Holidays Act – could change finally be on the horizon?

With the economy continuing on its downward slide, you will not be alone in giving thought to potential cost cutting measures, including reducing your labour costs. Restructuring is usually a last resort for employers and is only a step that tends to be taken when there seem to be no other viable options for reducing costs quickly.  While the impact on employees is immense, it is clear that a restructure process can be just as stressful and fraught for an employer.  That is why, sometimes, employers can get things wrong and may find themselves at the centre of a personal grievance, which can result in greater stress, cost and uncertainty. A restructuring needs to be substantively justified, and procedurally correct.  If you do not meet both of these requirements, there is a risk that if an employee were to make a claim against you, it could be upheld. What is Substantive Justification? It is likely that during recessionary times, such as we are in now, the substantive reasons for a restructure will be fairly obvious to your employees.  However, you will still need to justify this by providing evidence in support.  This may include pointing to reduced sales figures or forecasts, showing increased costs (i.e. materials, rent, insurance), or any other information that you are willing to share that goes toward justifying the proposal to restructure. What is the Correct Procedure? The procedure for restructuring is usually where an employer can get tripped up.  To start, you need to remember that you should not pre-determine that a restructure is inevitable.  You have a good faith obligation to your employees to consult with them before any decisions that may affect their employment are made.  It may be that during consultation, you are able to see a way forward that means a restructure is not required, or at least not to the extent that you had originally envisaged. Once you have substantive justification, you need to advise your employees that you are proposing a restructure and give them adequate information including what the restructure would entail, how it would impact them, and how you wish to consult with them about it. You will then move to the consultation stage and be ready to provide further information or answer any questions the employees may have.  Once you have finished consultation, you will need to advise the employees of your proposed decision.  Your employees should then be given an opportunity to comment on or ask further questions about the proposed decision.  It is not until they have been given this opportunity that you should procced to confirm your decision. The exact process you follow will depend on factors such as the size of your workforce, the number of roles that may be impacted, the typical method of communication with employees, the specific terms of your employment agreements, and the location of your employees. Having guided employers through numerous restructures, the one point we want you to keep in mind is that getting your restructure right is by far more preferable than having to deal with the consequences (and potential costs) of getting it wrong.  We can provide specific advice and guidance on restructuring and all other employment related issues, so please contact our employment law team at any time for further information.

The use of Artificial Intelligence (“AI”) in the workplace is likely to become increasingly common as technologies advance and benefits become proven and trusted. One AI development that looks set to be eagerly embraced by business is the generative pre-trained transformer model designed by developer OpenAI and used in its Chat GPT product (as well as in competing products, such as Google’s Bard and Microsoft’s Bing Chat). In a nutshell, Chat GPT is a large language model chatbot that is able to generate content based on requirements set by the user.  It essentially searches the internet to find information that matches your query and can then produce written content including articles, emails and even social media posts, as well as images and graphics. While the use of this technology may create huge benefits for your workplace, there are a few key points that you should be aware of before you start: If you plan to use Chat GPT in the workplace, you should open a Chat GPT Enterprise account (or its equivalent). The Enterprise account will provide greater speed, data security and privacy than a standard individual account.  Yes, it will cost more, but if your employees use Chat GPT from their own account there is a risk that sensitive/confidential information may be leaked and could become available to anyone.  If you use the Enterprise level service, any information you input or work product received will remain private to you and will not be used by the model to provide work output for third parties. Furthermore, if an employee uses their own Chat GPT account to generate work product, it is the employee who will be the copyright owner of the work product – not the employer. This may create the issue of having to assign or license the right to use the content, or the employee having the ability to share the work product with third parties without requiring your consent to do so.  It may be simpler to have copyright clearly belonging to you from the start. Another important point is that the content that you receive may not always be correct or suitable! Chat GPT looks for any available information to help it formulate its work product.  That means it will not always retrieve accurate information, and in some cases could be basing its work product on false information.  Furthermore, the style of the response may not be suited to you or your customers.  Chat GPT is not yet able to distinguish between what might be a great communication to an American consumer from one that would work better in a New Zealand context. If you are thinking about using AI in the workplace, it really is a good idea to put policies in place so that you and your employees understand the parameters and effects.  It is an ever-evolving world of technology so you will need to ensure that policies (and employment agreements) are regularly reviewed and updated to meet your needs. If you require any assistance with your policy drafting and implementation, our employment law team is here to help (and will provide you with a much better-tailored service than Chat GPT!)

