Time to take stock of employment law compliance

Posted on 18 February 2020 by Craig Sidoruk

Welcome to 2020

In the rush of business, it is easy to take our eye off the ball when it comes to employment law compliance. The beginning of the New Year is a good time for many businesses to take stock and review changes to employment law and how they may impact on your business. Here is a brief overview of the key changes that have taken place over recent years:

Tougher penalties and sanctions for breaches of employment standards. You are required to keep records in sufficient detail to demonstrate that you have complied with minimum entitlement provisions.
If you do not provide a written employment agreement to an employee, a Labour Inspector may issue you with $1,000 infringement fee.
Addressing zero-hour contracts. All employment agreements must include any agreed hours of work and, if you ‘require’ an employee to be available for additional hours, you must include an availability provision in the employment agreement and ensure the employee receives reasonable compensation for the ‘required’ availability. Also, the introduction of “shift cancellation” provisions requires you to provide reasonable notice or compensation to cancel a shift.
Secondary Employment. You cannot restrict secondary employment for employees unless you have a genuine reason based on reasonable grounds to do so, and record these grounds in the employment agreement.
Before any deductions are made in accordance with a general deductions clause, you must first consult with the employee.
Reinstatement is back as the “primary remedy” if requested by an employee when a proceeding is before the ERA or employment court.
Meal Breaks and Rest Periods are specified as having to be at least one 30 minute unpaid break and two paid 10 minute breaks in a typical eight hour day. Unless there is agreement about when these breaks are taken, the law requires the breaks to be taken at times as specified in the Act, so long as it’s ‘reasonable and practicable’ to do so.
90-day trial periods have been restricted to businesses with fewer than 20 employees.
After 6 months service, employees are entitled to up to 10 days paid per annum to deal with the impact of family violence. This could relate to dealing with the impact of historical violence that occurred prior to them being employed by you.
Parental Leave. Changes to these provisions include extending payments and entitlements to a wider group, the introduction of ‘keeping in touch’ hours during the paid leave period, and allowing employees to resign and continue to receive payments from IRD.
Collective Bargaining provisions have been strengthened. This has included restoring the duty to conclude collective bargaining as a part of Good Faith, the provision of reasonable paid time for delegates to undertake union activities, and the requirement to provide new employees with information about the Union (provided by the Union). The 30 day rule has also been restored, which means that for the first 30 days, new employees must be employed under terms consistent with the applicable collective agreement.

Coming Up in 2020

12. “Triangular Employment” relationships. This refers to the situation where you have the employees of other contractors on your site, but you effectively control their day to day work. From 27 June 2020, if such an individual is dismissed unfairly, they will have the ability to ‘join’ your company in any Personal Grievance proceedings.

13. The Ministry of Business, Innovation and Employment (MBIE) is currently reviewing the concept of ‘vulnerable / dependent contractors’. We are also waiting to see the draft legislation in relation to a new Holidays Act and Fair Pay Agreements.

These changes, along with whatever is promised by the political parties, will ensure that the employment law space remains dynamic and subject to change in 2020.

It’s Great to be an Employer

Posted on 18 February 2019 by BDO HR

I decided a celebration of the good things about being an employer was in order. These things apply whether you own your own business or you manage someone else’s business.

I am often asked why anyone would want to work in HR – with a clear implication that it involves a lot of unpleasant ‘stuff’ no-one likes doing. This is partly true, but it’s not all bad by any means.

On other occasions, when I have been a self- employed consultant and I have been asked why I haven’t employed staff to help with the workload, I have cynically replied that I know all about employment and why would anyone be an employer? We can become a bit jaded if we have been through some tough employment issues of late but let’s not forget the positives. I decided a celebration of the good things about being an employer was in order. These things apply whether you own your own business or you manage someone else’s business.

At the highest level every person you employ and every wage you pay is a vital contribution to our economy and society in many ways. You, personally and directly, have improved our employment statistics. You have boosted the tax take that funds so many great things like health, education and our national infrastructure.

