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.
This was an appeal to the Employment Court from an Employment Relations Authority (“ERA”) decision. The case arose from the termination of someone’s (Mr Darren Pyne’s) employment as part of a restructure, where the employer had concerns about his conduct and performance. Redundancies are meant to be about the position (being superfluous to the employer’s requirements), not about the person (i.e. not about performance or behaviour issues).
The employer admitted that the decision to make Mr Pyne redundant was “…a kind of mixed motives type situation…” However, the ERA held that the employer’s decision was “…predominantly about [Mr Pyne] and his performance, not about the position and its business needs…”
Mr Pyne’s claim was largely upheld by the ERA. However, he appealed to the Employment Court, and argued that the remedies awarded by the ERA were inadequate. The appeal was successful.
Mr Pyne was employed by Invacare New Zealand Limited (“Company”) in August 2019, in a “Rental Business Operations Manager” role. The role was initially fixed term, but became permanent in February 2020.
In 2019 Mr Pyne made comments to colleagues that were said to have been offensive. One comment concerned the impact of Brexit on immigration issues in Britain. Another was a negative comment made to a colleague, Mr Dar, about women wearing the hijab. Mr Dar made a complaint. There were also general expressions of concern about Mr Pyne’s cultural fit for the workplace, and about his performance (including competency and time-keeping).
When considering disestablishing Mr Pyne’s role, there was a management communication referring to Mr Pyne as being “…not the right person for the role…” and that “...he did not fit the business values…”
The Company considered keeping Mr Pyne’s role in place, but changing his reporting line. One of the Company’s Vice Presidents emailed a senior manager, suggesting a “viable alternative” to disestablishing the role would be that Mr Pyne reported to her. However, the Vice President added that this would mean that she would inherit “…a people problem…”. The senior manager quickly replied that “…I don’t want to manage [Mr Pyne]…” and “…we have way too much to get done that to try and performance manage him.”
The Company put the investigation of Mr Dar’s complaint on-hold to see whether Mr Pyne’s employment survived the restructure.
Two roles were disestablished in the restructure (including Mr Pyne’s) and one new role was created. Mr Pyne was not given the opportunity to interview for the new role (despite the Company having told Mr Pyne that he was “qualified” for it).
Mr Pyne was given a redundancy notice in April, and his employment ended on 1 May 2020.
The ERA decision was issued in June 2022. The ERA held that the Company’s decision to make Mr Pyne redundant was predominantly about the person and his performance, not about the position. The termination of Mr Pyne’s job (and the failure to redeploy him) was therefore an unjustified dismissal.
There was only limited evidence in the ERA about how the redundancy had personally impacted on Mr Pyne. However, he did say it had affected his self-confidence and appetite. There was more detailed evidence about his attempts to find alternative employment. Mr Pyne had gone 20 months without securing alternative full-time permanent employment. During that time, he had applied for over 600 other jobs, attended many interviews, and moved to Australia. However, during those 20 months he had undertaken some fixed-term employment and part-time self-employed work.
The ERA awarded Mr Pyne $27,500 compensation for 3 months lost wages (which is usually seen as a ceiling for lost wages, but subject to the ERA or Court’s discretion). The ERA also awarded $10,000 hurt and humiliation compensation under s 123(1)(c)(i) of the Employment Relations Act 2000. However, the $10,000 award was then reduced by 15 per cent, to $8,500, for contribution (because of the culturally inappropriate comments that Mr Pyne had made to Mr Dar). The Authority found that the Company had breached its obligations of good faith to Mr Pyne, but it declined to impose a penalty for that breach (the ERA held that the other awards sufficiently addressed the Company having acted with a lack of good faith).
The Court considered whether the ERA’s award for lost wages was adequate.
Section 128(2) of the Employment Relations Act 2000, read in isolation, treats 3 months wages as a ceiling for such an award (the lesser of actual wages lost or 3 months wages). However, s128(3) provides this is subject to the ERA and Court’s discretion.