On Monday 11 December 2023, the new three-party Coalition Government confirmed that the Fair Pay Agreements Act 2022 would be repealed, and that the use of 90 day trial provisions will be extended beyond small businesses. It is the Government’s intention that these changes will be implemented through a Member’s Bill which will be passed under urgency before Christmas. There are also other proposed changes to employment law that have been signalled by the new Government. 90 day trials Currently the use of 90 day trial periods, which allow an employer to dismiss an employee without being required to provide any reasons for the dismissal, is limited to businesses with 19 or fewer employees. The change will mean trial periods are available to all employers when taking on a new employee regardless of the number of employees. If done correctly, dismissal pursuant to a trial period clause means an employee is unable to raise a personal grievance for unjustified dismissal. The change restores the position as it was under the previous National Government. The new Government considers that this change will allow greater opportunities for employees as employers could then take a risk on someone who “might not tick all the boxes in terms of skills and experience but who has the right attitude, without the risk of a costly dismissal process”. It is important to note that employers will still be required to comply with the existing provisions under the Employment Relations Act 2000 which relate to trial periods, such as ensuring the trial period is limited to new employees, and agreed to in writing before the employee starts work. We suggest employers wanting to utilise 90 day trial periods touch base with our employment team to ensure that these clauses are correctly drafted for inclusion in employment agreements and meet all requirements to allow them to be used as intended. Fair Pay Agreements Fair Pay Agreements were introduced by the previous Labour Government to try and improve the collective working conditions and wages of particular sectors. It allowed workers to negotiate collectively, in an attempt to increase their negotiation and bargaining power. The Government has now confirmed that this will be repealed. Currently six sectors have successfully applied to start negotiations (including security, hospitality and cleaning) but none have yet received a Fair Pay Agreement so it appears these will not advance any further. It is important to note that even with the change, collective bargaining will still continue under Part 5 of the Employment Relations Act, just without the formal process provided by the Fair Pay Agreements Act. Other signalled changes The Coalition Agreement entered into by the new Government also signals its intention to progress several key changes to personal grievances. This would include removing eligibility for an employee to claim remedies, including financial compensation, for a personal grievance where the employee is at fault. Additionally, the Government plans to put in place income thresholds for personal grievance claims. If an employee earns over a certain amount then they will be statutorily barred from raising a personal grievance claim. The specifics of this are still to be confirmed, however may take a similar form to a Bill introduced by the National party while in opposition (the Employment Relations (Allowing Higher Earners to Contract Out of Personal Grievance Provisions) Amendment Bill) which included a provision allowing employment agreements to contain a clause preventing an employee from raising a personal grievance if that employee earnt over the set threshold. It is unclear at this stage what the Government intends to set the income threshold at. Independent contractors are another area of employment law which the Government has indicated it wishes to reform. Under the Coalition Agreement “contractors who have explicitly signed up for a contracting relationship can’t challenge their employment status”. This would be a big shift away from the current legal position which allows the Courts to look beyond the written agreement and at the true nature of the relationship between the parties. This will mean that those wishing to enter into an independent contractor arrangement will need to be careful as to how this is documented to ensure it accurately reflects the parties intentions. Other smaller changes indicated by the new Government include stopping work on the income insurance scheme, allowing for moderate increases to minimum wage, a commitment to providing greater protections against migrant worker exploitation, reforming health and safety law, and increasing the annual cap on workers under the Recognised Seasonal Employer scheme (likely a welcome announcement to the horticulture industry). If you would like further information regarding the upcoming changes, or to amend your employment agreements to include trial periods, please do not hesitate to get in touch with a member of our specialist employment law team.