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What is work?

There will be significant implications for many employers following a recent Employment Court Case. If your employees attend training, meetings, work functions or travel for work purposes you may need to reconsider how you pay them.

The case involved the Smiths City Group. Every morning prior to opening, the sales manager at each of their 29 locations holds a 15 minute morning meeting to discuss issues and talk about sales promotions and targets. The employees were not paid for their attendance.

In January 2016 a Labour Inspector issued an improvement notice to Smiths City that required the organisation to undertake an audit to identify where wages had been paid below the statutory minimum. The audit was for all employees who attended the 15-minute morning meeting who was on, or close to, the minimum wage rate and it applied across all 29 stores. The audit had to cover all current and previous employees for the last six years. The company was to calculate the arrears of pay below the minimum wage and reimburse those arrears accordingly.

Smiths City objected to the improvement notice claiming the 15 minute meeting was not work. In addition, Smith City was claiming the commissions and bonuses paid to employees ensured they were paid above the minimum wage even when the hourly base rate was at the minimum wage and the 15 minute meeting was deemed to be work. The matter went to the Employment Relations Authority and the Authority agreed with Smith City, rescinding the notice. The Labour Inspector appealed, and the case was heard by a full bench of the Employment Court.

The Employment Court looked at the Idea Services case (known as the Sleepover case) as the basis for determining whether the 15-minute meeting was “work” for the purposes of the Minimum Wages Act.

Smiths City argued that the employees were not compelled to attend the meetings, that the meetings didn’t put a significant degree of constraint on the employees, and there was no responsibility on the sales staff during the meetings, and they argued that the meetings were not critical to the business.

The Employment Court found that staff were required to attend the meetings, and that while there were different expectations of behaviour in the meetings compared to when they were in the store, that it did not alter the fact that their personal freedom during those 15 minutes was constrained by the employer.

The Court rejected Smiths City’s claim that there was no responsibility on the employee during the meetings, but rather like a training course, the employees were expected to sit, listen and learn the information being presented by the Sales Manager so they could apply it during the day.

The Court also rejected Smiths City’s claim that both the employer and the employee benefited from attending the morning meeting, by earning higher commissions.

Accordingly, the Court found that the sales employees who attended the morning meetings were working during those 15 minutes.

That left the Court to consider whether Smiths City had breached the Minimum Wage Act. Smiths City contended that when the sales commission was taken into account, all of their sales staff earned more than the minimum wage. The method of payment was justified by the company because wages, and commission, were earned over the whole pay period which it considered to be the correct interval for the calculation of minimum wage.

The Court accepted that the commission does form part of wages, but said it didn’t satisfy s 6 of the Minimum Wage Act. The Court found that commission and incentive payments were not earned for attendance at the meetings and were not connected to hourly rates of pay generally. They were achieved against targets specified by the company. The commission payments were deemed to be additional income earned over and above the contractual hourly rate, and not a substitution for it.

The Court stated that Smiths City’s method of calculation did not satisfy the Minimum Wage Act. The Court reinstated the Labour Inspector’s Improvement Notice. This means Smith City will be required to backpay, for a six year period, any hourly paid employee who attended the morning meetings.

If you have concerns about how your remuneration is structured and whether you are inadvertently failing to meet minimum wage requirements, please contact our team.

Accountants to comply with AML/CFT legislation

Some time ago New Zealand has passed a law called the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT).

The purpose of the law reflects New Zealand’s commitment to the international initiative to counter the impact that criminal activity has on people and economies within the global community.

The first sector required to comply with this legislation was the Finance sector (Banks, Financial Planners etc), lawyers are required to comply with the requirements of the AML/CFT Act from the 1st July 2018 and recent changes to the Act mean that from 1 October 2018 accountants are required to comply too.

The intent is for the entire professional services community (lawyers, accountants,banks, etc) to help combat money laundering and terrorist financing, and to help Police bring the criminals who do it to justice so even though the vast majority of our clients are honourable people we know well, and have had a long relationship with, this legislation requires us to do a number of things with regards to every client

The law says that we must assess the risk we may face from the actions of money launderers and people who finance terrorism as well as identify potentially suspicious activity and that means more paperwork for us and a requirement for you to supply us with more information.

