Member Briefings Winter 2012 - EMA

ContentsECONOMY.................................................................................... 1BUDGET 2012GREECE, FRANCE, REST OF EUROPE AND USAREVIEW OF EMA’S GUIDING PRINCIPLESBUSINESS ISSUES........................................................................ 9EXPORT NZ.................................................................................12LABOUR MARKET AND WAGES..............................................13LEGISLATION.............................................................................18EMPLOYMENT RELATED ISSUES.............................................23EMPLOYMENT RELATED CASES .............................................30OCCUPATIONAL SAFETY AND HEALTH (OSH).....................38Australia call us on 1800 300 362 Page | 3

1.4 Exchange Rates – volatility will continue given global influencesMost recent outcome: NZD = US$0.7635 as at 18 May 2012NZD = AU$0.7720 as at 18 May 2012TWI = 69.2 as at 18 May 2012Notes:AUD (cents)Mar 12 Mar 13 Mar 14High 0.775 0.825 0.820Avg 0.768 0.799 0.809Low 0.760 0.770 0.789USD (cents)Mar 12 Mar 13 Mar 14High 0.850 0.900 0.870Avg 0.796 0.828 0.788Low 0.750 0.780 0.750TWIMar 12 Mar 13 Mar 14High 73.5 76.6 76.0Avg 70.6 73.4 71.9Low 67.6 70.5 69.01.5 Inflation – well within Reserve Bank’s target rangeMost recent CPI: +1.6% year-ended Mar 2012-0.5% change from Dec 2011 to Mar 2012• The main upward contribution came from the alcoholic beverages and tobacco group(up 4.7 percent), reflecting an increase in the excise duty for cigarettes and tobacco.• Prices for the housing and household utilities group rose 0.7 percent, reflecting higherrentals for housing.• Recreation and culture prices fell 2.4 percent, reflecting seasonally lower prices forpackage holidays.Forecasts: % Change in Inflation (CPI)Years EndingMar 12 Mar 13 Mar 14Highest 1.8 2.5 3.0Average 1.7 2.3 2.8Lowest 1.6 2.1 2.5Source: ANZ, ASB, BNZ, National, and WestpacAustralia call us on 1800 300 362Page | 2

ECONOMY1.6 National Bank Business Confidence Index – results need to betaken with a grain of saltNotes:Percentage expecting improvement in general business conditions minuspercentage expecting deterioration1.7 Employment – edging upwards but headline figures do not necessarily tell thefull storyMost recent unemployment: +6.7% year-ended Mar 2012Forecasts: Unemployment % (HLFS)As at end ofMar 12 Mar 13 Mar 14Highest 6.4 6.1 5.8Average 6.3 5.8 5.2Lowest 6.1 5.7 4.8Source: ANZ, ASB, BNZ, National, and Westpac1.8 Labour costs – continue to be subduedMost recent LCI: +2.0% year-ended Mar 2012Forecasts: Labour cost index percentage change (wages & salaries)Years endingMar 12 Mar 13 Mar 14Highest 2.3 2.5 2.8Average 2.2 2.2 2.4Lowest 2.0 1.9 2.1Source: ANZ, ASB, BNZ, National, and WestpacPage | 3 New Zealand call us on 0800 800 362

BANK OF NEW ZEALAND - BUSINESS NZ PMI: April 2012Takes 1-2 minutes per month to complete. EMA and Business NZ are always looking formore manufacturers to come on board and fill the survey in every month.Contact michael.burgess@ema.co.nzNotes:NOTE: Above 50 points indicates expansion; below 50 indicates contraction; distance from 50 indicates thestrength of expansion or contraction.Australia call us on 1800 300 362Page | 4

ECONOMYBANK OF NEW ZEALAND – BUSINESS NZ PERFORMANCE OF SERVICES INDEX (PSI):April 2011Notes:NOTE: Above 50 points indicates expansion; below 50 indicates contraction; distance from 50 indicates thestrength of expansion or contraction.Page | 5 New Zealand call us on 0800 800 362

2012 BUDGETNotes:•Wafer thin surplus for 2014/15•KiwiSaver auto enrolment of all workersdeferred• 3% contribution still effective 1 April 2013•More money for education, innovation,science and health•Future Investment FundFuture Investment Fund is earmarked to provide:• $250m to KiwiRail• $88.1m to Health• $76m to Advanced technology Institute• $34m to ultrafast broadband in schoolsOther changes announced were:• Disclosure rules for KiwiSaver Fund Managers so performancecan be compared on an ‘apples for apples’ basis.• Tax credits abolished:▪ Active Income of Children tax credit of up to $240 p.a▪ Childcare tax credit of up to $263 p.a▪ Housekeeper credit of up to $263 p.a.Notes:Budget2016Forecast2014Growth 3% 3.3%Inflation 2.5% 2.8%Unemployment 4.7% 5.2%Exchange Rate (TWI) 63 71.9Interest rates 4.4% 4.5%Australia call us on 1800 300 362 Page | 6

ECONOMYGREECE, FRANCE, REST OF EUROPE AND USAPublic debt as a percentage of Gross Domestic ProductCountry 2011 (estimate) 2012 (forecast) 2013 (forecast)1 Estonia 12.3 13.1 132 Australia 26.8 27.9 27.93 Luxembourg 28.2 30.9 34.64 Korea 35.5 36.3 36.85 Switzerland 42 41.2 40.76 Sweden 46.2 45.3 43.17 Norway 56.5 51.3 48.68 Czech Republic 47.1 48.7 49.79 New Zealand 44.1 47.6 50.210 Slovak Republic 49.8 53.4 55.311 Denmark 56.1 58 58.212 Slovenia 53.7 58.1 6113 Poland 64.9 65.4 64.714 Finland 61.2 65.5 68.515 Israel* 74.6 73.8 72.416 Netherlands 72.5 75.3 76.917 Spain 74.1 77.2 7918 Austria 79.9 81.9 83.219 Germany 86.9 87.3 86.420 Hungary 89.8 90.8 91.521 Canada 87.8 92.8 96.622 Belgium 100.3 101.5 10123 United Kingdom 90 97.2 102.324 France 98.6 102.4 104.125 OECD-Total 101.6 105.7 108.426 United States 97.6 103.6 108.527 Ireland 112.6 118.8 122.428 Portugal 111.9 121.9 123.729 Iceland 127.3 127.4 126.230 Italy 127.7 128.1 126.631 Greece 165.1 181.2 183.932 Japan 211.7 219.1 226.8Source: Global Finance, Harvard Business SchoolPage | 7 New Zealand call us on 0800 800 362

Notes:REVIEW OF EMA’S GUIDING PRINCIPLESNew principles are based on the role that business and EMA canplay in building prosperous families and communities.We will build a prosperous future for New Zealand by being thechampion of business through influence, education, leadershipand capability building.We will achieve this:• Through providing best in class training and advice• Setting the agenda for business growth• Building a world leading professional organisation• Providing wise counsel• Growing membership through engagement, empowermentand partnershipBUILDING A PROSPEROUSNEW ZEALANDNotes:Join New Zealand’sleading businessassociation andhelp Kiwi’s createfuturesAustralia call us on 1800 300 362 Page | 8

BUSINESS ISSUESSubmissionsEMA and Business NZ - our national lobbying organisation - have completed the following submissionssince the Summer 2012 briefing report. For copies, contact AdviceLine:BusinessNZ submissions which EMAcontributed to:• To the Ministry of Economic Development – on their DiscussionDocument, “Audit Firm Incorporation”• To the Ministry of Foreign Affairs and Trade – on the Trans PacificPartnership and the inclusion of Canada, Japan and Mexico• To the Ministry of Education – on “Key Roles in Industry Training”• To the Health Select Committee, on the Natural Health Products Bill• To the Ministry of Economic Development on Audit FirmIncorporation• To a “Cross Government Committee” on suggestions to improveGovernment – Business Facing “Services”• To the Commerce Committee on the Consumer Law Reform Bill• To the Resources Policy Group of MED, on their Review of the CrownMinerals Act 1991 RegimeEMA Submissions:• To the Ministry of Foreign Affairs and Trade on the TransPacific Partnership and the possible inclusion of Canada,Japan and Mexico• To the Health Select Committee on the Natural HealthProducts Bill• To the Auckland Council on the Auckland Long Term Plan• To the Rotorua City Council on the Rotorua Long Term Plan• To the Hamilton City Council on the Hamilton City Long Term Plan• To the Tauranga City Council on the Tauranga City Long Term PlanConsumer Law ReformAdditionally, EMA made the followingsubmissions on behalf of Trade Groups:• Cosmetic Toiletry & Fragrance Assn – Cosmetic Group StandardRevision - EPA• Cosmetic Toiletry & Fragrance Assn – NICNAS Reviewsubmission - Australia• NZ Hot Water Association – Assn & EECA Work Programme (EECA)• Cosmetic Toiletry & Fragrance Assn – Oral Hearing CosmeticGroup Standard• Cosmetic Toiletry & Fragrance Assn – Consumer Law Review Bill• Cosmetic Toiletry & Fragrance Assn – Natural Products BillSelect Committee Oral Hearing• Direct Selling Assn – Consumer Law Review Bill• DSA – Natural Products Bill Select Committee Oral Hearing• Consumer Electronics Assn NZ – Consumer Law Review Bill• NZ Hot Water Association – Submission to Ministry of Energyfor enhanced subsidy• Cosmetic Toiletry & Fragrance Assn – Vote on new SunscreenStandard• Cosmetic Toiletry & Fragrance Assn – Additional comment onGroup Standard Changes to EPA• NZ Hot Water Assn – Additional Submission to EECA on subsidyThe Consumer Law Reform Bill is now progressing through Parliament, with public submissions beingheard and changes to the proposed law reported back to parliament in August 2012. EMA met with theSelect Committee on 17 May 2012.The proposed law is the most significant change to consumer lawin New Zealand in 20 years and will affect all businesses who sellproducts or services to the public. It is important to be acquaintedwith the changes well before they come in to effect; some parts ofthe new law might require changes in your business that will takemore than a day or two to complete.The new Bills are called:• Fair Trading Amendment Bill• Consumer Guarantees Amendment Bill• Weights and Measure Amendment Bill• Second- hand Dealers and Pawnbrokers Amendment Bill• Carriage of Goods Amendment Bill• Auctioneers BillAbolished laws will include:• Door to Door Sales Act 1967,• Layby Sales Act 1971,• Unsolicited Goods and Services Act 1975 and• Auctioneers Act 1928.A summary of the key changes were included in the Winter2011 Briefing.For a copy of those details, please call AdviceLine on:NZ 0800 800 362 or Australia 1800 300 362.Page | 9 New Zealand call us on 0800 800 362

