While it is early days for New Zealand’s new coalition government, the cost of living crisis is still hurting a lot of working New Zealanders.

The National Party campaigned on tackling the crisis. “Our plan is carefully targeted to ensure that those who will benefit the most are working New Zealanders. It’s about time they got some relief from Labour’s cost-of-living crisis and National will deliver that to them”, Christopher Luxon said.

The minimum wage effects a significant proportion of our workforce and helps to enable many of our most vulnerable working New Zealanders support themselves and their families. Ministry of Business, Innovation and Employment (MBIE) figures show that there were estimated to be just under 80,000 people earning between the current minimum wage of $22.70 and $23 last year.

Last month Stats NZ advised that the Consumers Price Index increased 4.7 percent in the 12 months to the December 2023 quarter and that the cost of living for the average New Zealand household increased 7.0 percent in the 12 months to the December 2023 quarter.

Yet the new government recently announced that the minimum wage will increase by only 2 percent, from $22.70 to $23.15, from 1 April 2024. Workplace Relations and Safety Minister Brooke van Velden said given economic headwinds with a softening labour market and high net migration, a cautious approach was required to raising the minimum wage.

MBIE reviewed a range of scenarios on the wage increase. It recommended an increase of 4 percent to $23.60. It said adopting this increase would be "prudent" because the cost of living crisis was likely to remain an issue and the labour market will be more sensitive to minimum wage increases compared to the past two years, as unemployment looks to be increasing.

But it is understood that in a Cabinet paper that the Workplace Relations and Safety Minister had proposed and recommended that Cabinet only adopt a 1.3 percent increase.

Of course the Labour Workplace Relations and Safety spokesperson Camilla Belich said the "tiny" increase was not enough to help low income earners in a cost of living crisis. "This pathetic increase is beyond disappointing. As the price of goods and services continue to climb, the coalition government has chosen to turn a blind eye to our most vulnerable income-earners by not increasing minimum wage to a level in line with inflation."

Last year the then Labour government increased the minimum wage to $22.70, a boost of 7 percent (in line with inflation last year). The former Prime Minister Chris Hipkins said "I do understand that a number of small businesses will have concerns about this decision, however in a cost of living crisis we can't leave those on the lowest incomes behind".

The Employment Court has said that the Minimum Wage Act “is a statute of fundamental importance in the sphere of employment law in New Zealand. It is a statute that is designed to impose a floor below which employers and employees cannot go. It is directed at preventing the exploitation of workers, and is a statutory recognition of the diminished bargaining power in low paid employment”.

The CTU has argued that “A low minimum wage keeps New Zealand’s general wage levels low and traps many workers and employers in a low-wage low-skill equilibrium. It consequently has negative consequences for productivity, equality, poverty, the gender pay gap and labour participation rates”.

The issue of course is complicated. Increasing low pay is not the same as alleviating poverty. It is not uncommon for parents to work two or more jobs to support their family. Reports of students working up to full-time to help their family are becoming more common. Even workers paid above the minimum wage may face poverty if they need to support a large family, and low-paid workers may live in so called “high-income” households.

What is clear is that our lowest paid workers will continue to go backwards as the cost of living continues to increase. Future minimum wage increases by this government are also likely to fall well short of inflation and the cost of living. There is no sign yet of that relief promised by National in their election campaign.

Where does the pay for our most vulnerable workers cross the line from a minimum level of fair pay into exploitation? Read more...

The Ports of Auckland (POAL) has often been in the news for the number of accidents that have occurred at the Port.

Late last year POAL was fined more than half a million dollars after pleading guilty to two charges over the death of a stevedore who was killed by a falling container in August 2020.

A further stevedore at POAL, aged 26, died in April 2022 after being crushed by a container. That accident, and a further one at Lyttleton Port, were separately investigated by the Transport Accident Investigation Commission (TAIC) which released its findings in a joint report in October last year.

The Chief Investigator of Accidents, Naveen Kozhuppakalam, said the report identified broad safety issues for the whole stevedoring sector. He said that neither company monitored how well its employees were using rules and guidelines to manage workplace risks. "People become desensitised to risk, they take shortcuts or drift away from following rules, some of which are thought to be impracticable. Administrative risk controls only work with ongoing active safety leadership, good supervision, and a culture of safe working behaviour."

In the past decade, New Zealand has had 18 deaths and 397 reported injuries in its ports. TAIC Chief Commissioner Jane Meares said stevedoring has the second highest rate of fatalities of any industry in New Zealand.

A recent decision of the Employment Relations Authority, and on appeal to the Employment Court, has reinstated a dismissed stevedore, Ethan O’Brien, at POAL on an interim basis.

