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What to Say When

Below is the first in our series of one liners we use in response to challenging behaviours. We hope they come in handy for your own work situations. If you have any of your own that work please email them in and we can include them.

Passive Aggressive Colleagues

We have a passive aggressive person on our team who constantly moans to his colleagues but won’t say anything to me. The team want him to stop. What can they say to him?

Next time he corners them in the tea room and he his being negative about the latest thing, get his colleague to say : “That sounds really important to you, let’s go and tell the manager.”

Crying

What do I say to the employee who always cries when I raise something with them. Firstly accept crying as being okay, not something to be intimidated by. Acknowledge they are upset, but don’t be put off from discussing what you intended, or hearing what they have to say. A response to tears can be as simple as passing over some tissues and saying: “I can see this is upsetting for you, I will give you a couple of minutes.” Just sit there. Say nothing. It is more likely than not they will start talking again. The key is to not allow the tears to bring the discussion to an end. It may temporarily put it on hold, but always come back to it.

Blaming

Next time someone simply blames others e.g. says, ‘but I couldn’t do it because John did/didn’t do that thing’, respond with “I’m interested in what you could do differently next time so that we still get the necessary outcome”. For example: Ted hasn’t completed the report he was supposed to do for you. It was John’s fault (according to Ted) because he didn’t get the information to Ted to complete the report. What could have been done differently? Ted could have chased John for the information, communicated to John a timeline, told you before the report was due that there was possibly a delay, or completed other parts of the report while he waited for the other information. All things Ted could have done. Place the responsibility back on to Ted. i.e. the person who blames others.

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.

International Automatic Exchange of Information

New Zealand has signed up to the Automatic Exchange of Information (AEOI) – a global OECD initiative to combat tax evasion.

Inland Revenue has been running an AEOI awareness campaign since 9th June 2018 with a primary focus of this campaign being to generate awareness among New Zealand tax residents most likely to have offshore accounts or financial interests, so they can take steps to determine if their tax affairs are in order and disclose if they identify issues. New Zealand tax residents with complex international tax affairs should contact us for support or advice.

This awareness campaign has included online advertising on relevant websites and via Facebook. These ads include a link to IRD’s campaign landing page.

As part of AEOI financial institutions will provide Inland Revenue with information about foreign tax residents with financial accounts in New Zealand, in line with the Common Reporting Standard (CRS).

IRD are now exchanging information with many other countries so it is vital you tell us about any income or assets you may have in other countries, if you don’t then chances are IRD will find out about it and that may cause you a few problems, something no one likes happening with IRD

The requirement of New Zealand Tax Residents to report world-wide income hasn’t changed, but IRD are now more likely to find out about it even if you don’t declare it. Please make sure information regarding ALL overseas income, bank accounts or assets is provided to us for your tax return preparation, even if you think it’s non-taxable income!

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.

Employment Relations Amendment Bill

The first wave of changes to legislation in the employment arena were announced last week. There was nothing unexpected, except for possibly the usefulness of NZ First to act as a hand brake for more widespread changes.

One of Labour’s flagship policies was the abolition of the 90 day trial period. The great news for SME’s is that if you have 19 or less employees, the trial period will still be available to you. An unexpected turn of events and a moved that has disappointed unions. Unions however did get a number of changes they were seeking.

The purpose of this Bill is to implement the Government’s post-election commitments to restore key minimum standards and protections for employees, and a suite of changes to promote and strengthen collective bargaining and union rights in the workplace. Read here a summary of the changes, and over the next few weeks we will detail how the changes may affect how you operate your business.

Proposed Amendments

Restoring Key Minimum Standards and Protections for Employees
  • Removing the exemption for employers with fewer than 20 employees from the current rules about business transfers, which will allow vulnerable workers of these employers to elect to transfer to an incoming employer
  • Extending the time frame for vulnerable workers to elect to transfer to an incoming employer and placing information and notification requirements on employers in respect of their employees’ personal information
  • Reinstating the right to prescribed rest and meal breaks, as applied previously regarding number and length of breaks within specified work time, with limited exceptions for essential services where certain conditions exist
  • Restoring reinstatement as the primary remedy in unjustified dismissal cases, where the employee requests it and where reinstatement is practicable and reasonable
  • Limiting trial periods to employers with fewer than 20 employees
Collective Bargaining and Unions

The proposed amendments include:

  • Removing the requirement for a union representative to gain consent from an employer before entering a workplace
  • Requiring employers to allow union delegates reasonable time during working hours to perform their duties in respect of the employees of that employer.
  • Reinstating that the parties are required to conclude a collective agreement, and repealing the provisions that enable the ERA can determine that bargaining has concluded
  • Reinstating the ability of unions to initiate collective bargaining 20 days before an employer
  • Repealing sections 44A to 44C that allow employers to opt out of multi-employer collective bargaining once bargaining has been initiated
  • Requiring that collective agreements must contain rates of pay and that rates of pay must be agreed during collective bargaining
  • Repealing the ability of employers to deduct pay as a response to partial strikes
  • Requiring that new employees are afforded the same terms and conditions as the applicable collective agreement relating to their work for the first 30 days of employment
  • Restoring key minimum standards and protections for employees
  • Requiring employers to provide the applicable collective agreement and union contact details and the option to join the union at the same time as they provide an intended individual employment agreement to an employee
  • Requiring that employers provide information about the role and functions of the applicable union when the intended employment agreement is given to prospective employees
  • Encouraging an active choice by a new employee on whether to join the union, and whether to object to the employee’s employer providing the employee’s name and notice of the employee’s choice to the relevant union
  • Extending the grounds for discrimination to include an employee’s union membership
  • Extending the time frame under section 107 for which an employee’s union activities may be considered to contribute to an employer’s discriminatory behaviour from 12 months to 18 months

AIM Method of Calculating Provisional Tax

Many of our clients may have seen or received information from IRD about the AIM method of Provisional Tax calculation

This method will become available for use on 1st April 2018. We are not recommending it to our clients for the following reasons:

  1. Most SMEs (Small Medium Enterprises) qualify to use Standard Provisional Payments without any Use of Money Interest
  2. Depending on your business you may have to do things such as a physical stock take every two months
  3. While IRD are promoting that this is an easy method to use in fact, in our opinion, it is not and also the option is not available through Xero and MYOB for clients to use – it is only available to firms such as ours to use.

If you want to discuss the AIM option please give Sari or Anna a call.