Sophie Law
Associate
tel:+6475700680
mailto:sophie.law@hobec.co.nz
Qualifications
- LLB, Waikato University 2014
- Admitted to the Bar in New Zealand December 2014
Community Activity
- Trustee of He Kaupapa Kotahitanga Charitable Trust (HKKT)
Contact
- DDI: +64 7 570 0680
- M: +64 27 305 7190
- E: sophie.law@hobec.co.nz
Sophie is an Associate at Holland Beckett and advises clients on all aspects of employment and relationship property matters.
Sophie acts on a broad range of employment law matters, both contentious and non-contentious. She has particular experience in providing assistance to clients who are undergoing employee investigations, Holidays Act compliance issues, personal grievance claims, disciplinary and performance processes, restructures and negotiated exits. This includes assisting clients with representation in dispute resolution processes such as mediation and the Employment Relations Authority.
She also assists clients to implement proper and thorough processes in their business through preparing employment agreements, independent contractor agreements, executive remuneration arrangements, bonus policies, flexible working policies and other HR documentation and policies.
In addition, Sophie is focused on upskilling her employer clients through delivering bespoke training workshops focusing on Holidays Act compliance, updates to employment law, and bullying and harassment.
Sophie also specialises in relationship property and can assist clients with post-separation relationship property disputes, including negotiating, drafting and advising on Relationship Property Agreements, and acting in Court proceedings, preparing Contracting Out Agreements (“prenups”), and other general family law issues.
She is committed to achieving practical solutions for clients and ensuring matters are resolved quickly and pragmatically and through out of Court dispute resolution methods. However, Sophie is also an experienced advocate when required.
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Restructuring in the workplace – What employers need to know
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.
Holidays Act – could change finally be on the horizon?
Earlier this week the Workplace Relations and Safety Minister Brooke Van Velden gave a speech to the Auckland Business Chamber, reiterating her priorities following the conclusion of the Government’s 100-day plan in which Fair Pay Agreements were abolished, and the availability of 90 day trial periods extended to all new employees. The Minister has confirmed that delivering changes to the Holidays Act (“Act”) is one of her top priorities, which is likely to be welcome news to both employers and employees.
Compliance with the Act has been difficult and costly for employers and payroll providers. The Labour Government put together a taskforce in 2018 to address the many issues being experienced by employers when calculating leave and holiday entitlements. The taskforce made a number of recommendations, all of which were accepted (for further details on these changes see our previous article here). A draft Leave Entitlements Bill was prepared, however was not introduced prior to last year’s election.
The overarching issue with the Act is that there are multiple ways to calculate an employee’s holiday pay, and the Act has struggled to keep up with working arrangements outside of a normal five day a week salaried employee. Payments such as bonuses, commission, or if an employee works variable hours mean that the calculations are not straight forward and are often done incorrectly. The changes proposed were an attempt to simplify these calculations.
The Minister has now confirmed that the changes recommended by the taskforce and the draft Bill will not be “simply rubberstamped” and will be subject to scrutiny as well as consultation with key stakeholders. She went on to say “if the policy is difficult to draft, chances are businesses would have a tough time implementing it too”. This indicates a major reset of the Act, and the changes which we had expected, could be on the way.
Other indicated changes to employment law include a change to the rules surrounding contractors (with the Court of Appeal due to hear the Uber case this month (see here for our previous advice regarding this), we are likely to also have further developments in this area from the Courts later in the year) and changes to personal grievances. The Minister has asked for advice on whether an income threshold for raising a personal grievance can be set and removing eligibility for any remedies when an employee is at fault.
The Minister has been very clear that she would like to receive feedback from the stakeholders who will eventually have to work with the Act and it is important that businesses use this opportunity to have a say on the Act. The majority of employers have struggled to achieve strict compliance with the Act due to its many complexities. Putting forward issues which regularly impact your business will ensure these can be given consideration. Our team will be closely monitoring this and will provide specific information on how feedback can be given when this information is available.
If you require assistance with your current obligations under the Act, or would like to discuss providing feedback then please feel free to get in touch with a member of our specialist employment law team.
