Mai Chen: Vital to keep on top of shifting employment law

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Labour leadership candidates Shane Jones, David Cunliffe and Grant Robertson.  Photos / NZ Herald
Labour leadership candidates Shane Jones, David Cunliffe and Grant Robertson. Photos / NZ Herald

The Labour leadership contest playing out between David Cunliffe, Grant Robertson and Shane Jones is highlighting how Labour-led and National-led governments would differ in their approach to employment law.

David Cunliffe and Grant Robertson have outlined some of the fundamental employment law changes they would make if they were the Prime Minister after the next election. Both have pledged their support for a "living wage", currently reckoned to be $18.40 an hour, as a minimum for all government employees and contractors. They would also roll back amendments to the Employment Relations Act going through Parliament.

The constitutional change made at the Party's annual conference last year which democratised the vote for the leadership underscored the importance of worker rights by giving the party's affiliated unions 20 per cent of the vote, while party members have 40 per cent and caucus members 40 per cent.

Labour is proposing new industry standard agreements representing the minimum employment standards in a particular industry, agreed between unions and employer organisations in that industry; to repeal many of National's amendments to the ERA, including 90-day probationary periods; to restore reinstatement as a primary remedy for unjustifiably dismissed workers and to repeal the changes affecting film and television workers as a consequence of the Hobbit crisis.

But changing government policy prescriptions is only one source of changes to employment laws. Having just completed with others in my firm a book on employment law for business, I am struck by the constant redefinition of the obligations owed by employers and employees through judgments of the Employment Court or Court of Appeal. Who would have thought that employment law would be such an ever changing beast? Some examples:

• National is amending legislation to provide greater flexibility for employers, including removing the requirement to conclude collective bargaining and saying when bargaining ends;

• An increased onus on health and safety in the aftermath of the Pike River disaster including a duty on directors, chief executives and others in governance roles to be pro-active in health and safety. Significant liability will potentially ensue if such a duty is not met.

• Employers will be required to have accurate information (that is, able to be verified) in any restructuring proposal and be prepared to reconfirm or redeploy employees to other positions.

• Employers can now seek employees' Facebook and bank records to check whether they are validly taking sick leave;

• Aligning pay in sectors where the workforce is predominantly female with comparable roles mostly performed by men in other sectors.

Given so much change, it is not surprising that employers make mistakes. Some common ones in my experience include failing to ensure individual employment agreements are up to date, reflect employment law, and reflect the role performed by the employee.

Another common failing occurs in fixed-term employment agreements. You need genuine reasons based on reasonable grounds for an agreement to expire on a certain date.

Many get redundancy proposals wrong - incorrect statements or justifications may undermine the justification for the redundancy, and the Employment Court will check.

Employers need to understand what constructive dismissal is. Employees have to resign for there to be a constructive dismissal, if they are still employed they have not been constructively dismissed.

Some do not understand what acting in good faith means. Employers need to be active and constructive and responsible and communicative. They need to respond to and act on issues raised in a disciplinary investigation.

When conducting lawful investigations employers still have obligations of good faith. Where there is a criminal dimension, where possible employers should complete an employment investigation without relying on, or waiting for, a criminal investigation.

Adding "no fault" termination provisions into senior executives' and chief executives' contracts is wise. This would allow employment to be ended by an agreed payment when the board has lost trust in the person, which may not otherwise be a lawful reason to dismiss.

Who leads Labour into the 2014 general elections, and who will be leading the country following those elections, will affect what employment laws we have. Regardless, there is already plenty of change that requires employers and employees to keep up with the latest employment laws.

Mai Chen is a partner in Chen Palmer and adjunct professor at the University of Auckland Business School.

- NZ Herald

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