Workplace Law Newsletter: August

In this edition:

MBIE releases Holidays Act compliance document

The Ministry of Business, Innovation and Employment (MBIE) has published new guidance intended to help employers, employees and payroll providers in applying aspects of the Holidays Act 2003 (the Act), as part of its work to address problems related to non-compliance.

Click here for the Guide 

New regulations for hazardous substances

New regulations aimed at reducing the number of workplace deaths and injuries caused by hazardous substances have been released and will come into force on 1 December 2017.

The Health and Safety at Work Act (Hazardous Substances) Regulations 2017 (Regulations) are intended to simplify the regulatory landscape relating to hazardous substances. The rules for work-related use of hazardous substances will move from the Hazardous Substances and New Organisms Act 1996 to the Health and Safety at Work Act 2015 (HSWA). In addition, WorkSafe New Zealand will take over the responsibility for administering the rules from the Environmental Protection Agency.

The Regulations are targeted at reducing the immediate harm and long term illness caused by work-related use of hazardous substances. The Regulations will provide clear requirements for workplaces to ensure the safety of workers in environments where there are hazardous substances that have potential to be harmful.  Businesses working with hazardous substances are expected to know what the substances are, the risks they pose and how to manage the risks.

Around 150,000 New Zealand workplaces that manufacture, use, handle or store hazardous substances will be affected by the Regulations and will be required to review their hazardous substances management to ensure compliance.

Prior to December, WorkSafe is to provide guidance, information and tools to help organisations understand their obligations under the new Regulations.  

Labour Inspectorate hot on minimum entitlement breaches

Japanese fishing company fails to keep accurate records

A Japanese fishing company must pay $122,252 for breaching employment law while in New Zealand’s exclusive economic zone (EEZ), following a Labour Inspectorate investigation.

Ikeda Suisan Company Limited was penalised $40,000 by the Employment Relations Authority (ERA), having already paid arrears of $82,252 to the 16 Indonesians employed on board the Hoshin Maru 77. The Hoshin Maru 77 spent 50 days in New Zealand’s EEZ between 30 April and 23 June 2015, during which time they were visited by a Ministry of Primary Industries (MPI) observer.

The MPI observer saw the hours they had recorded the crew as working were significantly longer than what was being recorded by the six Japanese officers on board, concerns which they passed on to the Labour Inspectorate.  An investigation was launched by the Labour Inspectorate which found that during the 50 days the Hoshin Maru 77 was in New Zealand waters, 5,200 of the workers hours went unrecorded.

Kiwifruit industry under fire

A Labour Inspectorate operation targeting the kiwifruit industry in Bay of Plenty has found the majority of labour hire contractors have been breaching their obligations as employers.

Inspectors carried out audits on 62 labour contracting companies and interviewed 687 employees during the operation, which occurred over three months last year, ultimately uncovering 94 breaches of minimum employment standards.

The operation showed 53 per cent of employers were failing to meet all minimum employment standards, such as providing employment agreements and paying at least the minimum wage.

Employer unable to avoid obligations by calling employees “contractors”

Two car companies in Hamilton have been ordered to pay $65,000 in penalties by ERA, following a Labour Inspectorate investigation.

Direct Auto Importers (NZ) Ltd and Cheap Deals on Wheels Limited failed to pay minimum wage, correct holiday pay, provide employment agreements, or keep records of employment.

The sole director and shareholder of both businesses, Vishaal Sharma, claimed that the employees were contractors and denied he owed them their minimum entitlements – a claim thoroughly refuted by both the Inspectorate and the ERA.

The Labour Inspectorate made it clear that an employer cannot avoid their obligations by simply calling their employees ‘contractors’, and any attempts to do so will not be tolerated .

Direct Auto Importers (NZ) Ltd was penalised $50,000 for not paying their three employees’ holiday pay, providing written employment agreements, or keeping wage, time holiday or leave records, with a further $726 in arrears to be paid to two staff members for holiday pay owed and working on public holidays.

Cheap Deals on Wheels Ltd was penalised $15,000 for a similar set of breaches.

