Client Update – June 2022

Client Update – June 2022

Finally, we bring you a client update that does not canvass COVID-19 related issues:

New whistleblowing legislation

The Protected Disclosures (Protection of Whistleblowers) Act 2022 comes into force on 1 July 2022.

‘Serious wrongdoing’ now includes behaviour that is a serious risk to the health and safety of any individual.  Also, the protections in the Protected Disclosures Act will apply to the person making the disclosure even where the person is wrong, and there is no serious wrongdoing, unless the disclosure is made in bad faith.

The protections in the Act extend to someone who discloses information in support of, or relating to, a protected disclosure (again unless that is knowingly false or the person is acting in bad faith).

Contracting out – any provision in an agreement that stops someone from disclosing information that could support or relate to a protected disclosure will have no effect.  This would presumably include confidentiality clauses in settlement agreements.

Disclosure can now be made directly to an appropriate authority at any time.  There are a number of other changes – we recommend that you seek advice if you are unsure of the implications for you.

Engaging independent contractors

Changes to the Fair Trading Act 1986 come into force in August 2022.  Those may have consequences to businesses engaging independent contractors.  “Trade” in this legislation includes (but is not limited to) any business, industry, profession, occupation etc relating to the supply of goods or services.

Protections against unfair contract terms have been extended to cover standard form small trade contracts.  ‘Standard form’ means ‘take it or leave it’ contracts with no opportunity for negotiation.  ‘Small trade contracts’ are between parties engaged in trade (not a consumer contract) where the value is less than $250,000 annually, from when the relationship first starts.  Unfair contract terms might include a contract that allows one party to terminate, or vary the terms, but not the other.  There is also a new prohibition against unconscionable conduct and various other changes.

Potential employment law changes

Employment law bills

The Employment Relations (Extended Time for Personal Grievance for Sexual Harassment) Bill is currently before Select Committee.  If enacted, this would extend the timeframe for raising a personal grievance for sexual harassment from 90 days to 12 months.

The Fair Pay Agreements Bill is also before Select Committee.  This provides a framework for collective bargaining for fair pay agreements for minimum terms and conditions of employment across industries or occupations, rather than just between unions and particular employers.

A new bill that would remove the restriction on trading and selling alcohol on Good Friday and Easter Sunday had its first reading in late May.

Restrictions on restraints of trade for lower-paid workers?

There are a number of employment related bills in the Parliamentary ballot.  One to watch out for is MP Helen White’s Employment Relations (Restraint of Trade) Amendment Bill.  This would restrict the use of restraint of trade clauses for lower-paid workers.  If enacted, restraints of trade would have no effect if an employee earns less than three times the minimum wage.  Employers would be required to pay half the employee’s weekly earnings for each week that the restraint of trade remains in effect, and the maximum duration for any restraint would be 6 months.

Compulsory redundancy compensation?

The Government is considering public submissions on the proposed Income Insurance Scheme, designed by the Government, Business New Zealand and the New Zealand Council of Trade Unions.  If introduced, permanent employees made redundant or who have to stop working because of a health condition or disability, would get four weeks’ notice, and their employer would continue to pay wages for four weeks at 80 percent of their usual salary when the job ends.  After this second month, the income insurance payments would begin, again at 80 percent of their usual salary, up to the current ACC cap. The payments from the employer would be in addition to any other redundancy provisions in an employment agreement.

The scheme would be administered by ACC, and funded by levies on wages and salaries, with both employers and workers paying an estimated 1.39% each.  The proposal includes up to twelve months of support for re-training.

Case law

Employees vs volunteers:  the Employment Court’s recent decision involving the Gloriavale Christian Community examined whether three people born into the community, who began working at the age of six, were in fact employees.

The question of whether an employment relationship exists involves looking at the real nature of the relationship – the label used by the parties to describe the relationship is not determinative.  Each case will depend on its own particular facts.

The defendant argued that work done by the plaintiffs between the ages of six and 14 were chores, that work done when they were 15 was part of their schooling, and work undertaken from 16 years of age was done on a voluntary basis.  The Court disagreed, and held that from the age of six, the plaintiffs were employees.   The work undertaken as children was strenuous, difficult and at times dangerous, was for the benefit of Gloriavale’s commercial activities, and were performed over a long period of time. It could not be considered chores.  At age 15, the work undertaken could not be described as educational work experience, and for other reasons, the work undertaken from the age of 16 could not be considered volunteer work.

