Tim joined Frank Ogilvie in 2022 as a Consultant.
He graduated with a Master of Laws from Victoria University of Wellington in 1991. He spent over 20 years in private practice working across sole practice and mid size firms, before spending nine years working in-house.
In private practice, Tim was involved in a mix of civil and criminal litigation, and employment law. Tim also taught as a lecturer at the University of Waikato and the Open Polytechnic, and as an instructor for the Institute of Professional Legal Studies.
As well as working for Frank Ogilvie, Tim is General Counsel for Hospitality New Zealand.
In his personal time, Tim likes to learn new things (for example, in 2019 he completed a postgraduate management course). He also enjoys spending time with friends and family, and never says no to a coffee.
The change of government means new priorities and standards for New Zealand’s employment law. This Explainer outlines some of the changes that have been implemented already, and the changes that employers can expect.
Re-instatement of 90 day trials
As campaigned on by both the National and ACT Parties, and included in their coalition agreement, the Government has reintroduced the ability for all employers to include a ‘trial period’ of up to 90 days in employment contracts. Previously this was only available to employers with fewer than 20 employees. Trial periods allow for an employee to be dismissed within this period without being able to bring a personal grievance in respect of their dismissal.
This does not prevent an employee bringing a personal grievance against their employer on another matter, and employees still cannot be dismissed on the basis of any prohibited grounds of discrimination under the Human Rights Act. A trial period must also be included in an employee’s employment agreement, agreed to before the employee starts work, and cannot be contrary to any collective employment agreements that cover the employee.
Repeal of ‘Fair Pay Agreement’ Legislation
Another common policy of the National and ACT parties was the repeal of the Fair Pay Agreements Act 2022. This legislation would have allowed for unions and employer associations to bargain for minimum employment standards, which would have applied across entire industries.
Several applications were underway at the change of government, prompting a repeal of the legislation under urgency, though no agreements had been concluded at the time of the repeal.
Strengthened migrant worker protections
In January 2024, the Worker Protection (Migrant and other Employees) Act came into force, strengthening protections for migrant workers and creating stronger enforcement measures for employers using migrant labour. The Act requires employers to provide employment-related documentation within 10 working days when requested of them by an immigration officer, and enables the Chief Executive of MBIE to publish the names of employers who commit offences against the Act.
The Act also introduces new infringement offences for employers. These include allowing someone to work who isn’t entitled under the Immigration Act to do that work, getting someone to work in a manner inconsistent with the work-related conditions of an employee’s visa, and failing to comply with an immigration officer’s request for employment-related documentation.
Simplifying the Holidays Act
One area of reform that has been a long time coming is the simplification of the Holidays Act. In 2021 the government accepted all 22 recommendations of the Holidays Act Taskforce Report, and the current government has taken up the baton as one of its upcoming legislative priorities. These changes are intended to correct the difficulty of employers to properly calculate and pay out employee holiday pay entitlements, most prominently by multiple government agencies with arrears in the billions of dollars.
The Government has not yet detailed the changes they will make to the Holidays Act, but the recommendations of the Taskforce included new formulas and tests for leave entitlements, expanded access to some currently available forms of leave, and increased transparency for employees on their entitlements.
While these changes are being determined, the current obligations still apply, including for employers to remediate historical underpayments.
Explicitly stated ‘independent contractor’ arrangements to be recognised as such
One of the most significant developments in the modern employment space is the rise of the ‘gig’ economy and ‘platform work’, where people provide services through an online platform such as an app or website. There is significant contention around whether the individuals providing these services are “employees” for the purposes of the Employment Relations Act (and therefore entitled to benefits such as the minimum wage and paid leave), or whether they are simply contractors (as the platforms’ agreements tend to stipulate).
The coalition agreement between the National and ACT parties includes a commitment to maintaining the current status quo. This will mean that workers with contracts explicitly describing their work as independent contracting cannot go to court claiming to actually be employees.
Protections for employers against vexatious Personal Grievances
The Minister for Workplace relations has also indicated changes to simplify the personal grievance process, and increase the protections for employers against vexatious complaints by employees, noting the significant burdens of legal costs and the impacts to reputation. The Minister has indicated these changes will include setting a high-income threshold above which a personal grievance may not be pursued, and to remove eligibility for remedies where the employee is at fault for the personal grievance.