Eco Smart BusinessFor the third year in a row EMA is running its popular EcoSmart Business programme of five three hour workshops toassist businesses to become accredited to the EnvironmentalManagement System Eco Warranty. The programme runs at EMA inAuckland from May 24th to October 5th and in Hamilton at Wintecfrom June 25th to November 9th. In the last 3 years 80 businesseshave completed the course with most gaining Eco Warranty andothers going on to ISO 14001.Eco Smart Business is a proven route to success for companieswanting to demonstrate to the market that they are environmentallyresponsible. Eco Smart Business is EMA’s recommended path for itsmembers to achieve environmental accreditation.This year’s Eco Smart Business is provided at a subsidisedrate thanks to the support of the Energy, Environment andConservation Authority (EECA) and Councils in the Auckland andWaikato region. Some subsidised places are still available.To register please contact Julie (09) 3670913Julie.Brough@ema.co.nzLocal GovernmentThis year EMA submitted to the Long Term Plans of the following CouncilsAuckland Council• EMA objected to the Councils business rating differential of 2.63.• EMA asked for a higher Uniform Annual General Charge (UAGC)as this is fairer to all ratepayers.• EMA strongly objected to Council running a wastewaterdifferential against business.• EMA recommended that Council fund its long term strategictransport projects by means of a low variable toll on themotorway network.• EMA stated that the goal of having 75% of all new housing withinthe Metropolitan Urban Limit was neither practical nor desirableand recommended that more land for development be releasedoutside the limit.EMA’s submission was well received by council. EMA wascomplimented on an excellent and comprehensive submission.Some councillors took issue with parts of what was submitted.Hamilton Council• EMA said that the Hamilton rate increase at 3.8% was too high.• The business differential at 2.27 should be reduced to zero overtime.• Hamilton should go to a capital value rating system• Hamilton Council is remiss in not having a UAGC. The rates systemwould be much fairer with fixed charges totalling 30% of the totalrates take.• Hamilton needs to introduce charges for rubbish bags, watersupply and waste water.• EMA agreed with Hamilton’s plans to reduce debt and also urgedcouncil to consider selling off part of the airport.The submission was well received by council. Council commentedthat the point about transition to capital value was accepted but thepolitical climate is not yet right for it.Tauranga Council• EMA objected to the 4.8% rates increase proposed andrecommended that rates increases be no more than the rate ofinflation, plus growth in the rating base.• EMA congratulated the council on maintaining capital value withno differential.• EMA congratulated the council on having the UAGC near themaximum level allowed of 30%.• Tauranga should move to volumetric charging for wastewater.• Tauranga should look at selling off its airport to the private sector.The submission was well received but some councillors tookexception to the suggestion to sell off the airport.Rotorua Council• EMA congratulated Rotorua council on a low 2.9% rates increase.• EMA congratulated council for moving to capital value rating.• EMA requested that Rotorua reduce its business differential of 2.2over time to zero.• EMA congratulated council on its on-going programme of leanthinking throughout the organisation.• Waste water should be charged by volume.• EMA congratulated council on its initiative to find a private sectorbuyer for its stock of pensioner housing. EMA also recommendedthat Rotorua look at selling off part or all of the airport.• EMA commended Rotorua for setting up an economicdevelopment CCO.The submission was well received by Council.Australia call us on 1800 300 362 Page | 10

BUSINESS ISSUESGovernment ProcurementUpdateGovernment is committed to its procurement review and a lot ishappening. There are plenty of opportunities for private sectorbusinesses to get involved.• www.business.govt.nz/procurement is the website thattells you what is happening, including when sessions are foryou to meet the people in government who make purchasingdecisions.• GETS (Government Electronic Tenders Service) is an importantwebsite private sector businesses are encouraged to join. Thisis where tenders to supply the Government are advertised andinformation relating to the Procurement Review is posted.www.gets.govt.nzBUSINESS ISSUESLOCAL COUNCILS• Tauranga• Rotorua• Hamilton• AucklandWhere and How?Notes:Page | 11 New Zealand call us on 0800 800 362

EXPORT NZExport Training Courses• Appointment & Management of InternationalAgents & Distributors• Global Expansion - Are You Ready?• Global Expansion - Strategy Development• Global Expansion - Strategic Alliances & Joint Ventures• International Trade Documentation & Procedures• Marketing to the Global Market• New Zealand School of Export Certificate and Diploma• Relationship Building In the Global MarketDetails of these courses can be found in the Training Directoryavailable today.Alternatively, call us on 0800 800 362 (NZ) or 1800 300 362 (Aust).Export NZ ContactsAuckland: Catherine Mullane, Ph: (09) 367 0970catherine@exportnewzealand.org.nzBay of Plenty: Angela Wallace, Ph: (07) 571 0600angela@exportnewzealand.org.nzWaikato: Lotta Bryant, Ph (07) 839 2710 Mobile: 021 842 577lotta.bryant@ema.co.nzEach branch runs a comprehensive programme of networkingand educational events (some market focused) and can assist withmost export related enquiries.Membership of Export NZ is free to all EMA members and allexporters and potential exporters are encouraged to get involved.There are benefits for all, including well established exporters.Australia call us on 1800 300 362 Page | 12

LABOUR MARKETHousehold Labour Force Survey: March 2012› Unemployment rate: 6.7% [6.4% Dec 2011]› Male: 6.3% [6.4% Dec 2011]› Female: 7.0% [6.3% Dec 2011]› European/Pakeha: 5.6% [4.7% Dec 2011]› Maori 13.9% [13.4% Dec 2011]› Pacific 16.0% [13.8% Dec 2011]› Asian 9.4% [9.1% Dec 2011]› Middle Eastern/Latin American/African 8.0% [14.1% Dec 2011]› Other 8.0% [14.1% Dec 2011]Notes:Regional unemployment rates› Northland: 8.7% [8.3% Dec 11]› Auckland: 7.9% [6.7% Dec 11]› Waikato: 8.6% [6.3% Dec 11]› Bay of Plenty: 8.5% [8.3% Dec 11]› Gisborne/Hawkes Bay: 8.5% [7.0%]; Taranaki: 4.8%; [3.8%]; Manawatu/Wanganui:8.9% [6.2%]; Wellington: 6.1% [7.2%]; Tasman, Nelson/Marlborough, West Coast:5.9% [4.9%];Canterbury: 5.5% [5.0%]; Otago: 5.2% [4.8%]; Southland: 4.4% [5.1%]› Unemployed: 160,000 [151,900 – Dec 11]› Employed: 2,230,000 [2,221,000 – Dec 11]› Not in labour force: 1,086,000 [1,105,000 – Dec 11]› Labour force participation rate: 68.8% [68.2% - Dec 11]› Under-employed: 105,100 [97,500 – Dec 11]Page | 13 New Zealand call us on 0800 800 362

Notes:Household Labour Force Survey: www.stats.govt.nzInternet Job Advertisements – April 2012Jobs Online measures job vacancies advertised on the main internet job boards, focusingmainly on skilled occupations at a regional level and in different industries. The resultsare presented as an index, which measures change in the number of job advertisements,rather than the absolute number of job advertisements.Australia call us on 1800 300 362Page | 14

LABOUR MARKETNotes:[http://www.dol.govt.nz/publications/jol/report/jobs-online]JOB MARKET• Construction andtrades big movers• IT, HR, educationshrinking• 21% increase inCanterburyNotes:Quarterly Employment Survey: March 2012› Full-time paid employees: 1,100,800 [1,102,500 Dec 11]› Part-time paid employees: 467,600 [468,300 Dec 11]› Average ordinary hourly earnings: $26.92 [$26.56 Dec 11]› Average overtime hourly earnings: $28.68 [$28.04 Dec 11]› Average total hourly earnings: $26.96 [$26.59 Dec 11]› Average total private sector: $24.90 [$24.58 Dec 11]› Average total public sector: $34.82 [$33.86 Dec 11]› Average total male: $28.66 [$28.28 Dec 11]› Average total female: $24.91 [$24.59 Dec 11]Page | 15 New Zealand call us on 0800 800 362

Sector movements in average ordinary time hourly rates2012Mar2011Dec2011Sept2011JunForestry and mining 27.10 27.27 27.79 26.67Manufacturing 25.29 24.88 24.81 24.51Electricity, gas, water, and waste 34.01 30.89 31.13 31.63Construction 23.75 24.06 23.93 23.73Wholesale trade 26.76 26.83 27.01 26.90Retail trade 18.04 17.90 17.82 17.66Accommodation and food services 16.77 16.43 16.32 16.40Transport, postal, and warehouse 25.10 24.46 24.30 23.78Info, media, and telecoms 34.64 34.28 33.19 32.88Finance and insurance services 38.36 37.64 37.59 36.63Renting, hiring, and real estate 26.57 26.38 26.88 25.70Prof, scientific, tech, admin 31.42 30.68 30.47 29.40Public administration and safety 32.48 32.43 32.10 32.00Education & training 33.60 31.56 31.91 31.05Health care and social assistance 28.29 28.06 27.62 27.92Arts, recreation, and other services 22.69 22.93 23.12 22.82Total all industries combined 26.92 26.56 26.53 26.21Quarterly Employment Survey: www.stats.govt.nzLabour Cost Index (Salary & Ordinary Time Wage Rates): March 2012www.stats.govt.nz› All sectors: +2.0 [Year to March 2012]; +0.5% [Change from last quarter]› Private sector: +2.1% [Year to March 2012]; +0.5% [Change from last quarter]› Public sector: +1.6% [Year to March 2012]; +0.4% [Change from last quarter]Labour Cost Index (All Labour Costs): July 2011This survey measures all labour costs (both wage and non-wage) and is completed annually each June.It compares costs in the June 2010 quarter with those in the June 2011 quarter:• Surveyed labour costs rose 2.4 percent.• Non-wage labour costs rose 4.9 percent.• Annual leave and statutory holiday costs rose 2.1 percent.• Superannuation costs rose 11.3 percent.• Workplace accident insurance costs rose 27.5 percent.• Other non-wage labour costs (vehicles, medical insurance, andlow interest loans) rose 0.9 percentAustralia call us on 1800 300 362 Page | 16

