July 2018 Newsletter
Welcome to our July newsletter. This month it was hard to decide what to include as there are so many changes afoot at the moment it is hard to keep up with what impact these may have. Being prepared is always the best option.
Russell Drake Consulting Recruitment: As a business we continue to grow and develop and are looking to employ a graduate law student to join our team. The role will be advertised this coming week. If you know of someone send them to our website for more information where the role will be posted later this week.
The Cost of a Personal Grievance
Each year the Employers and Manufacturers Association (EMA) analyse all Determinations of the Employment Relations Authority to track the actual costs for both Employers and Employees in taking or defending a personal grievance claim.
The analysis results for the 2017 calendar year has recently been released. These results confirm that there is a growing trend for remedies increasing for Employees.
When issuing a Determination in favour of the Applicant, this generally being the Employee, the Authority are required to consider awarding remedies within three (3) specific areas: Hurt and Humiliation; Loss of Wages; and Contribution towards representation costs.
Hurt and Humiliation
In 2013 a successful Employee received on average $5,042.00 compensation. However, in 2017 the average increased to $8,711.00 – a 24% increase from the 2016 average award of $7,007.00. Nationally awards were greatest in the Christchurch ERA jurisdiction (average $9,707.00) and lowest in Wellington jurisdiction (average $5,949.00).
Hurt and Humiliation awards were generally higher where the case involved constructive dismissal with the National Average being $9,839.00 with the lowest awards being made for disadvantage related claims where the National Average was $6,398.00.
Lost of Wages
Loss of wages claims averaged $15,954.00 nationally.
Awards for cost contribution from an Employer to an Employee averaged $4,616.00 Nationally.
In interpreting this data the critical information for Employers relates to the total costs involved in either losing a case, or successfully defending the Employer’s position. The 2017 EMA data confirms the following:
Cost for the Employer to Lose
After taking into consideration the average hurt and humiliation payment ($8,711.00), the average lost wages payment ($15,954.00), the contribution to be made to the Employee’s costs of representation ($4,616.00), and the average costs to be incurred by the Employer in obtaining representation ($31,344.00), the total cost for an Employer to be unsuccessful in defending themselves against the personal grievance claim has now risen to a staggering $60,665.00.
Cost to the Employee to Lose
The average representation costs to the Employee are now at $11,415.00. When combined with the average costs contribution figure a ‘losing’ employee would be required to pay, the total costs to the unsuccessful Employee have now risen to $18,560.00.
The 2017 statistics show the Employee success rate in winning cases was 70% nationally (79% in Auckland, 73% in Christchurch, and 46% in Wellington).
Constructive Dismissal claims remain the hardest cases for Employees to win (45%) and performance related claims the easiest (83%).
The data confirms that 17% of Employers were successful in winning their cases, however data for cases where the EMA provided representation demonstrated that 41% of cases were determined in favour of the Employer.
If you need assistance in seeking representation in relation to a personal grievance claim please feel free to contact us.
Ownership and Consultation
Are you required to consult over changes to an Employee’s Workspace?
In business it is common for Employers to think of new and innovative ways to enhance productivity, collaboration, and efficiency within their Organisation. An Employer may decide that they want to increase collaboration and teamwork in the hope of increasing productivity. This could be achieved by refreshing the office environment. An Employer could knock down walls, create an open-plan area, or even have shared working spaces. However, what happens if Employees have a perceived ownership of space which they think is theirs. Does this mean you have to consult with your Employee and seek their agreement prior to making any changes to the working environment?
We have had cases in the past where Employees have raised personal grievances for unjustified action causing disadvantage for moving their desk from a single office into an open plan office space because the Employer failed to consult with them and take into account their views on the change.
In most working environments, particularity office-based working environments, Employees have an assigned desk or office (which in most cases they can keep organised in the way they please). Over time an Employee could build up items of stationary or office supplies which they believe to be theirs. An Employee could even form the idea that the area around their desk or the office they have been assigned is their space. If Employees form the perception that a certain space, area or object within the working environment is theirs it’s more likely than not that you would face resistance if you tried to make changes within the office environment.