Clarifying the Health and Safety at Work Act
Another priority for the Government with little revealed detail so far is a reform to the Health and Safety at Work Act. The Minister for Workplace Relations has signaled a review of the Act to check that it remains fit for purpose. Identified issues with the Act include opaque obligations for businesses, impractical requirements, and superfluous activities aimed at compliance rather than actual safety measures.
There will be upcoming consultation in the coming months on the possible changes to the Health and Safety at Work Act.
Migrant workforce changes
The New Zealand First Party’s coalition agreement with National also included commitments to changes in employment law, largely focused on the migrant workforce. The changes agreed include improving the Accredited Employer Work Visa to focus on attracting in-demand skills and workers, making Immigration New Zealand engage in proper risk management and verification so migrants fill gaps in New Zealand’s workforce, and investigating the establishment of an “Essential Worker” workforce planning mechanism to allow for long term planning around skill and labour shortages.
The coalition agreement also included a commitment to stronger enforcement and action on migrant worker abuse. The details of these changes have not been announced yet, but a National Party member’s bill has been drawn from the ballot that will increase the maximum penalties for slavery offences in New Zealand. As a bill from a member of a governing party, it can be expected to pass.
Continued increases to minimum wage
As part of the coalition agreement between the National and New Zealand First parties, the minimum wage will continue to moderately increase yearly, starting with a change on April 1 from $22.70 to $23.15 per hour.
For further information on the issues raised in this brief, please contact Director Rob Ogilvie.
Renee Jones v Nga Rangitahi Toa Creative Arts Initiative Trust is a September 2022 decision and the latest word from the Employment Relations Authority (ERA),about when employers can rely on fixed-term employment agreements.
Section 66 of the Employment Relations Act 2000 limits when employers are allowed to rely on fixed-term employment agreements (as opposed to offering permanent employment to workers). Section 66(2) says :
Before an employee and employer agree that the employment of the employee will [be fixed-term only] … the employer must … have genuine reasons based on reasonable grounds for specifying that the employment of the employee is to end in that way…”
This issue was previously considered by the Employment Court in 2019 in Morgan v Tranzit Coachlines Wairarapa Limited. In that case a bus driver was on a one year fixed-term employment agreement that the employer has been rolling over every year for 18 years. The employment was fixed-term because the job was reliant on the employer continuing to secure annual Government funding. The Employment Court did not accept that this was a genuine reason based on reasonable grounds for continuing to offer the employment as fixed-term only. The concern that the Government would not continue funding was speculative (not an actual reason to think that was going to happen), and if it did happen the employer could address that through a redundancy process. This case resulted in some uncertainty among employers and employment lawyers about when fixed-term employment agreement are allowed.
Renee Jones was employed as an administrator by Nga Rangitahi Toa Creative Arts Imitative Trust (‘the Trust”), on a one year fixed-term part-time agreement, from February 2020 to February 2021.
The Trust works with vulnerable South Auckland students, and uses arts and well-being programmes to engage those students in higher education and employment. The Trust relies on philanthropic funding,and most of its funding was tagged for specific purposes. In previous years it had insufficient unallocated funding to employ an administrator (and had relied on volunteers), and there was no guarantee it would have sufficient unallocated funding to employ an administrator in future years.
When Ms Jones’ fixed-term agreement came to an end, so did her employment. She claimed that this amounted to an unjustified dismissal, and argued (amongst other things) there were not genuine reasons based on reasonable grounds for the employment being fixed-term only.
The ERA followed the Employment Court decision from Morgan v Tranzit Coachlines Wairarapa Limited and applied the following test:
When assessing whether a fixed-term agreement has been entered into for genuine reasons based on reasonable grounds, it will be relevant to consider whether the stated reasons were sincerely held (at the time the agreement was entered into) and whether they were for a proper purpose.
Applying the Criteria in the Renee Jones case
The ERA found that the employer had more genuine and reasonable grounds in the present case, compared to the Morgan v Tranzit Coachlines Wairarapa Limited case, to be concerned about its ability to fund ongoing employment. In the earlier case, there was an 18 year track record of being able to fund the role, and no particular reason to think that was about to end. In the present case, there was a track record of not being able to fund the role, and funding being earmarked for other purposes. It was reasonable for the employer to honestly believe that its ability to fund the role on an ongoing basis was too uncertain.
The fixed-term nature of the employment agreement was upheld. The termination of the employment at the end of the agreement was not an unjustified dismissal.
For further information please contact Director, Rob Ogilvie
Summary
In E tū Inc & Anor v Raiser Operations BV & Ors (the latest Uber case) the Employment Court decided that certain Uber and Uber Eats drivers were not contractors, as their written agreement specified, but were actually employees.