LABOUR MARKETNotes:National Employers Wage &Salary Survey› 2011/12 Survey results are now available› 436 employers relating to 30,100 employees participated.› 215 positions in 18 sections› www.nzsalarysurvey.org.nz to order or callAdviceLine 0800 800 362 / 1800 300 3622011/12 BenchmarkResultsSenior Management +3.0%2nd Tier Management +1.0%Accounting Clerical +3.8%Skilled / Semi Skilled +1.4%Unskilled +5.6%Page | 17 New Zealand call us on 0800 800 362

LEGISLATIONActs passed since previous briefingActs are available online at: http://www.legislation.govt.nz/.The following list was accurate at the time of printing.Antarctica (Environmental Protection) 2012 No 3Amendment Act 2012Appropriation (2010/11 Financial 2012 No 35Review) Act 2012Biosecurity Amendment Act 2012 2012 No 26Building Amendment Act 2012 2012 No 23Charities Amendment Act 2012 2012 No 4Citizens Initiated Referenda 2012 No 5Amendment Act 2012Civil Defence Emergency Management 2012 No 6Amendment Act 2012Companies Amendment Act 2012 2012 No 7Crimes Amendment Act 2012 2012 No 8Criminal Proceeds (Recovery) 2012 No 9Amendment Act 2012Crown Pastoral Land (Rent for Pastoral 2012 No 36Leases) Amendment Act 2012Customs and Excise Amendment Act 2012 2012 No 25Domestic Violence Amendment Act 2012 2012 No 10Employment Relations (Secret Ballot 2012 No 37for Strikes) Amendment Act 2012Judicature Amendment Act 2012 2012 No 11Limited Partnerships Amendment Act 2012 2012 No 12Marriage Amendment Act 2012 2012 No 13Military Manoeuvres Act Repeal Act 2012 2012 No 33Mutual Assistance in Criminal Matters 2012 No 14Amendment Act 2012National Animal Identification and 2012 No 2Tracing Act 2012New Zealand Railways Corporation 2012 No 15Amendment Act 2012New Zealand Superannuation and 2012 No 16Retirement Income Amendment Act 2012Nga Wai o Maniapoto2012 No 29(Waipa River) Act 2012Ngāti Manawa Claims Settlement Act 2012 2012 No 27Ngāti Pāhauwera Treaty Claims 2012 No 30Settlement Act 2012Ngati Porou Claims Settlement Act 2012 2012 No 31Ngāti Whare Claims Settlement Act 2012 2012 No 28Public Finance Amendment Act 2012 2012 No 17Road User Charges Act 2012 2012 No 1Royal Society of New Zealand 2012 No 1Amendment Act 2012Search and Surveillance Act 2012 2012 No 24Social Security Amendment Act 2012 2012 No 18Southland District Council (Stewart Island/ 2012 No 1Rakiura Visitor Levy) Empowering Act 2012Student Loan Scheme2012 No 32Amendment Act 2012Sugar Loaf Islands Marine Protected 2012 No 19Area Amendment Act 2012Taxation (International Investment and 2012 No 34Remedial Matters) Act 2012Trade Marks Amendment Act 2012 2012 No 20Wild Animal Control Amendment Act 2012 2012 No 21Wills Amendment Act 2012 2012 No 22www.legislation.govt.nzEMA Learning offers a variety of courses in EmploymentLaw, including those dealing with the Holidays Act, theEmployment Relations Act and Payroll Essentials.We invite you to contact EMA Learning on 0800 800 362/1800 300 362 or visit our website at www.ema.co.nz forinformation about these courses.Australia call us on 1800 300 362 Page | 18

Darrell Weekes is Director of Strategy at Attaché Software. In the currentseries of EMA Briefings, Darrell is talking about business improvement throughbetter systems and processes. Here he looks at how “visual management” canreduce complexity and, as a result, raise productivity, reduce risk and improvedecision making.Simple, but not simpler“Everything should be made as simple as possible, but not simpler” Albert EinsteinApple’s iPhone and iPad are prime examples of “simple…butnot simpler”. They employ basic motor skillsand visual elements to control advanced technology –technology that was just a concept ten years ago!Today however, in an increasingly sophisticatedbusiness world, the principle of simplicity is beingapplied very successfully using visual tools, such asdashboards, to trim complexity and provide access torelevant information quickly and easily. Simple accessto information has empowered business owners andmanagers, allowing them to leverage business data,thus facilitating productivity, reducing risk, and underpinningdecision making at all levels.We all know running a business is seriously demanding.The challenge is taking all the variables andcomplexity and making it effortless to understand andmanage. This is the very reason development and useof management-style dashboards has skyrocketed inthe past few years.Dashboards give time-poor business owners and executiveseasy-to-understand, up-to-date analytics aboutthe main financial and operational aspects of theirbusiness. For example, gross profit, sales, expenses,debtor days and cash position, to name a few.Dashboards let you focus on key business drivers, bolsteringtimely and accurate decision-making. Areas forimprovement, potential business risks and underlyingtrends also become easier to identify.“But what about spreadsheets?”, I hear you say. Well,although spreadsheets can often be powerful analyticaltools, they typically increase underlying complexityrather than reducing it. Their accuracy relies on countlessvariables, like precise data extraction, labour-intensivedata entry and complicated formulas. Multiplefilters, graphs and pivot tables, which require expertskills to create, are often required to articulate complexspreadsheets.Dashboards, on the other hand, can be built into financialsoftware and pre-configured, “out of the box”, providingpowerful yet simple analytics while eliminatingthe risk of returning erroneous data. A great dashboardlets you simply and easily drill down further, throughthe buried layers of information, giving you direct accessto the underlying data.So really, just how valuable is a dashboard? Well, letme draw an analogy for you. Airline pilots have longused a form of dashboard to view and interpret vitalinformation quickly and accurately. Imagine relyingon printed reports to fly a plane! Would you travel in aplane if you knew the pilot was flying without properinstruments or that critical co-ordinates were plottedout on a spreadsheet?Piloting your business with information that’s difficultto understand, out-of-date or incomplete is a catastrophewaiting to happen. Applying an appropriatesystem that’s easy to implement, with dashboards thatare simple to understand, will strengthen your financialreturns and reduce stress. Really, it’s that simple!Contact Darrell at darrellw@attachesoftware.comPage | 19 New Zealand call us on 0800 800 362

Australia call us on 1800 300 362 Page | 20

LEGISLATIONBills Before ParliamentThe following Bills were on the Order Paper to be considered by Parliament on 22 May 2012.Government Orders of the Day• Arts Council of New Zealand Toi Aotearoa Bill Hon ChristopherFinlayson Interrupted debate on second reading• Crown Entities Reform Bill Hon Dr Jonathan ColemanSecond reading• Reserve Bank of New Zealand (Covered Bonds) Amendment BillHon Bill English First reading• Arms (Military Style Semi-automatic Firearms and ImportControls) Amendment Bill Hon Anne Tolley Second reading• Juries (Jury Service and Protection of Particulars of Jury ListInformation) Amendment Bill Hon Judith Collins Second reading• Commerce Commission (International Co-operation, and Fees)Bill Hon Craig Foss Committee stage• Biosecurity Law Reform Bill Hon David Carter Committee stage• Airports (Cost Recovery for Processing of International Travellers)Bill Hon David Carter Committee stage• Sentencing (Aggravating Factors) Amendment Bill Hon JudithCollins Committee stage• Trade (Safeguard Measures) Bill Hon John Banks Committee stage• Regulatory Reform Bill Hon John Banks Committee stage• Regulatory Reform (Repeals) Bill Hon John Banks Third reading• Employment Relations (Rest Breaks and Meal Breaks)Amendment Bill Hon Kate Wilkinson Second reading• Housing Corporation Amendment Bill Hon Phil HeatleySecond reading• New Zealand Geographic Board (Ngā Pou Taunaha o• Aotearoa) Amendment Bill Hon Maurice Williamson First reading• Subantarctic Islands Marine Reserves Bill Hon Kate WilkinsonFirst reading• Taxation (Income-sharing Tax Credit) Bill Hon Peter DunneSecond reading• Lawyers and Conveyancers Amendment Bill Hon Judith CollinsSecond reading• Social Assistance (Living Alone Payments) Amendment Bill HonPaula Bennett Second reading• Identity Information Confirmation Bill Hon Chris TremainSecond reading• Insolvency Practitioners Bill Hon Craig Foss Second reading• Social Security Amendment Bill (No 3) Hon Paula BennettSecond reading• Regulatory Standards Bill Hon John Banks Consideration of report• Legislation Bill Hon Christopher Finlayson Second reading• Reserves and Other Lands Disposal Bill Hon Maurice WilliamsonSecond reading• Antarctica (Environmental Protection: Liability Annex)Amendment Bill Hon Murray McCully Second reading• Radio New Zealand Amendment Bill Hon Craig Foss Second reading• Alcohol Reform Bill Hon Judith Collins Committee stage• Geneva Conventions (Third Protocol–Red Crystal Emblem)Amendment Bill Hon Murray McCully First reading• Local Electoral Amendment Bill Hon David Carter First reading• Mokomoko (Restoration of Character, Mana, and Reputation) BillHon Dr Pita Sharples First reading• Companies and Limited Partnerships Amendment Bill Hon CraigFoss First reading• Commerce (Cartels and Other Matters) Amendment Bill HonCraig Foss First reading• Human Rights Amendment Bill Hon Judith Collins First reading• Spending Cap (People’s Veto) Bill Hon John Banks Second reading• Prisoners’ and Victims’ Claims (Redirecting Prisoner• Compensation) Amendment Bill Hon Judith Collins First reading• Inquiries Bill Hon Chris Tremain Second reading• Cultural Property (Protection in Armed Conflict) Bill HonChristopher Finlayson Committee stage• Patents Bill Hon Craig Foss Second reading• Health and Safety in Employment Amendment Bill (No 2) HonKate Wilkinson First reading• Gambling Amendment Bill (No 2) Hon Chris TremainCommittee stage• Public Health Bill Hon Tony Ryall Second reading• Therapeutic Products and Medicines Bill Hon Tony RyallSecond reading• Ngā Rohe Moana o Ngā Hapū o Ngāti Porou Bill Hon ChristopherFinlayson First reading• Food Bill Hon Kate Wilkinson Second reading• Exclusive Economic Zone and Continental Shelf (EnvironmentalEffects) Bill Hon Amy Adams Second readingPrivate and Local orders of the Day• Waitaki District Council Reserves and Other Land EmpoweringBill Jacqui Dean First readingMember’s orders of the Day• Fair Trading (Soliciting on Behalf of Charities) Amendment BillMichael Woodhouse Third reading• Register of Pecuniary Interests of Judges Bill Dr Kennedy GrahamFirst reading• Depleted Uranium (Prohibition) Bill Phil Twyford First reading• Shop Trading Hours Act Repeal (Waitaki Easter Trading)Amendment Bill Jacqui Dean First reading• Holidays (Full Recognition of Waitangi Day and Anzac Day)• Amendment Bill Dr David Clark First reading• Joint Family Homes Repeal Bill Simon O’Connor First reading• Illegal Contracts (Unlawful Limitation on Regulators’ Powers)Amendment Bill Hon Lianne Dalziel First reading• Parental Leave and Employment Protection (Six Months PaidLeave) Amendment Bill Sue Moroney First reading• Lobbying Disclosure Bill Holly Walker First readingPage | 21 New Zealand call us on 0800 800 362

