The Court of Appeal has handed down its decision in the case of Idea Services Limited –v- Dickson. It’s an important case which has implications for all employers employing staff to sleep on call.
Mr Dickson works in a residential care home for disabled people. He occasionally has to sleep over and be available to deal with the many issues that arise at night in such a care facility. He is not permitted to lock the room in which he is sleeping, must remain in the home, can only have visitors with permission, must limit his activities and not consume alcohol. He could also be interrupted several times during the night.
Mr Dickson received more than the minimum wage for his day time hours but did not receive the minimum wage for the period in which he slept over, receiving instead a lump sum sleepover allowance, which worked out at much less than the hourly minimum wage. Mr Dickson argued he was entitled to the minimum wage for each hour of the sleepover.
The Court of Appeal has confirmed the previous findings of the Employment Relations Authority and the Employment Court that Mr Dickson’s duties during a sleepover constituted work for the purposes of the minimum wage legislation. Relevant factors in reaching this decision are:
1 the constraints placed on the freedom of the employee during a sleepover;
2 the nature and extent of his responsibilities during a sleepover; and
3 the benefit to the employer of having the employee perform the role.
Just because there were times when Mr Dickson did nothing did not mean he was not working, any more than a shop assistant is not working when he or she is not serving customers or doing other shop tasks.
The other finding of the Court of Appeal was that the employer is not permitted to average the wage received by Mr Dickson over a fortnightly period (which would work out at an hourly wage above the minimum wage) but that Mr Dickson had to receive the minimum wage for every hour worked. This conclusion is based on the wording of the Minimum Wage Act 1983, which makes no mention of averaging.
This case involves just one worker of course, but there are likely to be many hundreds of workers in similar positions who may now claim back pay. It has been estimated that this could cost around $500 million.
I predict a quick change to the legislation by government (which, however, reflects EU and UK law in this respect). However, government cannot make a retrospective change, disentitling workers to back pay, without creating a lot of controversy.
Thursday, February 17, 2011
Wednesday, February 16, 2011
Don’t knock a good IT policy
There has recently been reported an Australian case which illustrates how careful employees have to be if they have been given and have agreed to comply with a workplace IT and internet usage policy. This case could easily have happened in New Zealand with the same outcome.
The case (Griffiths v Rose [2011] FCA 30) was heard by the Federal Court of Australia and involved a senior public servant working for the Department of Energy, Resources and Tourism. Mr Griffiths accessed pornography at his home using his own internet connection but using a laptop supplied by the Department. No-one else saw the material, and it was not illegal. Mr Griffiths also deleted the browser history to prevent accidental discovery.
However, unbeknownst to Mr Griffiths, the Department had installed a desktop logging system on his laptop which recorded particular keywords and snapshots of his computer's desktop every 30 seconds. It recorded Mr Griffiths' viewing of pornography after he typed a flagged keyword, 'knockers', into a search engine.
Mr Griffith’s problem was that he had read and signed the Department’s IT policy which expressly prohibited the viewing of pornography on its IT facilities, and which also stated expressly that the use of its IT facilities would be monitored. Despite his 25 years’ service, Mr Griffiths was dismissed.
As Mr Griffiths had been expressly warned in the policy that his use of the equipment would be monitored and that the viewing of pornography on the equipment was prohibited, the court held that the covert monitoring was not unfair.
Furthermore, given that the IT policy stated that disobedience of the prohibition on viewing pornography could result in termination of employment, and given that Mr Griffiths had come up with an elaborate explanation as to why he had viewed the material which the court found was not credible, the court found that his dismissal was not unfair. The judge did say that the termination “may well be harsh – there will be those who think it inhumane” but that was not the requisite standard and so the dismissal was not unreasonable.
The lesson for employers is that you should make crystal clear in your IT policies that you will monitor the use by employees and contractors of your systems and equipment, that viewing of pornography is prohibited, and that termination may follow if that prohibition is breached. Employers should also get employees and contractors to sign a declaration to say they have read and understood the policy.
The case (Griffiths v Rose [2011] FCA 30) was heard by the Federal Court of Australia and involved a senior public servant working for the Department of Energy, Resources and Tourism. Mr Griffiths accessed pornography at his home using his own internet connection but using a laptop supplied by the Department. No-one else saw the material, and it was not illegal. Mr Griffiths also deleted the browser history to prevent accidental discovery.