For most of our clients we will be asking for certain information when you bring in your annual accounts work, while we need to have compliant processes in place by the 1st October we have a year or so to collect this information about all clients. New clients will need to provide the information BEFORE we can carry out any work.

To complete the risk assessment we must obtain and verify information from prospective and existing clients about a range of things. This is part of what AML/CFT calls “customer due diligence” (‘CDD’).

CDD requires us to undertake certain background checks before providing services to clients or customers. Accountants and other professionals must take reasonable steps to make sure the information they receive from clients is correct, so we need to ask for documents that show this and we need to keep the information on file for a minimum of five years.

If your business activities change significantly then we may need to update the CDD

The minimum information we will need to obtain from you and verify to meet these legal requirements includes:

  • your full name; and
  • your date of birth; and
  • your address.

To confirm these details, documents such as your driver’s licence or your birth certificate, and documents that show your address, such as a current bank statement will be required.

If we complete work for a company or trust we will need information about the company or trust too, including the people associated with it (such as directors and shareholders, trustees and beneficiaries).

We will need to ask you about the nature and purpose of the proposed work you are asking us to do for you; in most cases it will be business advisory and annual accounts/tax work.

We may need information confirming the source of funds for certain transaction to meet the legal requirements and we may also need to ask you for further information depending on a range of variables required by the legislation.

If we are not able to obtain the required information from you, it is likely we will not be able to act for you.

Before we start working for you, we will let you know what information we need, and what documents you need to show us and let us photocopy.

While we may shake our heads at some of the requirements, the Act is bringing New Zealand into line with other countries and if you have any queries or concerns please contact our Practice Manager, Neil Hodgson, who is our AML/CFT Compliance Manager.

From our business perspective there is a huge amount we need to put in place, including various compliance programmes and reporting systems, staff training programes all of which will be audited every two years (NOTE – this is not an audit of you, it is an audit of our systems). We need to keep records regarding AML/CFT for a minimum of five years and this will be held in individual client files as well as in our various compliance documents.

And just so you know they aren’t picking on you we even have to carry out Department of Justice checks and credit checks on our staff as part of our compliance programme.

Chapman ER News – Employer Successful in Constructive Dismissal Case

We have seen an increased occurrence of employees resigning and then raising a PG, stating that their resignation was constructive dismissal and unjustified.  In many instances they haven’t previously raised their concerns with their employer or the issues raised appeared minor with the employer believing each was addressed at the time as no further concern was raised by the employee.  However, post-resignation, the employee might list all of the minor issues trying to prove that a trend existed. They may even claim an illness that they believe resulted from issues in their employment.

It is reassuring to see the Employment Relations Authority reject a recent claim of constructive and unjustified dismissal by Kathryn Gifkins that she was forced to resign from her position at Marinoto Rest Home in Taranaki.

The claim followed two incidents; one regarding a false accusation of Gifkins dragging a resident and the other about her being stalked by a dementia patient.  Gifkins​ claimed her manager did nothing about either incident and so felt she had no option but to resign i.e. her resignation was constructive dismissal and was unjustified.

Gifkins was employed as a healthcare assistant at Marinoto Rest Home in July 2016. Two issues arose, shortly after she started which she said were of “significant concern for her”.

She soon realised that she was expected to dispense medication to patients which was something she felt uncomfortable doing in case she made a mistake and also felt it was a a registered nurse duty.

Her manager, Barbara Kay, said Gifkins did not convey her concerns about making a mistake and commented that Gifkins was “very competent” at providing medication and had no concerns about her confidence.

The Authority was satisfied the dispensing of blister pack medications was a reasonable activity for Gifkin’s position.

The second issue Gifkins had was with a dementia patient who became “infatuated” with her.

The patient told her he wanted to marry her and proposed to her. He continuously sought her out, giving gifts, making phone calls to her home and following her to the car park.

Despite complaining to Kay about feeling harassed, she said her concerns were never addressed.

However, Kay argued she told Gifkins she did not have to go to the area of the rest home where the patient was living, she did not have to care for him or communicate with him.

Gifkins said it was difficult to distance herself from him due to the size of the rest home.

The Authority member said it was clear Gifkins received unwanted attention from the resident, but she could not apportion blame to the rest home as options were given to her by management to reduce the interaction.