Bills Before Select Committees as at 22 May 2012Bills go to the Select Committee to enable public submissions to be made on them before they becomelaw. After hearing public submissions, the Select Committee presents a report on that Bill back toParliament and often recommends changes. [Note: To become an Act of Parliament, a bill goes throughseveral stages: Introduction; First reading; Referral to select committee; Select committee report;Consideration of report; Committee stage; Second reading; Third reading; and finally the Royal Assent.](First date is when public submissions close, second date is when the Committee’s report is due).Commerce Committee• Consumer Law Reform Bill (29 March 2012, 9 August 2012)• Financial Markets Conduct Bill (26 April 2012, 7 September 2012)• Gambling (Gambling Harm Reduction) Amendment Bill (21 June2012, 9 November 2012)• Regulatory Standards Bill (18 August 2011, 30 July 2012)Finance and Expenditure Committee• International Finance Agreements Amendment Bill (5 June2012, 8 November 2012)• Mixed Ownership Model Bill (13 April 2012, 16 July 2012)• Non-bank Deposit Takers Bill (6 October 2011, 1 June 2012)• Taxation (Annual Rates, Returns Filing, and Remedial Matters) Bill(submissions not called, 8 June 2012)Foreign Affairs, Defence and Trade Committee• Defence Amendment Bill (13 April 2012, 6 September 2012)Government Administration Committee• Electronic Identity Verification Bill (30 March 2012, 29 June 2012)• Members of Parliament (Remuneration and Services) Bill (18 May2012, 28 September 2012)• Statutes Amendment Bill (No 3) (13 April 2012, 16 August 2012)Health Committee• Medicines Amendment Bill (13 April 2012, 2 July 2012)• Natural Health Products Bill (24 February 2012, 31 July 2012)Justice and Electoral Committee• Legal Assistance (Sustainability) Amendment Bill (30 September2011, 10 August 2012)• Prisoners' and Victims' Claims (2012 Expiry and ApplicationDates) Amendment Bill (11 May 2012, 11 June 2012)• Privacy (Information Sharing) Bill (23 March 2012, 15 June 2012)• Victims of Crime Reform Bill (17 February 2012, 3 July 2012)Law and Order Committee• Administration of Community Sentences and Orders Bill (22June 2012, 8 November 2012)• Bail Amendment Bill (29 June 2012, 10 November 2012)• Corrections Amendment Bill (12 April 2012, 28 August 2012)Local Government and EnvironmentCommittee• Building Amendment Bill (No 4) (11 June 2012, 1 September 2012)• Game Animal Council Bill (20 April 2012, 1 September 2012)• Heritage New Zealand Pouhere Taonga Bill (21 June 2012, 8November 2012)• Hutt City Council (Graffiti Removal) Bill (12 April 2012, 28 August2012)• Manukau City Council (Regulation of Prostitution in SpecifiedPlaces) Bill (29 February 2012, 31 July 2012)• Marine Reserves (Consultation with Stakeholders) AmendmentBill (submissions not called, 14 December 2012)• Marine Reserves Bill (28 February 2003, 14 December 2012)• South Taranaki District Council (Cold Creek Rural Water Supply)Bill (3 May 2012, 21 September 2012)Māori Affairs Committee• Maraeroa A and B Blocks Claims Settlement Bill (18 April 2012, 8September 2012)• Maraeroa A and B Blocks Incorporation Bill (18 April 2012, 8September 2012)• Ngai Tāmanuhiri Claims Settlement Bill (29 March 2012, 16August 2012)• Ngāti Mākino Claims Settlement Bill (22 March 2012, 16 August 2012)• Ngāti Manuhiri Claims Settlement Bill (18 April 2012, 8September 2012)• Ngāti Whātua Orākei Claims Settlement Bill (18 April 2012, 8September 2012)• Rongowhakaata Claims Settlement Bill (18 April 2012, 8September 2012)Primary Production Committee• Dairy Industry Restructuring Amendment Bill (24 April 2012, 8June 2012)Social Services Committee• Child Support Amendment Bill (20 June 2012, 8 November 2012)• Social Security (Youth Support and Work Focus) Amendment Bill(13 April 2012, 31 May 2012)Transport and Industrial Relations Committee• Immigration Amendment Bill (8 June 2012, 10 September 2012)Full text copies of bills are available at www.parliament.nzAustralia call us on 1800 300 362 Page | 22

EMPLOYMENT RELATED ISSUESEXPERIENCE PROGRAMMESHands-on practical experience coached by EMA’s experts.Conducting Disciplinary MeetingsDate: 21/22 November 2012Cost: $850 + GSTUndertaking Restructuring and RedundancyDate: 27/28 September 2012Cost: $1200 + GSTNZ BRIEFINGS IN AUSTRALIABrisbane - 10th July 2012, Australian Industry Group, 9:00am – 10:30amSydney - 11th July 2012, Pullman Hotel at Sydney Olympic Park, 8:30am – 10:00amNorth Sydney - 11th July 2012, Australian Institute of Management, 1:00pm – 2:30pmMelbourne - 12th July 2012, Bayview on the Park, 9:30am – 11:00amMEDICAL CERTIFICATESEMA is taking up employers concerns regarding medical certificates. We have had several meetingswith various professional bodies. All have welcomed our approach and the discussions have beenhelpful and constructive. Clearly issuing medical certificates is difficult for all concerned given thecomplexity of the relationships.• There is some thought being given to enabling qualified practicenurses to issue medical certificates as well as doctors.• There are guidelines for doctors to issue medical certificateswhich are tighter than what may have been expected. The fullMedical Council statement can be viewed at www.mcnz.org.nz or via the following link http://www.mcnz.org.nz/assets/News-and-Publications/Statements/Medical-certification.pdf• Medical certificates issued that do not meet those guidelinesmay be rejected by the employer, but an employer is advised toensure employees have advance warning of how and why thatmay occur and what happens should that occur.• When an employer requires a medical certificate, EMA remindsCollective Bargaining for EmployersDate: 16/17 August 2012Cost: $1900 + GSTMedical Council Guidelines on Medical certificatesThe following is a brief summary of the Medical Council of New Zealand statement that provides informationto doctors on their professional obligations. The statement is due for review by December 2012.1. Professional obligations- Certificates are legal documents. Any statement a doctorcertifies must be honest and made in good faith.- A doctor’s obligation is to their patient and the law.2. Implications of Certificates- Doctors must be aware that completing a certificate hasemployers the Holidays Act refers to ‘proof of sickness or injury’and not medical certificates specifically.• If an employer intends to take a firmer approach on medicalcertificates, EMA advises a clear policy be put in place. (EMA hasprepared a draft on what a policy might include).• Maintaining as much of a person’s normal lifestyle as possible,including work, is medically recognised as benefiting recovery.• There is no single format for a medical certificate and it wouldtake all the professional associations who currently issuecertificates to agree on a format before that is possible.• The guidelines for issuing medical certificates are due for reviewin late 2012 and EMA will be consulted.implications for the patient, themselves and the agencyreceiving the certificate.- Certifying a patient to undertake work when they are unfit mayplace the patient or their colleagues at risk.- Providing misleading or untrue information, either deliberatelyor negligently, is professional misconduct that may result indisciplinary action.Page | 23 New Zealand call us on 0800 800 362

3. Content of certificates- Information disclosed should be accurate and based uponclinical observation, with patient comment clearly distinguishedfrom clinical observation.- Certificates should only provide the necessary informationrequired by the receiving agency, and consented to by thepatient. It should not include private or irrelevant information.A diagnosis does not have to be disclosed unless it has directimplications for the receiving agency.- Any comments on fitness for work should only be made onceaccurate information about the patients work is obtained.- Any duties that should not be attempted should be clearlystated in the certificate.- A certificate should show the examination date and the timeperiod of treatment (if any).- Retrospective certificates should be clearly identified as such.- The receiving agency has the right to accept or reject a medicalcertificate.The full Medical Council statement can be viewed at www.mcnz.org.nz or via the following link http://www.mcnz.org.nz/assets/News-and-Publications/Statements/Medical-certification.pdfNotes:MEDICAL CERTIFICATES• Not all medical certificatesare equal• Grounds for rejectingcertificates• Holidays Act does not referto medical certificates• Consistent certificate formatrequires many associationsto agree• Alternative workDEVELOP AMEDICALCERTIFICATEPOLICYEMA Medical Certification Policy Advice (abridged version)1. Outline when a medical certificate may be required:• After 3 days• Less than 3 days• Long term absence• The employment agreement• Holidays Act entitlements and provisions• Sick leave outside of minimum entitlements2. Cover the differences in managing short term and longer termabsences, including health and safety issues.3. List why certain medical certificates may not be acceptableas proof of sickness, using MZ Medical Council guidelines asyour basis.4. Provide information on what may happen if a medical certificatedoes not meet the requirements outlined in the Medical Councilguidelines, including implications for pay.5. Cover the consideration of alternative work options subject to adoctor’s opinion, health and safety, and work availability.Full Policy Advice: The above is an abridged version of our advice.For a full copy, please contact AdviceLine.Australia call us on 1800 300 362 Page | 24

