The usual line taken by government Ministers is that they do not get involved in operational matters. But the latest meddling in operational issues is playing out around the pros and cons of working from home. Public Service Minister Nicola Willis has directed the public service to tighten up on working-from-home arrangements.

The directive does not appear to be evidence based and seems more motivated towards assisting small hospitality and retail businesses in Wellington’s CBD. Understandably, the move has been welcomed by some Wellington businesses, who have complained that the work-from-home culture has made it difficult for businesses in the city.

However, the opportunity to work from home has become more of a necessity for workers in Wellington and other larger centres with many workers struggling to make ends meet. High inflation has significantly pushed up the cost of servicing mortgages or paying rent. The cost of living crisis has significantly pushed up everyday costs such as food and petrol. The government has removed half price fares on public transport, the cost of parking is exorbitant, road user charges have been introduced for electric vehicles and there is even serious discussion about introducing congestion charges in the larger centres. Even a day or two working from home can make a difference to a family’s finances.

Not only are many workers struggling, there appears to be little confidence in the job market. The latest Westpac-McDermott Miller Employment Confidence Index fell by 2.2 points from 91.4 to 89.2 in the September quarter. That is the lowest reading since New Zealand emerged from the first Covid-19 lockdown in 2020. Pessimism is even lower in Wellington where the impact of government directed job cuts in the public service continues to take its toll.

In support of the Public Services directive the Prime Minister said he wanted a “highly productive and collaborative” public service. “I do not want to see working from home, undermining that ambition that we have” he said, adding he was worried young graduates did not have the opportunity to learn from senior public servants because they were working from home. In reality, those young graduates that have survived the job cuts are probably more worried about retaining their jobs than concentrating on their career development in a public service where public service is not valued and they are witnessing careers being cut short by government directive.

By way of contrast, the new UK government is pushing back against their previous government’s attempts to get workers back in the office, having directed officials to spend at least 60 per cent of their time, or three days in a week, in the office. The new Business Secretary, Jonathan Reynolds, has backed remote working, saying it is good for the economy because people are more productive when they are 'happy at home'. Other Ministers such as the Transport Secretary Louise Haigh and Deputy Prime Minister Angela Rayner have told staff they support 'flexible working'. Their comments have been interpreted by civil servants as a 'relaxation' of the drive to force them back to the office.

Anecdotal research, particularly by recruitment firms, show that flexible working arrangements, including being able to work from home, are an important benefit for employees. Research earlier this year by Robert Walters showed that flexible working is a significant drawcard for employees. Forty percent of those surveyed would look for a new job if their employer made them return to the office five days a week, while a further 33 percent would if their work-from-home days were reduced. 

For the significant number of businesses that have provided working from home opportunities since the Covid-19 lockdowns, the issue may not be easy to resolve. For many businesses the way work may be undertaken has changed, and employees have increased expectations around a work/life balance.

The starting point is that the ability to work from home is not usually a contractual right that can be enforced. Employment agreements are required to provide a location where the work will be performed, which will usually be the business premise. However, many businesses will have implemented working from home type policies. Even more businesses will have negotiated directly with employees regarding their working arrangements. Employees are likely to have been recruited on the basis of the promise of providing the opportunity to work from home.

Employees also have the right under the Employment Relations Act to request flexible working arrangements, and employers are required to deal with such requests in good faith. It makes it harder to refuse such a request in good faith if there is clear evidence that a working from home arrangement has worked well and there have been no concerns over the employee’s performance.

The government’s directive to significantly cut the public service has had a huge impact on the moral of public servants. The directive to work from the office will further deepen that impact and make the retention and recruitment of those valued staff that the Prime Minister wants to mentor the public services new recruits that much harder. Read more...

The Fair Work Commissions in Australia has recently ordered Virgin Australia to reinstate an aircrew employee after he had been dismissed earlier this year after being accused of being on duty in breach of Virgin Australia’s drug and alcohol policies and using a Dating App to have casual sex after asking for a roster change due to fatigue. The case raises serious questions about workplace surveillance and whether employees have a right to a private life while in their work provided hotel room during a work-related trip.

Dylan Macnish was dismissed after two separate incidents in 2023. It was not disputed that Mr Macnish’s performance at work was of a high standard. He had “glowing” feedback from Cabin Crew Managers.

One incident involved Mr Macnish drinking a glass of sparkling wine at a work Christmas party seven and a half hours before he was due to work. This was said to be in breach of the airline’s polices that provide that cabin crew members are not allowed to consume alcohol within eight hours of being on duty.

The Fair Work Commission’s decision found that Mr Macnish had breached the Virgin Australia policy as he had drunk the glass of prosecco 7.5 hours prior to his sign-on but it noted that just because an employee is in breach of a policy, it does not automatically mean that there is a valid reason for the dismissal. The circumstances must be considered.