In May 2017, Gifkins resigned. This followed an incident which Gifkins described as “the final straw”.

Gifkins claimed that earlier that day Kay falsely accused her of dragging a patient when she and another carer were trying to lift a patient off the floor into a chair.

Gifkins claimed Kay yelled “Are you dragging him or lifting him?”. Kay admitted she said those words, but denied she yelled them, or directed them solely at Gifkins.

Gifkins said she was unhappy with the way she had been treated and felt distressed that Kay had not listened to her or been responsive.

The Authority member noted that Kay’s manner, along with the words used at the time of the incident, may have been “insensitive and unhelpful in the moment” and added “I accept, however, that Ms Gifkins was unhappy and resentful as a consequence, but I am not at all persuaded that the interaction could be regarded as a breach of Ms Gifkins’ employment, let alone one that could be fairly characterised as dismissive or repudiatory conduct that would make it reasonably forseeable Ms Gifkins would resign, an employer is under no contractual obligation to behave sensitively towards its employees.”

A constructive dismissal occurs where an employee resigns from employment but really the resignation was forced or initiated by the action(s) of the employer.

The Authority assessed whether a substantial risk of resignation was reasonably foreseeable and found that it was not in this case.

Volume wins big

The old saying that nice things come in small packages couldn’t be more apt in the case of another client who has been successful, this time at the 2018 Retail Hotlist Awards.

The very small shop in Church Street that is home to Volume – The Space for Books belies the stature of this perfect little bookshop. After opening just over 18 months ago Volume has quickly gained a reputation as one of the very best independent bookshops in New Zealand and this was recognised recently when they won the People’s Choice Award for BEST PROVINCIAL RETAILER at the 2018 Retail Hotlist Awards – not just for bookshops but for all retailers

This is proof that customers want great service and that is just what Thomas and Stella deliver everyday to every customer

 

Hopgood’s & Co win big

We are delighted our client, Hopgood’s & Co, has had huge success at the Silver Fern Awards. They were named Best Restaurant in New Zealand, Aaron Ballantyne was named as the Best Head Chef and they won the award for Best Dish in the competition.

Think about all those top restaurants in Auckland and from other parts of New Zealand and you will realise just how special this achievement is.

Hopgood’s & Co chefs Aaron Ballantyne, left, and Kevin Hopgood

Congratulations to Kevin Hopgood, Arron Ballantyne and the rest of the great team at Hopgoods.

Here are some links to articles about both Kevin and Aaron that Neil Hodgson wrote for his Taste of Nelson column, their extensive backgrounds, hard work and total commitment to quality have rightly been recognised with these awards..

 

 

 

 

 

The Minimum Wage Increases from 1 April 2018.

While the Government must review the Minimum Wage annually the new Government has already pledged to get it up to $20 per hour by 2020. The first step to this target is the increase that comes into effect from 1st April 2018

The new minimum wage rates are:

Adult – $16.50 an hour
Starting-out – $13.20 an hour (up from $12.60)
Training – $13.20 an hour (up from $12.60)

If you already pay above the minimum wage there is no obligation to increase it proportionally.

If you have any employees earning less that $16.50 an hour then you MUST increase their pay rate to the appropriate new minimum wage

Employees who are paid wages need to be paid for the actual hours they work. This includes any extra hours completed.

For Salaried staff you need to consider if they are being paid below minimum wage for total hours of work.

Nelson Pine Industries Business Awards

At this year’s Nelson Pine Industries Business Awards hosted by the Nelson Tasman Chamber of Commerce two of our clients won awards; Emma

Heke won the Innovation Award for her range of specialty herbal teas and Shane & Annette McCrae from McCraes Blinds and Drapes were awarded a special Business Excellence Award in the large business category.

A huge congratulations to both businesses and the very hard working owners.

It is worth noting that Emma completed the year-long Barbican Training business course before she started her business, this meant she had a full business plan, finance plane, marketing pan and the skills to manage her new business. It just goes to show if you start off on the right track with a new business success can be just around the corner.

 

Employer Owes $2.4 Million To Employees

In a recent investigation into wage payment irregularities at SOE Landcorp, the Labour Inspector found significant issues. The Inspector determined that over the last seven years Landcorp had been incorrectly calculating the entitlements of approximately 1,400 employees.

