113 – workplace law newsletter

In this edition:

Authority looks at when an Employer can “Fairly Cry Halt”

In Gillan v Amcor Flexibles (New Zealand) Ltd [2017] NZERA Christchurch 186, Mr Gillan, who had been employed by Amcor Flexibles (New Zealand) Ltd (Amcor) for 20 years as a senior printer, claimed he was unjustifiably dismissed from his employment with Amcor.

In June 2015, Mr Gillan experienced a seizure while at work. This seizure was the result of a medical condition that he had since birth. As his job involved working with large and dangerous machinery, Amcor engaged medical professionals to undertake assessments of the health and safety risks following Mr Gillan’s seizure. They received a series of recommendations stating that although there would need to be some adjustments to his working conditions and shift durations, the safety risks for his condition were minor. Mr Gillan therefore continued to work subject to these recommendations. In October 2015, he experienced another, less severe, complex partial seizure where there was no convulsion or loss of consciousness, but severe inflammatory sensations. In January 2016, Mr Gillan’s neurologist suggested a plan for changing his medications.

However, in February 2016, Mr Gillan was advised that if Amcor was not satisfied that he would be able to make a return to the full duties of his role within a reasonable time; his employment may be terminated on the grounds of medical incapacity. He was subsequently advised in March that his employment was to be terminated.

The main issue put before the Employment Relations Authority (Authority) was whether Amcor’s decision to dismiss Mr Gillan was substantially and procedurally justified.

Did Amcor have an obligation to hold Mr Gillan’s job open?

The Authority acknowledged Amcor’s concerns that Mr Gillan was only able to undertake certain types of work and that returning to the full duties of his role may be in breach of its health and safety obligations. It was uncertain as to whether the change in medication could effect some change, nor was it clear how much time this would require.

It is well established that an employer requires certainty, and is not bound to hold a job open for an employee who is unwell or prevented from carrying duties for an indefinite period and there can come a point at which an employer can fairly cry halt.

It was held that whether there was substantive justification will depend mainly on whether there was procedural fairness.

Was the dismissal fair and reasonable in the circumstances?

This turns on whether there was a fair and reasonable enquiry into whether Mr Gillan could return to his duties or be otherwise satisfactorily accommodated if necessary with modifications to his work tasks or environment.

Amcor claimed that the dismissal was not a knee jerk reaction following the seizure, but was a careful consideration in good faith over eight months with the engagement of medical professionals for neurological assessments that were paid for by the company.

Although the Authority acknowledged that Amcor had engaged medical professionals at their own cost, they found that further enquiries should have been made before “crying halt” to a relationship of 20 years, not only because Mr Gillan was a long serving employee, but also because of the nature of the medical information that was provided.

No significant discussions were undertaken regarding the recommendations of the doctor to modify and adjust Mr Gillan’s shifts and roles and the extent to which certain tasks that Mr Gillan was unable to perform could be undertaken by others. Instead, the evidence suggests that Amcor was holding a pre-determined view that dismissal was the only option because of the risk associated with Mr Gillan’s seizures, rather than considering and discussing whether there could be some accommodation for him in the meantime and into the future to address concerns.

The Authority held that Amcor’s termination of Mr Gillan’s employment was premature and that the lack of enquiry and discussion on whether there could be an accommodation of Mr Gillan and his condition, objectively assessed, was not fair or reasonable in the circumstances.

Mr Gillan was granted payment for lost wages for a period of 13 weeks in the sum of $24,199.11 and hurt and humiliation compensation of $20,000.00.


Tis the Season to…Pay your Employees Correctly

The silly season is almost upon us, which equates to annual leave and public holidays for most employees. In the lead up to Christmas, the Ministry of Business, Innovation and Employment (MBIE) Labour Inspectorate has been proactively targeting businesses and stepping up investigations into compliance with minimum employment standards, with significant consequences for those failing to comply with their obligations.

Labour Inspector investigations continue to uncover widespread employment breaches and employers failing to provide minimum entitlements to employees, including complying with requirements under the Holidays Act 2003 and the Minimum Wage Act 1983. So far the Labour Inspectorate appears to have been targeting the hospitality and agriculture sectors. These industries typically involve low wages and long hours, particularly in peak seasons, such as the one that is upon us. Failing to pay minimum wage to salaried employers appears to be a common issue for businesses within these industries, while payroll and Holidays Act compliance tends to be an issue for a number of employers.

We suggest all businesses ensure its payroll system is ready for the holiday period. It is worth noting that the Authority has made clear that it is the primary responsibility of the employer to ensure its employees are paid correctly in accordance with legislation, as opposed to pointing the finger at the accountants who may undertake the work. In particular, an employer must have basic knowledge of its financial obligations to its employees as well as obligations to IRD, in terms of PAYE.


90 Day Trial Periods – Authority pedantic about correct use

We now have a further case which highlights the Authority’s strict interpretation of section 67A and 67B of the Employment Relations Act 2000 regarding trial periods. In Pelabon v ZUMO Retail Nelson Ltd [2017] NZERA Wellington, the Authority found ZUMO’s failure to expressly state the beginning of the trial period in the employment agreement meant the employee was entitled to bring a personal grievance concerning his dismissal to the Authority for investigation and determination.