During his 13 months of employment Mr O’Brien had been caught out on a number of health and safety incidents. He was issued with a health and safety breach notice for driving a motorcycle on the port without a helmet or licence. A further two incidents occurred where Mr O’Brien made errors which resulted in damage being caused to client vehicles. Mr O’Brien also attempted to enter the POAL site without his access identification card. Although denied entry by security staff, he again attempted to surreptitiously enter the site but was again stopped by security.

Due to the high-risk work environment there is a Drugs and Alcohol Policy which provides for random drug testing for drugs and alcohol. In July last year Mr O’Brien was selected for random testing. When Mr O’Brien gave his urine sample the technician stood behind and to the side of him. His evidence was that he was not able to see Mr O’Brien’s genitals or urine stream as the sample was being provided. The technician could only see that he took the cup and that his arms were held in front of him in the region of his genital area while the sample was being provided.

The technician’s evidence was that the test cup was just over half full, and the cup did not feel as warm as it should have when Mr O’Brien handed it to him. The technician advised Mr O’Brien that the thermal strip had not been activated, which indicated that the sample was outside the required temperature range, so he was unable to continue with the sample and would be invalidating the test. The technician did not inform Mr O’Brien that his sample had also failed to meet the minimum level of creatinine required for a valid sample.

Mr O’Brien’s evidence was that he asked the technician, and then his manager, whether he could undertake another test. The technician did not recall that request being made and his manager strongly refuted that any request was made. Mr O’Brien was then sent home and suspended from work. Following a disciplinary process Mr O’Brien was dismissed.

Mr O’Brien applied for interim reinstatement (an order providing reinstatement of employment until a full hearing of the case can be heard).

On appeal, Judge King said that there is a strongly arguable case that Mr O’Brien was unjustifiably dismissed. However, when considering the overall justice of the case, the Judge said that she was satisfied that full interim reinstatement should not be ordered. She ordered that Mr O’Brien was to remain on the payroll until the full hearing of Mr O’Brien’s substantive claim in the Employment Relations Authority. She said that the expert evidence that there is a risk of serious injury or death if Mr O’Brien is reinstated to the workplace could not be taken lightly by the Court.

While the clear indications from the Authority and the Court are that Mr O’Brien will be successful in his claim that he was unjustifiably dismissed, he may be less successful in his application for final reinstatement.

Without detracting from the serious safety issues in the stevedoring industry, the stand taken by Mr O’Brien’s employer indicates that employees, or at least some of them, have their part to play in making the workplace safe for themselves and others. Read more....

How are we once again at this point where there is another u-turn on a big infrastructure project? Surely there must be accountability on these big projects? Before these projects get approval, there are numerous feasibility reports, consultant reports, reviews within the relevant Ministries, scrutiny in Ministers offices, and sign off by the Government.

There can be no doubt that New Zealanders deserve a better and safer solution for the important connection of the ferries on our state highway network. Both ferry companies operating the Cook Straight have had a year of cancellations due to engineering and mechanical issues. Some of the Interislander ferry woes have been particularly worrying.

In January this year the complete failure of the ferry 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.

In February the ferry Aratere lost power near the Tory Channel entrance, on its way to Picton.

In March the ferry Kaitaki was taken out of service after new engineering problems, this time with its gearbox. The repair took more than a month to rectify.

In August passengers were forced to spend the night on the ferry Kaitaki anchored out in Wellington Harbour after it turned back from its sailing due to steering issues.

Sailings of the ferry were also cancelled on the ferry Kaitaki in August after a bow door was damaged by a large wave during a crossing.

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).

No doubt the replacement ferries that have been on order were a big part of the Interislander’s risk minimisation plan for the future. Within businesses, serious failures in health and safety are treated as issues that could amount to serious misconduct warranting dismissal. At governance level, oversight of those responsible for health and safety would (or should) also sit heavily on their shoulders.

However, the Interislander’s plans for the future proofing of our inter-island link have been thrown into disarray with the Government announcement last week that it would not contribute new funding to KiwiRail to address rising costs involved in upgrading the ferries and terminal infrastructure. It reportedly has quadrupled in cost since 2018 to about $3 billion overall - much greater than the original $775 million business case. 

Chief Executive of KiwiRail (owner of the Interislander), Peter Reidy, has defended his team's work and processes. Mr Reidy said the engineering project was "exceptionally complex". "We're talking about a seismic area of New Zealand; we're talking about having to lift the whole Wellington infrastructure a metre because of the flood modelling codes", "Once you start to look through all the design and the real costs of constructing, that's where the envelope obviously started to increase." 

Even to a layman, there is nothing new in Mr Reidy’s explanation. Yes, we know that this is an active seismic area; yes, we know that sea levels are expected to rise. No doubt numerous feasibility reports and consultant reports dealt with these issues (or should have). How does that justify a quadrupling of the cost at this stage of the project?

