Client Update – August 2023

Sexual Harassment Amendment Act

As highlighted in our May 2023 client update, the Employment Relations (Extended Time for Personal Grievance for Sexual Harassment) Amendment Bill came into force on 13 June 2023.   All new employment agreements must now include a reference to the 12-month period for raising a personal grievance for sexual harassment.   Existing employment agreements are not required to include such reference, but the 12-month period for raising a personal grievance for sexual harassment will still apply.  The 12-month period begins from the date on which the action alleged to amount to the personal grievance occurred or came to the notice of the employee, whichever is later.

COVID-19 Restrictions Removed

At 12.01am Tuesday 15 August 2023, all remaining COVID-19 restrictions were removed.  Those related to wearing masks in certain healthcare settings, and a mandatory 7-day self-isolation period if an individual tested positive for COVID-19.  The removal of the self-isolation period also concludes the COVID-19 Leave Support Scheme.  Employers can still apply for the Leave Support Scheme if the employee’s self-isolation period started before 13 August 2023.

Employers are still obliged to comply with Health and Safety requirements and can undertake their own health and safety assessments related to COVID-19, which could include (after consulting with staff) whether employees are required to wear face masks, or to be vaccinated.

Other Bills

The Employment Relations (Protection for KiwiSaver Members) Amendment Bill would allow an employee to raise a personal grievance where their KiwiSaver status causes an adverse impact on their employment terms and conditions.  This bill aims to address the issue where employers include a “total remuneration” clause in an employment agreement which includes the employer’s contribution to an employee’s KiwiSaver.  Where the employee is on minimum wage, the effect of such a clause means the employee is being paid less than minimum wage.  This is something we have observed before so if some of your employees are paid the minimum wage, it’s a good idea to check.

The Employment Relations (Restraint of Trade) Amendment Bill has been referred to the Select Committee with submissions closing on September 18 2023.  This bill would restrict the use of restraint of trade clauses to only employees who earn more than three times the minimum wage.  If enacted, restraints of trade would have no effect on employees paid less than that. For qualifying employees, 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.

Case law:

Riddler v Meridian Energy Ltd [2023] NZEmpC 87

The Employment Court was asked to determine whether the employee could proceed in a claim solely against a contended controlling third party, having already entered into a settlement agreement with the employer.

Mr Riddler was an employee of Fujitsu New Zealand Limited.  Fujitsu had a commercial arrangement with Meridian Energy to provide it with information communications technology equipment and services.  Those services were provided by Mr Riddler.  At some point, Meridian asked Fujitsu to remove Mr Riddler.  Mr Riddler was advised by Fujitsu to no longer attend Meridian’s premises.  A disciplinary process then occurred and Mr Riddler was dismissed from Fujitsu.  Mr Riddler raised a personal grievance with Fujitsu, and put Meridian on notice as a contended controlling third party that Meridian’s actions had led to Mr Riddler’s dismissal.

Fujitsu and Mr Riddler entered into a settlement agreement.  Meridian was not party to that settlement.  Mr Riddler then sought compensation against Meridian.  The Employment Court dismissed the claim and confirmed that action against a claimed controlling third party must be joined to a claim against the employer.  Mr Riddler’s claim was not successful as he needed to have a claim against Fujitsu to which Meridian could be joined as a party.  The settlement agreement with Fujitsu was a bar to that happening.

GF v Comptroller of Customs [2023] NZEmpC 101

This recent Employment Court judgment was notable for its discussion of tikanga in employment law, and increasing the s 123 compensation “bands” for hurt and humiliation.

GF was a customs officer that was subject to the COVID-19 Vaccination mandates.  GF did not wish to be vaccinated and did not consider that their work was covered by the mandates.  GF was subsequently dismissed from employment.

The Court found that Customs had voluntarily imported tikanga values into its employment relationships with staff.  That meant in addition to its statutory obligations to be a fair and reasonable employer under the Employment Relations, and further, to be a “good employer” in terms of the Public Service Act, Customs also had to act in accordance with tikanga values in dealing with any employee.

The Court held that where an employer incorporates tikanga values into its employment relations framework, the extent to which tikanga has been met will be relevant to assessing the reasonableness and fairness of an employer’s actions, and if good faith requirements have been met.   The Court held it was for Customs to consider how applicable tikanga should inform its conduct in dealing with employment issues, and act accordingly.

In concluding that Customs had acted unfairly and unreasonably in dismissing GF, the Court also took the opportunity to increase the compensation bands for hurt and humiliation payments (often referred to as a s 123 payment) in line with inflation.

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

Paul McBride (Partner) – paul@mdjlaw.co.nz or 021 614 215
Guido Ballara (Partner) – guido@mdjlaw.co.nz or 021 782 891
Frances Lear (Partner) – frances@mdjlaw.co.nz or 021 237 7811
Saadi Radcliffe (Senior Solicitor) – saadi@mdjlaw.co.nz or 021 557 236
Alec Nash (Solicitor) – alec@mdjlaw.co.nz 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