When an Employer is seeking to refresh the working environment and they believe that some or all Employees have taken ownership of certain spaces or objects, they should not blindside their Employees by coming in one (1) Friday afternoon with the handyman talking about how the office is going to change. Although how an Employer organises their workplace is at their discretion, the change may not be embraced by your team and could result in a personal grievance.
It is human nature to stick within our comfort zone, so if change is afoot, there should be some degree of consultation with Employees to ensure you are acting in Good Faith. Consultation could occur by simply calling a team meeting, letting everyone know that over the next few months you are thinking of changing the office space, however prior to any changes being confirmed you would like Employee input. You may be surprised at the level of feedback you receive in terms of changing your workspace. Furthermore, as your Employees are the ones who must live and breathe the changes you are making, they should have some input as they could come up with great innovative ideas that you may never have imagined.
As such, if you consult with your Employees prior to making changes, any changes that you do implement will more likely be embraced by most of your team. Therefore, your overall purpose for the changes could then be achieved faster causing the least disruption possible.
Some Employees will always be resistant to change however, if you consult with your team you reduce the risk of exuberant resistance being demonstrated by your team and enhance your ability to create a positive attitude towards the change.
If you are thinking of shaking up your working environment but are unsure how to go about it or initiate a consultation process that is right for you, feel free to give us a call. We would be happy to help.
Bullying in the Workplace
100 Complaints of Bullying to WorkSafe NZ but Zero Prosecutions
In recent times the #MeToo Movement has created a lot of noise in the media which has raised awareness in terms of inappropriate behaviours and actions being demonstrated by some within the workplace. As a result of this movement, we have seen an increase in Employees coming forward and raising complaints when they believe they are being subjected to inappropriate behaviours and actions within the workplace.
However, just because someone believes they are being bullied or harassed, does not always mean that they are. Between 2013 – 2017 WorkSafe NZ received 100 complaints of bullying however, in almost half of the complaints no actions were taken by WorkSafe. The remainder of the complaints, 42 were referred to other Organisations and nine (9) were investigated. However, WorkSafe never prosecuted anyone for bullying.
WorkSafe has stated that “while no prosecution took place in those nine (9) cases, you can be very sure engagement and education did occur. Our response to any incident or allegation must be proportionate to the harm. Taking someone through to a full legal process must meet certain standards for legal prosecution.”
When an Employer receives a complaint, they must take it seriously and investigate it. If it is found that an Employer has failed to take the complaint seriously, they could be found to have breached their obligations under the Health and Safety at Work Act 2015. Although WorkSafe may not have prosecuted anyone for bullying, this does not negate your obligations as an Employer to provide your Employees with a safe and healthy working environment and to take their concerns seriously. Therefore, if you do receive a complaint and would like some advice in respect of the investigation process or would like us to independently investigate the complaint feel free to give us a call, we would be happy to help.
Employment Law Changes
Progress on Employment Relations Act 2000 changes
The Employment Relations (Triangular Employment) Amendment Bill was introduced in February 2018 and had its first reading in March and is now at the Select Committee. The Committee usually has six (6) months to report to the House. During this time, they usually call for public submissions, hear evidence on such submissions, and then make recommendations to the House. Submissions for this Bill closed on 11 May 2018 and the Education and Workforce Select Committee are expected to report to the House on 21 September 2018.
After this time, the Bill will go to the Second Reading which is the main debate parliament will have in respect of the principles of the Bill. After having this debate any amendments to the Bill that did not have the unanimous support of the Committee are voted on together. The Bill can also be defeated at this stage and therefore will not become legislation if this is the case the process must commence again.
However, if this is not the case, the Bill will go to the Committee of the Whole House where all members of the House are to consider the Bill in detail and make further amendments which members may propose in writing. There are no timeframes on this stage of the process however, once the final form of the Bill has been agreed, it goes to the Third Reading.
The Third Reading is the last chance members have to debate and decide whether the Bill should be passed into law. This debate can last up to two (2) hours and once agreed, the Bill will be submitted to the Governor-General for Royal Assent. Once Royal Assent is granted the Bill will become law within six (6) months.
The Employment Relations Amendment Bill is also at the Select Committee Stage. Submissions for this Bill closed on 30 March 2018 and the report is due on 7 September 2018. After which, the Bill will go onto its Second Reading.
If you have any questions in respect of this process, or how the proposed changes may affect you, feel free to get in touch with one of the team.