Trust and confidence is an essential part of the employment relationship. It may amount to serious misconduct warranting the termination of the employment relationship; it is more than mere inadvertence, oversight or negligence. Surely there is at least a case to answer here within the senior management team and at Board level?

KiwiRail chairperson, David McLean, has said that without the further funding from the Government they couldn’t proceed with the project and that an alternative long-term solution could take years to develop. “We sought a strong outcome for New Zealand through this project for a more resilient State Highway 1 across Cook Strait for exporters, domestic freight forwarders, tourism and domestic commuters.”

The Government is the majority shareholder Air New Zealand. Does it expect lesser safety standards of its’ national marine carrier than it does of its national air carrier? How would the public feel if they heard that Air New Zealand was failing to replace safety-critical parts which were years past their use-by dates.

Unfortunately for New Zealanders, and according to our Finance Minister, the best we can now expect for the Cook Straight connection is a reliable Toyota Corolla. Until then, the problematic Interislander service will continue to operate. Read more....

Employers and employees commonly enter into employment agreements that will take effect when the employee commences work at some later date. Once the agreement is made that person is intending to work and will have enforceable rights.

Particularly in certain occupations, offers of employment are often made on the basis that satisfactory pre-employment checks, such as Police checks, are received. A recent Employment Court decision highlights the importance of completing those pre-employment checks before employment commences.

Towards the end of 2020, Mr Edwards was looking for new employment opportunities. He had several meetings with Mr Justin Soong, who was the Chief Technology Officer for Laybuy. Mr Edwards was verbally offered employment with Laybuy by Mr Soong, who also advised him that there would be some pre-employment checks to go through.

Mr Edwards was then sent documents including a letter confirming the conditional offer of employment, a copy of an individual employment agreement already signed by Mr Soong, and a consent form for pre-employment checking (which included consent to a police criminal check).

In the letter, Laybuy advised that should it not be satisfied with the results of the checks, the offer could be withdrawn. The individual employment agreement did not contain any conditions regarding pre-employment checks.

Mr Edwards then had a conversation with the HR manager and told her of various matters that were likely to show up on his police criminal check. He said he had not advised the company of these matters sooner as he was not explicitly asked. The HR manager advised Mr Edwards that when the checks were received, the results from the police criminal check would be escalated within Laybuy for consideration.

The police criminal check came back. That check confirmed the matters Mr Edwards had mentioned to the HR manager. The next day, the HR manager called Mr Edwards and advised him that the offer of employment was withdrawn because of the outcome of the police criminal check.

A letter confirming the withdrawal of the offer was sent to Mr Edwards on 12 January 2021. Mr Edwards then emailed Laybuy advising that, as his contract required him to start at work the following Monday, he wanted to make it clear that he was not abandoning his employment and was awaiting further instruction on what to do on the morning of Monday 18 January 2021.

Laybuy further replied, saying that there was no employment relationship entered into between Mr Edwards and Laybuy and no requirement for him to attend the Laybuy office as the offer of employment had been withdrawn.

The Employment Relations Act includes an extended definition of “employee” to include “a person intending to work”. A person intending to work “means a person who has been offered, and accepted, work as an employee”. The Act does not define the words “offered” or “accepted”.

The Employment Relations Authority determined that as the offer of employment was conditional, and as the conditions attached to the offer were not fulfilled or waived by Laybuy, there was never a completed offer and acceptance. That meant that Mr Edwards was not a person intending to work and was not covered by the Act and could not bring a personal grievance claiming that he was unjustifiably dismissed.

On appeal to the Employment Court, Judge Holden took a different approach. She said the Act departs from a strictly contractual approach to employment, and its emphasis is on the relationship between the parties. Where parties have not yet begun to act on that relationship, the only thing tying them together is any understanding or agreement between them. If one or both of the parties do not intend to be bound by that understanding or agreement, it seems implausible to describe the situation as an “employment relationship”, giving rise to the rights included in the Act, including the right to bring a personal grievance.

The Judge concluded that the letter from Laybuy advised Mr Edwards that he would only be employed if it was satisfied with the results of the pre-employment checks. If it was not satisfied, then if Mr Edwards had not started work, the offer would not proceed – it would be withdrawn. Laybuy’s withdrawal of the offer made it clear that it did not intend to be bound to employ Mr Edwards even though Mr Edwards had accepted the employment agreement.

Unfortunately, some pre-employment checks (such as police checks) can take some time to come through. It is not uncommon for the person to start work before the business receives the check. This judgment makes it clear that if Mr Edwards had indeed started work, the employment relationship would have been established and he would be entitled to bring a personal grievance claim – a much harder scenario for Laybuy to extricate itself from. Read more....