Subscribe to Newsletter
| Around the traps - April 09 |
 |
 |
 |
|
Reflections from Chris Rowe on dealing with employment and other problems. Chris Rowe, Director of Corporate Dynamics Ltd is a Warkworth New Zealand based Employment Relations Advisor and Mediator As I’m writing this in early April, it seems appropriate to wish you a happy new financial year! Tough times bring bizarre problems It seems from my current employment work that tough financial times bring out the worst in some people. Be especially careful with any disciplinary or redundancy discussions with employees. If my workload is any guide, financial uncertainty breeds personal grievances. Even when they are not genuine, and/or you win, it costs money to defend them. I have also been responding to employment queries which are directly related to people having less money in their pockets. Here are two tips: • Currently it is unlawful to cash in annual leave unless the employee receives more than the statutory entitlement of 4 weeks. From recent reports, this may change, but until that occurs, don’t agree to cash in leave for employees. • Being kind to your employees by offering them advances on pay can backfire. I have several clients who have done what they thought was the right thing, and then been abused for their kindness – often at great cost. My strong advice is not to do it! GRIEVANCE-FREE TRIAL PERIODS I’m frankly bemused by the excitement about the Employment Relations Amendment Act 2008 (ERAA). The Act provides that employers of fewer than 20 employees can include a trial period of up to 90 days in employment agreements and during that period an employee can be dismissed without warning and cannot file a personal grievance for unjustified dismissal. I’m bemused because, as many of you will know, the ERA 2000 already provided for trial periods and I have been recommending them to my clients for years. Previously (and still, for those with more than 20 employees) employers had to follow normal proper process with any dismissal during a trial period, which seems to me to be fair and reasonable. Employees could raise a personal grievance during that period if they believed they had been unjustifiably dismissed. In fact I do not recall any of the hundreds of grievances I have dealt with having occurred within the first 3 months; and I would be concerned if this law change encouraged employers to ignore proper process on the grounds that they will not get a personal grievance. Also if you’re going to have such a law, why limit it to employers with less than 20 employees? By the way, 20 employees means 20 actual employees. It is not relevant how many hours they work. For example, if you have 20 employees who work only 10 hours a week each, you do not qualify to use this provision. Under the ERAA employees can still raise personal grievances during the trial period for matters other than unjustified dismissal, like discrimination, sexual or racial harassment or unjustified disadvantage. I expect to see more of those! You should also be aware that, if you qualify, and want this provision to have effect, it must be in the written employment agreement, and agreed with the employee (i.e.signed). I can assist with appropriate clauses for your employment agreements with new staff. Employment agreements I keep repeating it………the Employment Relations Act 2000 requires all employees employed since October 2000 to have a written employment agreement. The Act does not state that the agreement must be signed, but they’re not useful if they are not signed! Almost every day I come across employers who do not have helpful (or any) agreements with their employees, and this can be very costly when trouble brews. Because of my recent experience I am now recommending that you do not allow employees to start work with you until you have a signed employment agreement with them. If you have existing employees who are reluctant or slow to take advice and/ or sign agreements, please chase them and put a reasonable time limit on their coming back to you with any queries. I’ll be happy to expand on this advice if needed! REST AND MEAL BREAKS From 1 April 2009 these are enshrined in law. Go to www.ers.dol.govt.nz for full details. These breaks are to be observed at times agreed between employer and employee, but where there is no agreement, the employer cannot unilaterally restrict or reduce the number and length of breaks. Redundancy Consultation In my last newsletter I wrote about the required “consultation” process for redundancies. In a recent case, HP Industries (NZ) Ltd v Joseph Davison AV44/08, the Employment Court confirmed an earlier determination of the Employment Relations Authority (ERA) that the dismissal of Joseph Davison resulted from genuine restructuring, but that his particular employment was not genuinely redundant; and that his dismissal was unjustifiable because he was not treated fairly and sensitively. A meeting where Mr Davison was notified of a restructure was found not to be a “ consultation in the proper sense”. The employee was told that he needed to consider his options but was not provided with sufficient information at that stage that would have enabled him to do that. S4(1A) ERA 2000 recognises that the provision of information relevant to the continuation of an employee’s employment is the responsibility of the employer. The Court said the obligation was on the employer to provide the employee with information about possible alternatives to redundancy or options for redeployment. Mr Davison was not entitled to compensation for the loss of the job itself, but was awarded $9000 for the effects on him of the unlawful termination. Reference Checking Reference checking is a critical part of recruitment, and must comply with the Privacy Act. You must have the consent of an applicant to approach a person as a referee. If persons are named as referees in a resume, that is sufficient. Naturally applicants usually provide the names of people they think will give good references. For example an applicant may not want his/her current employer to know s/he is job-seeking and that would be a good reason for not providing a current employer as a referee. The employer, however, may think the current employer will give the best information about the applicant. Whatever the situation, it is necessary to have the applicant’s consent to approach as referees people who are not named by the applicant. The employer and applicant need to discuss it. It is even possible for the employer to make it a condition of the job offer that the current or previous employer gives a satisfactory reference. That is a fair process because if gives the applicant the chance to explain why a particular person has not been named as a referee. CONSTRUCTIVE DISMISSAL Dismissal has been defined as the termination of employment at the initiative of the employer and this definition includes constructive dismissal. A finding of constructive dismissal occurs when there is a breach of the terms of the employment agreement that was serious enough to warrant the employee resigning. The question which needs to be resolved is “was the resignation reasonably foreseeable?” In Ringrose v Brazin Ltd and Bras n Things NZ Ltd AA31/08)the employee resigned after experiencing an unreasonable workload which led to “burn out” resulting in ill health. The ERA was satisfied that the employee’s first period of ill health was caused by her excessive workload, and that her resignation amounted to constructive dismissal. The ERA said that, following the employee’s first period of ill health the employer was on notice that the employee’s workload could affect her health. The harm the employee suffered from then on, and her resignation, were direct results of pressures at work and the treatment she received from her managers. The harm caused was foreseeable and the employer did not put in place appropriate steps to prevent it. The respondent breached its duty to provide a safe system of work. The employee was awarded $20,000 in compensation for hurt and humiliation to the employee. In another case about illness resulting from workplace stress, Wendy Anne Clear v Waikato District Health Board AC49/08 the Employment Court said: “it is an implied condition of all employment relationships that the parties will not breach the trust and confidence of the other. A fair and reasonable employer faced with Ms Clear’s repeated complaints should have undertaken a comprehensive investigation at the earliest opportunity, reached a firm conclusion on the complaints, kept her fully informed of the process, advised her of the decision and then taken steps to address the dysfunction.” I frequently conduct employment investigations for employers who want to make well-informed decisions based on an independent assessment of their problem. Users find this a very cost-effective, helpful service. Cheers! Chris Rowe Disclaimer: The information in this newsletter is to the best of the author's knowledge true and accurate, but does not constitute professional advice and should not be relied on as such. The Author will be pleased to comment on specific issues of concern to readers, and to offer appropriate advice. Chris Rowe is a Director of Corporate Dynamics Ltd; and is a Fellow (Mediation) and Member of the accredited Panel of Mediators for the Arbitrators' and Mediators' Institut of NZ. Inc. (AMINZ) |