If an employer told an employee one thing, encouraged them to rely on it, and then suddenly changed its position when it suited the employer, surely that would cause outrage. In the employment context the parties would be discussing some important underlying values such as “good faith”, “trust and confidence” and “misleading conduct”.
Governments are entitled to change their minds. Election campaigns are entitled to produce new policies. Circumstances change. Politics may be “politics” but perhaps employment law may provide a useful lesson.
The National Party’s announcement that, if re-elected, there will be “no new taxes” has created another problem for the Prime Minister. Only weeks ago, a bed tax was being actively considered. Now, Mr Luxon is being emphatic - “This is about no new taxes, and I can’t be clearer.”
Yet consideration of “bed taxes” have been part of regional deals with Auckland and Queenstown. Now National says it is off the table. The Auckland Regional Deal provides the most obvious difficulty. As recently as April this year Mr Luxon and Auckland Mayor, Wayne Brown, signed New Zealand’s first City Deal. The agreement describes a long-term partnership between central Government and Auckland Council and includes a commitment to “consider” an accommodation levy in 2027.
Mr Brown is understandably unhappy - “the deal is meaningless if the government cannot honour even a relatively modest commitment to explore an agreed proposal,” he said.
The position of Queenstown is interesting because the regional deal has not yet been signed. It is understood that, like Auckland, consideration of a bed tax was to have been part of that agreement. The proposed agreement was due to have been signed in August, but the signing was postponed amid National’s internal leadership crisis.
Queenstown Lakes Mayor, John Glover, described National’s decision as a “complete U-turn” and said it felt like “policy making in a state of panic”. Destination Queenstown said the reversal was a “massive blow”.
The New Zealand First leader has taken a more principled view to National. “A deal is a deal,” Mr Peters said. He says the signed Auckland agreement states that the levy will be considered in 2027 and that “nothing has changed”.
Politics being politics, Mr Peters went further, saying that when Mr Luxon made the commitment he was speaking on behalf of the Government, not merely the National Party. The Labour Party Leader, Chris Hipkins, made the political point more sharply: “If the mayors across the country can’t trust Christopher Luxon’s signature, why should any New Zealanders?”
Why does it matter? It is about setting expectations and letting New Zealanders rely on them. Back in 2017 the then National-led government passed a forerunner to the pay equity legislation for the health sector. In 2018 when it was in opposition, National supported the Labour government’s new Equal Pay Act, as well as the Equal Pay Amendment Act in 2020. Those changes were designed to extend a pay equity process to all occupations and create a clearer pathway for making pay equity claims. Both major parties were seemingly aligned.
Last year the National lead government made changes to the legislation that meant that existing pay equity claims would be blocked. Those claims were in some of our most valued occupations - Plunket nurses, community midwives, hospice nurses and health care assistants, primary care nurses, nurses in residential care. In making the changes the government also raised the bar for future claims to be successful.
The Employment Relations Act requires employers and employees to deal with each other in good faith. It goes further than simply requiring honesty. The parties must not directly or indirectly do anything to mislead or deceive each other, or anything likely to mislead or deceive. The Act says the obligation is wider than the implied obligations of trust and confidence and requires the parties to be active and constructive, responsive and communicative.
That is a pretty high standard, but it is something New Zealand values and it has enshrined those values in our laws.
Governments, like employers, depend on relationships. An employer may change its mind. But if it has made a commitment, the process of changing course matters. It cannot simply pretend the earlier commitments never happened. It is about maintaining relationships through honesty, communication and consistency. Trust and confidence are damaged when commitments are made and then discarded. Read more.....
An employee may have concerns about their workplace but a constructive dismissal claim may be hard to successfully prove.
In a recent Employment Relations Authority decision a former zookeeper at Hamilton Zoo was unsuccessful in her claim that she was constructively dismissed even though she was awarded $18,000 compensation for an unjustified disadvantage claim regarding the behaviour of one manager that the Authority considered to be “very close to amounting to sexual harassment”.
Ashleigh Sanders worked at Hamilton Zoo from 2017 until December 2020. During her employment she developed a growing list of concerns about the Zoo. There were complaints about staff shortages, heavy workloads, rosters being released late, difficulties taking leave, a lack of training and development opportunities, animal welfare and the way the Zoo was managed.
The appointment of a senior manager, anonymised in the Authority’s decision as “T”, caused Ms Sanders concern as she considered that T had created a culture of fear. She said he privately approached staff, asked questions about colleagues and used information he obtained against people. A colleague described him as “grooming” people he believed he could control and trying to get rid of those he could not.
T’s conduct towards Ms Sanders became increasingly personal. He contacted her by txt outside working hours, initially about work, but later about her personal life. After Ms Sanders separated from her boyfriend, who also worked at the Zoo, T discussed the former boyfriend’s work performance with her. He asked her out for coffee on one or two occasions, which she declined. When she tried to put some distance between them, she said he continued approaching her and calling her into his office.
Ms Sanders told a friend that T had said her relationship with her former boyfriend had damaged her prospects for training and development. On another occasion, she said he told her that she would not get anywhere because managers did not like her, while also telling her that he personally liked her and would support her.
The Authority accepted much of Ms Sanders’ evidence about T. There was no apparent legitimate work reason for the level of contact he initiated, particularly outside working hours. The Authority also accepted that he had persisted in seeking personal information from Ms Sanders after she had indicated that she did not want to discuss it.
The problems at the Zoo were not confined to Ms Sanders. Concerns about fatigue, morale, staffing and bullying had been raised more generally. A staff engagement survey found that the Zoo’s engagement score was below set benchmarks, with favouritism, fatigue and low morale among the concerns identified.
