Do as the locals do

We often get enquiries from Australian clients, wanting to quickly convert their Australian employment agreement templates into New Zealand agreements, or push back on a New Zealand-based employee who has raised an unjustifiable dismissal claim. Given we are neighbours with legal systems rooted in the same history and commonalities in legislation (like our Health and Safety Acts), the expectation is that our employment law will look, and play out, much the same.

But that isn’t the case. The Employment Relations Act 2000 (ERA) places relatively stringent obligations upon employers who employ employees in New Zealand. Failure to abide by these statutory rules can expose employers to quite serious legal risk and result in liability for compensation, lost wages and more.

Most of the time, these mistakes aren’t malicious – they generally derive from genuine and/or positive intentions. However, the Employment Relations Authority does not consider intent to be relevant when assessing whether the strict letter of the law has been followed. We summarise some of the frequently seen stumbling blocks that can cause a fair bit of trouble for both employers and employees alike:

  1. Not telling the full story

Many employers leave out aspects of their criticism, or avoid hard conversations, to spare their employee’s feelings – and are astonished at the seemingly counterintuitive expectation that all the nitty gritty details be shared. It may seem harsh or unnecessary, but this is to ensure the employee is fully informed about any/all employment issues, so that the employee has the opportunity to properly speak to these issues, and a chance to address/repair them. Transparency is part of what it takes to be considered a fair and reasonable employer, and it’s expected within the overarching duty of good faith outlined in the ERA.

  1. “Do you want to go for a quick chat?”

Some employers prefer to have an informal conversation without launching into a proper process, for fear of intimidating an employee or coming across overbearing – particularly when the issue is new or seems minor. While the sentiment is completely understandable, this does lead to issues if the employee’s behaviour, conduct or performance worsens over time. Once a past incident has been addressed, albeit informally, an employer cannot then ‘double dip’ and rely on it again to undertake a formal process against the employee. Doing so can give the impression that the employer is not communicating reasonably: the goal posts are effectively shifting, making it impossible for the employee to understand what the employer truly expects from them.

  1. Forcing circles into squares

To increase efficiency or consistency, employers are sometimes tempted to take the ‘she’ll be right’ attitude and apply the same paperwork or expectations in a broad-brush way to employees located all over the world. Not only does this risk employment agreements being rendered mostly ineffective or void in New Zealand, it can result in employers falling foul of the ERA’s requirements for specific matters to be referenced within the documentation, whether that be employment agreements, policies or letters in relation to an employee’s employment. It is always best to do as the locals do.

As demonstrated above, despite the two jurisdictions’ surface-level similarities, our differences are sufficient to give rise to serious legal risk. We strongly recommend that any employers based outside of New Zealand seek New Zealand-based employment law advice to ensure their business, and their employees, are protected and legally compliant.

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