Using Chat GPT in the workplace – what you need to know
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!)
Change is coming – what does this mean for your business?
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.
Summertime Hours – the on-trend alternative to a pay rise
Given the current economic conditions facing employers in New Zealand, it is predicted that pay rises for employees will be at far lower levels than those seen during the past two years. However, employees are also aware of the relatively tight labour market and are themselves facing increased living costs, which may mean they are willing to look for other employment opportunities if their expectations are not met. This can provide a difficult situation for an employer. The need to keep pay increases to a minimum will need to be balanced against the need to retain valued employees and limit the costs of recruitment and training for new employees. So, is there anything an employer can offer that won’t negatively impact the bottom line but might keep employees motivated and committed?
Well, one possible solution could be the introduction of “Summertime Hours”. Put simply, Summertime Hours represent a set period of time during those (hopefully) warm, sunny months when employees are able to end their working day a few hours earlier to make the most of the (fingers crossed) great weather. For example, Summertime Hours could be specified as being a 3.00pm finishing time on Friday afternoons during the months of January and February.
The upside to Summertime Hours? Firstly, your employees will be even further convinced that they are working for the right employer, meaning that more employees will choose to stay in your employment and will not be tempted to look elsewhere for alternative roles. Secondly, it will boost staff morale on the whole, and a happy workplace leads to better results all round. Furthermore, this initiative is unlikely to cost you anything. It is very possible there will be little impact on productivity levels because employees will show their gratitude by ensuring they put in extra effort throughout the rest of their week as a show of appreciation (and to ensure the Summertime Hours happen again next year). As was seen with the introduction by some employers of four day weeks, employees continued to have the same level of output even when working within the condensed time frame. Finally, it is a great way to boost your public reputation as a good employer, meaning you may be first choice for potential employees looking to be hired.
There may of course be reasons Summertime Hours would not work. For example, it may be difficult for some businesses to implement Summertime Hours if there are certain employees whose roles necessitate them remaining in the workplace until the usual close of business time (while everyone else is flying out the door with their beach towel slung over one shoulder). You don’t want to create division as this may lead to frustration and feelings of unfairness, but workarounds might be found (ie. those particular employees take the time off at a different time or day of the week). Another reason Summertime Hours may not work is if they become an administrative hassle to organise (ie. if employees want to take advantage of the early finish, but request for it to occur on a different day to the one you were willing to offer). This may mean that more time and effort goes into the implementation of the policy than was initially expected.
Overall, Summertime Hours do seem able to provide a real benefit to employees that will boost the morale of the whole workplace, while not adding to wage and salary costs and having no detrimental impact on productivity. As such, it may be an idea worth serious consideration.
The key to successful implementation of a Summertime Hours Policy is to ensure that the terms of the policy are clear and workable. The first step might be to raise the idea with your managers and/or employees and get feedback as to whether it would be something they think is a good idea (note: we predict they will say “yes”), how they see it working in your workplace (ie. the most appropriate day, how they will plan their time to ensure all required work is completed as usual), and to get ideas about what the parameters should be (for example, it will only happen on a Friday afternoon, and only until the end of February).
If you want to discuss a possible policy for your employees, or any other employment related policy ideas that you might have, we are happy to help and will ensure you have a clear and well-drafted document for everyone in your workplace to follow.
If you have any general employment related queries or topics of interest that you would like us to cover in our upcoming articles, please let us know!