We suggest that all employers moving forward ensure employment agreements expressly state the commencement of the trial period in the agreement, even if it obvious that it almost always begins on the first day of employment. Keeping in mind that we may, however, see the end of 90 day trial periods all together under the Labour led government. A controversial part of Labour’s policies included replacing the current 90 day trial periods with a “fair trial period” that provides protections against unjustified dismissal and a supposedly simple, fair and fast referee service. The new fair trial periods would require employers to provide reasons for dismissal and provide employees with recourse for unjustified dismissal during the trial period. Employment disputes relating to trial periods would be heard by a referee service, without lawyers present, and referees would have powers to make final, binding decisions, including reinstatement and award damages. There has, however, been no discussion to date about whether these changes are imminent.


Third Prosecution under the Health and Safety at Work Act 2015

A South Canterbury cropping company has been fined $100,000.00 after one of its workers lost two fingers when his hand was dragged into a grain auger. Fairlie business PG & SM Callaghan Limited was fined in the Timaru District Court this month for failing to ensure the health and safety of casual worker Graham John McCabe.

Judge Joanna Maze stated that the enactment of the new health and safety legislation should have been a prompt to “literally everyone engaged in employing others to review and check the process for identifying, establishing and monitoring compliance.” She said that such was “plainly expected following the passage of the new act.”

Defence counsel Scott Wilson said the Callaghan family “deeply and sincerely regrets this incident.” Wilson claimed that the Callaghan family had tried as best they could to remedy the situation. An example of that was the $54,000.00 in reparations the Callaghan’s had paid to McCabe in the months before the sentencing. In court, McCabe stated that since the accident he had gone back to work for the Callaghan’s, and that that they have no ill feelings toward each other.

A WorkSafe representative said that it was unfortunate that some overseas suppliers of machinery and equipment do not meet New Zealand’s safety standards. He said that buyers of new or second-hand equipment need to be aware of their obligations to create a safe working environment, regardless of how the equipment arrives with them.


Immigration

Immigration New Zealand Office Restructure and Closures

Immigration New Zealand (INZ) has formulated the view that the standardisation of visa processes in recent years, supported by new technology platforms, has provided them with the confidence to move to a product model that will better serve the needs of customers in a digital world.

INZ are therefore restructuring visa processing, both by assigning specialised offices for processing visas, and closing a number of current offices offshore over the next 18 months.

The visa specialisation and applicable branches are as follows:

  • Business Visas: Manukau, Porirua, Christchurch
  • Education Visas: Mumbai, Palmerston North, Beijing
  • Tourist Visas: Beijing, Porirua
  • Community Visas: Hamilton, Porirua
  • Specialist Visas: Manukau, Porirua

In relation to offshore branch closures, it is understood that by June 2019 INZ will have ceased processing activities in Dubai, Hong Kong, Pretoria, Ho Chi Minh, Moscow, Jakarta, Bangkok, Shanghai, Washington DC, New Delhi and Manila.

It has also been proposed to cease processing in London. However, this is yet to be confirmed. A decision on the processing future for London will be made this month once the staff consultation period required by UK law has been complied with.  But, we expect this is merely a formality and the announcement of the closure of that branch will be made at the end of that consultation period too.

It is proposed that the remaining two major offshore processing centres will be in Mumbai (Education Visas) and Beijing (Tourist Visas [including Chinese Education Visas]), the three Pacific offices in Suva, Apia and Nuku’alofa will also be retained, and Pretoria/Dubai will retain risk and verification capability only.

INZ released the following table to outline the timing and sequencing of change across the INZ global network.

Date

Location

Change

 March 2018 Hong Kong Office closed
March 2018 Dubai Processing withdrawn, risk and verification retained
April 2018 Pretoria Processing withdrawn, risk and verification retained
May 2018 Ho Chi Minh Office closed
June 2018 Moscow Office closed
July 2018 Jakarta, Auckland Central Office closed
September 2018 Bangkok Processing withdrawn, risk and verification retained
October 2018 Shanghai Office closed
November 2018 Washington DC Processing withdrawn, risk and verification retained
December 2018 London Proposal subject to confirmation December 2017: Processing withdrawn, risk and verification retained
March 2019 New Delhi Office closed
June 2019 Manila Processing withdrawn, risk and verification retained
June 2019 Henderson Office closed

We are encouraged by INZ’s proposed model and whilst there are likely to be some “teething issues” initially, we do expect that the proposed changes will ultimately lead to a more consistent, efficient, accurate and coherent system of migration where these underlying principles seem to have been lost by some branches and/or the individuals processing visas in them for many years.

The loss however of the London Branch and processing in Washington DC will be quite a big blow for corporate visa providers such as our firm (and applicants alike), who have relied on the efficient and “in time zone” processing of urgent visa applications from time to time, by a team of highly skilled and engaged service providers.

For further information or advice regarding immigration law contact the Workplace Law team at Lane Neave by calling 0800 802 800, or visit our dedicated immigration law website at www.laneneaveimmigration.co.nz

The Workplace Law Team wishes everyone a Merry Christmas
We look forward to working with you in the New Year

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, Kathryn McKinney, Siobhan Rastrick,Gwen Drewitt; Hannah Martin; 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
ACC: Andrew Shaw
Health and Safety: Andrew ShawFiona 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.