Closer to home, at a very practical level, you are feeding the families of your employees, paying the bills, and building homes. If you provide health insurance you may have helped your employees in a time of real need. If you have EAP or other wellbeing initiatives you are helping people to be well and live better and stay in better shape for their loved ones. Over the long term you are helping your employees save for their retirement (it doesn’t matter that it’s compulsory).

When you recruit, train and develop people you are developing their skills, their confidence, and their career. Sometimes this includes supporting them to step outside your organisation to continue their growth. You are providing opportunities that will lead them down all sorts of pathways to bright futures. It is satisfying to share our knowledge and experience and enthusiasm for our respective field with those coming behind us. You often learn something from them as well – most likely an app on your phone you’d never heard of, and if you’re lucky some insights into how they see your organisation that are pure gold.

Even when you provide casual holiday jobs to tertiary students which helps your business at a busy time, you are powering the next generation of employees to start their employment journey. When you employ part time school students on the weekend you are teaching them life skills, work habits and team behaviours that will help them find their first ‘real’ job.

When you create a team, small or large, you are bringing people together and creating all kinds of connections that enrich their lives. In the workplace your employees develop friendships that last a lifetime. They connect with people who become their flatmates, sports team-mates, car pool buddies, or mentors.

Depending on the jobs you can offer and the industry you are in you may be providing your employees with a purpose and an opportunity to make a difference to others or to our world. That’s a pretty cool reason to be an employer.

You are most likely helping the people who work for you to fulfil their dreams – whether that is doing their dream job or perhaps saving money to achieve their dream – a house, overseas travel, or a car.

Employment is not just a transaction where we are trading work for money – it’s a relationship that can enrich your life and your employees’ lives. Be proud to be an employer. Celebrate the good times for your own sake as well as your staff. When times are tough and you have to make the hard calls remember all the good you are doing, every single day.

First Impressions Count

Posted on 12 November 2018 by BDO HR

Organisations generally invest significant amounts of time on the recruitment process to fill vacancies, plus checking the credentials of the preferred candidate and getting them signed up. After investing all that time and money it’s important to get your new employee off to a good start.

It may be timely to review your induction process, or if you don’t really have a process, to consider developing some structure around it. The first impression you make on your new employee in the initial days and weeks will very likely have a lasting impact. Assuming they arrive at the new job excited and enthusiastic, the last thing you want to do is diminish the new energy you just brought to the business.

These days most businesses give priority to a sound health and safety induction, which is absolutely critical. This needs to be done by someone who believes in safety and can communicate your culture and expectations relating to safety. It needs to be documented so you have evidence of completion but try to ensure that it doesn’t come across merely as a compliance exercise to ‘tick the boxes’.

Taking time to think beyond the essentials like health and safety means you can create a well organised and consistent experience for your new hires. They will feel like they have joined a professional, well run organisation and that you care about your employees by taking time to settle them into the new job thoroughly.

It is beneficial to include organisation history, values and culture in your induction programme. This helps the new employee to connect with the organisation and to begin to understand ‘how we do things around here’ and why that is. It can also engender pride in the business (we are the biggest, the first, fastest growing, started from small beginnings, proud to be family owned etc.)

In a small organisation you may only need a one page checklist to remind you of the key information to cover off (key people the new appointee should meet, building security and facilities, payroll paperwork, computer log-in, any equipment or uniform to be issued, house rules, hours and break times and so on).

In larger organisations you will probably have a policy manual for the employee to read through and sign-off. This may be on-line, as so many things are these days. This is great for allowing the employee to go through the information at their own pace and to refer back to material later, and can be presented in a very engaging way with useful links to follow and video content and so forth.

There is often a lot of information to present to new employees so you need to consider ‘information overload’ and what can realistically be absorbed on day one or two. Consider the pace of the induction process and what you can reasonably spread over the first week rather than the first day.