Extended timeframe for raising sexual harassment claims
Amendments to the Employment Relations Act 2000 means that from 13 June 2023, employees will have 12 months to raise a personal grievance related to sexual harassment. Employers should be aware of changes that will be required for all new employment agreements. The new law extends the timeframe for employees to raise a personal grievance with their employer for sexual harassment claims from 90 days to 12 months. The timeframe commences from the date on which the action alleged to amount to a personal grievance occurred or the date the employee became aware of the action, whichever is later. The new law will not allow for any retrospective/backdated sexual harassment personal grievance claims. The extended timeframe will only apply to cases where the sexual harassment occurred or came to the employee’s attention on or after 13 June 2023. The previous 90-day period will continue to apply to any sexual harassment that occurred before the new law came into force. What steps are employers required to take? Employment Agreements Employment agreements entered into on or after 13 June 2023 will need to reflect the new law. It is a legal requirement for employment agreements to contain information on how to resolve employment disputes, as well currently including a specific reference to the 90-day time limit period for raising personal grievances. Employers will now need to refer to the extended 12-month timeframe for sexual harassment claims for all new employment agreements finalised on or after 13 June 2023. Failure to do so may result in the employer being liable for a penalty, and could provide a defence to an employee if they failed to raise a personal grievance claim within the new 12-month period. We recommend that employment agreement templates are updated accordingly. Employment agreements are not required to be updated for current employees (employed prior to 13 June 2023). Policies Employers should carefully review company policies that refer to time periods for raising personal grievance claims, and update these to reflect the new 12-month period for sexual harassment claims. How can we help? Please let us know if you would like any assistance in updating your employment agreement templates and policies to reflect this change. It may also be a good opportunity for employers to also undertake a more general review of their employment documentation to ensure compliance and best practice.
Fair Pay Agreements Act 2022
The Fair Pay Agreements Act 2022 came into effect on 1 December 2022. The Act creates a statutory framework for collective bargaining for Fair Pay Agreements (FPA) that provides for a mandatory, sector-wide collective bargaining regime. FPAs will also supplement collective bargaining between unions and employees, as well as bargaining for individual terms and conditions.
We have outlined how FPAs will operate and the potential implications for businesses and employers.
Why are Fair Pay Agreements being implemented?
The Government has stated that the purpose of the legislation is to bring together employers and unions to bargain for minimum terms and conditions for all employees across an entire industry or occupation.
How will the Fair Pay System work?
Initiating the process
The FPA process will start if a union meets either the representation test, or the public interest test and initiates bargaining. The representation test means that 10 percent of a given occupation or sector, or 1000 workers (whichever is less) support initiating bargaining for the proposed FPA. The public interest test requires the relevant employees to receive low pay and:
Have little bargaining power; or
Have a lack of pay progression; or
Not be adequately paid, taking into account factors such as working long or unsocial hours (for example, weekend or night shifts) or have contractual uncertainty (for example, performing short-term seasonal work or working on an intermittent or irregular basis).
The union must identify who would be covered to establish that one of the above tests have been met. The union must also identify whether it is to be occupation or industry based. The union then applies to the Chief Executive of the Ministry of Business, Innovation and Employment (MBIE).
MBIE must be satisfied that either the representation or public interest test has been met. MBIE can request further information and/or call for public submissions in making this determination. If a union is successful it must identify and notify all unions that represent affected employees, and affected employers, and publish a notice to that effect. All employees in the occupation or sector covered by the proposed FPA will be covered by the bargaining, as will their employers.
Representation
Both employers and employees will be represented throughout the process. For workers, this will likely be the union who initiated the bargaining process. For employers, this will largely depend on whether or not it is a public or private sector.
All parties have a duty of good faith, as well as requirements to ensure Māori employees and employers are adequately represented.
FPA terms
Parties must agree on the following employment terms:
Start date and expiry date of the FPA which must be for a period of between three and five years;
Who is covered by the FPA;
The normal hours of work;
Minimum base wage rates (including when and how they are adjusted);
Overtime;
Penalty rates;
Any superannuation; and
The process for varying an FPA.
Parties must discuss, but are not required to include in the FPA, the following topics:
Redundancy;
Flexible working;
The objectives of the FPA;
Training and development;
Leave entitlements; and
Health and safety.
Parties may also discuss and include any other employment-related topics they consider to be relevant.
They can also allow exemptions for businesses that are in significant financial hardship, set regional differences, and other differential terms, so long as they comply with the Human Rights Act 1993 and minimum employment entitlements.
If disputes arise during the bargaining process, parties can access the MBIE mediation service. In some circumstances they may also apply to the Employment Relations Authority (ERA) to have the terms of an FPA fixed through a Determination.