EMPLOYMENT RELATED ISSUESMETH FREE WORKPLACEAs part of a wider community strategy, EMA has agreed to lend itssupport to reducing the use of methamphetamine (or “P”). Whiledrugs have long been held to be a workplace safety issue, theconcept is for workplaces to join with the wider community andtheir concerns about P use per se.If you are interested in becoming a Meth-Free Workplace,please contact david.lowe@ema.co.nz.Being a Meth-Free Workplace involves encouraging employeesto admit to using and assisting them to break the habit. Theprogramme is about removing P form the community, not justfrom the workplace.Notes:METH-FREE WORKPLACE• 76,885 of ‘P’ usersare employed• 3% of the workforce• Average cost tobusiness is $50K perperson (Massey University)FACEBOOKThe outcome of a recent Fair Work Australia (FWA) decision hashighlighted the importance of maintaining and consistentlyreviewing internal social media policies.FWA made the decision in Glen Stutsel v Linfox Australia Pty Ltd[December 2011] to reinstate the employment of an employee whohad been dismissed for making comments about his managers onhis Facebook profile.Glen Stutsel had been employed as a truck driver by logisticscompany Linfox, and was fired in May 2011 after managementbecame aware of comments he had made online which criticisedhis managers.However, FWA found that Stutsel had made the comments in aforum which he held to be private – he had set up his Facebookprofile with the maximum security settings.FWA found that, for this reason, the employee believed he couldprivately and candidly interact with his friends.While the ombudsman agreed the employee’s comments were“foolish”, it was found that the comments were not intended forpublic display, and therefore there were no valid grounds fortermination. As a result, his employment was ordered tobe reinstated.According to Harriet Stacey, co-founder and principal of WiseWorkplace Investigations, many employers don’t realise thatsocial media policies are not a ‘set and forget’ policy, and mustcomprehensively spell out what is acceptable online conduct.Simply banning social media usage in the workplace is insufficient,as comments made outside of work can be just as detrimental anddamaging to an organisation’s reputation.While many workplace policies are seldom referred to – commonsense and practical problem solving are sufficient to resolve mostissues – social media is one policy area that regularly comes intoplay when things get complicated.Page | 25 New Zealand call us on 0800 800 362

Employees and Technologymanaging the use of technology in the workplaceThis publication provides a comprehensive summaryof the law in relation to the use of technology in theworkplace and explains what obligations employershave when dealing with employee use and misuse.It includesUse of computers & cellphones | GPS | CCTV |Social mediaIllegal file sharing | Time keeping & technology$35.00+gst(available to members only)To order phone 0800 800 362 1800 300 362 or email advice@ema.co.nz“In times of rapid change, as we are seeing with the developmentof social media, it is critical to stay ahead of the game. You mustdetermine what is OK and what is not OK for your organisation -and put it in writing,” Stacey said.In the recent case of Damien O’Keefe v Williams Muir’s Pty Ltd T/ATroy Williams The Good Guys [2011] FWA 5311 (August 11, 2011) anunfair dismissal application was dismissed in part because of thestrong policies held by the Good Guys company.The employee had been sacked for serious misconduct afterposting derogatory comments about the employer on hisFacebook profile.Despite the employee making the comments on a personalcomputer outside of work hours, the court found in favour ofthe Good Guys, largely because the company had a clear andcomprehensive employee handbook covering the way staff shouldcommunicate with each other as well as spelling out firm bullyingand harassment policies.Notes:Australia call us on 1800 300 362 Page | 26

EMPLOYMENT RELATED ISSUESPRIVACY COMMISSIONERwww.privacy.org.nz.Some job applicants are being asked by potential employersto allow access to their Facebook page, Privacy CommissionerMarie Shroff says. Shroff this morning told Parliament’sJustice and Electoral select committee that she would like toinvestigate anecdotal evidence of the trend but did not haveenough resources.EMA suggests that asking an applicant for their username andpassword is a step too far, as is asking the applicant to make thepotential employer a temporary friend. However, it is perfectlyacceptable to search the internet for public information on apotential candidate to get a greater appreciation of the personbeing considered for employment; although like most things onthe internet, that information needs to be taken with a grain of salt.Notes:SOCIAL MEDIA DEVELOPMENTS• Australian casessound warning toemployers• Keep policies updated• Accessing jobapplicants socialmedia pagesSECRET BALLOT TO STRIKE LAW PASSED• The requirement for a secret ballot will come into force 1 yearafter the Royal assent date of 14 May 2012. Unions must amendtheir rules to contain a provision relating to the process forholding a secret ballot as soon as is reasonably practicable andno later than 2 years after the Royal assent.• In the event of a proposed strike before the strike may proceedthe union must hold, in accordance with its rules, a secret ballotof its members who would become party to the strike.• The question that must be put to the union members is “whetherthe union member is in favour of the strike.”• The result of the secret ballot is determined by a simple majorityof the union members who are entitled to vote and who do vote.• After the conclusion of the secret ballot the union must notifythe result of the ballot to their members.• The secret ballot requirement does not apply to a strike that islawful on the grounds of health and safety.HEALTH AND SAFETY REVIEWThe Minister of Labour has ordered a full review of New Zealand’shealth and safety system by an independent taskforce to ensureit is fit-for-purpose. The independent taskforce, once established,will be asked to report back by the end of the year with fresh ideasto improve the system.The health and safety legislation is now 20 years old. This review istimely, particularly with the rebuild in Canterbury gearing up, andthe Pike River Royal Commission due to report back in September.Workplace health and safety will get a $37 million boost over thenext four years.The number of inspectors will rise to 180 over three years – a 20per cent increase that will bring New Zealand in line with Australia.Source: Extract from media statement of Minister of Labour dated 2May 2012Page | 27 New Zealand call us on 0800 800 362

COLLECTIVE BARGAINING LAW CHANGES• Extending the right to request flexible working arrangementsto all workers, right from their first day on the job. Under thecurrent law this is only available to caregivers, and only thenafter six months of employment.• A return to the original position in the Employment RelationsAct where the duty of good faith does not require the parties toconclude a collective agreement.• Allowing employers to opt out of multi-employer bargaining.• Removing the 30-day rule that forces non-union members totake union terms and conditions.• Fix the anomaly where there are different time frames for unionsand employers to initiate collective bargaining.An issue EMA is working on is what happens when an impassein collective bargaining is reached. The question is around whenbargaining ends along with the legal restrictions imposed on abusiness.• Allowing for partial pay reductions in cases of partial strike action.Parties will be required to provide notice of a strike or lock-out.LAW CHANGESNotes:• Secret ballot to strike lawpassed• Starts May 2013• Collective bargainingchanges• Details not yet released• Health and Safety inEmployment Act review• ACC Reforms• Self-insurance instead ofprivate sector insurancecompanies• RehabilitationACC ReformsThe Government is reviewing its original decision to offer competition between the ACC Corporationand the private sector insurance market for workplace accidents.It appears the Government is looking at extending the current selfinsurancemodel known as the Accredited Employer Programme.EMA is encouraging the Government to:• Ensure there is greater flexibility for employers to discuss risksharing with whatever levy-setting agency or agencies that areallowed to be involved.• Provide competition around rehabilitation to promote efficiency.This competition could take a range of options from an employerchoosing their own private sector rehabilitation provider to agovernment agency letting rehabilitation contracts with servicelevel specifications on both efficiency and adhering to the socialobligations inherent in the ACC scheme.• Merge all the various agencies involved in accident preventionto one single entity.Australia call us on 1800 300 362 Page | 28

EMPLOYMENT RELATED ISSUESENVIRONMENTAL PROTECTION AUTHORITY (EPA)www.epa.govt.nz.There are no recent news items to report.HUMAN RIGHTS COMMISSIONwww.hrc.co.nz.There are no recent news items to report.DEPARTMENT OF LABOURwww.dol.govt.nz.MBIE to proceed from 1 JulyThe Government has today confirmed its plans to establish thenew Ministry of Business, Innovation and Employment on 1 Julythis year. The Ministry will bring together the existing functions ofthe Ministry of Economic Development, Ministry of Science andInnovation, Department of Labour and Department of Buildingand Housing.The new Ministry will assist the Government drive forward itsbusiness growth agenda and make it easier for businesses toengage with the Government.EXPERTSIN THEFIELDAvoid the MinefieldEMA’s experienced consultants know how to get the job doneCollective bargaining • Union management • ACCPersonal grievances • Disciplinary & performance issuesRestructuring • Coaching & development • Health & SafetyRotorua, Waikato, Tauranga, Auckland & WhangareiPhone us on: 0800 800 362 1800 300 362Page | 29 New Zealand call us on 0800 800 362

EMPLOYMENT RELATED CASESOur weekly Employer Bulletin reports on all employment cases. You can read the latest online or have itsent to you via email each Friday (call AdviceLine). Below is a selection of cases that have been reportedover the past four months.Court of AppealEmployer justified in refusing toindemnify employeeThis case was an application to the Court of Appeal for leaveto appeal an Employment Court decision which held thatMana Coach Services (“Mana”) was not liable to indemnifytheir employee, Ms Katz, for legal costs incurred when she wasprosecuted for careless driving.Ms Katz was driving Mana’s bus when she collided with a stationarycar. Both the car and bus suffered damage. Ms Katz pleaded guiltyto operating a vehicle carelessly and was discharged withoutconviction. Such a discharge is deemed to be an acquittal. Ms Katzthen sought to recover $562.50 in legal fees from Mana.The Employment Court decided that because the accidentwas caused through Ms Katz’ negligence, she lost any right toindemnification. In other words where liabilities or expenses ariseout of some breach of duty by the employee, that employee willlose their right to indemnification. In this case the EmploymentCourt considered that Ms Katz had breached her obligation to takereasonable skill and care in the course of her employment.Before the Court of Appeal, counsel for Ms Katz submitted thatthree questions of law were raised – Did the Employment Court errin determining:• That there was no common law indemnity where the bringing ofthe charges was linked to the performance of the employee’s duty?• The obligation to indemnify at common law is lost if there issome mere act of negligence on the part of the employee?The majority of the Court accepted that the scope of commonlaw indemnity owed by an employer to an employee does havegeneral importance. However the Court cited previous authoritywhich expressed the principle that indemnification at commonlaw does not extend to where “expenses were not incurred by theworker as an agent of the employer in the reasonable performanceof the worker’s duties.”The Court accepted the Employment Court’s conclusion that theaccident was caused solely through Ms Katz’ negligence, andthat there was conduct that constituted the offence. On the basisof the principle above, the Court did not “see how it could besensibly argued that Ms Katz’ conduct fell within the reasonableperformance of her duties.” The Court declined leave to appeal.In a minority judgment Justice Glazebrook reached the sameconclusion but for a different reason. His Honour thought therewas a public policy reason why indemnity should not be availablefor defending criminal charges where a person is guilty of theoffending. He noted that while a discharge without conviction isdeemed to be an acquittal, an offender must first be found guiltyor plead guilty. In his Honour’s view the circumstances could beequated with costs incurred in defending a charge where theoffender is guilty.Katz v Mana Coach Services Limited [[2011] NZCA 610;2/12/2011; Glazebrook, Arnold and Ellen France JJ]• The discharge without conviction did not affect the above?Notes:Australia call us on 1800 300 362 Page | 30