While the paperwork and/or the online process is valuable you also need to be careful not to overlook the human factor. This includes introducing new hires to key people so they know who’s who in person, rather than a list of names and positions in the manual. Each of those introductions also makes the person feel welcome and is opportunity to express how pleased the organisation is to have them on board.

Most organisations will assign another team member as a ‘buddy’ for the first few weeks. This provides someone the new hire can ask what may feel like dumb questions in the early stages, rather than having to bother their manager. Hopefully they can also provide some social support in the first few

days to make sure their new colleagues meets team mates, knows where to park, where to buy lunch, and has some company for lunch if wanted at the start. Again, it’s important to choose the right person for the buddy role, making sure they are approachable, knowledgeable about company processes, have the time to devote to the task and will be a positive influence.

The little things count. Make sure someone is assigned to get the workplace essentials ready for when the new employee arrives so they feel welcome and that you are well organised – workstation, computer, phone, stationery, uniform, PPE, equipment, and so on. It also means they can be productive quickly, rather than waiting for email access and IT log-ins to be set up.

We all know that being thrown in the deep end is not a good way to start a new job. Having invested in finding the right person, it makes sense to put some effort into settling them into the job well to make the appointment a success for both parties.

The art of letting go

Posted on 7 August 2018 by BDO HR

When the time comes for employees to make a change and resign their employment it generally occurs under a shroud of secrecy. People go to great lengths to ensure their current employer is the last to know.

This isn’t an ideal scenario for any of the parties. The employee has to sneak away to interviews, they can’t use the current organisation as a referee and they angst about their boss finding out. Their employer doesn’t get a chance to address any issues that might be influencing the person’s decision to leave and has minimal time to plan for the change. Other team members get taken by surprise and are unsettled. Customers wonder if something untoward has occurred. The new appointee may not get the opportunity for an effective handover with their predecessor.

In the less common scenario where there is transparency, everyone tends to be a great deal more comfortable and the whole process operates with goodwill. This tends to happen when there is a specific reason for the move which employees feel they can be open about such as personal health or family circumstances (for example their partner transferring to another location). But surely we should aim for this open approach more of the time?

There are some organisations that have strict policies requiring employees to leave immediately on giving notice, particularly if there they are moving to a direct competitor. In this context secrecy is perhaps understandable but still a disadvantage to all parties.

There is no doubt that staff turnover is a disruption to business and managers would generally prefer not to lose current expertise and have to spend time and money recruiting replacements or arranging temporary cover. However, we are also realistic and accept it as part of the normal employee life cycle. We can reduce that level of disruption if we encourage employees to be transparent about the process.

So how do we create an environment that encourages people to deal with leaving more openly? It needs to be something that is reinforced as part of our structured HR processes as well as our informal communication with people.

• I have seen some great Employment agreements and policies that accept resignation as normal and encourage people to discuss possible changes with their Manager at an early stage, so they can plan the best possible transition for everyone. These documents specify the minimum amount of notice but encourage employees to give as much prior warning as they can. The key element is the positive tone.

• Career planning and performance review processes are a good opportunity to talk about future plans with employees, to understand their aspirations and provide guidance. Be clear about development opportunities and progression the company can offer – opportunities not being clear or not being delivered on is a common reason for people leaving their job. If they are valuable talent and you have plans for them make sure they know it. However, we should also acknowledge that experience outside the organisation can be a beneficial part of someone’s career path and discuss how the organisation will accept and support that.

• Provide regular opportunities for real dialogue about how things are going in the current job – any frustrations, concerns, workload issues, and the things people love and want to do more of. There may be simple things you can do to retain the employee.

• In your informal communication and one-to-ones with team members make sure they know you are committed to being a mentor and will support their career, wherever they choose to take it. Share examples of how you have supported others in the past through your networks and as a referee. Let them know they can seek your advice about changing jobs without fear of any awkwardness or disadvantage.

If organisations handle the leaving process well it makes the change easier for everybody, and it also improves the potential for the employee to refer future recruits to you or to perhaps return when the time is right.