Finalising FPAs
Once agreed between the parties, an FPA needs to be approved by the ERA who will carry out a compliance assessment. If approved, then it will be ratified and come into force through regulations or orders.
All employers who fall within the coverage of the FPA will then be bound by it. This includes employers who did not participate in the bargaining process.
What are the (potential) implications of the Fair Pay System for employers and business owners?
Unlike current collective bargaining, under the Fair Pay System there is no opportunity for employers to opt out. Therefore, businesses may have less freedom to negotiate individual employment terms with their employees which could have a negative impact on small-to-medium-sized businesses. That employment terms will apply to all businesses operating in an industry or occupation regardless of their involvement in the bargaining process could lead to businesses feeling disengaged. It also remains to be seen how this will work in practice with multiple employers with competing interests.
Independent contractors are not currently covered by FPAs but the Government has indicated this may change. There will be penalties for employers that attempt to avoid the FPA process by engaging workers as independent contractors when they are truly an employee.
If you would like further information regarding the effect that the Fair Pay System may have on your business, please contact a member of our employment law team.
Uber drivers succeed in being declared employees in the Employment Court
Last week the Employment Court released its decision in which it has found in favour of four Uber drivers, ruling that they are deemed to be employees rather than independent contractors. This is in contrast to an earlier decision of the Employment Court in 2020 which held an Uber driver was not an employee. Employment Court Decision The Employment Court was tasked with assessing the real nature of the relationship between the four Uber drivers and Uber to determine whether the drivers are employees or independent contractors. In doing so, the Court looked at the real nature of the relationship, including looking at features of control, economic reality, and integration which were present in the relationship between the drivers and Uber. After hearing a raft of evidence from both sides over a two month period, the Employment Court made a declaration that the drivers were employees. This declaration meant, among other things, that the drivers were entitled to approximately six years of backdated wage entitlements such as sick leave and annual leave. In reaching its decision, the Court looked past the wording of the drivers\' contractual terms. Little weight was given to the drivers being labelled as “independent contractors”. Rather, the Court prioritised the control which was exercised by Uber over the drivers. For example, the contractual terms were set by Uber with the drivers being unable to engage in any negotiation. This in itself reinforced a high degree of control over their drivers. A key part of the control over the drivers was Uber’s ability to set the prices for each driver’s fare and not revealing this information until the driver had accepted the ride. In doing so, Uber deprived the drivers from assessing the profitability of each potential ride. Drivers were unable to run their business as they saw fit which the Court recognised as a hallmark of an independent contractor. Control was not limited to pricing; drivers were unable to uniquely market their services. They could not develop their own branding, sign-write their cars, or differentiate themselves in any meaningful way. The contractual terms and app also functioned in a way which prevents drivers from establishing business relationships with clients. Any goodwill accumulated by the drivers was limited to Uber’s driver rating system which drivers could not control. The Court held that the only way for a driver to increase their profits, was to work longer hours. Along with the drivers’ inability to determine the price for their services, the way in which the rides are distributed were also controlled by Uber. Drivers with higher ratings would be offered more profitable rides more often; those with lower ratings were offered limited work. Ultimately, Uber was unable to convince the Court that they were purely a platform which connected customers with drivers. Uber emphasised that drivers are able to choose their times of work and work in other jobs. The Court did not accept this point – in a post-pandemic employment environment flexible working has become common place and is a neutral factor in determining whether someone is an independent contractor. The Court also gave little weight to drivers providing their own vehicle and mobile phone as an indication of the drivers being contractors. Historically, providing your own equipment implied a significant investment into a specialised craft, however, most people have access to a car and a mobile phone so the Court considered this was not a specific investment for the role with Uber. What does this mean for the future? Uber NZ has signalled that they will be appealing the decision to the Court of Appeal. This may help in providing clarity given we now have two judgments from the Employment Court which both reach different outcomes. We consider this to be a timely reminder for businesses that they need to regularly review any independent contractor arrangements they may have, and assess the real nature of the relationship. If you require assistance with this please contact a member of our experienced employment law team.