There are a range of arrangements that sometimes call into question whether there is in fact an employment relationship, for example, students, trainees, interns, independent contractors, volunteers, and people following a spiritual calling.  We recommend seeking advice if in any doubt about whether an employment relationship exists: significant consequences in terms of wages, leave, and other minimum entitlements can arise.

Restraint of trade: earlier this year, the Employment Relations Authority issued its determination in Tova O’Brien v Discovery New Zealand Limited.   Ms O’Brien left Discovery for a new role at Mediaworks.  She argued they were not in competition as they both operated in different media formats and targeted different audiences, and therefore her restraint should not apply.   Discovery succeeded in upholding the restraint but lost on the duration of the restraint.  The notice period was taken into account – the notice period, plus the restraint period, together came to 6 months which was longer than necessary to protect Discovery’s proprietary interests. The restraint of trade period was reduced to 7 weeks (on top of the 3 months’ notice period).

Holidays Act 2003: for those that may have missed it, the Court of Appeal overturned the Employment Court’s decision in Metropolitan Glass & Glazing Ltd v Labour Inspector, Ministry of Business and Innovation and Employment.   The Court of Appeal held that Metropolitan Glass’ short term incentive bonus scheme was a discretionary payment and did not form part of the “gross earnings”.  The incentive scheme was not part of the calculation for annual leave holiday payments.New Zealand Law Awards 2022

Nominations for these awards are now open.  We would be grateful if you have the time, and are prepared, to nominate us for the employment law category of the firm awards.  If so, the link is below:

For any advice from our employment law specialists, please contact us via email or by mobile:

Paul McBride (Partner) – or 021 614 215

Guido Ballara (Partner) – or 021 782 891

Frances Lear (Senior Associate) – or 021 237 7811

Saadi Radcliffe (Solicitor) – or 021 557 236

Alec Nash (Solicitor) – or 021 352 288


Disclaimer – this newsletter is necessarily brief and general in nature.  You should therefore seek professional legal advice before taking any action in relation to any matter addressed above.  © McBride Davenport James

COVID-19 Update – May 2022

Changes to the COVID-19 Public Health Response

Over the past month, several changes to the COVID-19 public health response have taken effect, including moving to the ‘Orange’ light setting of the COVID-19 protection framework, changes to gathering sizes, face mask requirements, vaccination mandates, and the opening of borders to allow international visitors from approved countries to enter New Zealand without isolating.

Two key provisions that affect workers and employers are:

COVID-19 Public Health Response (Protection Framework) Order 2021

Medical grade face masks are still mandatory for some workers under the ‘Orange’ light setting of the COVID-19 protection framework.  This mandatory requirement applies to all workers who work with members of the public, customers, or clients, on premises that are open to the public, where they are:

  • A worker at a food and drink business or service; or
  • A worker at a close-proximity business or service; or
  • A worker at an event.

Employers must have systems and processes in place to ensure, as far as is reasonably practicable, that:

  • workers at the workplace wear a face mask, or a medical grade face mask; and
  • mitigate, as far as is reasonably practicable, the risks of spreading COVID-19 where workers are unable to wear a face mask in certain circumstances.

Note that face mask requirements have also changed for the ‘Red’ light setting, which we will cover in a future update if New Zealand moves back into ‘Red’.

COVID-19 Public Health Response (Vaccinations) Order 2021

The Government mandate to be vaccinated, and for the employer to hold records of that vaccination, no longer applies to workers at:

  • an education service;
  • a food and drink business or service;
  • a gym;
  • a permitted event; or
  • a close proximity business or service.

If you are uncertain of what your obligations are as an employer or worker, please discuss your circumstances with us.

Case Commentary

There have been a number of Court cases on COVID-19 related matters over the past few months, including last week’s High Court case where Grounded Kiwi Group successfully challenged the ‘lottery’ system used for spaces in MIQ.   We expect to see more decisions from the Courts, including in the employment jurisdiction.

Two recent cases dealing with vaccine mandates include:

Yardley v Minister for Workplace Relations and Safety [2022] NZHC 291

This decision of the High Court focused on whether the vaccination mandate that applied to workers in the New Zealand Police and the Defence Services was a justifiable limitation on the right to refuse medical treatment under s 11 of the New Zealand Bill of Rights Act.  The reason given by the government for the mandate was to ensure the continuity of the public services provided by these agencies, due to the risk of absenteeism caused by the pandemic, instead of being aimed at limiting or stopping the spread of COVID-19.   The difficulty for the government was that the Police and Defence already had existing vaccination policies in place requiring their staff to be vaccinated against COVID-19.