Background
For many years, the pendulum has swung, about exactly where the border lies between the definition of a contractor (employed under a contract for services) and employee (employed under a contract of service).
There have been previous cases in New Zealand and overseas, about the employment status of Uber drivers, and different cases have resulted in different conclusions.
The plaintiffs in the present case were unions. The defendants were four companies within the Uber group. The people who were the subject of the litigation were four workers who drove for the various Uber companies.
The work had been operating on the basis that those workers were contractors. The Unions brought at application to the Employment Court, to have those workers declared employees.
There are various reasons why it can be very important to know whether someone is an employee or a contractors; for example, it determines whether the Employment Relations Authority has jurisdiction to hear a grievance raised by the workers, relevant to tax treatment, determines whether minimum employment standards apply, coverage of collective employment agreements and the relationship to the unions.
The unions sought the declaration so that the drivers could access the rights and protections under the employment law including the minimum wage, guaranteed hours, holiday pay, sick leave and the right to unionise and collectively bargain.
The Case
Tests
Traditionally, various tests have included – how the parties chose to define their relationship (what their written agreement said), tax treatment (including PAYE, GST and ACC), invoicing practice, whether the relationship was exclusive (if lots of clients, more likely to really be a contractor), whether the worker was expected to provide their own tools, how much freedom the worker had to choose where and when and how to work, whether payment is by results or by hours worked, whether the worker can sub-contract the work, and to what extent the worker was integrated into the business team. None of these consideration alone would necessarily be determinative.
Section 6 of The Employment Relations Act 2000 provided some assistance, stating:
In deciding … whether a person is employed by another person under a contract of service, the court … must determine the real nature of the relationship between them ... [and] …must consider all relevant matters, including any matters that indicate the intention of the persons; and…is not to treat as a determining matter any statement by the persons that describes the nature of their relationship.
The previous leading decision in this area was the 2005 Supreme Court decision in Bryson v Three Foot Six Ltd. In that case, the Supreme Court emphasised the importance of focusing on:
· The fundamental nature of the relationship, including terms of the written and/or oral agreement between the parties; and
· How the agreement operated in practice, including control and integration.
In this case, the Chief Judge acknowledged the Bryson decision is binding, but said the criteria were not intended to be exhaustive. She had regard to a wider set of criteria, which she stated were “infused” by the Bryson criteria, including:
· The nature of the business, and how it operates in practice,
· How the company’s business model impacted on those workers,
· Who benefited from the drivers’ work,
· Who exercised control, and how it was exercised,
· What the document between the parties said, and
· The extent to which the drivers were identified as part of the business.
Applying the Criteria in the Uber case
The Chief Judge applied the criteria to the facts, although much of the criteria overlapped (i.e. some facts appeared relevant to more than one criterion). She observed that:
· The contract that the workers had to sign reinforced a high degree of control and subordination in the relationship between the Uber companies and the drivers, including because the Uber companies retained control over fares, payment, review of disputed fees and information about passengers.
· The Uber companies exercised strong influence over when and how drivers worked, including by controlling and setting training, keeping the relationship limited to that driver (i.e. little or no ability to sub-contract), using a rating and reward system, and using a disciplinary system.
· The overall way in which the system worked was that the drivers were economically dependent on Uber (i.e. not the sort of economic independence you would expect when workers genuinely operate their own independent business) including because Uber was responsible for marketing and advertising, and the drivers’ ability to build up their business was limited to non-existent.
· There was some evidence that the drivers identified as Uber drivers, and associated with Uber.
· The fact that the workers provided their own cars, and set their own working hours, was not enough to show independence.
· The fact that their written agreements said that they were contractors, was not reflective of the reality of the relationship.
Result
The Chief Judge determined that the reality was that the drivers could not be considered to have been running their own independent businesses. The Employment Court make a declaration, that each of the drivers had been an employee for at least one of the Uber companies, during particular periods of time.
Have the goal posts just shifted? The debate among employment lawyers now includes questions such as:
· Was the Chief Judge following the factors from the Bryson case (even if she was using somewhat different terminology)?
· If the Chief Judge was not just following the factors from the Bryson case, was that okay (i.e. because the factors from the Bryson case were not intended to be exhaustive)?
The Court of Appeal granted Uber leave to appeal the Employment Court decision on 8 June 2023.
For further information on this case or similar issues, please contact Tim Blake, Consultant.