The Value of Longevity

Posted on 3 May 2018 by BDO HR

I started working in HR a long time ago – I won’t say how many years because it ages me. Back then it was very common to have benefits in employment agreements to recognise length of service.

There was long service leave, salary scales with automatic increments based on service, generous service-based redundancy formulae, extra annual leave after so many years’ service, and so forth. These types of benefits are much less common these days, particularly in the private sector.

A number of reasons spring to mind – such as the opportunity for employers to gradually remove such benefits, along with overtime rates and penal rates and other historic ‘standard’ terms through individual bargaining. The aim of this was generally to reduce employment costs but also the drive to recognise performance over service.

We have a changed career paradigm now based on multiple jobs and often multiple careers rather than the ‘job for life’ concept of the past. Though of course not everybody did their time in one company or one job even in the good old days.

So what is the value of long service? Most people would agree that retention of staff is a desirable goal and the regular turnover of staff after relatively short periods of employment is costly to the business. It also has a destabilising effect on other team members. Having a few long serving anchors in a team can be very positive in an environment of constant change. Of course, very low turnover can also present problems, so as with most things achieving balance is key. Perhaps some of the service-related benefits we have removed contributed positively to staff retention.

Even in the new work environment people are impressed when a colleague retires with long service or reaches a milestone such as 20 years service. I don’t think this is just because it occurs less often. People respect the commitment and loyalty such service represents. Employees with long service have valuable organisational history

and experience. They know what happened when we tried a particular idea before and what we learned from it, or how a challenge or problem was solved in the past or where our current practises, or values or success came from.

I don’t believe long service and high performance are necessarily mutually exclusive. People who love their work stay current, enthusiastic and are great mentors and inspiration for other staff. They also can have great wisdom and optimism – they know we have come through bad times in the past and can survive.

There are times when employees remain in their job too long and are not able to, or motivated to meet the performance standard required – they may not be able to keep pace with technology, or the physical demands of the job, or are no longer a positive contributor to the team and the organisation. Some people give the impression they are biding their time until they are ready to, or can afford to retire. An HR colleague of mine referred to these people as “retired but not yet left”.

Back in the good old days we had compulsory retirement at age 60, which could be extended by agreement. This helped to resolve the dilemma of those staff approaching retirement who had not managed to maintain their skills or enthusiasm for work. There was a known end date that the employee and employer could plan for in advance which allowed a dignified exit for the employee at the end of a long career. In the current environment if the employee stays beyond the optimum time the employer is faced with a formal performance management process or restructuring or trying to negotiate an agreed transition to retirement. Even handled sensitively these options are not the ideal way for someone to end their career.

We know a diverse workforce adds strength so we want some ‘old heads’ alongside the ‘young bloods’. It is worthwhile giving some thought to placing value on service and loyalty in your retention and recognition strategies. In your performance

and development discussions consider how you can support long serving staff to keep learning and stay up to date at the same time as sharing their wisdom and experience with others. In career planning processes try to have open dialogue about planning for retirement well ahead of time so it can be a positive new phase for all parties.

Show Me The Money

Posted on 20 March 2018 by BDO HR

After a long period of low inflation and low wage and salary rises pressure is building in the remuneration market. There are a number of factors having an impact, most of which have featured prominently in the media.

The new Government’s pledge to increase the minimum wage will be good news for those on low wages and will undoubtedly also have a ripple effect to workers on rates above the minimum, where previous margins between the rates of different groups of employees will be eroded.

Shortages of skilled workers are being experienced now and in certain occupations are predicted to accelerate as digital transformation occurs across industries and occupations. Employers are having to pay more to recruit and then may also need to address internal relativity issues with existing employees whose pay has not kept pace with the market.

The cost of housing in Auckland is putting pressure on wages and salaries and also contributing to labour shortages. Employers struggle to recruit in occupations with national public sector salary scales that do not reflect the cost of living in Auckland and we are seeing Aucklanders relocate to the regions (for many good reasons as we know).

