and
- There’s an opportunity to ask questions directly to MBIE and the NZCTU.
A full programme is available to view at http://www.emaevents.co.nz/erchanges/
When: Day 1 Thursday, 7 June 2018 - From 9:00am to 4:30pm
Day 2 Friday, 8 June 2018 - From 9:00 am to 12:30pm
Where: EMA Business HUB, 145 Khyber Pass Road, Grafton, Auckland
Cost: NZ$ 898.00 + GST (EMA Members)
NZ$ 1179.00 + GST (Non-Members)
If you would like to attend, please confirm your attendance by emailing us at email@example.com
EMA Winter 2018 Waikato-BoP Member Briefing
The aim of these Briefings is to give you a glimpse into the possible changes for New Zealand's business climate, and the advocacy work we have been doing on your behalf.
In this round of Briefings, we will be covering the following:
- Latest personal grievance statistics from the Employment Relations Authority and Employment Court,
- Liability for unpaid work time – the effect of the Smiths City case,
- Probationary Periods – the new reality for many employers currently using the 90-day trial,
- Important Employment Relations and Health and Safety case updates
- Economic Update including international and national influences such as the Budget 2018,
- Employment Relations Bill progress, impacts and what it signals for the future for employers,
- The impact of artificial intelligence, robotics and the future of work.
- Our Briefings are a complimentary member event. All are welcome.
When: Monday, 16 July 2018 - From 9:30am to 11:00am
Where: Thames War Memorial Civic Centre, 200 Mary Street, THAMES
When: Thursday, 19 July 2018 - From 9:30am to 11:00am
Where: FMG Stadium, Bronze Lounge (Level 3), Gate 5, Seddon Road, HAMILTON
Your registration details