18 Dec 2007
NZ Employment Bulletin
Welcome to the final edition of the NZ Employment Bulletin for 2007. The Workplace Relations and Employment team at DLA Phillips Fox would like to wish you the very best for the coming festive season and a happy new year.
This publication includes:
To download a PDF of this publication, please click here.
Employment Relations (Flexible Working Arrangements) Amendment Act 2007
The Employment Relations (Flexible Working Arrangements) Amendment Act was passed last month. The new provisions come into force on 1 July 2008.
The Amendment Act grants employees who care for others the statutory right to request flexible working hours if they have 'the care of any person'. It provides a framework for employees to negotiate with their employers about working arrangements. The Act is much wider than the initial Bill which was to provide a regime for flexible working arrangements for parents of young or disabled children only.
The Bill creates a positive onus on employers to try to accommodate requests for flexible working hours or to have a good business reason for why a request from an eligible employee cannot be accommodated.
Employee's right to make a request
An employee may make a request for a flexible working arrangement if they have the 'care of any person' and have been employed for the previous six months. 'Working arrangement' is defined widely, so a request can be about the place of work for example working from home or at the employer's place of work as well as hours and days of work.
The request must be in writing and state the variation to the working arrangements requested by the employee. The request must also explain, in the employee's view, how the variation will enable the employee to provide better care for the person concerned.
The employee is not entitled to make another request earlier than 12 months after the previous request was made.
Duties of the employer
Employers now have a duty to seriously consider requests from caregivers for flexible working hours. The employer must notify the employee of their decision regarding a request as soon as possible but within three months of the request.
An employer may refuse a request on the following grounds:
- The employee is not eligible to make a request (that is the employee does not have the care of any person and/or has not been employed for six months or more.
- Inability to reorganise work among existing staff.
- Inability to recruit additional staff.
- Detrimental impact on quality.
- Detrimental impact on performance.
- Insufficiency of work during the periods the employee proposes to work.
- Planned structural changes.
- Burden of additional costs.
- Detrimental effect on ability to meet customer demand.
An employer must refuse a request if the request is from an employee who is bound by a collective agreement and the working arrangements proposed will be inconsistent with the agreement.
If business reasons are relied upon the employee must be told of the ground for refusal and be given an explanation of the reasons for that ground.
Disputes over an employer's decision to refuse the request
Employees who are not happy with the way a request has been dealt with can take the dispute to a labour inspector. If the dispute remains unresolved the next step is mediation. If mediation fails, then an employee can take the dispute to the Employment Relations Authority on limited grounds within 12 months after the refusal or if the employer has not dealt with the request within three months after the employer received the employee's request.
Remedies
If the Authority finds the employer has wrongly decided the employee is not eligible to make a request for flexible working hours, the employer will be ordered to comply with the requirement to deal with the request and make a decision to approve or refuse it in line with the Act.
However an employee cannot challenge his or her employer's refusal of a request on the basis of a business reason except to the extent that a labour inspector may look into the issues and assist the parties to resolve the matter and the dispute may be mediated. A penalty can be imposed by the Authority where an employer has failed to deal with the request, notify the employer of the decision and, the grounds and reasons for it where the request is declined for a business reason. The maximum penalty is $2,000.
The Amendment Act is to be reviewed two years after its commencement.
The employment team at DLA Phillips Fox will continue to keep you updated on case law around this amendment.
For further information, please contact the authors:
Johanna Drayton, Senior Associate
Tel: +64 4 474 3216
johanna.drayton@dlaphillipsfox.com
Aleise White, Law Clerk
Te: +64 4 474 3228
aleise.white@dlaphillipsfox.com
KiwiSaver update
KiwiSaver Legislation has been amended under the Supplementary Order Paper issued on 6 December 2007 which amends the Taxation (Annual Rates, Business Taxation, KiwiSaver and Remedial Matters) Bill.
Briefly, the changes include:
- Complying superannuation scheme members can phase in their minimum contributions (being 2% on 1 April 2008 and contributing 4% by 1 April 2011) just as KiwiSaver scheme contributors can.
- A complying superannuation fund: must prevent a person over the NZ superannuation qualification age from joining, and must not have unreasonable fees and the Government Actuary is to be informed of any fee changes to monitor their reasonableness.
- Further, the funds are to be noted on a sub register of the register of KiwiSaver schemes.
- The penalty in the KiwiSaver Act imposed on employers in respect of failing to make deductions or incorrectly making deductions now applies to complying superannuation funds where employers fail to make compulsory employer contributions, until 1 April 2009. After that date, IRD will impose penalties on unpaid compulsory employer contributions and employee contributions in relation to complying superannuation funds under the Taxation Administration Act 1994.
- A transitional period for compliance being up to February 2008 is currently provided for in the legislation.
As can be seen, many of the amendments are to ensure consistency between complying superannuation funds and KiwiSaver schemes.
We will provide a further update on KiwiSaver issues next year.
For further information, please contact the author:
Johanna Drayton, Senior Associate
Tel: +64 4 474 3216
johanna.drayton@dlaphillipsfox.com
Steadily increasing Health and Safety penalties
As you know, awards made against employers for breaches of the Health and Safety in Employment Act 1992 (the Act) are continuing to steadily increase. The Courts shifting attitude to imposing more hefty awards against employers in breach of the Act, is both a change in perspective adopted by the Courts and a clearly expressed intention of Parliament.
The introduction of the Health and Safety in Employment Amendment Act 2002, has increased the maximum penalty Courts can impose under the Act from $50,000 to $250,000. In certain circumstances the Court also has the ability to award penalties of up to $500,000, although an award of this nature has not been made in relation to Health and Safety prosecutions.
The last year is illustrative of the upward trend in awards. For example:
- Sealord Group Limited was convicted for breaches under the Act, where an employee died after being trapped in a cooking machine on board the ship. On 24 July 2005 Sealord was ordered to pay $120,000 in reparation in addition to a fine of $5,000 on the first charge and reparation of $75,000 and a fine of $5,000 on the second charge.
- Carter Holt Harvey was convicted of Health and Safety breaches when an employee died after falling through a PVC roof and onto a concrete floor suffering fatal injuries. In January 2006, the employer was ordered to pay reparation of $100,000 and a fine of $30,000.
- Fletcher Concrete and Infrastructure Limited was convicted of breaches under the Act when the truck driven by an employee fell off the quarry's cliff face, inflicting serious injuries. On 10 August 2007 the employer was ordered to pay a total of $22,000 in sanctions.
- Fletcher Concrete and Infrastructure trading as Stresscrete was convicted of Health and Safety breaches under the Act when an employee was killed on-site. On 29 July 2007, the company was ordered to pay a total of $225,000 in sanctions.
The increase in reparation awards, means employers are increasingly having to pay out more money directly to employees injured in the workplace. This is essentially a 'back-door' way of awarding damages for personal injury suffered in the workplace, which is otherwise prohibited by ACC legislation.
The Courts trend of imposing much higher penalties than previously, suggests employers need to be more stringent in ensuring all steps are taken to identify potential hazards and action is taken to eliminate, isolate or at the very least minimize them. The new year may be a good time for employers to check and update their Health and Safety policies and procedures. We are available to assist employers in doing this and to help provide practical ways for employers to minimize their exposure under the Act.
For further information, please contact the author:
Fran Hesp, Lawyer
Tel: +64 4 474 3268
fran.hesp@dlaphillipsfox.com