The Government pay equity settlement for 55,000 care and support workers is likely to have far reaching effects as those costs come to bear on large numbers of low paid workers over the next five years. They certainly deserve better remuneration but their supervisors and colleagues who now see their pay relativity diminished and wages compressed will very likely be seeking a consequential adjustment.

All of these factors are driving up expectations that potentially will hit businesses hard if they are not in a position to pass wage rises on through price increases to consumers. These factors will impact differently depending on whether you are in the private sector, not-for-profit or public sector and whether you are in Auckland or the ‘rest of New Zealand’ and the extent to which skill shortages may affect your business.

There is plenty of research to show that for most people salary is not the primary motivator of performance or retention. Other factors drive employee engagement which in turn is linked to performance and retention, including:

Learning and development
Career opportunities
Work that has purpose and meaning
Work life balance
Quality of leadership and people management

However, feeling valued is very important and may become the thing that tips the balance for existing staff to look elsewhere if your remuneration gets too far behind the market. Likewise it can be the deciding factor in which job a candidate chooses if all other things are equal.

You don’t have to be the best payer to recruit and retain staff but it certainly helps if you can manage remuneration well. There are a range of factors to consider that can make a positive difference to your remuneration and recognition practices:

• Aim to keep in reasonable touch with the market for your industry and/or location. Use remuneration surveys or your networks to regularly check what’s happening.

• Have a clear remuneration structure and process. Make sure people understand how pay levels are set, how it links to performance, how they can progress.

• When people reach a ceiling at the maximum salary the job is worth or don’t have career progression available, be transparent and creative about how to keep them challenged and rewarded. Consider one-off payments instead of base salary increases or other non-monetary benefits. Try to assign interesting projects or extra responsibility that provides development and satisfaction.

• Keep your promises – do salary reviews when they are due and communicate well about the reasons for pay rises or the lack of them.

• Consider the total package you offer employees – are there benefits aside from salary that are cost-effective to provide and attractive to employees? Make sure these are visible and not taken for granted. When communicating about remuneration remind people about the extras they receive (such as funding for study, phones, health insurance, car parking, extra leave)

• Be active and deliberate about non- monetary recognition for good work and commitment. Thank people often, show appreciation with a small gift or morning tea. Acknowledge birthdays, length of service, passing exams and other milestones.

• Celebrate success and recognise achievements in front of peers with awards, a certificate, commendations at team meetings or in newsletters.

Pay attention to the drivers of engagement noted above to promote retention and engagement of existing staff and make sure you tell the story of your culture and work environment to prospective employees to support your market reputation and to ensure you attract the attention of desirable candidates.

Are You a Good Leader?

Posted on 28 November 2017 by BDO HR

If you are a business owner or manager you are responsible for leading others in pursuit of the organisation’s success. Whether it’s a small business with a few employees or a large entity with multiple divisions, if you are the leader of a team you are having an impact on a daily basis by what you do, or don’t do. I rather like this quote; “All leaders lead by example…. whether they intend to or not.” (Source Unknown)

It’s important for leaders to take time out occasionally to reflect on how well they are doing at being the boss. In a large organisation there is generally data and processes available to help with this. There are likely to be higher levels of management or a board of directors that will go through a structured performance review process with you that also requires some personal reflection.

This may also include some 360 degree feedback from peers and staff that provide you with insights about your leadership. There may be periodic staff engagement surveys that provide feedback about aspects of leadership. You may have access to turnover data, exit interviews and other useful indicators of the effectiveness of your people management and it is paramount that you use these information sources to mould your leadership approach.

Contrastingly, in a small business you probably won’t have the types of processes in place that a large entity typically would and it’s likely you will have less opportunity for reflection as small business owners are often busy with operations, marketing, finance, HR and all the things small business owners need to do. So how can you get some insights to develop your leadership skills?