Mr Macnish was concerned that he could be in breach of the airline’s policy. He asked a Manager at the party for his views on whether he should turn up for duty. The Manager said that if in doubt he should look at the policies. Mr Macnish did and came to the view that he could go on duty. He also took the precaution of self-testing with a personal breathalyser, which returned a zero reading. The Commission concluded that the policies on drinking before duty were confusing. The sections on layover and duty travel are worded in such a way that it contemplates situations where a Virgin employee could be permitted to drink alcohol within eight hours of a duty.

The other incident involved Mr Macnish’s request to be moved to an afternoon flight rather than returning to Perth on a rostered earlier flight. Mr Macnish relied on the airline’s fatigue policy; saying that he had not been able to sleep after his previous flight as he had assisted with a medical incident with a passenger who had become unwell and had accidentally wet himself and Mr Macnish as he tried to assist the passenger. During Mr Macnish’s extended “layover” at the Brisbane hotel he arranged a hookup on the gay dating app Grindr in the early hours of the morning.

In the course of the investigation the airline requested CCTV footage of Mr Macnish’s hotel hallway and his room swipecard records. The footage showed him leaving his room at 5.13am and returning with a guest five minutes later. The guest then left at 9.00am. Virgin argued that Macnish had requested the roster change to engage in “social activities”.

The Fair Work Commission’s decision said that Virgin Australia’s conduct when investigating the hotel incident was “mystifying.” The Commission noted that it was not unusual for friends or family to stay with staff in hotels. In fact it had been acknowledged by a Manager that it was common practice for employees staying in Virgin-provided accommodation on layovers to use dating apps. The Manager had also conceded that if a straight, married man were to have sex with his wife after accessing the fatigue policy then it would ‘probably not’ be any of the airline’s business to comment on it.

The issue of how Virgin Australia accessed the CCTV footage and room swipecard information from the hotel was not addressed in the Commission’s decision. Australia has similar privacy laws to New Zealand. Unless there has been some informed consent by Mr Macnish to disclosure it is likely that his privacy has been breached by the hotel. Virgin Australia would also require a very explicit “workplace surveillance” policy that effectively provides that employees can be monitored in their “temporary residence” while being required to work away from home.

There may be occasions when an employee’s privacy in relation to their personal off-duty activities could be outweighed by the employer’s health and safety obligations. While it could be argued that airlines have a greater interest in a worker’s off-duty conduct in safety-sensitive positions than other employers, the information should be used legitimately for workplace safety and in a non-discriminatory way. It should not make any difference if Mr Macnish was a “straight, married man.” Read more.....

Changes to employment law in Australia came into effect last week that would enable the Fair Work Commission to provide platform or gig economy drivers, food delivery riders and parcel couriers with minimum employment standards for the first time; including superannuation, personal injury insurance and a safety net on pay.

Last week in New Zealand our Court of Appeal unanimously rejected an appeal by Uber and upheld, with some criticism, the decision of the Chief Judge in the Employment Court that four Uber drivers are employees.

Essentially, the Uber business works as follows: riders/eaters download the Uber App; they advise Uber (via the App) of where they want to travel to/what they want to eat; Uber (via the App) offers the trip/food to available drivers; an available driver accepts the offer, collects the rider/food and drives to their chosen location. Riders and eaters make payment to Uber; Uber makes payment to the drivers.

The Court of Appeal criticised the Employment Court’s approach to the test provided in the Employment Relations Act. In deciding whether or not a worker is an employee or a contractor the Court “must determine the real nature of the relationship”. In doing so, the Court must consider “all relevant matters, including any matters that indicate the intention of the persons” and “not to treat as a determining matter any statement by the persons that describes the nature of their relationship”.

The Court of Appeal confirmed that the first step should be to look at the parties’ agreement and that the focus should be on the substance of the parties’ mutual rights and obligations. But the Court said that when dealing with contracts which are offered on a “take it or leave it” basis, it will be much less likely that labels and similar terms genuinely reflect the parties’ intentions about the real nature of the relationship. 

There are multiple different contractual documents between Uber and their drivers. While the Court of Appeal determined that on their face the contracts did not appear to give rise to an employment relationship, but in practice aspects of the agreements were found to be ‘window-dressing’.

The Court of Appeal then went on to consider the three common law tests often used to determine whether an employment relationship is established; the control, the integration and the fundamental tests.

It examined the level of control Uber exercises while a driver is logged into the App and found that this was more consistent with an employment relationship. Drivers are logged out for repeatedly ignoring requests; if drivers repeatedly decline requests they are given warnings, suspensions, and ultimately termination of the relationship.

Interestingly, while the Court noted that Uber drivers do not wear uniforms and their vehicles have no Uber signage, nevertheless the Court found that the drivers are the public face of the Uber brand and are integrated into its business. 

