Lack of proper process costs trucking company $15,000…

In a recent Employment Relations Authority case a transport company has been ordered to pay its former employee for unpaid overtime, wages, days in lieu, notice and holiday pay plus interest.  These amounted to $5,000. 

The company was also ordered to pay $5,000 compensation for the lack of any proper process in the dismissal.  All the employee got was a phone call and a text saying he was dismissed.

The ERA ordered the company to produce wage records for the employee but they failed to do so.  As a result the company was penalised a further $5,000.  Half of this is to be paid to the Crown and half to the employee.

If you need help with the right way to carry out a disciplinary process or to defend a personal grievance claim call me on 04 473 6850.

Alan Knowsley

Dominion Post Surviving Redundancy Article

I was quoted by the Dominion Post in its article on surviving redundancy on 22 August. There is no general right to a redundancy payment. It all depends on your employment agreement and particular circumstances. Employers must follow a fair and proper process when considering redundancies. For the full article click on this link.

http://www.stuff.co.nz/business/money/7519962/Be-prepared-for-the-pink-slip

If you need help with a redundancy issue then give me a call on 04 4736850

Employees need to watch out for long notice periods…

In a recent case an employee was bound by the employment agreement to give three months notice of resignation.  A term of notice this long is quite common for professionals or senior executives.

In this case the employee was a chef working in a factory.  Unfortunately the Employment Relations Authority has no power to vary an unusually long notice period and the employee had to comply.

Employers can recover damages if the right notice period is not worked, so employees need to watch out when signing up to agreements that they know what they are getting into.

If you need help to negotiate your way out of an employment agreement (or to enforce one) give me a call on 04 473 6850.

Alan Knowsley

Employment restraints of trade too wide & too long…

A recent Employment Relations Authority decision has given a warning on the need to get your restraint of trade clauses right.

The ERA found that the employer had no proprietary rights that needed protecting.  The employee was a chef making one particular product.  His knowledge of that product predated his employment and he could not be stopped from being employed to make it for another employer as he was not using any proprietary information of the employer.  In addition the ERA refused to uphold the restraints because they sought to ban the employee from working in any food manufacturing business.  The restraint should only have related to what was necessary to protect the employer’s proprietary interests i.e. not making the same product for a competitor.

The restraint was for two years.  This was held to be far too long and three months might have been more appropriate.

The restraint was for the whole of New Zealand and should only have related to the area where the employer did business.

The ERA said that, as there was no proprietary interest to protect, the clause was unenforceable.  Even if there had been an interest to protect it was worded so widely (activity, duration and geographical location) that it was unreasonable and the ERA would not have used its power to amend the clause to make it reasonable and enforceable.

By being too greedy the employer could not use the clause to protect itself at all.  You need to get your restraint clauses right if you want to enforce them.

If you need assistance with reasonable restraints give me a call on 04 473 6850.

Alan Knowsley

Use of Undercover “Spy” Costs Employer $25,000...

An employee was asked by her employer to assist a student with his thesis on service.  She was told to answer all his questions and make files available. 

It turned out that the “student” was actually a consultant hired to make cost savings. 

The employer then made the employee redundant without any proper process and she was escorted off the premises immediately.  The employee raised a personal grievance claim and the ERA awarded her lost wages of $15,000 and compensation of $10,000 for the way she was treated.

If you need assistance with managing a redundancy process call me for an initial chat on 04 473 6850.

Alan Knowsley

Obligation to provide information to employees costs employer $11,000…

All employers have to act in good faith towards their employees.  That includes providing relevant information.  An employer who is proposing to make a decision that will have an adverse effect on the continuation of an employee’s employment must give the employee access to relevant information and an opportunity to comment on it before making the decision.

A failure to provide the information means the employer has not complied with their statutory obligations and the dismissal is unjustified.

The Employment Relations Authority ordered an employer to pay lost wages of $2,000 and compensation of $9,000 following the dismissal of a worker for alleged bullying.  Details of the complaints and complainants were withheld from the employee so she could not comment on the material.  The verbal versions given by the employer were also misleading.

What may have been a justified dismissal following numerous complaints from staff and customers became a costly lesson for the employer because the correct process was not followed.

If you need help with the disciplinary process call me on 04 473 6850 for an initial chat.

Alan Knowsley

$20,000 exemplary damages for copying materials…

In a very interesting recent Court of Appeal decision the Court has upheld a $2,000 damages award for breach of a restraint of trade provision by setting up in opposition and distributing material.

Of greater significance was that the Court increased the damages from $1,000 to $20,000 for copying operational materials line by line in breach of the duty to keep materials confidential.  The Court held this was a flagrant breach justifying the 2000% increase in damages.  The defendant company was liable under the Copyright Act and the individual who breached the confidentiality was ordered to pay $20,000 exemplary damages.

These damages were awarded because actual damages were slight but the Court found it necessary to punish the flagrant breaches by the defendant who had copied the material and then aggravated matters with a denial of that copying.

Really great to see the Courts upholding the business owner's interests in their intellectual property from those who feel they have a right to make use of those materials for their own gain and hitting the defendant hard to discourage similar behaviour from others.

If you need help drafting contracts to protect your interests, or enforcing them, give me a call on 04 473 6850.

Alan Knowsley

Poor performance management process results in 3 months wages plus $5,000 for injury to feelings…

Disciplinary processes often give rise to personal grievances but so too can a performance review as this case from the Employment Relations Authrority demonstrates.

A manager was given target hours for his staff to reach, and put on a performance management plan.  Only two weeks later he was dismissed when the staff hours were not up to the target, and also for alleged health and safety failures.

The Employment Relations Authority has found the process followed to be poor.  The dismissal was unjustified and the employee was awarded 3 months wages, $5,000 compensation, compensation for 3 months lost Kiwi Saver contributions, lost health insurance, and loss of use of a car.

The health and safety failures alleged occurred while the manager was on leave so were couched in terms of failing to put in place sufficient measures before going on leave.  The Authority did not uphold this as the foreman in charge was not subject to any disciplinary action for allowing the unsafe practices after the safety plan had been put in place.

In relation to the performance management process the Authority found numerous problems: 

* The period for reaching the new targets set was too short (only 2 weeks)…

 * Others had an effect on the targets not being met but no action was taken against them…

* The managers who made the decisions to dismiss had not heard from the employee, but relied on reports from others…

* The employee was not heard at all on whether he should be dismissed, or some other outcome, such as demotion, imposed.

It is important to ensure that those making the decisions actually hear directly from the employee concerned.

They should give the employee opportunities to comment, not only on the poor performance allegations, but also on what should happen if poor performance is proved.

If you need help with a performance management process call me for an initial chat on 04 473 6850.

Alan Knowsley