There appear to be two main areas where Landcorp incorrectly calculated the entitlements:

a) Landcorp did not include the employee’s accommodation allowance into the calculation of gross earnings. This had a flow on impact to the calculation for sick, annual, bereavement and public holiday leave.

b) Landcorp breached the minimum wage for employees who were on salary, but worked long hours during peak season.

The amount owed to 1,400 former and current employees is approximately $2.4 million.

Employers can take several lessons from this decision.

Firstly, even if the employer uses a payroll system to calculate entitlements, it is up to the employer to ensure that the payroll system is calculating this correctly. In Landcorp’s case the payroll system incorrectly excluded the accommodation allowance from the gross salary calculation. MBIE have stated that at the end of June 2017 it has 140 cases which it categorised as payroll audits. Of those 118 had been investigated which led to 53 enforceable undertakings, 29 improvement notices and 2 cases lodged with the ERA.

Secondly, where employers have salaried employees on lower salary levels (less than $55,000 at present) and those employees are working long hours over a peak period of work, the employer must calculate the weekly/fortnightly pay ensure that employee is paid above the minimum wage for every hour they work in that week/fortnight.

Precinct Dining Co. Motueka

Motueka has had an important role in this region’s food industry for many years, primarily as a place food is grown and processed, but in recent times it has also become home to some wonderful eating establishments including Precinct Dining Co.

Located on the corner of High Street and Greenwood St in part of the Countdown building, Precinct Dining Co was established in December 2015 by Tim and Kylie Andrew, Tim is the chef and Kylie “does everything else which is about 80% of running a hospitality business” according to Tim.

Last week I sat down with them over one of my favourite drinks, a double shot long black, and we talked about why they chose Motueka as a place to start a café.

They told me that Motueka didn’t have many places like the one they envisaged, in the past there were plenty of places to eat but nothing offering a modern dining experience, in recent years that has changed a lot with several places making great food delivered with very good service.

In the case of Precinct they wanted to create a place that had a modern feel to the food and a dining environment that wasn’t too big so they could manage it pretty much by themselves.

“Instagram, social media and tv shows like Master Chef have helped change people’s expectations of food, it doesn’t have to be steak, eggs and chips or bakery foods, food is much more exciting now and the people of Motueka appreciate it just as much as anyone else.”

Something else that drew them to Motueka is the fact it is small town New Zealand with a very high summer tourist density and quieter winters, “it is absolutely full-on in summer and we get a bit of time off in winter so we can have a lifestyle you don’t get when you are working in the restaurant scene in big cities.”

While Tim is a chef and Kylie has a qualification in Bio-Medical Science they have both worked in the hospitality sector for some time; Tim trained in Queenstown at Skyline where he had an apprenticeship, “we were doing 1500 meals a day but it was all buffet style food, we did the same thing every day and it made me realise I don’t like doing buffet, but it was so hard to get an apprenticeship when the opportunity came up I jumped at it.”

He is a huge supporter of the apprenticeship programme, most people train at polytechnics or cooking schools these days but working as an apprentice has a lot of benefits, “you finish with a qualification and without a student debt because you are learning on the job, earning money while learning and getting real world experience.”

Tim has also had several apprentices over the years including Beau Lyttle who is working with him now and will be finished his apprenticeship at the end of this year.

As well as working at Skyline in Queenstown Tim also worked at the Millenium Hotel for the last year of his apprenticeship before moving to the Shoreline café at Kaiteriteri for a summer as Chef de Partie then on to his first Head Chef role at the Mecure Hotel in Dunedin which is where he decided working in a hotel kitchen wasn’t for him either.

So it was overseas for a few years, firstly to Orpheus Island, a high-end luxury lodge off Townsville, “I moved there to chill out a bit after the crazy hours of working in a hotel but it wasn’t as relaxing as I hoped, I was promoted to head chef after three days.”

His next stint working in a resort was at Peppers Palm Bay, another Island in the Whitsunday’s, that the owner ended up turning into his house on the private island.

