Published - HR Magazine Spring edition 2023

As technology continues to evolve to assist us with our businesses, HR professionals also have to consider the impact of technology and how this may affect the workplace. This may include being involved in restructuring the workplace if work is to be done differently or more efficiently with new technology. It may also involve the implementation of new technology to assist HR systems and monitoring in the workplace.

Technology used

Fingerprints are a unique biological characteristic of a person; they have long been recognised as an effective and accurate way of identifying someone. The recent decision of the Employment Relations Authority in Fonterra v Lanigan involved the introduction of fingerprint scanning technology (FST) for timekeeping and attendance.

By using biometric technology Fonterra wanted to reduce the administration time needed to support the collection of timekeeping and attendance data required by law to be kept, eliminate or reduce the opportunity to falsify or misuse information about timekeeping and attendance, and improve accuracy and consistency generally in computing employees’ pay, leave and other statutory and contractual entitlements.

The protection of encryption offered by Fonterra’s FST system is high. It instantaneously converts raw data (the fingerprints) to a numerical code. Once encrypted, the data cannot be decrypted. The fingerprints are not copied or stored but are converted to a binary code from which a person’s fingerprint cannot be recreated.

Mr Lanigan and about 30 other employees in the Maintenance Team at Fonterra’s Takanini plant were the last employees to resist the introduction of FST in Fonterra’s large workforce of approximately 8,000 employees. Mr Lanigan did not consent to offering his fingerprints to enable his registration for using the FST technology. He considered that by doing so, his privacy would be intruded upon and that Fonterra could not legally require him to do so by way of a direction or instruction.

Considerations

The Authority noted that there is a term implied in law in every employment agreement, requiring an employee to comply with a lawful and reasonable direction of their employer. The term is necessary to give practical effect to the right of an employer to exercise control over an employee. The direction must not be inconsistent with any express term of the employment agreement and must also be reasonable and lawful.

The Authority also considered the Privacy Act and the earlier Employment Court decision of OCS Ltd v SFWU and accepted that finger scanning technology had been approved in other jurisdictions such as Australia, the United Kingdom and Canada and that some principles could be extracted:

• Is the technology compatible with the contractual obligations of the parties?
• There is to be a balance between the need for the technology and the level of personal intrusiveness involved for the individual concerned.
• The employer has the right to introduce different systems of timekeeping technology subject only to reasonable consideration of valid concerns raised by the union and employees.
• The employer must take appropriate steps to inform employees of the new measures and to obtain their consent.

The Court in OCS Ltd noted that in our jurisdiction there is a general requirement to consult under the good faith obligations before implementing changes in workplace practices.

Authority’s decision

In analysing the introduction of FST at Fonterra, the Authority concluded that Fonterra had a lawful purpose connected to its role as an employer in wanting to collect biometric information from Mr Lanigan and the other workers.

In respect of the ability of Fonterra to give a lawful and reasonable instruction about the use of FST by Mr Lanigan, the Authority said that this is limited or qualified by the requirements for consultation and good faith behaviour.

The Authority found that Fonterra did have a discretion when selecting its systems and may exercise its business judgement as to what will best meet its needs. It said that this discretion appears to have been properly applied within the boundaries of the Privacy Act. The Authority also found that Fonterra did genuinely endeavour to balance the interests of Mr Lanigan in preserving his privacy against the benefits of using FST. It said that the level of intrusiveness into the privacy of Fonterra’s employees was at the lower end. The relatively slight intrusion on the privacy of Mr Lanigan and others was weighed up fairly alongside Fonterra’s business needs.

Accordingly, the Authority declared that Fonterra could lawfully and reasonably instruct Mr Lanigan to use the FST system for the purposes of recording time and attendance at work.

Should Mr Lanigan fail to follow such a lawful and reasonable instruction, it will be open to Fonterra to commence a disciplinary process with Mr Lanigan that may result in his dismissal should he continue to refuse to use the FST system.

Prior to Covid-19 New Zealand workers had comparatively less paid sick leave than most of the developed world. When the Labour government introduced a bill into Parliament to increase the minimum sick leave entitlement from 5 days to 10 days each year it was met by resistance from business organisations and the National Party.

The Head of Advocacy, Alan McDonald, at the Employers and Manufacturers Association argued against the move to double sick leave. He said “we are of the view that we are not quite sure there is a problem there that needs to be fixed. We are in the middle of an exceptional set of circumstances – that has been the driver behind the push for 10 days”.

Likewise, National Party workplace relations spokesman Scott Simpson said it was the wrong time to extend sick leave - “The Government is using Covid-19 as its rationale for doubling sick leave, but if that were the case then surely the change would be temporary rather than permanent”. Simpson said “doubling sick leave just piles more costs onto business at a time when they can least afford it, coming on top of minimum wage increases and the proposal for an extra public holiday”.