However, unbeknownst to Mr Griffiths, the Department had installed a desktop logging system on his laptop which recorded particular keywords and snapshots of his computer's desktop every 30 seconds. It recorded Mr Griffiths' viewing of pornography after he typed a flagged keyword, 'knockers', into a search engine.
Mr Griffith’s problem was that he had read and signed the Department’s IT policy which expressly prohibited the viewing of pornography on its IT facilities, and which also stated expressly that the use of its IT facilities would be monitored. Despite his 25 years’ service, Mr Griffiths was dismissed.
As Mr Griffiths had been expressly warned in the policy that his use of the equipment would be monitored and that the viewing of pornography on the equipment was prohibited, the court held that the covert monitoring was not unfair.
Furthermore, given that the IT policy stated that disobedience of the prohibition on viewing pornography could result in termination of employment, and given that Mr Griffiths had come up with an elaborate explanation as to why he had viewed the material which the court found was not credible, the court found that his dismissal was not unfair. The judge did say that the termination “may well be harsh – there will be those who think it inhumane” but that was not the requisite standard and so the dismissal was not unreasonable.
The lesson for employers is that you should make crystal clear in your IT policies that you will monitor the use by employees and contractors of your systems and equipment, that viewing of pornography is prohibited, and that termination may follow if that prohibition is breached. Employers should also get employees and contractors to sign a declaration to say they have read and understood the policy.
Redundancy consultation is essential – don’t botch it!
Following a redundancy dismissal many former employees allege that the redundancy was not genuine, and that the dismissal was therefore unjustified. However, whilst some redundancy dismissals are shams, this is often very hard to prove. Even if the decision to restructure results in the loss of a poorly performing employee, so long as there is a genuine need to restructure justifying the loss of the post, the redundancy will not be a sham and the reason will not be questioned by the courts.
A more fruitful avenue for redundant employees is to attack the process followed by the employer – it is often flawed. A fair process effectively means two things – (1) giving enough information to and (2) consulting with potentially affected employees before dismissing them as redundant. Consultation goes much further than giving information though, and that is where most employers go wrong.
The duty to consult derives from the statutory obligations of good faith dealing in s.4 of the Employment Relations Act 2000, which refers specifically to redundancy situations in s 4 (1A) and s 4 (4)(e).
What “consultation” means was detailed by the Employment Court in 1994, in the case of Julian v. Air New Zealand Ltd. In summary, consulting involves inviting views on a proposal before it has been finally decided upon, listening to those views with an open mind, and then deciding what will be done. Consultation does not require that there be agreement, but it clearly requires more than mere prior notification, and genuine effort must be made to accommodate the views of those being consulted, as the tendency in consultation is to seek at least consensus.
Potentially affected employees must know what is proposed before they can be expected to give their views and so sufficiently precise information must be given to enable the potentially affected employee to state a view, together with the reasonable opportunity to do so. The employee must be free to say what they think.
There are no universal requirements as to form or duration of consultation but consultation is never to be treated perfunctorily or as a mere formality, and consultation must be allowed sufficient time. The employer is entitled to have a working plan already in mind, must keep its mind open and be ready to change and even start afresh.
So, typically, consultation on an individual basis with each potentially affected employee must precede any final decision involving the following:
1 whether to restructure, reorganise or close down;
2 how the restructure, reorganisation or close down will take effect;
3 how many posts are to be lost;
4 precisely which posts are to be lost
5 the criteria to be used to select which staff will be dismissed;
6 whether the employee being consulted will be dismissed having applied the criteria;
7 which alternative posts may be available;
8 whether the employee being consulted will be placed in one of the alternative posts.
Although this looks daunting, a step by step approach will ensure that the employer will achieve a fair redundancy. And you never know - the consultation may even change your views on how to effect the changes.
A more fruitful avenue for redundant employees is to attack the process followed by the employer – it is often flawed. A fair process effectively means two things – (1) giving enough information to and (2) consulting with potentially affected employees before dismissing them as redundant. Consultation goes much further than giving information though, and that is where most employers go wrong.
The duty to consult derives from the statutory obligations of good faith dealing in s.4 of the Employment Relations Act 2000, which refers specifically to redundancy situations in s 4 (1A) and s 4 (4)(e).
