Over The Fence: Paid parental leave changes ahead, Upcoming employment law changes, Minimum wage review 2016 and New property taxation legislation.
Employment law changes: are you up-to-date?…
the government has introduced the Employment Standards Legislation Bill to Parliament.
Update on financial markets overhaul…
The Financial Markets Conduct Act 2013 is in the process of completely overhauling New Zealand’s financial markets laws.
Incorporated societies reform ahead…
There are more than 23,500 incorporated societies in New Zealand that are currently governed by the Incorporated Societies Act 1908.
Workplace bullying is a significant hazard in New Zealand. Not only does it affect people physically and mentally, but it can also disrupt workplaces and reduce productivity. Employers who don’t deal with it appropriately risk breaching legislation such as the Health and Safety in Employment Act 1992, the Employment Relations Act 2000 and the Human Rights Act 1993.
WorkSafe New Zealand recently released best practice guidelines on workplace bullying. Developed with the Ministry of Business, Innovation & Employment, the guidelines have a focus on both employees and employers responding early before a situation gets out of hand. The guidelines include:
- An Am I being Bullied? checklist
- A flowchart of actions for dealing with being bullied
- A calculator tool for employers to assess the cost of bullying, and
- A workplace assessment tool that measures organisational culture with a view to prevent bullying.
- Advice for employees ranges from how to assess if you’re being bullied to recording instances of bullying behaviour to providing a range of low-key solutions. Advice for employers includes information on how to respond best to reports or allegations of bullying, and how to promote a healthy and respectful work environment.
To download the best practice guidelines, go to http://www.business.govt.nz/worksafe/tools-resources/bullying-prevention-tools
When taking disciplinary action against any of your employees, you must follow the correct process or risk paying out large sums of money to aggrieved employees. The recent case of Stocker v Car Giant Limited[1] serves as a reminder of this.
Mr Stocker was an information technology manager at Car Giant, a car dealership in Petone. Car Giant called Mr Stocker to a meeting and told him he was dismissed, effective immediately. He was told he would receive no further payments from the company.
The Employment Relations Authority found that Mr Stocker had been unjustifiably dismissed without notice, and ordered Car Giant to pay him Continue reading
It’s said that the only things certain in life are death and taxes. For business owners, the list also includes resignations. Like death and taxes, resignations never occur at a convenient time, but you should ensure that you are prepared for the inevitable by turning your mind to the following three matters.
The finer details: Check your employee’s employment agreement to confirm the manner in which the resignation is to be notified (ie: in writing or verbally), notice periods and whether there are restraint provisions preventing your employee from such things as working for a competing company.
Communication: Consider how and when your employee’s resignation will be notified to colleagues, customers or other stakeholders who engage with your employee on a regular basis.
Tools and equipment: Along with the return of any tangible items such as keys, fobs, phone, laptop or iPad, you should ensure any access your employee has to company bank accounts, social media sites (Facebook, Twitter, and LinkedIn) or your website is discontinued. Also, you’ll need to think about how you wish to manage your employee’s social media connections that they’ve obtained and used whilst working for you.
The points above can be included in an exit policy so that it’s clear from the outset how matters will be dealt with at the time the employment relationship comes to an end.
The overhaul of the laws that govern New Zealand’s financial markets took another big step last September with the passing into law of the Financial Markets Conduct Act 2013. The new regime established under the Act will be phased in over the next few years. Right now though, it’s worth concentrating on two aspects of the new regime that should be of interest to many businesses around the country: a broader exclusion from the standard disclosure requirements which should make offering employee share schemes easier, and wider-ranging exclusions which should make raising capital more cost-effective.
Employee share schemes
Employee share schemes can be a great way to attract, retain and incentivise staff, particularly for early-stage companies. However, these schemes aren’t widely used in New Zealand. Part of the problem is that the rules you currently need to comply with in order to offer an employee share scheme make doing so impractical and, in a lot of cases, also undesirable.
The exclusion that will be available under the new regime is less restrictive than the current rules, and will enable employers to offer these schemes with more flexibility, and on a more cost-effective basis. Officials have acknowledged that it’s important to facilitate these schemes whilst, at the same time, also ensuring that employees receive basic information about the investment decision they’re making. So, certain disclosures will need to be made to participating employees, including the company’s latest annual report and financial statements (to the extent available), information about how the shares can be sold, and prescribed statements about the risks of employee share schemes. The new exclusion should be able to be used from 1 April this year.
