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Employment Law

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Employment Law

New Zealand has a unique system of employment law that has significant differences to all other western English speaking jurisdictions. The heart of the employment law legislation is the Employment Contracts Act 1991 which was designed to foster freedom of contract and freedom of association. The Act puts major limits on the right to strike and lockout. If effectively prohibits "closed shop" agreements and ensures that Unions do not have any exclusive right to bargaining representation or to the conduct of employment related litigation on behalf of employees.

However, despite the apparent intention of the Employment Contracts Act to achieve minimal Government regulation of the employment relationship, a number of provisions in the Act have been interpreted by the Courts in a manner which compromises individual rights.

The Employment Contracts Act itself requires all employment contracts to have an effective provision for dealing with personal grievances and disputes. If contracts do not contain such a provision then the Act sets out provisions which will be implied into the contracts. This means that all employees from the Chief Executive Officer down to the lowliest employee have the right to bring a personal grievance against the employer and to conduct that litigation in the Employment Tribunal, either on their own behalf of through an authorised representative such as a Union. There is a highly developed body of case law establishing some intricate principles that employers must apply when attempting to discipline or dismiss an employee. These principles are not found in the Employment Contracts Act itself but only in the case law interpreting it. Unless employers have a thorough awareness of their obligations they can easily end up paying compensatory damages to employees for procedural irregularities in a discipline process even if there were good grounds for dismissing or disciplining the employee.

A number of other Acts such as the Holidays Act, Minimum Wage Act, Health and Safety in Employment Act, Human Rights Act and Privacy Act also govern the employment relationship. They each impose obligations on employers and failure to comply with those obligations can result in financial penalties and, in some cases criminal charges. Skilled advice is therefore required for all those contemplating entering into an employment relationship or terminating an employment relationship. That advice is available at Caudwells.


Jenny Beck Lesley Brook

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Health and Safety

The health and safety obligations of all employers have been significantly increased in recent years. This is as a result of the Health and Safety in Employment Act 1992. There had been a general feeling that prior to this Act there had been a worsening of safety standards in the workplace. The Act was designed to overcome that trend. This Act now imposes upon all employers various general as well as specific obligations in relation to health and safety.

All employers are obliged to take all practicable steps to ensure the health and safety of not only employees but also various classes of visitors. A high standard of care is expected and the employer is obliged to make efforts to identify hazards and then eliminate them if possible. If they cannot be eliminated they must be reduced, minimised or monitored. Employers need to establish health and safety manuals and rigorously enforce procedures in these areas.

The government department that operates in this area is the Department of Labour, Occupational Safety and Health Branch. This is commonly known as OSH. OSH has in recent times taken a very active role in investigating any work place accidents and prosecuting. Fines can be very severe and it is not uncommon to find a fine of $10,000.00 for a fractured leg. A maximum fine is $50,000.00.

It is important to note that this Act applies to not just work places that are traditionally regarded as dangerous. It covers all work places including sites such as schools or offices. Indeed there have been significant cases where prosecutions have been brought against employers of computer operators for claims relating to occupational overuse.

The implication of a prosecution can be far reaching and it is important that if there is any accident being investigated by OSH legal advice be taken.

For legal assistance in this area contact:

Frazer Barton Liz Bulger

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Personal Grievance

The Employment Contracts Act 1991, much like its predecessors, is relatively sparse on the issue of what constitutes an unjustified dismissal. As a result the law of personal grievance has developed primarily through the Employment Tribunal and Employment Court jurisdictions, and when needed the Court of Appeal has stepped in to determine important questions of law.

Any employee who believes that they have grounds for a personal grievance against their employer or former employer may submit that personal grievance to the employer or the employer’s representative. Personal grievance actions have evolved through:

  • claims of unjustified dismissal
  • unjustified actions by the employer which have disadvantaged the employee
  • discrimination in the employment
  • sexual harassment in the employment, and
  • situations where there has been duress relating to Union membership or non-membership

By far the most common actions for personal grievance relate to dismissals (constructive or actual), redundancies, misconduct, unsatisfactory work performance, expiration of fixed term contracts, and unilateral variations of contracts.

To be justified the dismissal must have been substantively (ie, cause) and procedurally fair. These elements are fundamental to every employment contract and cannot be contracted out of. All employers must treat their employees fairly and reasonably, otherwise they face the prospect of having to defend a personal grievance claim. Similarly all employees must not undermine the employment relationship which is based on trust and confidence.

The personal grievance procedure commences with the employee’s submission to the employer, which must be made within the period of 90 days beginning with the date on which the action alleged to amount to a personal grievance occurred or came to the notice of the employee, whichever is the later. There is no obligation on an employer to consider a personal grievance submitted outside the period. Therefore if there is any doubt as to whether the submission is within time you should seek our professional advice.

If the grievance is not resolved at this stage by discussions between the employee and the employer, the next step involves a formal written statement by the employee. The statement must set out the nature of the grievance, the facts giving rise to it, and the remedies sought. If the employer is not prepared to grant the remedies sought then the employer must within 14 days give the employee a written response which sets out the employer’s views of the facts and the reasons why the employer is not prepared to grant the remedies sought.

The next step in the process is for the grievance to be referred to the Employment Tribunal for mediation assistance or adjudication. Caudwells has considerable experience in all aspects of litigation in the Employment Tribunal and Court, as well as the personal grievance procedure.

To avoid a personal grievance, it is recommended that employers treat all employees fairly, fulfil their obligations to act fairly and reasonably, and, contact us for advice - whether you are the employee or the employer. For further information contact:

Lesley Brook Malcolm Couling

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