The Zoo subsequently took a number of steps, including changing rosters, increasing staffing, reviewing health and safety procedures, providing counselling and employee assistance support, and introducing measures intended to reduce workload and provide emotional support for zookeepers.
Ms Sanders continued to struggle. In October 2019 she suffered a panic attack at work and received immediate assistance from HR and a counsellor. She subsequently had a number of health appointments and counselling sessions. She described her mental health as deteriorating, with increasing anxiety and depression.
But T had left the Zoo in October 2019. Dr Baird had became Zoo director. The Authority found that he regularly discussed matters with Ms Sanders, respected her work and was open to hearing her concerns.
Nevertheless, on 1 December 2020 Ms Sanders resigned, saying that her mental health was “severely compromised” by working at the Zoo and that she could no longer continue. She subsequently claimed that she had been constructively dismissed.
There are generally three categories of constructive dismissal. The first is where the employer effectively gives the employee a choice between resigning and being dismissed. The second is where the employer embarks upon a course of conduct intended to bring about the employee’s resignation. The third, the one relied upon by Ms Sanders, is where the employer breaches its obligations to the employee so seriously that the employee is justified in resigning.
The Authority accepted that T had behaved badly, but he had left more than a year before Ms Sanders resigned. There was also evidence of substantial support being provided to Ms Sanders after T’s departure. The new management had attempted to engage with her concerns, while she had access to HR support and counselling.
The Authority also found that there was insufficient medical evidence to establish that the earlier events had caused Ms Sanders to reach the point where she could no longer work at the Zoo.
There was a further problem. Ms Sanders did not made a sudden departure. She had sought references from people at the Zoo at least a couple of weeks before resigning. That suggested a considered decision to leave rather than a resignation forced upon her by an employer’s conduct.
The Authority concluded that even if there had been breaches of duty which contributed to the resignation, they were not sufficiently serious to make the risk of resignation reasonably foreseeable. Ms Sanders claim that she had been constructive dismissed failed.
There is a perception that if an employee may have been treated badly treated and resigns because they are unhappy, the law will regard that resignation as a dismissal. It does not. Constructive dismissal can be difficult to establish. Read more....
As election campaigns go, paid parental leave is not usually the issue that swings votes. But like infrastructure, it is an investment into the future. Something that New Zealand notoriously underinvests in. Paid parental leave supports the value we place on the first months of a child’s life, and the support society provides to the parents doing the caring.
The National Party’s recent announcement that it would gradually extend paid parental leave from 26 weeks to 30 weeks if re-elected deserves attention, given that the government it leads has reduced employment entitlements during its term in government. Arguably the most detrimental has been the controversial changes to how pay equity claims can be made. Dozens of existing claims have been blocked from female-dominated workforces which are generally considered to be underpaid in comparison to those dominated by men, saving the government “billions of dollars” as the Prime Minister admitted.
National’s policy would see paid parental leave extending to 30 weeks by 2029. The party has also revived its policy to allow parents greater flexibility in how they share leave entitlements, enabling mothers and fathers to take leave together or in overlapping periods rather than constraining families into more rigid arrangements. The Prime Minister describes the policy as giving families more choice and more time with their babies.
The Labour Party has pointed to National’s historical opposition to some parental leave extensions, while National has responded by highlighting Labour’s rejection of previous proposals to make leave-sharing arrangements more flexible. The reality is that New Zealand’s parental leave scheme remains modest by international standards.
Recent OECD comparisons show that mothers across OECD countries receive, on average, just under 19 weeks of paid maternity leave around childbirth. In the OECD many countries replace a substantial proportion of a parent's earnings during maternity leave, with a number of OECD countries effectively providing full-rate compensation for mothers on average earnings.
New Zealand currently provides up to 26 weeks of paid parental leave, which may appear generous. The difficulty is that payments are capped. From 1 July this year the maximum weekly parental leave payment increased to $811.05 before tax. For many middle-income and higher-income households, that represents a substantial reduction in income at precisely the time family expenses are increasing. Arguably, those households have less need for the State’s assistance, but a significant proportion of those households rely on both parents incomes to meet the high cost of living.
That gap has increasingly been filled by some employers. Contact Energy attracted attention when it introduced a parental leave package that tops up government payments to full salary for the entire 26-week leave period, continues employer KiwiSaver contributions during leave, offers flexible return-to-work arrangements, and provides a childcare contribution. It shows what progressive employers can do to support working families and improve gender equity in the workplace.
Employer generosity should not be the solution though. Statistics cited by the New Zealand Institute of Economic Research indicate that only a small proportion of employers provide salary top-ups or continue KiwiSaver contributions during parental leave. The result is that the financial impact of having children falls unevenly across the workforce. Employees of large corporates may receive more generous support but employees of small businesses often do not. Women are more likely to be significantly impacted in relation to their KiwiSaver plans, and their return to work. The Retirement Commission has highlighted that women retire with significantly less savings than men, reflecting factors such as pay disparities, part-time work, and periods spent caring for children.
While few people decide whether to have children based solely on parental leave entitlements, government support sends an important signal about whether families are valued (and the tamariki are New Zealand’s future workforce). Young families face many increased expenses, doctors appointments, prescriptions, increased housing costs, heating, expensive childcare etc, while often operating on reduced incomes.
Extending paid parental leave is expensive and the country faces fiscal challenges such as growing unemployment, increased inflation and a cost of living crisis. Those concerns are legitimate. But New Zealand is also a nation of small businesses, many of which operate on narrow margins and they cannot realistically afford extensive employer-funded parental leave schemes.
National’s policy will not place New Zealand at the top of the OECD rankings. It does not eliminate the costs many parents still experience when taking leave. It does not solve the long-term impact on women in particular. But it would move New Zealand in the right direction. Read more....
