Client Update – May 2023

Fringe Benefit Tax Exemption Extension

From 1 April 2023, employers are exempt from Fringe Benefit Tax when subsidising an employee’s public transport fares for travel by bus, train, ferry or cable car.  In addition, employers can now provide self-powered or electric powered bicycles or scooters to employees, and contribute toward “ride-share” schemes which offer self-powered or electric powered bicycles or scooters for hire.  Note, that “ride-share” does not include the likes of Uber.  The key criterion for the exemption is that the benefit needs to be mainly for travel between home and work.  Other vehicles which are a mobility device and not a motor vehicle can also be added to the exemption. Regulations are likely to be made in order to limit the maximum allowable cost on the relevant bike or scooter to prevent abuse of the exemptions.

Holidays Act Changes

The Government has confirmed that the long awaited Holidays Act changes have been delayed, yet again, until after the election.

Sexual Harassment

The Employment Relations (Extended Time for Personal Grievance for Sexual Harassment) Amendment Bill has passed through the Committee of the Whole House stage, so is likely to be passed into law soon.  It just needs the third reading and Royal Assent.  If/when passed, this will extend the 90-day time limit for a sexual harassment PG to 12 months.

All employment agreements will need to be amended to provide a specific reference to the 12-month period for raising a personal grievance for sexual harassment.  Once the law is in force, the new timeframe will apply only where the action alleged to be a personal grievance occurred or came to the notice of the employee.

Crimes (Theft by Employer) Amendment Bill

This has been drawn from the ballot.  This bill would make it a criminal offence for employers not to pay money owed to employees under the employment agreement, or as required by law.  If an employer is found to have intentionally failed to pay money owed to employees, that employer is liable to a fine of up to $30,000.  If the employer is an individual, they can be liable for a term of imprisonment of up to 1 year or a fine of up to $5,000 or both.   As a Member’s Bill however, it remains to be seen what support it receives in the House, and so whether it has any prospect of becoming law.

Case law: New Zealand Steel Ltd v Haddad [2023] NZEmpC 57

The Employment Court has again confirmed that an employer proposing to make employees redundant must consult with employees on redeployment opportunities.  A failure to do so will affect the fairness of the entire redundancy process.

New Zealand Steel (NZS) issued a restructuring proposal for the Process Computing department to managers in the department, who subsequently discussed the proposal with their teams and provided initial feedback that the proposal worked.  Only one position was proposed to be redundant, that of Mr Haddad, who was in the position of Process Computing Manager.  Mr Haddad was away on leave at the time the proposal was discussed.  On his return, he was presented with the proposal, and provided feedback on it.  He made it clear that he did not want to be made redundant but wanted to be redeployed.

However, NZS did not involve Mr Haddad in the feedback discussions or subsequent restructure proposals, such as what roles Mr Haddad’s colleagues would be moved to.  Mr Haddad was then advised of his role being made redundant.  NZS then failed to consider Mr Haddad for other roles, with a manager dismissing Mr Haddad’s interest in another role as “saving his bacon”.

The Court agreed that the decision to disestablish Mr Haddad’s role had been predetermined.  The Court also held that the redeployment discussion is not to be conducted unilaterally outside of the consultation process.  NZS had been put on notice that Mr Haddad wanted to be redeployed and was therefore obligated to act in good faith by identifying and discussing suitable roles with Mr Haddad, and to substantively justify its decision as to why redeployment was not possible.  Mr Haddad was reinstated by the Court to a role of Project Manager, which existed and should have been considered at the time of restructuring.

Case law: Taylor v Roper [2023] NZSC 49

ACC cover generally prevents a party suing for damages. This Supreme Court decision was about whether Ms Taylor could sue for damages for workplace events, or if that was prevented by ACC. Ms Taylor was a junior member of the RNZAF.  Her superior, Sergeant Roper sexually assaulted her and confined her (“false imprisonment”).    Ms Taylor had cover for mental injury (PTSD) arising from the sexual assault, but also sought damages in respects of the false imprisonment.

The Court of Appeal considered the mental injury was caused by the sexual assault and covered by ACC.  However, the Court of Appeal allowed the claims for damages for false imprisonment to proceed.  The Attorney-General appealed that decision to the Supreme Court.

The Supreme Court held that ACC cover encompassed PTSD from both the assaults and the false imprisonment. Therefore she could not advance the damages claim.  While the assaults were a material cause of mental injury, whether the false imprisonment was also a material cause was irrelevant as cover for mental injury would have been granted for either.  There was no distinction here which facet of the events caused Ms Taylor’s PTSD.

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 (Partner) – or 021 237 7811

Saadi Radcliffe (Senior 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