108 – Workplace Law Newsletter

In this edition:

Mental Health Care Workers lodge Pay Equity Claim

Following the historic $2 billion dollar Care and Support Workers (Pay Equity) Settlement (Settlement) to address pay inequity for aged care and support workers, a claim has now been lodged on behalf of mental health care and support workers.

The Settlement was a result of the successful claim in the case of Terranova Homes and Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2014] NZCA 516 (CA).  Here it was successfully argued that due to the fact that caregivers in the aged and disability care sector are predominantly female they are paid less than would be paid to a male with the same skill set in a different occupation.

The Settlement, announced by the Government in April 2017, will come into force on 1 July 2017.  This will result in wage increases for 55,000 workers in the aged and disability residential care and home and community support services across New Zealand.

The Settlement did not however address pay equity in the mental health care sector.  Consequently, two unions, the Public Services Association and E Tū have now lodged an equal pay claim with the Employment Relations Authority (Authority) on behalf of mental health care and support workers in New Zealand.

The basis of this claim was that the work carried out by mental health workers is similar to the work of those covered by the Settlement and there is no justification for excluding them from the Settlement. The claim is likely to affect 4000 – 5000 mental health support workers and could cost the Government $30 – $40 million if successful.

E Tū has asked the Authority to hear the claim urgently.  There is concern that the 1 July 2017 pay increases for other support workers will cause a crisis for the mental health care workforce as support workers will be influenced to leave the mental health sector and gain employment with other disability providers covered by the Settlement.

The claim lodged in respect of mental health support workers is significant.  Although the Settlement was not intended to set a precedent for other occupational groups, it has clearly had flow on effects for other workers in female dominated industries.

New Toolkit to Improve Health and Safety

ACC and Workplace Relations and Safety Minister Michael Woodhouse have announced a new Workplace Health and Safety Performance Improvement Toolkit (Toolkit) to provide businesses with advice and guidance to improve health and safety performance.

The Toolkit delivers a framework that defines what good health and safety looks like and encourages active involvement and engagement throughout the workplace, from workers and operational managers through to senior leaders and boardsBusinesses will be able to choose how the Toolkit best caters to their needs with access to resources on the WorkSafe website, an onsite assessment delivered by independent accredited assessors or a free online self-assessment” Mr Woodhouse stated.

The Toolkit is the culmination of the Safety Star Rating Scheme work undertaken by WorkSafe, ACC and the Ministry of Business, Innovation and Employment.  It will be available to employers from September 2017. 

Personal Liability of Officers

Previously, the Employment Relations Act 2000 (Act) provided very limited provisions permitting actions to be taken against a director or other individuals (now repealed section 234 of the Act).   Amendments to the Act in 2016 introduced accessorial liability provisions to hold persons other than the employer to account if they are found to be knowingly involved in a breach of employment standards.

Prior to this amendment, one factor contributing to a low level of compliance with employment standards was the ability for directors and other individuals to avoid accountability by winding up a company to avoid paying arrears when they are found to have breached employment standards.

Now, the Labour Inspectorate of the Ministry of Business, Innovation and Employment (MBIE), or an employee, can pursue a director personally in the Employment Relations Authority or Employment Court even if the corporate entity ceases to exist.

A person must be an “officer” of the entity to be involved in the breach.  However, an “officer” catches a wide range of persons, including company directors, partners, general partners and any other person occupying a position in the entity if they are able to exercise significant influence over the management or administration of the entity.

A person is “involved in a breach” of employment standards if they have aided, abetted, counselled, procured, induced, been knowingly concerned in, or party to, or conspired with others to effect the breach.

Wages or other money payable to the employee may be recovered from a person who is not the employee’s employer if there has been a default in payment, the default is due to a breach of employment standards and the person is a person “involved in the breach”.  In addition, persons involved in a breach of employment standards can be liable for penalties.

The necessary state of mind includes knowledge, intention, opinion, belief or purpose of the person and the reasons for that intention, opinion, belief or purpose.

The new amendments introduce defences for breach of minimum entitlement provisions as well. There would be no liability if the breach was due to reasonable reliance on information supplied by another person (not including a director, employee or agent of that person), or if the breach was due to the act or default of another person or an accident or other cause beyond the persons control, and the person took reasonable precautions and due diligence to avoid the breach.  There is, however, no defence in relation to wages or money owed as a result of a breach of minimum entitlements.


Published List of Non-Compliant Employers

In one of our resent articles, we set out our views regarding the intention of Immigration New Zealand to implement a temporary ban from securing visas (including the extension of visas) for migrant staff for employers who are determined to have breached New Zealand employment law –

Immigration – Enforcing Minimum Employment Standards

We noted that the list of non-compliant employers would be made publically available, and this has now taken place, and will be updated by INZ weekly.

The Published Stand Down List (List), which sets out the employer’s stand down period, and relevant legislation that has been breached can be found by searching for “Published Stand Down List” on Employment New Zealand’s website.

It is significant that although these measures have only been in place since 1 April 2017, the current List (dated 28 June 2017) already includes a total of 25 employers.  It comprises of some recognisably large companies, which we expect are reliant on migrant staff and would be very much impacted by this new regime.

It is also important to note that the stand down period for all (current) published employers is six months.  This is the shortest stand down period that will be issued under the new policy, and is triggered by an Infringement Notice issued by the Labour Inspectorate, or non-pecuniary penalties ($1,000 or less) from the Employment Relations Authority or the Employment Court.  It will be interesting to monitor the List over the upcoming months to see how many employers are caught by this new policy, and the range of stand-down periods imposed.

This policy is a real threat to all companies who employ migrant staff, and must be heeded, particularly those who have a large portion of their workforce holding temporary work visas.  We recommend that employers proactively seek legal advice to review their internal systems and processes for managing immigration and employment compliance before instances of non-compliance arise from identifiable pre-existing issues; and in the event issues are raised that could lead to negative employment findings by the Labour Inspectorate,  that advice is sought at an early stage.

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, Julia Strickett, Rita Worner, 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.