EMPLOYMENT RELATED CASESEmployment CourtEmployee was overpaid more than $70,000 butemployer unable to force repaymentOver a period of 16 months between July 2007 and November2008, Mr Foai was overpaid wages by his employer Air NewZealand (“Air NZ”) to a total of $70,428. Air NZ successfullyobtained a judgment in the Employment Relations Authorityrequiring Mr Foai to repay the nett overpayment, however Mr Foairaised a challenge in the Employment Court.Air NZ claimed that Mr Foai had been unjustly enriched by havingcontinued to receive the overpayment when he was aware that theamounts were quite high. It claimed a right to restitution, that is,to be restored to the position it would have been had the injusticenot occurred.Mr Foai claimed that he had queried the high amounts withboth HR and payroll staff at Air NZ on a number of occasions. Hesought to rely on the equitable defence of ‘change of position’ oralternatively, section 94B of the Judicature Act 1908 which holdsthat a payment made under mistake may not be recoverablewhere the person received the payment in good faith, and has soaltered his position in reliance on the validity of the payment that itwould be inequitable to order repayment.Mr Foai had worked for Air NZ since 2002 on a part time basis. Hehad been performing shift work with irregular hours and overtime,which was having an effect on his young family. In early 2007 MrFoai’s pay rate was $17 per hour for up to 30 hours per week, plusovertime at the rate of time and a half for the first three hours anddouble time thereafter. He worked a lot of overtime and somefortnights could earn about $2,000.During mid-2007, Mr Foai was promoted to the role of T&AAdministrator. A detailed job description was provided and theremuneration was simply stated “Payment for hours worked will beas now, at your average earnings hourly rate.” This was renewed ona three-monthly basis until December 2008.Mr Foai queried the pay rate with his manager and was told that “itwas a top up from his original hourly rate and that it prevented himfrom receiving overtime since *he+ was still classed as part time inthe system”.A report was provided of Mr Foai’s pay for the period July 2007to November 2008. The report showed overpayments of varyingamounts for each fortnightly pay, starting in 2007 with anoverpayment of $59 in one pay, $14 in another, $462 in another,$622 in another and by 2008 the overpayments were as high as$3,000 and $4,800 in two fortnights respectively. Mr Foai was alsounderpaid on two occasions.normal. He contacted payroll and was advised that the issue wasbeing looked into, but no further action was taken until December2008 when Mr Foai was advised that he had been overpaid.The Court accepted that Mr Foai had been enriched as a result ofthe overpayments, but considered whether Mr Foai’s position “hadso changed that it would be inequitable in all the circumstances torequire restitution.”Mr Foai showed that as a result of believing that he was entitledto the overpayment, he had moved into his own accommodationwhich he would not otherwise have done, had been on a numberof overseas trips and paid for gifts and trips for others, hadincurred a child support debt to the IRD, and had decided to getmarried and bought an engagement ring. The Court found thatbecause of the overpayments Mr Foai had lived beyond his realmeans for 16 months.It was held that Mr Foai had received the overpayments in goodfaith, having raised concern with his employer on a number ofoccasions and knowing that payroll and HR staff had access to hispayslips, contract and employment records.The balance of equities was found to favour Mr Foai and the Courtconcluded that Mr Foai “was entitled to rely on Air New Zealand toget the figures right”.Mr Foai was not required to repay to Air NZ the nett overpaymentof $42,635.Foai v Air New Zealand Limited [[2012] NZEmpC Wellington 57;04/04/2012; A Ford]Editor’s comment: This case illustrates the importance of havingclear terms in the employment agreement that are understood bythe employee and employer. Where the terms are complex or couldbe misunderstood, it will be even more vital that there is a commonunderstanding between the employee and staff members involvedin administering the agreement including management, HR staffand payroll.Notes:Air NZ was not able to identify the particular mistake that ledto the overpayments. The evidence showed that on at least twooccasions during 2007 Mr Foai asked his employer whether hispay was correct, and this was confirmed however no referencewas made to specific payslips. In late 2007 Mr Foai was contactedby a member of Air NZ’s payroll staff who had noticed the highpayments and that the issue would be referred to the payroll teamleader. He heard nothing back from payroll. In 2008 Mr Foai tookannual leave and noticed substantially higher payments thanPage | 31 New Zealand call us on 0800 800 362

Positive test for cannabisCoca-Cola Amatil (NZ) Limited (“Coca-Cola”) dismissed syrupmaker, Mr Hooper, after a drug test returned a positive result forcannabis use. Mr Hooper admitted to smoking cannabis everyday outside of work for 20 years, but claimed that he was unfairlytreated and that Coca-Cola breached its good faith obligations. TheEmployment Relations Authority dismissed Mr Hooper’s claims. MrHooper appealed to the Court for a new hearing. Mr Hooper wascovered by a collective employment agreement which providedfor drug testing of employees for cause. On 22 February 2010,manager Mr Kelly called Mr Hooper to the office where he met HRmanager, Ms Dunbier. Mr Hooper was informed that Coca-Cola hadreasonable cause to believe that he was consuming drugs duringworking hours, and he was required to provide a urine samplefor testing. The Court noted that there were no concerns with MrHooper’s work on that day.After the positive test result, Coca-Cola suspended Mr Hooper.At the disciplinary meeting Mr Hooper’s representative asked MrKelly why Coca-Cola had carried out a random drug test when thecollective agreement did not provide for random testing. Mr Kellyresponded by saying that the testing had “been for cause, notrandom.” However up until this point, Coca-Cola had not providedMr Hooper with any evidence of concern which would justify adrug test for cause. After an adjournment Mr Kelly revealed thatCoca-Cola had engaged a private investigator who said he hadseen Mr Hooper smoking cannabis in a park on his break severalmonths earlier. Mr Hooper denied the allegation and said that ifhe had been seen smoking it would have been cigarettes as hesmoked about 20 Dunhill cigarettes per day.Because Mr Hooper’s level of cannabinoids was so high, Coca-Colaconcluded that Mr Hooper was under the influence of an illegaldrug while at work and that it was sufficiently serious to warrantdismissal rather than pursuing options of professional counselling.In submissions to the Court, Coca-Cola included four further piecesof evidence to support its decision to dismiss Mr Hooper. Thatincluded Ms Dunbier, Mr Kelly and another senior manager goingto the park at lunchtime to see for themselves what, if anything,was going on. They observed Mr Hooper and another employeesitting in a car smoking. The three managers could not tell whatwas being smoked however, and they did not smell cannabis. MrKelly gave evidence that Mr Hooper’s team leader had a panickedlook on his face when Mr Hooper was talking at a team meeting.Mr Kelly also talked about how he caught Mr Hooper smoking in anon-smoking area and that Mr Hooper appeared to try and concealwhat he was smoking. Ms Dunbier also gave evidence of two‘whistleblowers’ at Coca-Cola who raised concerns about cannabisbeing smoked at work. The whistleblowers did not implicate MrHooper in any way. None of this evidence was put to Mr Hooper atany stage before the Court hearing.The Court agreed with Mr Hooper’s counsel that as the collectiveagreement did not provide for random drug testing, Coca-Colaneeded to have reasonable cause to test. The Court considered thatthe test results could not be relied on to retrospectively validate thetesting process if that process was fundamentally flawed.The Court found that as Coca-Cola did not provide Mr Hooper withevidence of reasonable cause before the disciplinary meeting, itbreached its good faith obligations. The Court also noted that ifCoca-Cola had suspicions about drug use several months earlier,then it should have required Mr Hooper to undergo a drug testat that stage. Counsel for Coca-Cola accepted that informationshould have been provided to Mr Hooper before the disciplinemeeting, but submitted that the failure was remedied by theinformation being put to Mr Hooper at the meeting. The Courthowever considered that “this is the type of ambush situation whichthe good faith provisions in the Act and principles of natural justice aredesigned to avoid.”The Court found that Mr Hooper’s dismissal was unjustified andordered Coca-Cola to pay Mr Hooper $4,000 compensation, andlost wages, with the amount to be calculated and agreed betweenthe parties.Hooper v Coca-Cola Amatil (NZ) Limited [[2012] NZEmpC 11;2/2/2012; Judge Ford]Australia call us on 1800 300 362 Page | 32

