Essential News – November 2009

In this edition: Inflation and Wage/Salary increases EEO Trust Work & Life Awards 2009 Legal Update Changes to Driving laws Flexible Working and Breaks Redundancy Court Case Update Need for evidence of agreements or warnings Forced removal of employee from property When an employee shows a clear pattern of failing to comply with rules Employee ignorance of details of policy

Inflation and Wage/Salary Increases
Inflation is now at 1.7% per annum. Of course this hides the 5% p.a. increase in food costs but the predicted reduction in transport costs is reflected in a 5% reduction since September 2008.

According to an EMA salary survey released in October in the year to June 2009 only 55% of participating positions were given salary increases. So for those of you who have held wage levels static as a means of helping ride out the recession, you will have forced a real reduction in pay of almost 2% on your staff. However as the mean, for those increases actually given, was closer to 5% staff with increases have actually had significant real increases.

In general, salary and wage increases tend to lag slightly so we will still see lower numbers in salary increases through the next 6 months or more – but somehow I doubt inflation will follow suit!

EEO Trust Work & Life Awards 2009
Something else that happened last month was the Annual EEO Trust Work & Life Awards. As always plenty of encouraging stories of what companies have been achieving in relation to their people.

A couple of examples I found really interesting:
• NZSki (the overall winner) has done some great stuff seeking leaders from the younger generation. Keeping Generation Y engaged and committed at work – “is partly freedom but also about feeling that they have a say.” (A Quesnel, a judge) That’s a company with only 40 permanent staff.
• BDO Spicers, Taranaki (about 80 staff) won an award for a scheme of “fully flexible working hours, provided neither clients nor colleagues are inconvenienced”. They have increased productivity and reduced staff turnover. “There’s no need for clock-watching. We promote positivity and a general respect for each other … honesty and commitment by all staff.”

For more ideas look at: http://www.eeotrust.org.nz/news/index.cfm?content_id=1901

LEGAL UPDATE
• Driving – law changes
We are all aware of the fact that using a cellphone by hand while driving is now an offence. But have you updated your company car use policy (or equivalent) to support the law and ensure that such fines are the responsibility of the driver. And have you thought of making it easier for you to contact your travelling staff by installing hands-free or blue tooth on company cellphones?
• Flexible Working and Breaks
The proposed amendments have been introduced and will take effect from 1 January if all goes according to government plans! For once a law change that makes things easier for us.

Broadly the expectation is that where breaks cannot easily be taken as envisaged in the current legislation then some compensation can be substituted (e.g. starting later or finishing earlier). This is clearly essential for a number of small enterprises that can’t afford to stop a production line, but don’t really have the staff numbers to allow for breaks.

• Redundancy
The Department of Labour has produced an Employment law Theme paper on Redundancy:
http://ers.govt.nz/law/case/themes/2009-07-redundancy-law-in-new-zealand.html

Not that there is anything new, but it is a comprehensive summary of what is needed:
• Genuine business reason for a change in structure
• Procedural fairness – consultation; proper notice; openness with regard to relevant information and selection criteria etc.
• Consideration of such factors as length of service in determining how to manage a situation.

If you find yourself needing to reduce staff numbers or reorganize – take it seriously and give me a call.

COURT CASES of interest

• Need for evidence of agreements or warnings
An Authority hearing in August heard that an employer did not know “when and how warnings were issued to employees; precisely what they were for, what improvements were required or what the timeframe was for improvement”. As a result the warnings were adjudged to be improperly given.

When warning an employee (incl verbal warnings) always write them down.
• Forced removal of employee from property can be unjustified disadvantage
The Authority ruled that when an employer had a disagreement with an employee it was not appropriate that the employee be forcibly removed from the property. Instead “the employer should have “let it go” and organized a meeting the next day to discuss the matter”.

Never let anger dictate your actions and if you force someone to leave be sure you have a suspension clause in your contracts.

• When an employee shows a clear pattern of failing to comply with rules
Good to see sense in the Court: in this case the final ruling was that while the employee’s conduct in a specific instance was not sufficient to justify termination on its own, there was a clear pattern of failure (evidenced by warnings) to comply with the Chief Executive’s rules. Dismissal was therefore justified.

The value of formal warnings for smaller things

Ignorance of details of policy no excuse
An employee’s dismissal was upheld because of serious e-mail violations, despite the employee claiming ignorance of the detail of the policy. However it was clear that he had been introduced to the policy and it was his responsibility to read it!

If you have policies ensure you can demonstrate employees are aware of it – you don’t have to spoon feed them!