If you have performance reviews for your staff use the opportunity for 2-way feedback and ask about what you can do more of or less of to help them in their work.
Consider using a business mentor as a sounding board about your leadership style and to provide suggestions for

improvement and contribute ideas to help you through challenging situations. Just having these conversations makes you reflect on how you are doing.
Try to fit in some learning opportunities for yourself to get inspired, be exposed to new ideas, keep up to date with emerging trends, or learn from the experience of others. Training and ongoing development is just as important for leaders as for your staff. This could be a seminar, conference, academic course, on-line learning, or speakers at local business events.
Endeavour to set aside time for personal reflection. What is it that your staff have been telling you? What tasks do you need to follow up on in order to provide your team with sound leadership and ensure they feel valued and listened to?

When you are able to set aside some time for personal reflection regarding your leadership and the productivity of your team try some of the tips above of some of the things a good leader provides, adapted from an article by Jeff Haden, entrepreneur and author. Consider how you are performing in these areas – there may be one or more aspects that you could consciously plan to do more of, changes you could easily implement, or even ‘big picture’ elements you may want to think further on to have a positive impact on the people working for you.

Don’t downplay the power of the Pen

Posted on 22 November 2017 by BDO HR

We talk about the pen being mightier than the sword. Of course these days it wouldn’t be a pen it would be a keyboard, but it’s the same notion of the power of the written word.

We in HR are sometimes accused of being bureaucratic pen-pushers, smothering people in layers of agreements, letters, forms and file notes. Naturally we have embraced technology and much of this red tape is now on-line; but it’s still there. We can just produce more, faster, with very attractive graphics and whizz-bang hyperlinks and whip it through cyber space to lots of people simultaneously, clogging up in boxes with gay abandon and polluting the clouds with cyber junk. Luckily New Zealand has the long white cloud to store all this stuff.

I accept that we can get overly pedantic about HR record keeping but there is method in this madness. If you are too far along the continuum towards no records, and many small employers are, you leave yourself very exposed to unpleasant consequences such as:

Fines for breaches of legislation
Wage arrears claims
Personal grievances

It is concerning to still hear of employers that don’t have written employment agreements at all, or don’t have them for certain groups of staff such as casual or seasonal workers. This is the most basic legal requirement and the foundation of the employment relationship. Not only does it provide legal compliance but protects both parties by confirming the terms you have agreed to work by. If you have agreements in place it is important to review these regularly to ensure you keep pace with legislative change and minimum entitlements.

The other important area of compliance is ensuring you keep thorough wage and time records which are sufficient to confirm that you are meeting minimum requirements, both in relation to wages and also holiday entitlements.

Government agencies do enforce these requirements and particularly regions like Hawke’s Bay with heavy reliance on seasonal workers can be subject to scrutiny from IRD, MBIE and NZ Immigration.

If you have a dispute, a claim or an audit you will need to prove your version of the facts with hard evidence – usually documents. This is the moment when you really wish you had done the dreaded paperwork. For small employers this may seem daunting but it doesn’t have to be complicated. Get your basic essentials sorted which are written employment agreements for all employees and adequate payroll records. Then when stuff happens with staff, as it inevitably will, write it down:

Record any changes to terms of employment such as hours, pay, duties
Keep notes of discussions about performance
Document disciplinary action such as warnings
Recorddiscussionsaboutrestructuring and changes to roles
Plus keep your documentation up to date with changes in legislation

When an issue arises, if you are not able to confirm that things were discussed, or agreed, and that the correct process was followed you are vulnerable and it can be costly.

In small teams there is generally less formality as you would expect, and most issues are dealt with in person. This is ideal for reaching understanding and agreement but not helpful when down the track the details need to be confirmed. Recollections can be inaccurate and things can be re- interpreted through a different lens based on subsequent events. A representative or support person can put a very different spin on discussions and agreements that both parties were quite happy with at the time.

Depending on the situation, your records don’t necessarily have to be formal letters – an email, a diary note, a note in an app or on-line appraisal system for example, are equally valid. These don’t have to be lengthy and they can be written in plain language rather than legal technicalities. However, if you are unsure or there is an element of risk involved take advice about the records you need to have in place.

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