After Peppers he ran a ski resort in Australia at Threadbo where the backpacker accommodation slept 300 people, “I was up at 2.30am to cook breakfast, then it was up the mountain to the other part of the resort for lunch service, a bit of snow boarding then back down the hill to feed everyone for dinner. It was a real challenge, I couldn’t do it now but back then I was living on coffee and adrenalin.”

In 2010 he spent another summer at Shoreline before he headed overseas to follow Kylie who was also working at Shoreline for the summer, “her mother was keen for her to spend some time at home for a while but she met me and I ruined her life by hooking her into hospitality, she is one of those people who is naturally great at hospitality” says Tim.

Kylie had an internship at Disney World so Tim followed her and he ended up working as a cooking teacher on Royal Caribbean Cruise Lines in the Caribbean, they sailed out of Miami every week with a new load of passengers and one of the things the cruise line offered was cooking courses.

“That was a cool job but hard work, six months on and 10-12 hour days teaching every day Americans who had no idea how to cook simple stuff, one lady had never seen a fresh carrot, she had only ever seen frozen carrot slices, it blew my mind how little some of these people knew about food let alone how to cook it, in some cases it was basically how to boil water.”

After the short US stint they moved back to New Zealand and Queenstown where they both worked in the then new Rata restaurant when it first opened.

After Rata it was back to Shoreline as the head chef and front of house manager. The couple used their previous experience at Shoreline and the experience working in other places to redesign the kitchen to give it a better flow, making it easier to serve hundreds of meals a day.

“It was a great place to work until the management board changed and the focus changed to serving as many people as possible in the hectic summer period; we had the attitude of ‘let’s serve everyone and make everyone happy’ and that changed to ‘let’s get as many people through the doors as we can’ so we couldn’t focus on the quality of food and service that was so important to us.

“We totally understand they wanted to generate as much income as possible at the busiest time of the year but it didn’t suit our philosophy so it provided the impetus to open our own café where we can focus on what we want to provide customers with, we take our time now and serve great food made with love rather than just being a production line.

“Having Kylie run the front of house is fantastic, she is very level headed and sees things differently to me, I have an opinion as a chef and she has an opinion as a customer would see it so we have complimentary skills, I don’t have anything to do with front of house and she doesn’t have anything to do with the kitchen. I think having quite different roles and respecting one another is the reason we work so well together in the business.”

This couple love what they do, especially giving young people an opportunity to do something that isn’t university, “it seems that at many schools kids are pushed to be successful by going to university but you don’t have to, university isn’t the only way to make a great future for yourself.”

In their first year in business they won a Beef and Lamb award and while they are enjoying what they we are doing and will be there for a while Tim says there will come a time we will move on to something else so Kylie can pursue her medical career or whatever she decides to do, “she has very much helped me get everything I wanted so it is only fair to do the same for her.”

www.precinctdining.com

Heke Homemade Herbals – Nelson Mail 04.07.17

This is a column written by Neil Hodgson and first published in the Nelson Mail, about one of our clients Emma Heke and her business Heke Homemade Herbals. These herbal teas have become firm favourites in our office and we think you should try them too.

 

I have known Emma Heke for many years, I have always been hugely impressed with the way she has approached her business ventures and she brings the same enthusiasm and attention to detail to her latest venture, Heke Homemade Herbals. 

 

Heke Homemade Herbals produces a range of outstanding herbal teas with the vast majority made using herbs and flowers she grows at home. The only ingredients she buys are those that don’t grow in New Zealand and come from an organic supplier. 

 

While the teas are fantastic much of the business success can be put down to her going about things the right way; firstly, she has a business she is passionate about and she has the background and business skills to turn that passion into a great business. 

 

Emma’s journey started as an artist with a fine art degree from Dunedin Art School after which she set up her first business, a papier maché venture. People would commission all sorts of custom-made sculptures from lemon trees to mini red Cadillacs! 

 

“I got to make a huge fairyland grotto to go under the staircase in a museum, it was a huge amount of fun and I loved seeing the kid’s reactions.”  

 

After running her small business in Dunedin for two years she moved to Sydney where she worked in a professional photographic lab for the next two years, “I was already really interested in photography and had been teaching myself but learned heaps working in the professional lab 

 

After Sydney it was off to England, where she was born before her family emigrated to New Zealand when she was seven. “For two years I couldn’t get any type of work that I wanted so ended up working in a bar and a boarding school for a pittance, I realised I didn’t want to live on minimum wages and had to do something with my skills. I just wasn’t selfish enough to give up everything and live life just for me as an artist.” 

