Everything begins with the agreement. There must be a written employment agreement between employer and employee. The time to closely examine the wording of that document is before you sign it. An employer must advise an employee that they have the right to seek independent advice about the agreement. There are a myriad of issues that need to be considered here, both from the employer's and the employee's perspectives. Are you an employee? Is it a fixed term contract? (Note that a fixed term employment agreement cannot be terminated prior to its expiry date by reason of redundancy unless it expressly provides a means to do so). Are you an independent contractor? Are you a volunteer? Are you a casual employee? Are you a permanent employee? If you are engaged in temping services, who in fact really is your employer?

In the case of later dispute, the Employment Relations Authority or Employment Court will look at the substance of the document and what was really intended between the parties. For example, and employment agreement could be entitled 'Casual Employment Agreement', but in fact be found to be reflective of a permanent employment status. The Employment R elations Authority is unique in the New Zealand legal landscape. It is inquisitorial in nature (as opposed to the traditional adversarial process).

How do your employment agreements stack up? Has adequate provision been made for performance reviews and disciplinary action, health and safety matters, personal grievances, alcohol and drug issues, confidentiality of sensitive information, restraint of trade following departure of an employee, Holidays Act compliance, suspension, redundancy and dispute resolution?

All employment agreements must contain an "employee protection provision". This is designed to protect employees in situations where business undertakings are sold, transferred, or contracted out. Absence of such a provision may affect the employer's ability to implement a business transaction.

Rennie Cox can help you prepare or review employment agreements and workplace policies that will meet the specific needs of your organisation. The sooner you talk to us, the sooner we can help reduce the risk to your business.

Disciplinary procedures must be carried out in accordance with the principles of natural justice. An employer can face particular difficulties when employees are not able to fully engage in the disciplinary process due to a medical condition. For additional advice on how disciplinary procedures can be coherently linked with such workplace policies such as harassment, for instance, call Rennie Cox and talk to one of our solicitors now.

The Health and Safety in Employment Act 1992 establishes duties relating to safety and health in employment. Employers are under a general duty to take all practicable steps to ensure the safety of their employees at work, along with certain volunteers, persons receiving job training and loaned employees. Employers are also under a number of particular duties in relation to the working environment. These centre on the provision and maintenance of facilities for the safety and health of employees at work, ensuring that machinery is safe and that employees are not exposed to hazards.

The Act establishes a hierarchy of actions in relation to significant hazards. Specific duties are established in relation to systems for identifying existing and new hazards and the monitoring of hazards, the elimination of significant hazards and the isolation of workers from such hazards that cannot be eliminated.

Duties are placed on employers to take all practicable steps to ensure that employees at work do not harm themselves or other people, and people with control of places of work are required to ensure that people in or near those places are not harmed by hazards arising there. Self-employed people are required to take all practicable steps to ensure that they do not harm themselves or other people, and corresponding duties are placed on principals of subcontractors and those who sell or supply plant for use in a place of work. Employees are required to take all practicable steps to ensure their own safety, and the safety of others at work.

This is a significant area of risk for any business, and it is important that full compliance with the Act be maintained at all times.

Personal grievances are defined as any grievance that an employee may have against his or her employer because of a claim based on:

  • unjustifiable dismissal; or
  • unjustifiable disadvantageous action; or
  • discrimination; or
  • sexual harassment; or
  • racial harassment; or
  • duress.

The employee must submit the grievance to the employer within 90 days from the date on which the relevant action occurred, or came to the notice of the employee. The Employment Relations Authority may extend this period if it is satisfied that the delay was due to exceptional circumstances and it considers it just to do so. The Act sets out four situations where exceptional circumstances will exist, based on: the traumatising effect of the matter giving rise to the grievance; "unreasonable failure" on the part of an agent to bring the grievance in time; failure on the employer’s part to supply a plain language explanation of dispute resolution procedures; and the employer’s failure to give reasons for dismissal. A grievance must be commenced in the Authority or the Court within three years from the date on which the grievance was first raised with the employer. This contrasts with a limitation period of six years for all other actions.

Personal grievances can be costly for your company, both in terms of money and consumption of valuable senior management time tied up with dealing with the grievance. We can help you minimise the risk of a personal grievance, or, if you are facing a personal grievance, assist you with defending the matter.

In contrast to other jurisdictions, in New Zealand there is no general statutory definition of the term "redundancy".

There are broadly three categories of redundancy.

The first category is where the position has abruptly ceased to exist. This might occur, for example, where an employer closes down or sells the whole or the relevant part of its operation, imports technology to carry out the relevant function, or determines that the relevant function will be performed by an outside contractor.

The second category is where an employer alters or purports to alter an employee's job description. Here, the question of whether or not a redundancy exists becomes one of degree: whether the employer has, within the bounds of managerial prerogative, merely altered the job description, or whether one position has in fact disappeared and another come into existence.

Cases in the second category give rise to complex questions of fact and law as to whether there is, in truth, a redundancy. The balance is a fine one. On the one hand, subject to the terms of the employment agreement, an employer is entitled to alter a job description and an employee is not entitled to expect that his or her job description will remain the same indefinitely. On the other hand, an employer does not have the right to alter the fundamental elements of the employment agreement between the parties so as to, in effect, terminate one employment agreement and create another.

The third form of redundancy relates to those times when an employer disposes of a business (or the relevant part of a business), that employer no longer requires the services of his/her employees. Employment agreements are not transferable from one employer to another, so the old positions are technically redundant, regardless of whether the new owner of the business is prepared to re-engage the employees on the same or substantially similar terms. Such a situation has come to be known as a "technical redundancy. Any obligation on an employer to pay redundancy compensation to an employee in such a situation is often seen as a windfall for the employee.

Provisions within the Employment Relations Act require all employment agreements, both individual and collective, to contain an employee protection provision to "provide protection for the employment of employees affected by a restructuring". The detail of such a provision will need to be agreed between an employer and its employees. However, to comply with the definition of "employee protection provision" in the Act, the following matters must be included in any such provision:

  • the process that the employer will follow in negotiating with a new employer about the restructuring to the extent that it relates to affected employees;
  • the matters relating to the affected employees' employment that the employer will negotiate with the new employer, including whether the affected employees will transfer to the new employer on the same terms and conditions of employment; and
  • the process that will be followed at the time of the restructuring to determine what entitlements, if any, are available for employees who do not transfer to the new employer.

Should any restructuring occur, the employer will be required to enter into negotiations with the prospective new employer according to the framework agreed within the employee protection provision. "Restructuring" means:

  • contracting out; or
  • selling or transferring (all or part of) the employer's business to another person; but
  • specifically does not include contracting in, subsequent contracting, the sale or transfer of shares, or any contract, arrangement, sale or transfer entered into, made or concluded while the employer is adjudged bankrupt or in receivership or liquidation.

It is important that any employment agreement you have with employees expressly deal with the issue of redundancy, and include the mandatory employee protection provision (applicable to most employees). Talk to us now about assessing your existing or proposed agreements for compliance with the Act and/or for risk management purposes.