While the increase in sick leave took place in July 2021, last year was the first full year of that impact.

The recent Workplace Wellness Report 2023 prepared by Southern Cross Health Insurance and Business NZ was released last week without much fanfare. It is interesting because it reports on the wellness of New Zealand’s workforce during the year of 2022. It shows that New Zealand workers do not appear to be abusing their increased sick leave entitlements.

The Report showed an overall absence of 5.5 days for each employee in the year that Covid-19 restrictions were eased and New Zealand’s borders reopened. The previous highest result was 4.7 days in 2014 and 2018. The lowest result was in 2020 with 4.2 days (the year New Zealand had a long lock-down and borders were closed).

The Report says a number of factors should be considered when examining the results. It says Covid-19 has had an impact on the Report results. Lockdowns and employers allowing more employees to work from home resulted in the lowest recorded absences in 2020. The change from the lowest result in 2020 to the highest result in 2022 also likely reflects the lifting of Covid-19 restrictions, the opening of New Zealand’s borders, and an increased view by employers that it is desirable for employees to stay home if they are unwell.

It is also interesting that the 2022 results continue to show the trend that higher average levels of absence are reported for manual workers compared to non-manual workers. The 2020 results showed that the average number of days lost for each manual worker was 5.3 days while in 2022 the average number of days had increased to 7.1 days.

The Report says that this may also be impacted by Covid-19. More non-manual workers may be able to work from home and a higher proportion of them may continue to work even if unwell. Manual workers may be refraining from going to work due to employers telling their workers not to come to work if they are unwell.

Employers remain able to challenge perceived misuse of sick leave. Employers may require a medical certificate from their employee if an absence is for 3 or more consecutive days (they do not have to be working days for the employee). Employers may also require a medical certificate if they agree to pay the cost of it for less than 3 consecutive days.

The difficulty is that doctor shortages are well reported. For non-urgent matters there are reported waiting times of up to 6 weeks. It seems unlikely that an employer’s request for a medical certificate will find priority with our overworked doctors. And realistically, how can a doctor certify that an employee was sick the previous week without relying on the self-report of the employee to their GP?

While 2022 continued to present challenges to employers from Covid-19, it is pleasing to see that the doubling of sick leave entitlements has not resulted in a doubling of absences. The ability to work from home when mildly sick may also be helping to reduce the impact of the increased entitlement on the cost to business. Read more....

The Interislander ferry Kaitaki is again in the news after ferry passengers were forced to spend the night on board in Wellington harbour after the ferry developed issues with its steering just outside the Wellington heads.

Last year the complete failure of the Kaitaki’s engines caused it to drift dangerously close to rocks near Wellington harbour. According to the Transport Accident Investigation Commission’s report it was caused in part by KiwiRail's failure to replace safety-critical parts, which were years past their use-by dates.

Inevitably, the Kaitaki drama drew comparisons with the Wahine disaster of 1968 when that ferry capsized just inside Wellington harbour, with the loss of more than 50 lives, during one of the most severe storms to batter the city. 

In 2006 the Wellington Regional Council received a Navigational Risk Assessment report that rated a ferry grounding at or near the harbour entrance as the top likely risk. The assessment raised concerns "given the rapidly changing weather conditions at Wellington” about the adequacy of the tug fleet of the time, and influenced the decision to replace the 1970s tug fleet.

Earlier this year the container ship MV Shiling lost power after leaving Wellington harbour. This again raised concerns that the present tugs are not equipped to tow to safety larger vessels. 

The 2009 sinking of the Tongan inter-island ferry MV Princess Ashika resulted in 74 deaths and 54 people being rescued. The inquiry concluded that the disaster "was a result of systemic and individual failures". It said that "The tragedy is that they were all easily preventable and the deaths were completely senseless." Four men charged were found guilty on charges in relation to the disaster. The company was also convicted.

At the core of New Zealand’s Health and Safety at Work Act is the requirement that all duty holders, so far as reasonably practicable, eliminate risks to health and safety. Risks that cannot be eliminated must be minimised. A business has a primary duty of care to ensure, as far as reasonably practicable, the safety and health of its workers and that others are not put at risk by the work carried out as part of the business. It must further ensure that there is, amongst other matters, safe plant (such as a ship) and that there are safe systems of work (such as replacing safety critical parts by their used-by dates).

What is “reasonably practicable” involves assessing the likelihood of the risk occurring, the degree of harm that might result, what the business knows (or ought to reasonably know) about the risk and the availability and suitability of ways to eliminate or minimise the risk. An assessment is also done to consider whether the extent of the risk and the cost of available ways of eliminating or minimising the risk is grossly disproportionate to the risk.

Clearly the risk of harm is very high in the Cook Strait. A severe storm, or a failure of a ship, could result in drownings.