 

So Heke returned to New Zealand and spent a year training to be a high school art and photography teacher before she worked at Whangarei Girls High School for 12 years, “I loved it, I ended up being the Check Moderator for NCEA levels 1-3 Art for New Zealand and was probably destined for Wellington and well paid jobs but had my son and everything changed” 

 

“Connor was very ill as a baby he was having allergic reactions to many things so while I tried to go back to teaching I couldn’t do both and gave up teaching. We moved to Nelson knowing it would be a good, safe place to bring up a young boy. It’s been fantastic for both of us” 

 

Heke says she had to reinvent her career, she wanted to have her independence and make her own way in life. When Connor was four she had great ideas for films and saw there was a gap in the market for kids films that weren’t all cutesy, something more with an education focus. 

 

“I also realised if I was going to have a successful business I had to get some business skills too so enrolled in a course at Barbican Training called Small Business Management, one night a week for a year and lots of homework but it changed my life. 

 

“I developed the confidence and skills to know I could succeed. During the course you work on your own business, all facets from business planning to financial planning and marketing, as the course progressed I could see the idea I had could work.” 

 

She had never picked up a film camera until she did the full time six-month TV production course at NMIT while completing the Barbican course.  

 

“My mum, Dawn, came down from Thames and she looked after Connor and took him to kindy while I was at tech, if she hadn’t done that I wouldn’t have been able to do many of the things I have.” 

 

Loaded with business skills and video training Heke created her first film Ours, NZ Nature for Children, “ It was huge for me, it sold really well and Air NZ picked it up for their inflight entertainment, many early childhood centres bought it and I won a Green Ribbon Award for it.” She then made a second DVD called Our Creative Children about art and creativity using nature as the inspiration. The third film, Our Green Roadie involved a tour around NZ to showcase eco-entrepreneurs and all the films have been available as DVDs until recently when Emma made the switch to fully digital downloads. 

 

This suits the modern market and fits really well with her marketing strategy that has been highly focused on social media, the videos can be sourced at www.facebook.com/redhekeproductions  

 

So how did she get into producing herbal teas? “After Connor and I had been travelling around the country I was keen to do something based in Nelson and wanted to make the space we had really productive. If I could create a business out of a steep south facing section it would also help other people, I wanted to break some myths people have about not being able to do a lot with small, colder south facing plots of land and wanted to create something viable . 

 

“Because I love herbal teas it was an obvious option for me to choose, something I could do at home without needing a huge amount of land but the micro climate of the garden meant I needed to use sturdy plants that would withstand the frosts, it was difficult to buy great organic teas that were affordable, I really wanted to showcase organic produce.” 

 

She started giving the teas to friends and family first and they kept asking for more, “I realised I had a potential business and created a Facebook page to see if there was a demand beyond friends and family, I harvested my herbs, dried them, made my four favourite blends and sold out in two days, two weeks later I harvested that last of my herbs and they sold out in two days as well. 

 

“We dug up all the lawns, planted lots of herbs and haven’t looked back.” 

 

Heke Homemade Herbals now has a range of 32 blends, “I have tried to keep a deliberately low profile so I can grow the business in a controlled way and manage the growth but people have approached me wanting to stock the teas, Morri Street Café have two teas on their winter menu, that have really taken off.” 

 

McCashins successfully used one of her herbal tea in a recent competition, “they used my white tea that I grow, called it Heke Herbal Tea IPA, took it to Auckland and it went down very well so they are keen to experiment further.”  

 

Heke sells her herbal teas at the Nelson Market on Saturdays and a lot of domestic travellers who buy at the market now order online so she has an ever-expanding mail order client base. 

 

She also runs children’s art classes at home and always has pots of herbal tea for them, “kids really get in to it, their favourite is peppermint, they go in to the garden and we make a big pot of it.” 

 

It is time you discovered Heke Homemade Herbals too, they are wonderful teas packed with flavour and made right here in Nelson and can be contacted through www.facebook.com/HekeHomemadeHerbals .