What “consultation” means was detailed by the Employment Court in 1994, in the case of Julian v. Air New Zealand Ltd. In summary, consulting involves inviting views on a proposal before it has been finally decided upon, listening to those views with an open mind, and then deciding what will be done. Consultation does not require that there be agreement, but it clearly requires more than mere prior notification, and genuine effort must be made to accommodate the views of those being consulted, as the tendency in consultation is to seek at least consensus.
Potentially affected employees must know what is proposed before they can be expected to give their views and so sufficiently precise information must be given to enable the potentially affected employee to state a view, together with the reasonable opportunity to do so. The employee must be free to say what they think.
There are no universal requirements as to form or duration of consultation but consultation is never to be treated perfunctorily or as a mere formality, and consultation must be allowed sufficient time. The employer is entitled to have a working plan already in mind, must keep its mind open and be ready to change and even start afresh.
So, typically, consultation on an individual basis with each potentially affected employee must precede any final decision involving the following:
1 whether to restructure, reorganise or close down;
2 how the restructure, reorganisation or close down will take effect;
3 how many posts are to be lost;
4 precisely which posts are to be lost
5 the criteria to be used to select which staff will be dismissed;
6 whether the employee being consulted will be dismissed having applied the criteria;
7 which alternative posts may be available;
8 whether the employee being consulted will be placed in one of the alternative posts.
Although this looks daunting, a step by step approach will ensure that the employer will achieve a fair redundancy. And you never know - the consultation may even change your views on how to effect the changes.
Monday, February 7, 2011
Suspension – the do’s and don’ts
Often, when an employee is suspected of misconduct, one of the first thoughts that cross the manager’s mind is “can we suspend him/her”?
The answer will, like most things legal, all depend on the circumstances.
First, do you have a contractual right to suspend? If the employment agreement refers expressly to the right to suspend the employee during any disciplinary investigation, the employer has greater freedom to suspend the employee. However, the right must be used in good faith and must not be for longer than is strictly necessary. Sometimes employees are suspended for months – that would almost certainly amount to a disadvantage in employment, except where the employee had sound reasons.
Can you suspend someone even without the express contractual right to do so? Yes, so long as there is a clear and justifiable rationale for the suspension and the employee does not have a right to work, either expressly or impliedly. (Which would be unusual – some performers, for example, have the right to work, so as not to lose their public profile and their skills atrophy).
Good reasons to suspend someone include where there is a genuine fear that the employee may interfere with witnesses; where there is an allegation of sexual or other harassment, and you wish to keep the alleged harasser and the alleged victim apart; where the allegation is one of theft or other dishonesty and the employer wants to protect their assets; where there is a risk of violence; and where there are material health and safety risks. More trivial reasons may not be seen as sufficient justification.
Should the suspension be paid or unpaid? If the employment agreement does not give the right to suspend someone without pay, you cannot do it. However, even if there is a right to suspend on pay, the employer must be very careful to ensure that the criteria for suspension have been correctly met, and that suspension without pay is not for any longer than is strictly necessary.
Even if suspension is on pay, overly long suspensions can amount to an unjustifiable disadvantage.
Finally, it is worth bearing in mind that, even though suspension is not a disciplinary sanction, and should not be treated as such, it can be seen by staff as indicative of guilt. It is not something to do lightly therefore.
The answer will, like most things legal, all depend on the circumstances.
First, do you have a contractual right to suspend? If the employment agreement refers expressly to the right to suspend the employee during any disciplinary investigation, the employer has greater freedom to suspend the employee. However, the right must be used in good faith and must not be for longer than is strictly necessary. Sometimes employees are suspended for months – that would almost certainly amount to a disadvantage in employment, except where the employee had sound reasons.
Can you suspend someone even without the express contractual right to do so? Yes, so long as there is a clear and justifiable rationale for the suspension and the employee does not have a right to work, either expressly or impliedly. (Which would be unusual – some performers, for example, have the right to work, so as not to lose their public profile and their skills atrophy).
Good reasons to suspend someone include where there is a genuine fear that the employee may interfere with witnesses; where there is an allegation of sexual or other harassment, and you wish to keep the alleged harasser and the alleged victim apart; where the allegation is one of theft or other dishonesty and the employer wants to protect their assets; where there is a risk of violence; and where there are material health and safety risks. More trivial reasons may not be seen as sufficient justification.