The Court found that as the existing vaccination policies had led to a high rate of vaccination in the workforce, the mandate applied only to a small group of employees, and was therefore an unjustified limitation.  There was no evidence that such a small group of employees being vaccinated would materially affect the ability of the Police or Defence Services to provide continuity of services.

The mandate was subsequently set aside by the Court.

NZDSOS Inc v Minister for Covid-19 Response [2022] NZHC 716

As with Yardley, the Court was asked to determine whether the vaccination mandate was a justifiable limitation on the right to refuse medical treatment for workers in the health and education sectors.

In the education sector, vaccination mandates were justified in October 2021, with the Delta variant in the community.  The mandate was necessary to reduce the spread and risk of infection.   When Omicron started spreading in an uncontrollable way, the justification for the mandate became less apparent (and in fact the vaccination mandate for the education sector was removed on 4 April 2022).  Despite this, there was a justifiable reason for the vaccination mandate.

For the health sector, the Court found that a zero-tolerance approach was required given that members of the public accessing critical health services will frequently be vulnerable and often unable to make choices about the healthcare they access. It found that the public could reasonably expect that all steps reasonably taken to minimise patient exposure to COVID-19 had been taken.  The justification for mandates existed based on inhibiting the spread of COVID-19.  The government has since stated their intent to review the scope of the mandate for the health and disability sector.  If the mandate is not reduced in scope, it may become unjustified.

Justice Cooke did note that even a more limited mandate for the health and disability sector would need an assessment as to whether it is truly necessary.  Following the reasoning in Yardley, hospitals and aged-care facilities are likely to have high vaccination rates, and an ability to impose vaccination requirements on staff.

Sick Leave during COVID-19

The Omicron outbreak has led to many employers asking if they need to pay employees who are required to self-isolate.  The COVID-19 Leave Support Scheme is available to employers in this circumstance, but does raise some key issues.

The Leave Support Scheme (LSS) was updated on 14 March 2022.

The LSS is available to employers to support employees (or to self-employed people) who must isolate if directed to do so (for a wide range of reasons). This includes those who have COVID-19, or who are household contacts of someone who has COVID-19.  However, this does not include what used to be called a “casual contact” of someone who has COVID-19, or someone who is isolating due to a belief that they are at greater risk of harm.

Requirements for Support

The employee must be isolating for at least 4 consecutive days.  It does not matter if these days are working days.

From 14 March 2022, employers can only apply for the LSS payment within 8 weeks of the day that the employee’s self-isolation period ends, if the period ends on or after 14 March 2022.  Employers can still apply for the LSS for the employees whose self-isolation period ended before 14 March 2022.

If the employee is required or advised to self-isolate for longer than 10 days, or again at a later date, the employer can apply for a further LSS payment.

What can I get?

$600.00 a week for full-time employees (20 hours per week or more) and $359.00 a week per part-time employee. Use the average hours worked each week over the last 12 months to calculate.

The employer will receive 1 payment for the first 10 days, and then 1 payment for each additional 7 days thereafter that the employee is required to isolate.

If you have any remaining subsidy, after the employee has been paid their usual wages or salary, this can be used to pay other affected employees.  If you have no other affected employees, or they’re already being paid normal wages, the LSS must be repaid.

Sick Leave

The LSS is silent on whether employees should have sick leave deducted at the same time that the employer receives the LSS.  However, the purpose of the LSS is to assist employers with the costs of paying for employees who, because of COVID-19, are required to self-isolate.  If the employee is sick, sick leave should be deducted as normal, subject to usual rules about the use of sick leave.  The situation is different if the employee is not unwell during their period of self-isolation.  We recommend employers obtain advice specific to their situation.


For any advice from our employment law specialists, please contact us via email or by mobile, and stay safe:
Paul McBride (Partner) – or 021 614 215
Guido Ballara (Partner) – or 021 782 891
Frances Lear (Senior Associate) – or 021 237 7811
Saadi Radcliffe (Solicitor) – or 021 557 236
And a warm welcome to our new team member, Alec Nash (Solicitor) – or 021 352 288

Disclaimer – this newsletter is necessarily brief and general in nature.  You should therefore seek professional legal advice before taking any action in relation to any matter addressed above.  © McBride Davenport James