Welcome to the October edition of Employment Bytes, our essential summary of all-things employment. As we map out our content ideas for this bi-monthly summary, we often discuss what to include, should there be no new rulings or employment news. However, as has been the case over the last couple of years, there doesn’t ever seem to be a need for a simple recap­­ of earlier stories – there’s always plenty of action to report on!

In this edition, we kick off with much-anticipated updates on our immigration and border situation and then move onto more general employment considerations.

Opening of border to immigrant workers:  what this means if you want to consider foreign applicants

New Zealand has finally opened its borders to immigrant workers, amidst huge changes to the immigration visa landscape. In the first instance, businesses are encouraged to focus on hiring, training, and upskilling New Zealand workers, prior to considering hiring migrant workers. If you cannot find suitable New Zealanders for a particular position, you may thenapply to hire migrants on the Accredited Employer Work Visa (AEWV) for up to three years.

If you’re considering foreign applications, several things need to happen before someone can enter NZ on the visa:

  1. You will need to have the relevant accreditation to hire on the AEWV—apply for this on the INZ website.
  2.  You will also need to apply for a job check. This confirms that the job has been advertised to New Zealanders first as well as the terms and conditions of the job, pay rate, location and minimum skills, qualifications and experience needed to do the job.
  3.  Once the job check is approved, your overseas candidate can apply for the visa.

For a handy overview  on the AEWV process, our Employer Guide has the information you need. Simply email us at hello@thepeopleplace.co.nz and we will send you a copy in reply.  

You may be wondering what the word on the street is as to how this new scheme is going. If recent headlines are anything to go by, the short answer is ‘not that well’. Of course, it’s still early days. We are yet to see how these visa changes will impact Kiwi employer staffing challenges in both the mid and long-term. However from what we are hearing thus far, businesses have been frustrated with the process. The first step in the process, the employer accreditation, appears to be working well with a majority of employers being approved. The second stage— the job checks that were aimed to be completed within 10 days— seems to have been harder and are reportedly taking longer.

Immigration New Zealand figures show fewer than half of the 14,000 accredited employer work visas approved since the start of July have been processed. INZ are urging employers to be patient as they adjust to the new AEWV policy and process.

Skilled Migrant Category reopening

On Wednesday 12th October, the Government announced that the Skilled Migrant Category (SMC) will restart in the next month. Given our current labour shortage, this announcement will come as positive news for both employers and migrants.

According to the Immigration Minister Michael Wood, "over 12,000 international migrants have applied for 511 different occupations across New Zealand since the Accredited Employer Work Visa opened."

The hope is that this category will provide a pathway for retaining the majority of these much-needed skills in New Zealand permanently, and incentivise and attract high skilled migrants to New Zealand.

The category will reopen under the current settings while consultation is underway,and the system is set up. Currently the first selection for migrants will be for those who have 160 points or above. This will then increase to 180 points after 9 November 2022.

Some of the roles usually accepted under the skilled migrant category have been moved to the Green List, which opened for applications last month. While work visas got off to a slow start, green-list residence visas seem to be moving faster. Of more than 400 Straight to Residence applications that have come in during the past six weeks since it opened in September, 61 have already been approved.

In the long term, the intention is that the new system will make eligibility clearer, allow New Zealand to retain the talent brought in via the new Accredited Employer Work Visa, and complement the Green List and Highly Paid Residence pathways announced as part of the "immigration rebalance" in May.

The system requires migrants to reach a threshold of six points, which could come from a mix of training and experience in their field, qualifications, and income. Migrants will also be required to have a job, or job offer, in New Zealand paying at least the median wage, or 1.5 times the median wage for some occupations. If migrants meet the skills threshold, this new system will supposedly improve processing times and there will be no cap on the number of people who can gain residence each year.

"Today's changes work in tandem with the immigration changes already made and will help further relieve labour shortages and ensure a competitive edge to attract talent to New Zealand" Wood said.

As consultation continues and the system is set up it will be interesting to see if this ‘solves’ or eases the current recruitment difficulties many New Zealand businesses have been faced with these last few years. Watch this space for more updates.

Conditional Offers of Employment

It is common practice for employers to request certain conditions be met before an employee commences work. These conditions may include conducting satisfactory reference checks, criminal history checks, credit checks, and drug testing.

Sometimes these pre-employment checks are conducted after an offer of employment is made and accepted, and therefore the employer will issue a conditional offer of employment, based on satisfactory checks being completed.  A challenge arises for employers should a  pre-employment check be unsatisfactory, failing to meet the requirements of the offer.  In this situation the employer may wish to withdraw the job offer—after it has been accepted.

The Employment Relations Act defines a person intending to work as a person who has been offered, and accepted, work as an employee. Therefore, an employee who has already accepted the position will become a person intending to work under the Act. The employee will acquire statutory rights, including being able to pursue an unfair dismissal personal grievance claim if the employer later tries to withdraw the offer.

To avoid potential issues, when making a conditional employment offer:

1.     It’s important to provide clear provisions as to exactly what it means to meet each condition you set out in the offer.

2.    It’s essential to ensure there is no room for misinterpretation.

3.    If time allows—difficult in this fast moving market we know!— we recommend conducting all pre-employment checks before an offer (conditional or not) is made.

4.    Ensure you can justify the dismissal, if it unfortunately leads to that.

ERA rules in favour of the employer after an unsatisfactory reference result in a withdrawn job offer

The Employment Relations Authority ruled in the favour of the employer who rescinded a conditional offer of employment, due to unsatisfactory background checks prior to the applicant starting in the position.

