105 – Workplace Law Newsletter

In this edition:

Substance and Process – Two recent Cases where Employers didn’t get dismissal right

Waihepe v AFFCO New Zealand Limited [2017] NZERA Wellington 13

Mr Waihepe worked for AFFCO New Zealand Limited (AFFCO) at the Napier Tannery.  He was also the Union Site Secretary.  A new Site Agreement had just been implemented which was unclear on overtime requirements.  Mr Waihepe took the Site Agreement to mean that workers were only required to complete work for non-perishable goods on Saturdays, other than in exceptional cases.

On Saturday 13th August 2016 the Production Manager Mr Ward asked for perishable work to be done.  Mr Waihepe told staff to only do the non-perishable work and then go home.  When this happened, Mr Ward said to Mr Waihepe, “What the f*** are you doing? Get back on the sammer”, to which Mr Waihepe responded, “For f***’s sake Darren, what are you on about?”  On Wednesday Mr Waihepe was issued a letter inviting him to a disciplinary to face allegations of threatening and intimidating behaviour, refusing to follow instructions, leaving his work station without authority and breaching his duty of good faith and fidelity by telling other employees to cease production.  Mr Waihepe was ultimately dismissed for serious misconduct and raised a personal grievance for unjustified dismissal and sought reinstatement.

The Employment Relations Authority (Authority) considered whether AFFCO’s actions were what a fair and reasonable employer could have done in all the circumstances.  In terms of substance, the Authority found AFFCO had a culture of swearing onsite and therefore it was not unusual for it to occur.  In addition, witness statements said Mr Waihepe’s comments were not threatening.  The Authority found it was usual practice for employees to do non-perishable goods and go home.  In terms of process, the Authority found that AFFCO had refused to listen to Mr Waihepe’s explanations about overtime work, which were crucial to his defense, and that flew in the face of section 103A of the Employment Relations Act 2000.  Overall, AFCCO had fallen well short in terms of how they conducted the process.  Mr Waihepe was reinstated, awarded $6,000.00 hurt and humiliation and lost wages for the period between his dismissal and reinstatement.

Leech v Big Mal Limited [2016] NZERA Auckland 404

Mr Leech was a labourer for Big Mal Limited (Big Mal). Big Mal dismissed Me Leech on two grounds of serious misconduct.  The first ground was that Mr Leech had seriously damaged Big Mal’s reputation for allegedly carelessly spray painting a client’s site, resulting in damage.  Mr Leech denied even being present.   The second ground was for serious and repeated failure to follow reasonable instructions on 9 February 2016.

On the day in question, Mr Leech had been working on a site, and as he was in charge, he assigned three employees to do the job.  Mr Newland, his Supervisor, arrived onsite and commented “Is this all you have f***ing done?” repeatedly and refused to listen to Mr Leech’s explanations for assigning three people to do the job.

On 11 February 2016 Mr Leech was invited to a meeting without warning and without any allegations put to him.  Mr Smith, Big Mal’s Director, informed Mr Leech that a letter inviting him to a formal meeting was on its way to him.  Mr Leech did not receive this until 22 February 2016, after which he had received a pay slip addressed “final pay”.  Mr Leech was subsequently dismissed for serious misconduct.

The Authority held the dismissal lacked substance, in that it was not what a fair and reasonable employer could have done as Mr Leech’s actions were not so serious as to justify dismissal, and that Mr Leech was actually entitled to assign three people as he was in charge that day.  Regarding process, the Authority found Mr Leech had had no opportunity to be heard and no investigation was undertaken.  Mr Leech received lost wages of $7,087.50 and $10,000.00 for hurt and humiliation.

Current Bills before Parliament to keep on eye on

The Employment Relations (Allowing Higher Earners to Contract out of Personal Grievance Provisions) Amendment Bill

This Private Members Bill proposes to amend the Employment Relations Act 2000 to allow employees with an annual gross salary over $150,000.00 to contract out of the personal grievance provisions.  The reasoning behind the Bill is that higher paid employees are capable of organising their own affairs and they should be able to come to an agreement with their employer to contract out if they wish.  The Bill provides for strict requirements around making the agreement.  In addition to the above, by allowing higher earners to contract out, many see this as helping focus employment law provisions on those who need protection the most, and reduce the number of personal grievances clogging up the system.

The Bill was read for the first time on 22 March 2017 and referred to the Transport and Industrial Relations Committee.

Equal Pay Amendment Bill

This Private Members Bill proposes to amend the Equal Pay Act 1972 and the Employment Relations Act 2000 to remove discrimination in pay rates between men and women in the same jobs.  This Bill would require all employers to collect statistical information about how much men and women are paid, to make it easier to find out where there is discrimination.

The Bill was read for the first time on 23 March 2017.

Quick Tip on Parental Leave

A recent case in the Authority is a good example of how not to deal with an employee on parental leave.  In the case of Eder-Entwhistle v Sixteen Eleven Limited [[2017] NZERA Christchurch 14; 25/01/2017] an employee was reinstated after her employer told her there were no hours for her to come back at the end of her parental leave.