Considering these factors, the Court of Appeal then considered whether the drivers were really in business on their own account (the fundamental test). It said that when logged into the App, the driver has no opportunity to establish any business goodwill of their own, or to influence the quantity or quality of the work they receive, or the revenue from that work (except to the extent that Uber agrees to give them some preference in relation to access to ride requests, information about rides, or supplementary payments – as part of the control Uber exerts). The Court concluded that the drivers were supporting Uber’s business rather than running their own.

The ruling provides the drivers with access to minimum employment standards such leave entitlements, holiday pay and the minimum wage. Immediately, and unsurprisingly, Uber confirmed that it would appeal the decision and apply for leave to appeal to the Supreme Court. Uber has deep pockets and operates in a global market. It can certainly afford to litigate this issue as far as it can. 

To date our most notable court decision on the employee/contractor issue is Bryson v Three Foot Six; where the Employment Relations Authority declared Mr Bryson to be a contractor, the Employment Court an employee, the Court of Appeal a contractor, before the case reached the Supreme Court and it finally concluded that Mr Bryson was an employee. Famously, the John Key lead National Government then changed the outcome of the Bryson decision for the film industry by enacting the so-called Hobbit law effectively making workers in that industry contractors.

In June this year the Workplace Relations and Safety Minister, Brooke van Velden, began work on law changes that could prevent workers from challenging their employment status in the courts. It also seems unlikely that the current government is considering any protections for a significant number of workers that are in effect vulnerable and “dependent contractors”. Read more....

Human Resources Magazine

EMPLOYMENT RELATIONS  David Burton

Flexibility at work comes with risk?

While we await the Court of Appeal’s ruling on the recent Uber cases, David Burton, an employment law barrister, looks at the implications for employers. Achieving flexibility by accessing the so-called “gig economy” may bring some risk.

Generally, the Uber cases reflect a testing of employment status in light of fast-moving changes to the way in which work is done. Most recently, the Chief Judge of the Employment Court in E Tū Inc v Rasier Operations BV issued a declaration that four Uber drivers were employees.

The business model and the law

The Court explained that the Uber operation works as follows: riders/eaters download the Uber App; they advise Uber (via the App) of where they want to travel to/what they want to eat; Uber (via the App) offers the trip/food to available drivers; an available driver accepts the offer, collects the rider/food and drives to their chosen location. Riders and eaters make payment to Uber; Uber makes payment to the drivers.

The starting point is the Employment Relations Act. In deciding whether or not a worker is an employee or a contractor, the Court “must determine the real nature of the relationship”. In doing so, the Court must consider “all relevant matters, including any matters that indicate the intention of the persons” and “not to treat as a determining matter any statement by the persons that describes the nature of their relationship”.

The Employment Court highlighted the need to adopt an approach to determining the status of the drivers with regard to legislation and its role in protecting vulnerable workers and ensuring that minimum standards are maintained. It said that the broader social purpose of the legislative framework must be kept in mind when considering whether a worker is an employee. The Chief Judge said that her task was to ascertain whether the individual is within the range of workers to which Parliament intended to extend minimum worker protections.

The Court’s findings

The Court accepted that some of the usual indicators of a traditional employment relationship were missing. However, it found that significant control was exerted on drivers in other ways. These included incentive schemes that reward consistency and quality. Other controls included withdrawal of rewards for breaches of Uber’s standards, such as slips in quality levels, measured by user ratings.

The Court observed that, on one level, being an Uber driver provides flexibility and choice. Drivers could juggle driving with their other jobs, businesses or family and community responsibilities. None of the drivers were required to log onto the App at any particular time and could work as long or as little as they liked.

The Judge thought that concepts of “flexibility” and “choice” were not particularly helpful in determining employment status. She observed that flexibility is a feature of modern employment relationships. Casual employees, for example, can exercise flexibility and choice about when they work (there being no legal obligation to accept work offered). The fact that they can choose to work at times that suit their personal commitments does not mean their worker status changes. She observed that in New Zealand any employee, casual or otherwise, is entitled to request flexible working hours and such requests can only be denied on a limited number of grounds.

Importantly, the Court said Uber had sole discretion to control prices, service requirements and standards as well as other aspects of the business such as marketing. Drivers were restricted from forming their own relationships with riders or organising substitute drivers to perform services on their behalf.

The cost of defending

In coming to its decision that the drivers were employees, the Employment Court was not deterred by the complex commercial operation that Uber uses in New Zealand. Interestingly, the Court found that an employee may have more than one employer and that an employer may be more than one corporate entity.

When considering flexible work arrangements, employers may need to consider the cost of defending the arrangement. Uber has deep pockets and operates in a global market. It can certainly afford to litigate this issue as far as it needs to (or can). The appeal of the decision has now been heard in the Court of Appeal and the decision will be released in due course. Whatever the outcome, it will be a significant decision.  Read more....