The fact that it had taken Mr Pyne about 20 months to find another full-time permanent job, despite serious efforts, led the Court to conclude that it should exercise its discretion and award more than 3 months lost wages (notwithstanding the evidence being vague about Mr Pyne’s part-time self-employment and limited fixed-term work over those 20 months). The Employment Court held that an award of 6 months wages was appropriate.
The Court then considered whether the ERA’s award for hurt and humiliation was adequate.
The Court noted that it generally applied the “banding approach” when determining the amount of an award for hurt and humiliation. There are three bands, ranging from $0 to over $50,000 depending on the level of hurt and humiliation.
The Court considered that the record was not sufficiently clear regarding how this issue had been dealt with in the ERA, so heard fresh evidence about hurt and humiliation suffered by Mr Pyne. The Employment Court held [para 41]:
The company’s unjustified actions left him feeling confused, unheard, side-lined, disrespected, stressed and uncertain. He was very concerned about his financial position and what his future might hold, and was obliged to take steps with his bank to protect his position…
And [at para 42]:
Mr Pyne was shocked and upset when he was advised that his role had been disestablished. The way in which the company came to that conclusion, and its failure to engage appropriately with him in good faith in respect of concerns it harboured, exacerbated the emotional harm he suffered. Mr Pyne gave evidence that in the months following his termination he felt betrayed, angry and frustrated, and that this impacted his personal relationships. He also had difficulty concentrating and sleeping. In the event, Mr Pyne had to explore alternative work in Australia, with the personal upheaval involved in that.
The Employment Court held that the hurt and humiliation type injury fell within Band 2 ($12,000 to $50,000 - mid-level hurt and humiliation level), and the compensation award should be $18,000 (overturning the $10,000 award set by the ERA).
The third issue the Court considered was whether the ERA was correct to reduce the hurt and humiliation award by 15% because of the comment he made to Mr Dar (about women wearing the hijab). The Employment Court took a different view of the evidence (and may have been provided with evidence that was not before the ERA). The Court found that Mr Dar had accepted an apology from Mr Pyne and they regarded the issue as resolved. The issue had and it had not contributed to the redundancy, and a reduction was not justified.
The Court considered whether a penalty should have been awarded against the Company, for breaching its obligation to treat employees with good faith.
It has been common for the ERA to decline to award penalties against employers who breach their good faith obligation in circumstances where significant compensation awards are made (compensation awards often being seen as already adequate to denounce the breach of good faith).
The Employment Court did not appear to consider that the award of significant compensation sums was a reason not to award penalties for breach of good faith. The Employment Court also declined to follow earlier cases that used to term “egregious conduct” as a test for when penalties were appropriate. Rather, the Court referred to the criteria in s4A of the Employment Relations Act 2000, which provides for penalties when a breach of good faith is deliberate, serious, and sustained; or when it is intended to undermine an employment relationship. The Court held that:
The inescapable inference is that the company’s breaches were deliberate, occurred over time, and were designed to undermine the employment relationship it had with Mr Pyne by bringing it to an end. The threshold in s 4A(b)(iii) is accordingly met.
The Court made an order for penalties in relation to conduct of this restructure and redundancy process, for $6,000, payable by the Company to the Crown.
The Court considered but declined making a second award of penalties for Company’s failure to treat Mr Pyne fairly in respect of potential redeployment (the issue was too close and too overlapping of the reasons for the penalties for the conduct of the restructure process).
The employee’s appeal to the Employment Court was successful. Important takeaways from the Employment Court decision include that:
• Employers should appreciate that it is dangerous to use a restructure as a way of getting rid of an underperforming or badly behaving employee.
• This decision will encourage the ERA to use its discretion to award lost wages for periods exceeding three months.
• This decision will pressure the ERA to follow the Employment Court more closely and consistently on the “banding approach “to hurt and humiliation compensation. This will push up the sums of such awards.
• This decision might pressure the ERA to be more cautious about reducing awards to employees because for “contribution” even though employees have behaved badly.
• This decision will encourage the ERA to award penalties, even though significant compensation has already been awarded against an employer.
For further information on this case or similar issues, please contact Director, Brigitte Morten.
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