It is vital employers understand the basics of parental leave, especially the law around keeping an employee’s position open.  An employer’s obligations regarding the employee’s position will depend on how long they are on leave for.

  • Leave for 4 weeks or less – if the employee is taking parental leave for four weeks or less, the law assumes the employer is able to keep the job open, unless the employer can provide that the employee’s position has become redundant.
  • Leave for more than 4 weeks – if the employee is taking parental leave for more than 4 weeks, the law assumes the employer is able to keep the job open unless they can prove it is not reasonably practicable to get a temporary replacement as the employee holds a key position, or the position has become redundant.


Increases to retirement age: impact on residence eligibility

On 6 March 2017, the Government announced its intention to begin progressively raising the age of superannuation in 20 years’ time (from 1 July 2037) from 65 to 67.  Increased life expectancy, longer lasting health and sustainability of the superannuation system were cited as reasons for this policy.

Importantly however, on the subject of residents, the Government has also advised that in order to be able to claim superannuation benefits in the future, residents will be expected to have been resident in New Zealand for 20 years prior, rather then the current requirement of 10 years.

This is a clear warning signal for all prospective migrants that an adjustment to the maximum age for eligibility under the Skilled Migrant Category (SMC) (and other employment based work to residence policies) is coming.  It would not be fair or appropriate to have a group of residents contributing to a New Zealand superannuation scheme and not being able to receive that benefit when they reach retirement age.

The current maximum age for securing residence under the SMC is 55, meaning that currently, by the time successful applicants retire at 65, these individuals are eligible for their superannuation. Therefore, with a 20 year adjustment to eligibility, the maximum age to secure residence under the SMC and work to residency policies will be reduced to 45 (like Australia).

If a visa holder is entering the age bracket of 45+ (but less than 56) in the short to medium term, they may wish to look at securing residence sooner rather than later.  There has been no clear signal as to when this inevitable policy change will be made, but there is a current review of the SMC underway.

Recent Changes to the Essential Skills in Demand Lists

The Ministry of Business, Innovation and Employment (MBIE) has reviewed and made changes to the Long Term Skill Shortage List (LTSSL) and the Immediate Skill Shortage List (ISSL).

The annual review has seen particular skills added, removed or moved between the lists, depending on local labour market needs and the need to compete internationally for skilled workers.

Applicants for residence under the Skilled Migrant Category (SMC) should pay close attention to the LTSSL updates, which will apply to Expressions of Interest (EOI) already made. For those already in the SMC Pool, this will involve checking that they remain eligible for the points claimed in their EOI. Only those already selected from the Pool or holding an Invitation to Apply (ITA) prior to 27 February 2017, will be unaffected by the updates.

The following occupations have been removed from the LTSSL:

  • Registered Nurse (Aged Care) (note – moved to the ISSL list below)
  • Registered Nurse (Critical Care and Emergency)
  • Registered Nurse (Medical)
  • Registered Nurse (Perioperative)
  • Ship’s Engineer
  • Ship’s Master
  • Ship’s Officer

The occupations of Registered Nurse (Mental Health) and Upholsterer have been removed from the ISSL, although the following occupations have been added:

  • Bricklayer for Auckland/Upper North Island only
  • Cabler (Data and Telecommunications) for all regions
  • Composite Technician for all regions
  • Floor Finisher for Auckland/Upper North Island and Waikato/Bay of Plenty only
  • Registered Nurse (Aged Care)
  • Stonemason for Auckland/Upper North Island only
  • Telecommunications Cable Jointer for all regions
  • Telecommunications Technician (c)

Please note that the removal of occupations from these lists does not necessarily mean you may no longer to qualify for a work visa or residency visa based on that occupation.  Similarly, an occupation on this list does not automatically guarantee that a work or residency visa will be issued.  If a potential applicant is uncertain as to how or whether they are affect, it is best to seek advice at the outset.

Workplace Law Team

If you have any queries in respect of the above, or any other workplace law issues, please contact a member of Lane Neave’s Workplace Law Team:

Employment: Andrew Shaw, Fiona McMillan, Julia Hurren, Siobhan Rastrick, Gwen Drewitt; Holly Struckman; Anna Needham
Immigration: Mark Williams, Rachael Mason, Nicky Robertson, Hetish Lochan, Daniel Kruger, Lavinia Shanks, Winnie Chen, Caroline Edwards, Ken Huang, Laura Hamilton
ACC: Andrew Shaw
Health and Safety: Andrew Shaw, Julia HurrenFiona McMillan, Gwen Drewitt

Disclaimer: Our aim is to assist our clients to be proactive in ensuring statutory compliance and best risk management in the area of employment law. This publication is, however, necessarily brief and general in nature. You should therefore seek professional advice before taking any action in relation to the matters dealt with in this publication.