The Pike River disaster resulted in 29 deaths. WorkSafe, the Crown agency charged with upholding New Zealand’s health and safety laws, received criticism over its handling of the prosecution in relation to the Pike River disaster. WorkSafe initially laid 12 health and safety charges against Pike River boss, Peter Whittall, but they were dropped after more than $3 million was paid to the victims' families. Eventually the Supreme Court ruled that WorkSafe’s decision to offer no evidence was "an unlawful agreement to stifle prosecution".

Our most recent national disaster is Whakaari/White Island. Twenty-two people died from extreme burns and blast injuries when Whakaari erupted in 2019, and many of the 25 survivors were seriously injured. WorkSafe has prosecuted a number of parties in relation to the disaster. A number of the parties have already pleaded guilty. The trial is continuing for other parties at present.

Again, WorkSafe is not without criticism in this. The Ministry of Business, Innovation and Employment (WorkSafe sits under its umbrella) commissioned an independent review that found that it knew that unregistered operators were taking tourists onto the island for five years leading up to the eruption and did nothing about it. More alarmingly, WorkSafe’s safety audits of registered operators did not assess volcanic risk, only walking hazards.

The Kaitaki has been the focus of recent attention and surely there must be some serious discussions being had on the safety of the passengers and crew on board that vessel. But the Interislander is not the only ferry company operating out of Wellington. Bluebridge has also had a share of problems recently. There are also multiple agencies that have some control over our ferry services. New Zealand obviously needs a sea link between its main islands. Clearly we cannot eliminate the risk of running the service, but given the risks, the oversight of those responsible should sit heavily on their shoulders. Read more....

The report released earlier in July by Te Ara Ahunga Ora Retirement Commission is showing that the gender gap in retirement savings is going in the wrong direction in New Zealand. It highlights that there is a 25% gender gap on average KiwiSaver balances, up 5% in one year from the 20% gap identified in 2021.

Worryingly, the research showed that gender gaps in every age category widened, with larger gaps opening in younger ages groups, up 7% for 18 to 25 year olds (now 23%) and up 8% for 31 to 35 year olds (now a total 27% gap).

Additional analysis was carried out to understand the impact of significant hardship withdrawals, first home purchase withdrawals, and savings suspensions. Withdrawals and suspensionKiwiSaver - the gender divide growss did not explain the differences - more men were on suspensions and had withdrawn more money.

The large gender gap can be explained because KiwiSaver is linked to paid work. It disadvantages women who are more likely to move in and out of paid work to care for family members. Other contributing factors are also likely to be that women continue to earn less than men and are more likely to be engaged in casual and part-time work.

The statistics are even worse when ethnic differences are examined. The ethnic pay gap further influences women’s hourly earnings, with Pasifika women earning 72cents to each $1 for Paheka men, and Māori wahine earning 75cents. 

The gender and ethnic differences have resulted in lower KiwiSaver balances for women and can have a significant impact on the retirement for women; which is compounded as women on average live longer than men and need to fund their retirement for longer. 

This gender gap is also confirmed across the ditch. Research released earlier this year by the Australia Institute’s Centre for Future Work shows that women in Australia earn $1million less on average over their lifetimes than men and retire with $136,000 less in superannuation.

It found that women earning the median wage would accumulate about $AUD393,676 in superannuation, $AUD151,000 below the level defined as a “comfortable retirement” by the Association of Superannuation Funds of Australia. It reported that the gender gap occurs across all occupations and industries.

In Australia, men have higher average salaries than women in 95% of all occupations, including those where women dominate the workforce. For example, women account for 99% of all midwives, and yet are paid on average 19% less. It is reported that there are about 80 occupations in Australia where men make up 80% or more of the workforce and that workers receive an average salary above $100,000. By contrast, there are no occupations in which women make up 80% or more of the workforce and pay an average salary above $100,000.

When an occupation or industry is affected by historical and persisting gender inequity issues, differences in pay can significantly limit retirement savings.

Likewise, periods or absence from the workforce to care for children can significantly limit retirement savings. While employers contribute to their employees KiwiSaver schemes, this does not extend to cover periods of paid parental leave. The overwhelming position remains with the mother being the primary carer, with only 1% of paid parental leave being taken by men. In addition to the parental leave issue, women also tend to take on more of the parenting load, which may involve giving up full-time work to work only casually or part-time to support the household.

The Association of Superannuation Funds Australia is calling for action to protect the retirement outcomes of Australian women who take time out of the workforce, including superannuation being paid while on parental leave and a $5,000 bonus payment into a mother’s super account per child.

In New Zealand, the Retirement Commission recommendations are to continue to address gender and ethnic pay gaps, occupational gender segregation and ensure KiwiSaver contributions are maintained during periods of parental leave.

Those recommendations should be taken as a given. Surely more proactive steps should be taken to ensure that the KiwiSaver gender divide does not continue to grow, resulting in a significantly negative impact on the retirement for women which is simply unjust. Read more....