We have nearly reached the midway point of 2024, and as anticipated, after a slow-down in the early months of this year, we are now starting to see a ramp up, both in activity from the Government, signalling upcoming law changes, and in judgements & legal rulings that may have an impact on the way you manage employment in your business.

Acting in ‘good faith’ is essential

A reminder that failing to act in good faith can lead to penalties for both employers, and employees, as is so clearly illustrated in a recent case.

About ‘good faith’

The employment relationship is underpinned by this concept—and fundamental obligation (of both parties)—to act in ‘good faith’. The Employment Relations Act 2000 (Act) explains that this requires:

  1. Parties to be “active and constructive” in establishing and maintaining a productive employment relationship, which includes an obligation on the parties to be “responsive and communicative”.
  2. An employer who is proposing to make a decision that will, or is likely to, have an adverse effect on the continuation of employees’ employment, to provide potentially affected employees with access to relevant information and an opportunity to comment on that information.

This duty applies in many common circumstances, such as

  • Bargaining on terms & conditions of employment.
  • An employer proposing to restructure, or sell a business.
  • During disciplinary situations, that may result in dismissal.
  • In medical incapacity processes that may result in termination.
  • During performance improvement processes.

In the recent case of, Keighran v Kensington Tavern Ltd The Employment Court commented on the duty of employers to always act in good faith.

The plaintiff worked at Kensington Tavern from November 2018. He was promoted to restaurant manager in March 2019, and then on 5 September 2020, was advised that he would no longer be managing the restaurant; rather he would be managing the bar. The plaintiff left the workplace and did not return. He pursued a claim in the Employment Relations Authority for breach of good faith, amongst other complaints, and the imposition of a penalty for failure to provide a written employment agreement.

The owner of the employer company, who received the employee’s allegations, acknowledged she had mishandled a meeting because she was suffering from stress and personal health issues. The Court found the employer was not acting maliciously or in bad faith. Even so, “An absence of bad faith is not a prerequisite for a finding of breach of good faith… There was clearly an established breach of good faith…”

In short, a breach of good faith can be unintended.  In this case, the Court did not award a penalty for breach of good faith because the plaintiff had not sought one. However, if he had, the Court could have issued penalties up to a maximum of $20,000 against the employer.

Employers play crucial role in supporting employee mental health

Under the Health and Safety at Work Act 2015, employers must provide a safe working environment for their employees – including when it comes to their mental health and wellbeing.  A recent report by WorkSafe highlights the crucial role that employers play in creating safe working environments.  Employers should take proactive steps to manage psychosocial hazards  in the workplace and take care of their employees’ mental health and wellbeing.

The report looked at deaths by suicide in New Zealand between 2017 and 2021. Of the 1,678 deaths examined, WorkSafe found that 12% were work related. Of those, 86% involved stressors related to work. The report breaks down organisational, social, and environmental factors that are psychosocial hazards.

The following work-related stressors appeared in work-related suicides:

  • Job demands – for example having too much work to complete within given time/resource constraints and unrealistic expectations of a worker’s competence or responsibilities.
  • Interpersonal relationships, such as conflict with colleagues.
  • Workload and work pace.
  • Working hours and schedule.
  • Bullying and victimisation.
  • Performance and management processes.
What do employers need to do to fulfil their obligations?

Employers should be mindful of their obligations under the Health and Safety at Work Act 2015 to ensure, as far as reasonably practicable, the health and safety of persons at work is not put at risk. They also have a duty to be a fair and reasonable employer and to act in good faith under the Employment Relations Act 2000.

In practice, where an employee raises a mental health issue, as an employer you should work with your employee to obtain medical advice and to understand the nature of the issues, and what support needs to be provided. You may need to make changes to accommodate employees with mental health issues, for example, modifying the working environment and providing flexible working arrangements. Where issues like bullying or harassment are raised by an employee, these should be taken seriously.

Updates in Immigration

Immigration New Zealand has continued to make significant changes to the Accreditation Employer Work Visa (AEWV) scheme. We have summarised some relevant information to help you adjust to these changes.

Renewal of Accreditation

INZ has provided new guidance on the renewal of accreditation process, including:

  • A recommendation that all employers should allow for at least six weeks to renew an employer accreditation. We also recommend that a further two weeks preparation time should be factored.
  • Interim employer accreditation is only available if a renewal of accreditation application is submitted before an employer’s accreditation expires. Interim accreditation will be granted for three months.
  • INZ will likely focus on and request for evidence showing that Employment New Zealand modules have been completed and settlement support has been provided

INZ has confirmed that the Franchisee accreditation category is to be disestablished as of this month (June 2024) and applications can no longer be submitted.

Updates on Processing Times and Priority Processing

There has been a slowdown in processing of Job Check and AEWV applications.  Job Check applications for non-green list roles and those that are non-priority, appear to be taking from four to seven weeks.

INZ have updated instructions for the order of processing applications. Job Check and AEWV applications that support:

  1. Roles listed on the Green List will be prioritised.
  2. Dairy Farm Worker or Farmer roles will be prioritised between 14 May and 1 August 2024.

Upcoming changes

Our coalition Government now is now full steam ahead with many of the campaign discussion points.  Below is a summary of potential changes that we will be keeping an eye on:

Proposed Members Bills
Crimes (Corporate Homicide) Amendment Bill

A new Members Bill from Labour’s Workplace Relations and Safety Spokesperson seeks to introduce a new criminal offence if despite a relevant legal duty of care a person or entity recklessly engages in conduct that exposes any individual to whom that duty is owed to a risk of death or serious injury, and a person dies as a result.

Security of Workers’ Wages Amendment Bill

A new Members Bill from a Labour MP proposes to amend the Companies Act 1993 and the Insolvency Act 2006 to ensure that, in cases of liquidation and insolvency, workers are paid for all amounts outstanding to them. The Bill also removes the cap for claims by employees to ensure that all outstanding amounts owed to the employee are paid and ensures that workers’ claims for outstanding money owed to them are prioritised.

Holidays Act Reforms

The Government announced last week that it is intending to publish an a ‘exposure draft of a Bill’ in September 2024 as a start to reforming the Holidays Act.  There will still be a public consultation as part of Select Committee procedures when the full Bill reaches that stage.

The indications are that the exposure draft will include proposals to (along with other changes);

  • A proposed approach to pro-rating sick leave so that there is some proportionality to how much an employee works.
  • Moving from a weeks-based entitlement system to a weeks-based accrual system for providing annual leave entitlement.
  • Simpler methodologies for calculating use of leave that do not require pay systems to access data about daily hours of work.
  • Objective criteria for using pay-as-you-go for annual leave and a less burdensome review process; and
  • Clarification that only full pay periods need to be included in 13-week reference periods.
That’s a wrap for our mid-year Employment Bytes. If you have more specific questions relating to the application of these points, or any other employment-related questions, our team is available to help. You can reach us on +64 9 300 7224.


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