Two Bills are currently at the select committee stage. The Domestic Violence – Victims' Protection Bill provides protection for victims of domestic violence by helping victims to stay employed, addressing discrimination stemming from domestic violence in the workplace, and treating domestic violence as a health and safety workplace hazard. This Bill brings a normally private matter into the working domain. The Employment Relations (Allowing Higher Earners to Contract Out of Personal Grievance Provisions) Amendment Bill seeks to allow employees earning over $150,000 to contract out of the personal grievance rights under the Employment Relations Act.
Domestic Violence – Victims' Protection Bill
The Victims' Protection Bill is an omnibus Bill, amending the Domestic Violence Act 1995 (DVA), Employment Relations Act 2000 (ERA), Human Rights Act 1993 (HRA), Health and Safety at Work Act 2015 (HSWA) and Holidays Act 2003 (HA). The Victims' Protection Bill can be viewed here.
The Victims' Protection Bill aims to increase legal protection for victims of domestic violence to enable them to remain in paid employment and to sustain productivity in a secure environment. It makes the workplace a primary place for intervention because of the risk that a victim may be targeted at work, or because of the risk of violence to the health and safety of other workers. The Victims' Protection Bill would:
- prohibit discrimination on the grounds of being a victim of domestic violence (often resulting from misunderstandings around victims' experiences and the situations surrounding their abuse),
- require businesses to treat behaviour resulting from the suffering of domestic violence, or being the instigator of domestic violence, as a hazard under the HSWA (businesses must ensure, so far as reasonable practicable, that workers are not exposed to hazards that may put their health and safety at risk),
- require businesses to establish policies which enable them to react effectively in situations where their workers are victims or instigators of domestic violence,
- provide victims of domestic violence with an entitlement to special domestic violence leave (this leave could be used for a range of reasons including counselling, addressing injuries resulting from abuse or to shift houses), and
- provide victims of domestic violence with the right to request flexible working arrangements (e.g. to enable victims to avoid predictability in their working hours and location, to allow victims to get to and from work with more ease and to reduce the possibility of the individual as well as other staff members being targeted at work).
Implications for businesses
Currently, domestic violence is not addressed in the employment legislation. Often a person's colleagues will be aware of or suspect instances of domestic violence before any support agencies are involved.
Under the Domestic Violence Bill, a "victim of domestic violence" is broadly defined and includes persons who provide care and support to sufferers of domestic violence in their household. As such, the number and range of persons covered by the protections of the Bill has the potential to be significant. Businesses must apply the provisions of the Victims' Protection Bill to all "victims" recognising the different circumstances of each case and responding appropriately to each individual's needs.
The obligations placed on businesses are also wide from a health and safety perspective. If the Bill is enacted, businesses must recognise the effects of domestic violence on a person's behaviour (including being an instigator of domestic violence) as a hazard, and ensure, so far as reasonably practicable, that workers' health and safety is not put at risk by exposure to that hazard. Businesses would be required to maintain policies on how to manage the health and safety risks resulting from a worker suffering the impacts of domestic violence, and ensure that health and safety representatives obtain appropriate training in this area. In essence, employers would be obliged to obtain health and safety expertise in an area which has historically been considered a private matter - outside the scope of work arrangements.
The provision of leave and flexible work arrangements may also impact some businesses from a financial and operational perspective. While the Victims' Protection Bill enables an employer to refuse a flexible working arrangement request in limited circumstances, there are no grounds on which an employer may refuse requests for up to 10 additional days leave per year, provided that the employee provides a document showing that they are a victim of domestic abuse. Special leave could be used by employees for any reason, as an employee is not required to explain the reasons for domestic leave requests to their employer.
New Zealand can learn from the Australian experience where the focus has been on practical steps that can be taken by employers to protect employees experiencing family violence. These steps have included:
- encouraging employees to disclose abuse,
- developing guidance or a Code of Practice outlining how to respond appropriately when protecting an employee,
- developing tailored work polices, risk assessment outlines and safety plans, and incorporating these into usual business practices, and
- increasing education, training and awareness in this area through consultation with unions, employer organisations and other relevant entities.
In our view, New Zealand businesses should follow suit by implementing these lessons and guidelines into everyday employment practice.
Employment Relations (Allowing Higher Earners to Contract Out of Personal Grievance Provisions) Amendment Bill
The intention of the Higher Earners Bill is to allow employees earning over $150,000 (higher earning employees) to contract out of the personal grievance regime under the ERA. Under the Higher Earners Bill, a clause in a higher earning employee's employment agreement excluding the personal grievance regime will be effective, provided that:
- the agreement containing the term is in writing and has been signed by both parties,
- the employee had independent legal advice before signing the agreement, and
- the lawyer who gave the advice explained the effect and implications of the term before the employee signed the agreement, witnessed the employee's signature, and certified that he or she complied with these requirements.
Implications for businesses
The key benefit of the Higher Earners Bill for employers is that, in exchange for agreed terms, it would enable an employer to terminate a higher earning employee's employment at any time without running the risk of a personal grievance for unjustified dismissal.
Allowing a high earning employee to contract out of the regime recognises the realities of an employment relationship between an executive and his or her board or company. For instance, the employment of an executive often ends abruptly as a result of a change of control, a belief that it is time for new leadership, or personal incompatibility. In these circumstances, it is important for businesses to have the ability to remove the employee as quickly and as efficiently as possible.
Australia has a similar provision in the Fair Work Act 2009 (FWA). Under the FWA an individual is not protected from unfair dismissal if he or she earns above the high income threshold (around AUD$140,000). The FWA provides no option for the employee to contract out of the right to bring a claim for unfair dismissal. The employee is denied this right automatically if he or she earns more than the high income threshold.
However, the FWA only prevents a high earning employee from bringing an unfair dismissal claim. In contrast, the Higher Earners Bill proposes to allow an employee to contract out of the personal grievance regime in its entirety. The personal grievance regime covers a wide range of unfair actions in employment including discriminatory conduct, harassment and breaches of the new hours of work and secondary employment provision requirements. This means that a high earning employee who contracts out of the personal grievance regime will have very limited rights of recourse against their employer for unjustified action except under the HRA.
The Higher Earners Bill is premised on the belief that individuals who are earning a salary of $150,000 or more are competent and skilled enough to negotiate on their own behalf, and therefore, are more likely to be of equal bargaining power with their prospective employer. This view is controversial.
In our view, it is important to provide an employer with the ability to remove a senior executive employee quickly and efficiently without running a significant risk of proceedings being brought against them. However, the rationale behind allowing an employer and employee to contract out of the personal grievance regime entirely (not only for dismissals) is unclear. Perhaps this will be ironed out at the select committee stage and New Zealand could follow the simpler approach used in Australia.
If you have any questions regarding any of the issues raised in our article, please contact us.
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.