An “injured” employee who took time off from work and was caught by a private investigator to be in a fit and healthy condition, received a penalty in the Employment Relations Authority, which was recently enforced by the Employment Court.
International companies that have New Zealand based employees may now be able to enforce their choice of foreign law in employment agreements should an issue arise. The New Zealand Court of Appeal has found that the express specification of foreign law in an employment agreement should be the relevant law to apply before assessing whether any conflict of law exceptions apply.
In New Zealand, the Christmas holiday period is the main summer holiday and many business close from 24 December through to 7 January, and often operate with reduced staff for much of January.
There is little guidance in New Zealand on how courts should approach penalties for companies that do not adhere to minimum employment standards, particularly for multiple breaches. However, a recent New Zealand Employment Court case, demonstrates an increased willingness to impose high penalties for multiple failures of minimum standards.
A New Zealand Teaching Association (union) has claimed that employees are being “forced” to accept fixed term contracts. The Teaching Association reports that only 15% of new teaching graduates are being employed in permanent positions, with many schools relying on fixed term contracts as a way to manage funding from year to year or to “trial” new teachers. In New Zealand, fixed term employment contracts can only be used where an employer has a genuine reason based on reasonable grounds for limiting employment to a fixed term. The consequences of not complying with the requirements for a fixed term contract are that if an employee challenges his/her termination, the employer is not able to rely on the fixed term to justify that employee’s termination. The practical effect of this will be that the employee relationship is permanent, and the employer could be ordered to pay compensation for an unjustified dismissal or to reinstate the employee.
Statistics New Zealand report that job numbers in New Zealand rose strongly to 3.1% in the year to June 2016, compared with a 2.2% increase in filled jobs in the year to the March 2016 quarter. While job numbers have grown, annual wage growth has remained low.
New Zealand’s Employment Court has held that it is possible for an employee trial period provision to be lawful and enforceable, even where the employment agreement cannot be produced. Provided there is evidence to demonstrate that there was a lawful trial period provision and employment agreement in place, the absence of the agreement does not mean that such a provision is invalid. Under New Zealand law, a trial period provision enables an employer to terminate an employee’s employment within a maximum of 90 days, without the employee being able to challenge the dismissal (except in the case of any ground of discrimination). It is important to note that section 64 of the Employment Relations Act requires all employers to retain a signed copy of an employee’s individual employment agreement and generally speaking, strict compliance with the law is required for an employer to be able to rely on a trial period provision in an employment agreement.
The limits of what preparatory steps can lawfully be taken by an employee who intends to leave an employer, and set up his or her own competing business, have been set out in a recent case. In this decision, the Court assessed the obligations an employee owes to its employer in such circumstances, such as fidelity and good faith, in addition to any restrictive covenants or restraints of trade that might apply.
A stern reminder has been issued from the Court regarding the effect that post-dismissal conduct may have on the amount of compensation awarded to a successful party. In this case, an employer’s post-dismissal conduct resulted in the compensation already ordered to be paid to an employee in a lower court, being doubled from $15,000 to $30,000, when it appealed the decision, where it had also been unsuccessful.
Statistics New Zealand reports that the Consumer Price Index (CPI), which measures the rate of price change of goods and services purchased by New Zealand households and is often used as a factor in determining wage increases, has increased from 0.2% in the March quarter to 0.4 % in the June 2016 quarter. From January 2016 to June 2016, the CPI inflation rate has remained stable, at 0.4 %.