EMPLOYMENT RELATED CASESEmployment Relations AuthorityRequirements for fixed term employmentMr Wright claimed that he was dismissed without reason andunjustifiably. His employer V Farms Limited (“V Farms”) claimedhe was engaged under a fixed term employment agreement andterminated at the end of the specified term.In early 2010 V Farms decided that due to recent felling of 28hectares of pine trees on the dairy farm where V Farms was asharemilker extensive fencing was necessary. Due to the amountof time involved with this V Farms sought to employ a full timeemployee in the upcoming season to assist with the farming andother duties until the extra fencing work was completed. Mr Wrightwas coming to the end of fixed term farm assistant’s positionand was looking for new employment; he approached V Farmsand was offered a farm assistant role for the upcoming season.There was no mention of it being a fixed term position. Mr Wrightwas provided with a standard Federated Farmers employmentdocument that contained a provision that the agreement wouldcommence on 1 June 2010 and terminate on 31 May 2011 and that“the position is for a fixed term because the job requires this length oftime for job to be completed”.The Authority applied the requirement for a valid fixed termagreement contained under section 66 of the EmploymentRelations Act 2000 and decided although the reason for enteringinto a fixed term agreement was genuine based on reasonablegrounds, and the written agreement complied by specifying thecommencement and termination dates, it did not comply withsection 66 (4)(b) because it did not sufficiently specify the reasonsfor the employment ending in the way described. The Authorityapplied the principle outlined by the Employment Court in thecase of Shortland v Alexander Construction Company Limited “thestatute requires the reasons to be in writing to ensure absoluteclarity and certainty. That cannot be provided by implication”. Inthat case the relevant clause did not contain the necessary clarityand certainty. The relevant clause in that case referred to thetermination of the agreement on the completion of a particularproject, without providing any method of identifying the point ofcompletion and without stating what the court found to be theactual reason namely that there was no other work in prospect.The Authority found that this was the situation in this case. Thereference to the “job” requiring “this length of time” to completewas too vague to satisfy the requirements of the section. Had it notbeen for this failure to comply with section 66(4)(b) the Authoritywould have found there was a genuine fixed term agreement thatterminated at the expiry of its term for genuine reasons.The effect of section 66(6) meant that V Farms could not relyon the fixed term clause in the employment agreement to endthe employment as it did. The termination of the employmentwas therefore a dismissal and it was not justified. Mr Wright wasawarded $3,500 as compensation for the injury to his feelingscaused by his personal grievance.Wright v V Farms Limited [[2012]NZERA Auckland 122;11/04/2012; R Monaghan]Employee avoids repayment of debt as notincluded in settlement agreementThe Rotorua Girls’ High School Board of Trustees (“the Board”)sought an order to be made that Mr Simons, a former employee,repay a debt owed to the Board.In 2009, due to a fall in the school role, the School was required toreduce staffing numbers. In November 2009 Mr Simons volunteered forredundancy. His offer was accepted by the Board with the effect that MrSimons became a supernumerary teacher for the 2010 school year. MrSimons was expected to inform the Board by 1 December 2009 as to hispreferred option in regard to the choice of supernumerary employment,retraining, or long service payment (redundancy).On 30 December 2009, Mr Simons informed the Board of his decisionto retrain which allowed him to participate in a course of study on fullpay for one year. Due to being informed so late in the year the Boardwas unable to notify the Ministry of Education (“MOE”) within thenecessary timeframe to ensure Mr Simons was paid as normal.It appeared that the MOE were under the impression that MrSimons had taken the redundancy option and so informed thepayroll provider (Payserve) accordingly. Payserve, acting on theinstructions from MOE paid Mr Simons a lump sum in December2009, effectively his final pay, which covered the pay period up toand including 27 January 2010. Mr Simons’ salary payments did notrecommence until March 2010, therefore he was not paid for themonth of February.In order to redress the situation, the Board paid Mr Simons salaryadvances to the total of $4,097.22. The expectation was that this wouldbe paid back once he received his due entitlements from Payserve.Unassociated with the redundancy situation and subsequentsalary payment issue, Mr Simons had raised a personal grievanceon 22 November 2009 relating to other matters. The partiesattended mediation on 24 February 2010 where a proposed recordof settlement was drafted. Part of this settlement was that theBoard would pay to Mr Simons a sum of money as compensationpursuant to s123(1)(c)(i) of the Employment Relations Act 2000.Discussions over the terms continued until the settlement wassigned on 22 April and certified by the mediator on 14 May 2010.During this time the Board was trying to recover the sum of moneyadvanced to Mr Simons as by early March he had been fully paidhis salary by Payserve. However, Mr Simons failed to engagewith the Board about the repayment. It was raised as part of thesettlement agreement in terms of offsetting the sum against thecompensation, but this was not agreed to by Mr Simons.After the settlement agreement was signed the Board continuedto request repayment of the $4,097.22 without success. It thereforewithheld the compensation payment agreed to in the recordof settlement. Mr Simons sought a compliance order whichwas granted in a determination dated 3 June 2011. Under thePage | 33 New Zealand call us on 0800 800 362

heading of “Comments” in that determination a counter claim wasmentioned which appeared to have prompted this matter.The Authority had empathy for the Board in regard to attemptingto recover the money from Mr Simons however it was unable togrant the remedy sought. The record of settlement contained theusual standard term stating that it be a “full and final settlement ofall matters arising out of the employment relationship” (emphasisadded). The discussion did include the possibility of an offsetin regard to the $4,097.22 and so became a matter “arisingNo flaws in disciplinary process againststressed employeeMr McAuslin resigned from his position as a merchandiser withGeorge Weston Foods (“GWF”) in the face of GWF initiatingdisciplinary investigations. He raised a grievance of unjustifieddisadvantage resulting from the decision to initiate theinvestigations. He did not claim any grievance arising from thetermination of his employment.The circumstances leading to the investigations revolved arounda complaint made by a New World supermarket manager toMs Moyle, the regional sales manager, about Mr McAuslin notcompleting all his in-store merchandising duties. Ms Moylecontacted Ms Jarvis, the territory manager, who followed up withMr McAuslin and later wrote to him setting out a summary of theallegations of unsatisfactory performance. She advised that ifthe allegations were established a first written warning could beissued. Mr McAuslin was asked to attend a meeting and advised ofhis right to bring a representative.The letter was delivered by courier to Mr McAuslin at home. Hesaid he was embarrassed to receive the letter shortly before hisengagement party which was being held that evening.At the time Mr McAuslin had been seeing a clinical psychologist forassistance with an unrelated problem. The psychologist thoughtthat Mr McAuslin should not attend the disciplinary meetingbecause it could have an adverse effect on his stress. GWF agreedto defer the meeting.Around a month later Ms Moyle rescheduled the meeting and sent MrMcAuslin a letter which repeated the work performance allegation butalso included a further allegation of serious misconduct and the possibilityof a final warning. The allegation followed further investigation of theearlier alleged incident and alleged that Mr McAuslin had submittedtimesheets for payment of hours he did not actually work.Mr McAuslin said he was shocked by the new allegation and heobtained a copy of the visitor pass from the supermarket whichshowed he left at 7.15pm. In evidence he said that he finished offpaperwork in the car, finishing work ten or fifteen minutes later.Mr McAuslin’s psychologist advised him that he should resign. Hislawyer wrote to GWF and answered the work performance andserious misconduct allegations.The letter also set out Mr McAuslin’s view that the way the matterhad been handled was the result of Ms Jarvis unfairly blaming himfrom the employment relationship” with full and final settlementsubsequently reached.The Authority shared the view that Mr Simons had obtained anunjust enrichment by refusing to pay the moneys owed, butunfortunately the Board had missed its opportunity to obtainrepayment when it entered the record of settlement.Rotorua Girls’ High School Board of Trustees v Simons [[2012]NZERA Auckland 102; 21/03/2012; K Anderson]over another matter. Mr McAuslin communicated his resignationand raised his complaint that the company had not dealt with thedisciplinary matters in good faith.There were several strands to Mr McAuslin’s grievance. First, heheld the view that Ms Jarvis was motivated by a desire for revengeagainst him because of his innocent involvement in anotherperson’s complaint against her. The Authority found two principaldifficulties with the view. The complaint about Mr McAuslin’swork originated from the New World manager, and the documenttrail demonstrated a perfectly routine handling of a potentialdisciplinary matter. The circumstances were that any employerwould have initiated a disciplinary investigation just as GWF had.An aspect of Mr McAuslin’s complaint concerned the delivery ofthe first letter to him on the day of his engagement party. TheAuthority found there was not sufficient evidence to establish thatMs Jarvis knew about the timing of the party. In any event, thetiming was unfortunate rather than unjustified.The third aspect to Mr McAuslin’s grievance was the decision ofGWF to make a secondary disciplinary allegation. Mr McAuslinclaimed that there was a complete answer to the alleged concerns.The difficulty was that GWF could not know that without MrMcAuslin responding to the allegation. No one else knew that hehad done some work in the car park after signing out of the lastsupermarket visit of the run.The Authority held that in all the circumstances known to GWFat the time, any employer would have initiated the seconddisciplinary allegation as GWF had. It followed that there wasnothing unjustified about the actions taken by GWF and MrMcAuslin did not have sustainable personal grievance.McAuslin v George Weston Foods (NZ) Limited [[2012] NZERAChristchurch 32; 22/02/2012; P Cheyne]Australia call us on 1800 300 362 Page | 34

EMPLOYMENT RELATED CASESStylist stole cash from handbag to settleemployer debtMs Black claimed she was unjustifiably dismissed by Zaibatsu 2006Ltd (“Zaibatsu”) where she worked as a hairstylist. Ms Black claimedshe had been dismissed following a meeting with the owner ofthe business, Mrs Smith, who accused her of theft and showed herCCTV footage.Ms Black claimed she had not been given an opportunity toexplain and prevent her termination at the meeting. Ms Blackcontended that she had been summoned to the meeting withoutwarning of its purpose and that the discussion during the meetingbecame heated and abusive and that she left and did not return tothe workplace after she was told to hand in her gear and keys.Ms Black had admitted to taking the money at the meeting butalleged she was not given an opportunity to properly explain heractions. Ms Black’s evidence was that she had taken on three differentoccasions on the same day three $20 notes out the office drawer andfrom Mrs Smith’s handbag as shown on the CCTV footage.She explained at the hearing that she had later returned one of the$20 notes. The reason why she had taken the money, which shenow regretted, was that she believed that Mrs Smith owed her thesum of $374. According to Ms Black she had allowed Mrs Smith touse her credit card during a work trip to Sydney and understoodthe charges would be reimbursed.Earlier that year Mrs Smith had prepaid for the accommodationand air tickets for her staff to attend a hair expo in Sydney. Onarrival at the hotel a credit card was required as security againstincidental costs and to release the room. The amount of $374 wascharged to the card for incidentals and room cleaning. Ms Blackhad presented these charges to Mrs Smith for reimbursementupon returning to NZ but Mrs Smith had refused to repay theamount. Mrs Smith had said that the arrangements she agreedto were that she would only pay for airfares and accommodationand all other costs including tickets to the expo and meals wouldbe the responsibility of individual employees. Mrs Smith had toldMs Black to organise a collection from other staff employed in thesalon to repay the credit card bill. Ms Black had placed a notice onthe notice board of this request but no money had been collected.A meeting was held between Mrs Smith and Ms Black to discuss theaccusation of theft. Ms Black claimed that she was dismissed at themeeting, however Mrs Smith denied that and said the discussionremained incomplete, with the termination being effected whenMs Black did not return to the workplace. The Authority did notaccept this argument and found that Mrs Smith’s words “get yourgear and go” when combined with a request for the keys was an actof dismissal.The Authority determined that the dismissal was however justifiedunder the pre 1 April 2011 test for dismissal under section 103A ofthe Employment Relations Act 2000. The process was not so bereftof fairness that it rendered the dismissal unjustified. Ms Black wasaware of her obligations but chose to ignore them. Her admissionto theft three times on one day came before she was advised ofher dismissal. The Authority stated that most employers would,in such circumstances, dismiss and justifiably so as the admittedconduct was totally destructive of the trust that was essential tothe on-going employment relationship, especially given that in thissituation the employment relationship was initially founded onpersonal friendship.The Authority did not accept the employee’s justification anddecided on the evidence provided by other staff that all staff knewthe rules, that staff were liable for the costs that were incurredon Ms Black’s credit card. Ms Black had not sought contributionfrom the staff but had only made demand on Mrs Smith. MsBlack had admitted and accepted that her behaviour was totallyunacceptable. Ms Black’s contribution to the situation was 100 percent. No remedies were awarded.Black v Zaibatsu 2006 Ltd [[2012] NZERA Christchurch 25;16/02/2012; M Loftus]Editor’s comment: This case illustrates that a flawed process will notnecessarily be fatal to an employer’s defence where the employee allegesunjustified dismissal. EMA recommends however that employers makethemselves familiar with disciplinary process requirements under lawand under the employer’s own policies before disciplinary events arise, inorder to respond appropriately to the situation.Order of costs against employeeIn an earlier determination, the Authority held that Ms Osborne’sdismissal from Farmers was justified. The parties were encouragedto resolve costs by agreement however, in absence of agreementthe Authority was required to make a costs determination.Farmers stated they had incurred actual costs in excess of$15,000 and sought an order for Ms Osborne to contribute$10,000 towards its costs. No cost submissions were receivedfrom Ms Osborne.The matter involved a one day investigation meeting followed bywritten submissions filed after the meeting.Farmers made a “without prejudice except as to costs” settlementoffer in September 2011 which proposed that if Ms Osbornewithdrew her claim it would not seek costs. Ms Osborne declinedto accept the offer.At the time the offer was made Farmers had filed their statementin reply and the parties had attended mediation but Ms Osbornehad not filed her evidence, and Farmers had not at that pointincurred the costs associated with preparing its evidence. The offerset out why the employer considered Ms Osborne’s dismissal claimwas without merit. The Authority in its substantive determinationagreed with all of the matters that had been identified in thesettlement offer as justifying its dismissal of Ms Osborne, thereforethe Authority found that Ms Osborne had been put on notice ofthe deficiencies in her claim.The Authority considered that the settlement proposal was arealistic offer which if accepted would have saved both parties thecosts associated with proceeding to an Authority investigation. MsOsborne’s failure to accept the offer was considered unreasonableand therefore put the employer to additional and unnecessary cost.Page | 35 New Zealand call us on 0800 800 362