Capital raising
In terms of general capital raising; currently there are a range of exclusions from the need for full compliance with the Securities Act 1978 when sourcing capital from investors. There’s a lot of uncertainty and subjectivity associated with the current exclusions, which has meant that they’re not as helpful as they should be. The new Act carries over a number of the current exclusions, but makes them clearer with the introduction of more objective tests.
A significant change will be the introduction of a small offer exclusion. This will allow companies to raise up to $2 million from up to 20 investors in any 12 month period, through ‘personal’ offers. The rationale here is that compliance with the full disclosure requirements would outweigh the benefits of making the offer. It’s expected that companies that want to use the small offer exclusion will need to provide a prescribed warning statement to investors and notify the Financial Markets Authority (FMA) that they’re using it. The purpose of this is twofold. Firstly, to ensure investors are aware of their regulatory position and secondly, to help the FMA monitor the level of activity taking place in this area. This exclusion is also expected to come into force from 1 April this year.
Looking ahead
If you’re interested in other aspects of the new regime, the next step in its implementation will be the development of the draft regulations, which is currently underway. These will provide a lot of the detail for the framework established under the Act (including the content of the new disclosure documents), as well as on the new licensing frameworks and other key operational changes.
There’s plenty to plan ahead for, but if you’re looking at setting up an employee share scheme or raising capital in the next few months it’s business as usual and you still need to comply with the current rules under the Securities Act.
If you’re thinking of offering your employees some shares in your company or you’re undertaking some capital raising, do talk with us early on. Despite the new legislation, these are still complex activities and you’ll need advice from us and also your accountant.
The Employment Relations Amendment Bill passed its first reading on 5 June 2013 and has been referred to the select committee; the committee will report back by 5 December 2013.
The Bill amends the Employment Relations Act 2000 to make changes in the following areas:
- Collective bargaining, including removing the requirement to conclude a collective agreement. It introduces an ability for employers to reduce employees’ pay in response to partial strikes
- Flexible working arrangements, to extend the right to make a request to all employees
- Part 6A of the Act, in particular, introduces an exemption from certain requirements for small to medium enterprises
- Good faith, to clarify the requirements for disclosure of information
- Rest break and meal break provisions, to allow for flexibility, including compensatory measures where there is a failure to provide a break, and
- The Employment Relations Authority to set time frames for release of determinations.
We’ll report on the progress of this legislation through the House.
A number of recent cases before the Employment Court have indicated an employer now potentially faces greater hurdles when justifying a dismissal for redundancy. Earlier this year the Employment Court released a decision in the Totara Hills Farm case[1] where the court found that if a redundancy is challenged by the employee, the employer cannot simply say there was a genuine business reason for the redundancy without the court examining the merits of the claim and the employer’s assertion that it had genuine business reasons. The court also emphasised that an employer’s obligations of good faith should encompass redeployment. It also found that a fair and reasonable employer would have done more than offer the employee the opportunity to apply for another position. Employers need to be careful about the business case they advance to justify a redundancy. The Employment Court will carefully examine the evidence and, if not in agreement with the employer, may decide the redundancy was not justified.
[1] Rittson-Thomas t/a Totara Hills Farm v Hamish Davidson NZEMPC WN (2013) NZ Empc 39 (20 March 2013)
Here we publish the March 2011 issue of Rural eSpeaking; we hope you enjoy reading it. If you would like to talk further about any rural issues, please don’t hesitate to contact us.
In this Autumn edition, you can read articles on:
· Personal Property Securities Act: Grappling with section 53 in a livestock purchase
· Leasing the Farm: Can be a practical solution
· Over the Fence: New minimum wage rates – Sharemilking Arrangements: 2011-2-12 season – Public Holidays: Easter 2011 – GST zero-rating land transactions
The next issue of Rural eSpeaking will be published in July.
Here is the Summer issue of Rural eSpeaking; we hope you enjoy reading it. If you would like to talk further about any of the topics covered in this edition, please don’t hesitate to contact us.
In this issue you can read articles on:
- Water, Water Everywhere: Now a finite resource
- Access to the Outdoors: Unlocking the gates to your property
- Over the Fence: 90-day trial periods – Changes to employment legislation – livestock grazing agreements
The next issue of Rural will be published in March.