Health and safety

Health and safety legislation

The report back for the Health and Safety Reform Bill has been set back to 30 March 2015 and it is now not expected to come into effect until the second half of next year. The Bill provides for much heavier penalties, including up to five years imprisonment for serious offences.

Former Justice Minister, Judith Collins, now sitting on the Transport and Industrial Relations Select Committee, expressed concern at a recent committee meeting that going from merely civil to potential criminal liability was “a very serious change”, particularly for directors in inherently dangerous industries and that some she had spoken to would consider resigning if the Bill passed in its current form.

Paul Mackay, Manager of Employment Relations Policy for Business NZ, said he had heard of similar concerns and that more clarity was needed in this area.

WorkSafe Annual Report for 2013/14

Although WorkSafe acknowledges in its annual report for 2013/14 that it “has yet to hit its stride”, it has some fairly convincing statistics to support its claim that it has been “working hard”. Over the year it completed:

  • 11,411 workplace assessments, 88% of them in the high risk sectors of forestry, agriculture, construction and manufacturing, and
  • 117 prosecutions, 82% of them successful.

Link: WorkSafe annual report

ACC plus reparations for persons injured in conduct of a crime

An amendment to the Sentencing Act, which came into effect on 6 December, allows persons injured in the conduct of a crime to receive reparation for the difference between the compensation they receive from ACC and their actual losses.

The change could be particularly relevant to successful prosecutions for workplace accidents where a company is found liable.

Link: Chapman Tripp commentary

Business Leaders’ Health and Safety Forum

The Forum now has 188 member organisations, a 48% increase over last year.

Link: Forum’s annual report

HASANZ leader

Shenagh Gleisner is Establishment Chair of the Health and Safety Association of New Zealand (HASANZ). Shenagh is a former deputy Chief Executive of the Department of Labour and chairs the Risk and Assurance Committee for the Department of Prime Minister and Cabinet. She is also a former director of KPMG.

Link: HASANZ website

Employment law

Employment Relations Act

This went through its third reading on 30 October, making it the first piece of legislation to be passed by the third term Key Government. The Act received the Royal Assent on 5 November and will come into effect four months from that date.

Link: Chapman Tripp commentary

Rainbow-inclusive workplaces

Standards NZ is developing guidelines for employers to measure their commitment to sexual and gender diversity in the workplace. Submissions closed on 29 November 2014.

Link: Standards NZ website

Court decisions

The importance of process and an open mind in dismissals

Margaret Harris, a Loss Prevention Officer at the Kaikohe Warehouse, had been found by the Employment Relations Authority to have been unjustifiably dismissed but was considered to be sufficiently at fault that she was not entitled to any redress.

Both parties appealed to the Employment Court which, in Harris v Warehouse Ltd, delivered Ms Harris a significantly better outcome. It ordered that she be reinstated and reimbursed most of her lost income and awarded her costs and $4000 compensation.

The dispute arose when Ms Harris ordered a customer to remove a small dog from the store as the only dogs allowed were seeing-eye dogs. The woman, a Mrs Pattinson, ignored her. It was accepted that she called Mrs Pattinson “arrogant” but it was disputed whether she made racial references or spoke loudly and disrespectfully so that others could hear.

The company’s House Rules included as a serious misconduct “threatening, intimidating or interfering with another team member or anyone on company premises” and defined as a misconduct “offensive language or rudeness to customers, suppliers or team members”.

Among the Court’s findings are that:

  • the employer’s failure to inform Ms Harris of an interview with another employee which was favourable to her cause amounted to a breach of good faith
  • the dismissal was based on erroneous information, in particular the reliance on one person’s assertion that Ms Harris had called Mrs Pattinson an “arrogant prick” when she denied it, no-one else alleged it and it was a phrase normally reserved for men, and
  • the note-taking of interviews was poor (the store manager and assistant manager each took handwritten notes on which they conferred after the meeting to create the official note, and destroyed the originals).

The Chief Judge also made some observations in passing on whether the Employment Court has the ability to reduce an employee’s remedies by 100% for contribution. Such reductions are commonly sought by employers so the Chief Judge’s comments are likely to have an effect on future decisions by the Authority and the Employment Court.

But the Chief Judge declined to make an emphatic ruling, saying he would prefer that the issue was considered by a full Court. It had not been “argued comprehensively” in this litigation and the case law on the matter was contradictory and preceded the 2010 amendments to the personal grievance provisions in the Employment Relations Act. The Warehouse has indicated that it will appeal some aspects of the judgment.

Link: Employment Court judgment

Court of Appeal upholds Employment Court decision in redundancy case

The Court of Appeal has upheld the Employment Court’s decision in Grace Team Accounting Ltd (GTA) and Judith Brake. The Employment Court found that, although the dismissal was genuine in that there was no ulterior motive, it was not justifiable and awarded Ms Brake 12 months’ salary and $20,000 for humiliation. Key factors against GTA were that:

  • it would not have enticed Ms Brake, an experienced accountant, away from KPMG had it had a correct impression at the time of its own business position, and
  • the agreement of two other employees to go had produced the required savings, removing any need for Ms Brake’s departure.

The case was heard under the 2004 provision of section 103(1)(a) and (b) of the Employment Relations Act. This was amended in 2011 to substitute could for would so that the justifiability test now requires an assessment of whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer could have done in all of the circumstances at the time of the dismissal.

Equal pay decision creates exquisite dilemma

The Court of Appeal ruling on the application of the Equal Pay Act 1972 in the Terranova Homes & Care Limited v Service and Food Workers Union case has put the Government on the horns of an exquisite dilemma.

The Court found the case “difficult” to decide, not least because of the poor quality of the Act’s drafting, and said it thought the issue was “more finely balanced” than had the Employment Court.

However it agreed with the Employment Court that the intention of the Act was to provide for pay equity (meaning equal pay for work of equal value) and found that, to assess what would be paid to the hypothetical man posited by section 3(1)(b) of the Act, “it may be relevant to consider evidence of wages paid by other employers and in other sectors”.

The Court of Appeal was asked only to determine this matter of law and was careful not to identify appropriate comparators or to give guidance on how the systemic undervaluation should be addressed. Unless there is a further appeal to the Supreme Court, the way is now clear for the Kristine Bartlett, the worker in whose name the action was taken, to take her claim to the Employment Court for resolution.

The Employment Court would have to develop some general principles and an objective basis for wage comparison as the Act provides no guidance on this matter.

The decision has potentially significant implications for the aged care sector (which estimates that it will push up the wage bill by $140 million a year) and for all female intensive occupations. It could also put pressure on the Government’s fiscal position if the result is that greater government funding is needed to keep affected service providers afloat.

So the Government is taking its time to respond. As it develops its response, it will need to weigh the political costs of legislating to limit the scope of the Equal Pay Act against the fiscal costs of allowing the judgment to stand. As the Prime Minister has pointed out, these costs could run to “hundreds of millions of dollars, not just a few million”. It is also worth remembering that one of the first actions of the newlyelected National Government in 1990 was to repeal the Employment Equity Act which had been in force barely six months and provided for equal employment opportunity as well as pay equity.

Link: Court of Appeal judgment 

Industry training


NZQA is developing new quality assurance and annual fee requirements for ITOs to reflect the changes in the Industry Training and Apprenticeships Amendment Act, which was passed in April this year. Submissions closed on 1 December.

Link: Discussion paper