The Authority went into the factors in more detail and commentedthat whilst Ms Osborne was entitled to challenge her dismissal, sheshould have known from the outset that her claim was unlikely tobe successful and there was a high risk she would be required tocontribute towards the employer costs.Employee dismissed on client’s instructionsTruck driver Mr Wallace claimed he was unjustifiably dismissedby Broadway General Carriers Limited (“Broadway”) after he wasinvolved in a road accident.Although Broadway was Mr Wallace’s employer, all of the workMr Wallace did was for Broadway’s major customer, Freight LinesLimited (“Freight Lines”). The accident occurred in February 2011when Mr Wallace was driving around a blind bend near Kaikoura.He crashed into another truck which had stopped on the road.Police established that the accident was caused by tourists whohad parked on the wrong side of the road to look at seals causingthe truck in front to stop.Broadway advised Mr Wallace a couple of days later that hewould be required to undertake a drug test. The subsequenttest was negative and Mr Wallace went off on sick leave ataround the same time. Consequently there was some delay inBroadway meeting with Mr Wallace to discuss the accident.About a week later, Mr Wallace’s wife called Broadway managerMr Church to arrange a meeting. Unbeknown to Mr Churchthe conversation was recorded. Mr Church indicated that MrWallace no longer had a job because Freight Lines had writtento it advising they did not want Mr Wallace carting their productanymore. Broadway did not meet with Mr Wallace about FreightLine’s concerns.The Authority was satisfied that the recorded phone callconstituted a dismissal. Broadway claimed that the surreptitiousrecording of the phone call was illegal and therefore the Authorityshould not be able to take it into account. However the Authoritywas able to rely on the recording pursuant to section 160(2) of theEmployment Relations Act 2000, which states that the AuthorityThe Authority doubled the notional daily tariff and ordered MsOsborne to contribute $6,000 towards the legal costs.Osborne v The Farmers’ Trading Company Limited [[2012]NZERA Auckland 79; 01/03/2012; R Larmer]may take into account such evidence as in equity and goodconscience it thinks fit, whether strictly legal or not.Broadway relied on the advice from Freightlines banning MrWallace to justify his dismissal. The Authority reviewed someprevious cases which involved so-called “triangular employment”relationships. Those cases established that an employer facedwith such advice from a client “still remains bound to full andfair procedures.” In this case Broadway did not attempt to getMr Wallace’s side of the story and communicated the dismissalthrough Mrs Wallace. In response to the statement of problemlodged with the Authority, Broadway responded by denying it hadever employed Mr Wallace.The Authority concluded that Mr Wallace was unjustifiablydismissed and awarded $7,500 distress compensation and$7,595.51 in lost wages. The Authority also upheld a further claimfor $5,195.35 unpaid holiday pay, $593.41 arrears of wages. TheAuthority ordered Broadway to pay $3,000 penalty for failure toprovide a written employment agreement, half of which was to bepaid to the Crown and half to Mr Wallace.Wallace v Broadway General Carriers Limited [[2011] NZERAChristchurch; 16/12/2011; D Appleton]Editor’s comment: An employer may feel they have no choice but toterminate when faced with a client demand that an employee beremoved from the workplace. However, as the Wallace case suggests,that should never be a fait accompli. Past cases have shown thatfull and fair procedure includes a requirement to consult with theemployee on alternative work prospects, to properly investigate clientcomplaints, and even making the client understand that employeeshave statutory rights and employers have liabilities to employees.Notes:Australia call us on 1800 300 362 Page | 36

OCCUPATIONAL SAFETY AND HEALTH (OSH)Occupational Safety and Health (OSH) is a service of the Department of Labour responsible forworkplace health and safety in terms of the Health and Safety in Employment Act 1992.Its website is www.osh.dol.govt.nzAssociation fined $15,000 forrollercoaster derailmentThe Caroline Bay Association Inc (“CBA”) is a not for profit societyestablished to organise the Caroline Bay Carnival in Timaru eachyear. The CBA has been organising the event for 100 years. On 31December 2010 Mr Meeking and his five year old son attendedthe carnival and paid to ride the rollercoaster. On the last lap ofthe ride, the carriage derailed and Mr Meeking and his son werethrown 1.5 metres onto the grassed area beneath the rollercoastertrack. Mr Meeking and his son suffered bruising, back problems,trauma and anxiety as a result of the incident.The CBA was charged under the Health and Safety in EmploymentAct 1992 s16(2)(b)(i) and s50(1)(a), with having failed to take allpracticable steps to ensure that no hazard arose in a place of work thatit controlled, and this judgment dealt with sentencing for the charge.Prior to the incident, the rollercoaster had been maintained by avolunteer of the CBA. There had been three failings of the rolleraxles on the rollercoaster, and new axles were manufacturedby Humphris Engineering Ltd. The new axles were fitted bya volunteer of the CBA who had experience in operating therollercoaster and who carried out daily inspections.After the incident, it was found that the axles had been mountedincorrectly and this had caused the carriage to derail.High CourtThe Court considered the gravity of the offence, CBA’s degreeof culpability, the seriousness of the offence and the effect ithad on the victims. The Court held that the CBA ought to havehad a trained mechanic supply and fit the axle bolts. The CBAsubmitted that this was not a practicable step as it relied heavilyon volunteers to operate the carnival each year and the cost ofengaging a mechanic to perform the necessary 750 hours ofmaintenance work would mean the carnival was potentially nolonger viable.The Court confirmed that the paying public places a significantdegree of trust in the operators to ensure that the equipment issafe, and that the CBA is responsible for ensuring those reasonableexpectations are met. A fine of $30,000 was set, reduced to $10,000due to the CBA’s cooperation, remorse and previous unblemishedsafety record. Reparations were set at $5,000 and the CBA wasurged to reprioritise its expenditure to engage trained mechanicsand engineers where required.Department of Labour v Caroline Bay Association Incorporated[CRI-2011-076-001168; 16/09/2011; Walsh J]Right to silence trumps OSH inspection powersMessrs.’ Bull and Speedy (“the plaintiffs”) were directors ofMangaohane Station Limited (“MSL”). On 8 March 2011 anemployee of MSL died tragically as a result of a farming accidenton Mangaohane Station near Taihape.The Department of Labour commenced investigations throughinspector Ms Utumapu, who wrote to the plaintiffs advising that shewished to interview them in accordance with s31(1)(f) of the Healthand Safety in Employment Act 1992. S31(1)(f) allows an inspectorto require a person to “make or provide statements, in any form theinspector specifies, about conditions, material, or equipment thataffect the safety or health of employees who work there.”The plaintiffs stated their willingness to provide the informationrequired, but “not in an uncontrolled manner” without prior noticeof the questions they were required to answer.Ms Utumapu responded by indicating the general areas thatthe questions would focus on but declined to provide the actualquestions to be asked.The plaintiffs sought judicial review, claiming that the inspector’spowers of investigation under s31(1)(f) must be interpretedwith regard to the overarching right of silence under the s28Bill of Rights Act 1990. This section and associated case lawwas cited which held that parliament must be presumed not tohave intended to abridge fundamental principles and freedoms,except by clear language, so that where a statute does impingeon a fundamental principle it must be interpreted to infringe aslittle as possible.The Court agreed, and held that the s31(1)(f) power must be readin a way that is consistent with the right to silence. It was held thatthere are other ways in which a statement can be required than byconducting an interview which do not conflict with the Bill of Rights.The Court indicated several consequences that flow from this decision:Adequate notice must be given of the specific matters to be coveredin an interview, including the legal significance of any proposedinterview i.e. the type of allegations the interviewee is facing.The interviewee must not be ‘detained’– although the inspector maystate a time and a place for the interview, the consequence cannotbe that the interviewee is detained for the duration of the interview.The inspector does not have the power to nominate arepresentative of the company to be interviewed, where theemployer is not a natural person.The s31(1)(f) power to require statements about the “conditions” thataffect employees’ health and safety must be interpreted narrowly,to include only the working conditions and practices related to thephysical environment of the workplace and not, for example, systemicmethods of identifying hazards, the sufficiency of steps taken toremove a hazard, or the prior knowledge a person had about a hazard.Bull and Speedy v Utumapu [[2012] CIV-2011-454-260 HighCourt NZ; 12/08/2011; Mackenzie J]Australia call us on 1800 300 362 Page | 38

NOTESPage | 39 New Zealand call us on 0800 800 362

Australia call us on 1800 300 362

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