The applicant was interviewed and conditionally offered a position which they accepted, subject to satisfactory reference and pre-employment checks being conducted. Both parties agreed on the start date, pre-employment forms were sent and the employer ensured regular updates were provided on the progress of the checks.

During the pre-employment checks, an unsatisfactory reference was collected  and the employer withdrew the offer based on this. Although the employee had not yet commenced working with the employer, they raised a personal grievance for unjustified dismissal.

After an investigation was carried out by the ERA to determine if the applicant was considered an employee and was a ‘person intending to work’ under the Act, they reached the conclusion that the applicant was not a person intending to work. 

The reasoning for this was:

1.     The employment offer made was conditional and this was clearly communicated in the offer, communication with the employer and clear fulfilment of the conditions.  

2.    Both parties signed the IEA and therefore accepted the conditional offer and the requirements of those conditions.

3.    The employer did not waive any of the conditions and maintained its position that the conditions needed to be met prior to employment commencing.

4.    The conditions set out were not fulfilled to the employer’s satisfaction and therefore withdrew the conditional offer asa result, prior to the applicant starting.

The ERA also concluded that the ‘offer was conditional, not the contract and as the conditions attached to the offer were not fulfilled or waived by the employer there was never a completed offer and acceptance. And it follows therefore that the applicant was not a person intending to work – he had not accepted an offer of employment as it was incapable of being accepted before the conditions attached to it were fulfilled.’

Ref: Kennedy v Field Nelson Holdings Ltd[2022] NZERA 421

Goodbye to the Covid-19 traffic light system: which employer H&S responsibilities should continue?

The Government has announced the removal of the COVID-19 Protection Framework (traffic light system) and other changes related to the management of COVID-19.

What does this mean for your workplace?

  • All mask-wearing requirements have been removed, except in healthcare and aged care facilities.
  • Those who test positive for COVID-19 need to isolate at home for 7 days.
  • Household Contacts no longer need to isolate, however they will be asked to undertake daily rapid antigen testing (RAT).
  • Close contacts (those who have been in contact with a COVID-19 positive person during the infectious period) are encouraged to wear a mask for five days after exposure.
  • Employers can continue to claim the COVID-19 Leave Support Scheme payments for any employees who test positive for COVID-19, however they can no longer claim payments for Household Contacts as they are no longer required to self-isolate. 
  • All vaccine mandates have come to an end.
  • The vaccination requirements for incoming travellers and aircrew have been removed.
  • All New Zealanders aged 65 and over, and Māori and Pacific people aged 50 and over, have automatic access to COVID-19 antivirals if they test positive. 

As an organisation, you should consider what, if any, additional support measures you may like to put in place with your staff. If employees are a Household or Close Contact, would you prefer them to work from home if their role gives them the ability to do so? Make sure you consider different scenarios and provide clear communications with your staff.

If your COVID-19 or Health and Safety Policy requires compulsory vaccination or mask use, you’ll need to review and update these to align to these changes.

Bakery owner to pay $313k in penalties following labour inspection

The owner of Dunedin-based Romecco Bakery has recently been ordered to pay penalties of $158,000 and a total of more than $193,000 to three of its employees in minimum wage arrears, as well as $40,000 in leave entitlements.

This follows a Labour Inspectorate investigation almosta year ago which found that the employer had failed to pay its employees the correct wages, holiday and sick leave pay, an as a result breached the Employment Relations Act 2000, the Minimum Wage Act 1983 and the Holidays Act 2003.

The Labour Inspector found that the three workers were paid wages for 40 hours per week, but in reality, they were working more than 80 hours per week. Therefore, the remuneration paid to the workers did not meet the statutory minimum wage rate when having regard to the total number of hours worked, the Employment Relations Authority (ERA) said.  

The bakery owner did not maintain timesheets and asked one of the employees to provide false and misleading information on minimum wages, public holiday payments, annual holiday entitlement and work location to the Labour Inspectorate and Immigration New Zealand. To make things worse, the owner also threatened his employees, in an attempt to stop them from continuing with the case. These actions warranted penalties at the higher end of the scale, ERA said.

This decision sends a clear message that businesses that exploit their workers will face severe penalties which will be enforced.

Ref: (Labour Inspector v Samuel and Ors [2021] NZERA479)

Fair Pay Agreements update

NOVEMBER UPDATE: The Fair Pay Agreements (FPA) Bill has now been passed into law, with the new bargaining system to take effect on 1 December 2022.

To recap, the Fair Pay Agreement (FPA) system will bring together employers and unions within a sector, to bargain for minimum terms and conditions for all employees in that industry or occupation. The Agreement will then apply to all workers in that sector, regardless of whether they are members of the union or not.

A Fair Pay Agreement wouldn’t replace the Individual and/or Collective Employment Agreements in a workplace, but employers must comply with the terms of the FPA at a minimum. It covers minimum employee entitlements such as hours of work, wage rates and superannuation entitlements. It may also cover other terms e.g. redundancy compensation and leave.  Industries and occupations with low wages and who are therefore seen as vulnerable are likely to have an FPA.

A union or unions will start the FPA process for a specific industry or occupation, the employers in that relevant industry would then appoint a representative to bargain for their collective interests, and an FPA can be finalised when a simple majority of covered employers and employees vote in favour.

FPAs will remove some of the flexibility employer sin New Zealand currently have when it comes to negotiating terms within minimum legislative boundaries, and it will likely mean an increase in admin and staff costs for businesses covered by an FPA.  

There certainly is a lot going on in the market, and many employment updates to keep track of and take into consideration in your workplace. We can provide advice on compliance and best practice when it comes to your obligations as an employer, please give us a call on +64 9 300 7224 if you'd like to chat. Of course, we always recommend you contact your lawyer for specific legal advice.