Should the suspension be paid or unpaid? If the employment agreement does not give the right to suspend someone without pay, you cannot do it. However, even if there is a right to suspend on pay, the employer must be very careful to ensure that the criteria for suspension have been correctly met, and that suspension without pay is not for any longer than is strictly necessary.
Even if suspension is on pay, overly long suspensions can amount to an unjustifiable disadvantage.
Finally, it is worth bearing in mind that, even though suspension is not a disciplinary sanction, and should not be treated as such, it can be seen by staff as indicative of guilt. It is not something to do lightly therefore.
Tuesday, February 1, 2011
A redundant process?
When people get made redundant, they often doubt the genuineness of the dismissal, saying that the redundancy was just a sham to get rid of them. The truth is, that’s usually not the case. And yet, so many Applicants win their claims for unjustifiable dismissal in the Employment Relations Authority because their employer did not follow a fair process.
A fair process entails a genuine consultation process. That’s more than just convening a 20 minute meeting, telling someone they are going to be made redundant and asking them what they think about it.
Yet another case has been reported of an employer, this time in Christchurch, losing the claim against them because of an inadequate consultation process even though the redundancy was genuine. (Dowds –v- Martin Hydraulics Limited - CA 236/10 5289465). Mr Dowds was awarded one month’s salary, together with $8,000 for hurt and humiliation. That’s quite a tidy sum, and one that could have been avoided with just a little more preparation and patience.
Here’s what should be done to make a redundancy consultation fair:
1 Consult with the employee about the business decision to reduce costs and make redundancies, not just about who should be made redundant. Consider alternatives to redundancy. This is a mandatory requirement under s 4 (1A)(c) of the Employment Relations Act 2000.
2 Follow any redundancy process set out in the Employment Agreement or other company documentation.
3 Give sufficiently precise information to allow the employee a reasonable opportunity to respond.
4 Give a reasonable time for the employee in which to respond
5 Keep an open mind and listen to suggestions made by the employee, consider them properly, and then (and only then) decide what is to be done.
6 If the employer is using performance as a selection criterion, put the concerns about performance to the employee and give him or her have an opportunity to answer them.
7 If the employee raises something that you cannot answer, adjourn and investigate, so you can give a complete answer.
8 Consider whether there is suitable alternative employment available for the employee and offer it if so.
9 When you make your final decision have another meeting to discus it; don’t just hand the employee a letter. Do address each and every point the employee made. Confirm this all in writing.
10 Offer the employee support in finding a new job.
All this may seem like a long drawn out process. It may be, but the alternative is to pay through the nose. Time is money, sure, but so is an unfavourable determination in the ERA!
A fair process entails a genuine consultation process. That’s more than just convening a 20 minute meeting, telling someone they are going to be made redundant and asking them what they think about it.
Yet another case has been reported of an employer, this time in Christchurch, losing the claim against them because of an inadequate consultation process even though the redundancy was genuine. (Dowds –v- Martin Hydraulics Limited - CA 236/10 5289465). Mr Dowds was awarded one month’s salary, together with $8,000 for hurt and humiliation. That’s quite a tidy sum, and one that could have been avoided with just a little more preparation and patience.
Here’s what should be done to make a redundancy consultation fair:
1 Consult with the employee about the business decision to reduce costs and make redundancies, not just about who should be made redundant. Consider alternatives to redundancy. This is a mandatory requirement under s 4 (1A)(c) of the Employment Relations Act 2000.
2 Follow any redundancy process set out in the Employment Agreement or other company documentation.
3 Give sufficiently precise information to allow the employee a reasonable opportunity to respond.
4 Give a reasonable time for the employee in which to respond
5 Keep an open mind and listen to suggestions made by the employee, consider them properly, and then (and only then) decide what is to be done.
6 If the employer is using performance as a selection criterion, put the concerns about performance to the employee and give him or her have an opportunity to answer them.
7 If the employee raises something that you cannot answer, adjourn and investigate, so you can give a complete answer.
8 Consider whether there is suitable alternative employment available for the employee and offer it if so.
9 When you make your final decision have another meeting to discus it; don’t just hand the employee a letter. Do address each and every point the employee made. Confirm this all in writing.
10 Offer the employee support in finding a new job.
All this may seem like a long drawn out process. It may be, but the alternative is to pay through the nose. Time is money, sure, but so is an unfavourable determination in the ERA!
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