The ERA set aside $10,000 in penalties to be provided to three of the former employees of the businesses.

World TV co-founder Gary Chang unjustifiably dismissed, awarded $469,000 in compensation and commission in Chang v World TV Ltd [2017] NZERA Auckland 188

Gary Chang was an original founder of World TV, an Asian language channel established in 1998 in Auckland.  World TV grew into an Asian language network, amassing seven TV channels and two radio brands, with Mr Chang serving as Chief Operating Officer.

In late 2015 Mr Chang decided to sell his shares in the company and informed his co-owners.  The following April Mr Chang was called to a meeting and told he was removed as a World TV director and dismissed from the company.  In his termination letter, World TV cited his poor decisions, lack of leadership and behaviour that had caused damage to the interest of the firm.   The letter also said that because Mr Chang had indicated he wished to sell his shares, he was incompatible as a director and senior employee of World TV.

The ERA found that the main reason for Mr Chang’s dismissal was his desire to sell his shares.  The ERA noted that even if there were issues, they were performance ones, in which Mr Chang needed to be put through a proper process.  His dismissal was likened to an “ambush” as he was not invited to bring anyone to the meeting nor was he told what it was about in advance.

The ERA held that World TV’s actions were not what a fair and reasonable employer could have done in all the circumstances.  Mr Chang was awarded:

  • $30,000.00 gross as lost wages or salary;
  • $17,000.00 as compensation for humiliation, loss of dignity and injury to feelings under s 123(1)(c)(i) of the Employment Relations Act 2000 (Act);
  • $132,706.92 gross as loss of future benefits under s 123(1)(c)(ii) of the Act;
  • $289,231.35 gross as commission which Mr Chang was owed for the period of February 2014 to March 2016; and
  • A 5% bonus based on World TV’s before tax profit for the years ending 31 March 2015 and 31 March 2016.

When can a South Island Contribution Work Visa be granted as an exception to the rules?

There was a significant announcement this year by the Minister of Immigration with the introduction of the South Island Contribution Work Visa policy.  The introduction of this policy provides an avenue for migrant workers employed in the South Island to be granted work visas which would put them on a pathway to residence.   The intent of this policy is to provide relief to certain lower skilled migrant workers, who are not able to qualify for New Zealand residence under any of the existing residence policies, but have been living and working in the South Island for a significant period of time.

Migrant workers who have, amongst other things, undertaken full-time employment in the South Island as the holder of Essential Skills work visas from 22 May 2012 to 22 May 2017 can apply for a work visa under the new policy.  However, if they are not able to meet this requirement Immigration New Zealand (INZ) does have a discretion to issue a visa as an exception to the standard rules if they are considered to be “marginally short” of the requirement.  The issue however, if that this term has not been defined.

Lane Neave has been making enquiries to better understand what INZ may consider to be “marginally short”, and what factors it may take into consideration when deciding whether or not to exercise its discretion and grant a visa as an exception.

The information we have obtained indicates that where an applicant is short to meeting the requirements, INZ will consider whether an applicant has “exceptional circumstances” which support INZ exercising its discretion as to whether or not to grant the visa as an exception.

If any of your migrant workers are interested in applying for a visa under these Instructions but are aware that they do not meet the specific requirements, they may wish to seek professional advice about whether their situation may be one that INZ would consider as “marginally short”.  Lane Neave are already handling a significant number of these applications and would be pleased to provide an opinion regarding potential eligibility under the new policy.

Changes to Skilled Migrant Category Residence applications delayed

We also wish to bring to your attention a recent announcement regarding the upcoming changes to the Skilled Migrant Category (SMC).  INZ recently announced that the changes to the SMC which were due to be introduced on 14 August 2017 have been delayed and will now be implemented on 28 August this 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, Julia Hurren, 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, Ken Huang
ACC: Andrew Shaw
Health and Safety: Andrew Shaw, Julia HurrenFiona McMillan, Gwen Drewitt

Click here for other Employment Law or Immigration Law articles.

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Andrew Shaw
Fiona McMillan
Mark Williams
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