Power companies are more often in the media as a result of their profits and the high cost of electricity. A “shout out” to Contact Energy for recently introducing a parental leave policy that helps set a benchmark that big business can look to and show their support for parents and their families in their workforces.

Key features include having the primary caregiver having a salary top-up to full salary for the 26 weeks of Government paid parental leave period which is currently $661.12 a week; the primary caregiver will also receive KiwiSaver Employer contributions of 3% for the duration of parental leave; when returning to work the availability of 6 months of flexible work including the ability to choose to work 80% of their normal weekly hours and still receive 100% of their normal weekly pay; a Childcare Koha of $5,000 as a contribution towards childcare.

Contact says this is all part of its vision to build a better Aotearoa New Zealand and to attract and retain the best talent from New Zealand and abroad.

The Chief Executive of NZIER has said that Contact is a role model organisation and it supports all moves to improve gender equity in the workplace. He referred to NZIER’s latest quarterly survey of business opinion that indicates a minimum statutory baseline approach for many employers in New Zealand. Only 8.9% of businesses who employ over 20 people top up the salary of their staff on parental leave for 26 weeks and only 6.4% of those same sized businesses continue to contribute to Kiwisaver accounts while on parental leave.

How does New Zealand compare? A recent report into maternity leave in OECD countries show that on average mothers are entitled to just under 19 weeks of paid maternity leave around childbirth. Almost all OECD countries provide mothers with at least 14 weeks leave around childbirth; the main exception is the United States which is the only OECD country to offer no statutory entitlement to paid leave on a national basis. The majority of OECD countries provide payments that replace over 50% of previous earnings, with 13 OECD countries offering a mother on average earnings full compensation across maternity leave.

Women are far more likely to be the primary caregivers, particularly during a period of parental leave. Only 1% of paid parental leave is taken by men.

A recent report from Te Ara Ahunga Ora Retirement Commission revealed that the gender wage gap continues into retirement. It showed that women have 20% less in retirement savings than men. The organisation’s director of policy Dr Suzy Morrissey said the disparity was likely a reflection of the impact of the gender and ethnic pay gaps, time out of paid work, and more women than men working part-time.

Most working people in New Zealand contribute to a KiwiSaver scheme which is tied to their employment. Even a period of 6 months out of the workplace caring for a child can have a significant impact on retirement savings. The effect is exacerbated when the caregiver wants to or needs to return to work part-time, sometimes for a number of years. Multiply that by having more than one child, and the difference can significantly impact on a workers retirement savings.

New Zealand is also a nation of small businesses. The Ministry of Business Innovation and Employment defines small businesses as businesses with fewer than 20 employees. There are approximately 546,000 small businesses in New Zealand, representing 97% of all firms. They account for 30 per cent of employment, around 680,000 workers. As at 2020 the average wage of a worker in a small business was just over $55,500. New Zealand also has a higher percentage of small businesses than many other countries.

Contact with its new parental leave policy is leading what New Zealand can do to support parents through those important few months of caring for a new child. Their policy means that the primary caregiver, whether male or female, is not advantaged for the first six months. The caregiver receives their usual salary. Importantly, the caregiver also receives the employer contribution to KiwiSaver (and with the caregiver receiving their usual salary the employee is also likely to continue with their KiwiSaver contributions).

Will the “big end” of town follow suit? Some will, but more probably, many will not. At the other end of town, while some small businesses may be more flexible when it comes to parental leave, the statistics show that many small businesses simply cannot afford to provide the parental benefits Contact is going to provide its workers.

Giving our children the best start in life is important. It would be a good aspiration to see that their caregivers are not disadvantaged, both when caring for the newborn and when the caregiver leaves the workforce and has to rely on their savings and whatever pension the government may provide in the future. Read moreParental Leave – caring for our future?

The giant social media companies are again in the media. The social damage that is often the focus of media reports for them is instead another type of social damage; it is focussed on reports of large scale layoffs.

Much ado has been made about Elon Musk’s, the world's richest person, $US44 billion acquisition of Twitter.

Since taking over, Twitter has started a major round of layoffs. It is reported that employees were alerted of their job status by email after the company barred access to the entrances of offices and cut off workers' access to internal systems overnight.

The move followed a period of uncertainty about the company's future. Elon Musk had tweeted that the service was experiencing a "massive drop in revenue" over doubt whether Twitter would protect content moderation on its platform.

Twitter has been silent about the depth of the cuts but it has been reported Twitter is looking to cut around 3,700 staff - about half the workforce. Staff who worked in engineering, communications, product, content curation and machine learning ethics were among those impacted by the layoffs, according to tweets from Twitter staff.

It is reported that a class action has been filed against Twitter by its employees, who argue that the company was conducting mass layoffs without providing the required 60 day advance notice, in violation of federal and California law.

Meta Platforms (Facebook) says it will also cut more than 11,000 jobs, or 13 percent of its workforce. Meta hired more staff during the pandemic to meet an upturn in social media usage by stuck-at-home consumers. But its business is reported to have suffered this year as advertisers and consumers cut spending in the face of cost of living pressures and high interest rates.

It is always difficult to hear that your job may be lost. If you understand the reason for it and if the process undertaken by the employer to come to that decision is fair then the loss of your job may be easier to bear. Afterall, redundancies are often referred to as “no fault” terminations of employment.

In New Zealand an employer can make an employee redundant if the employer has a good commercial reason to do so. But the employer must comply with the statutory duty of good faith. It needs to provide the employee with all relevant information and it must follow a fair process.

That fair process will involve consulting with affected employees. If the employees are union members, then the union must be involved in the consultation process. Where there is a need to make a number of staff redundant then the employer must establish a fair selection process. If there are opportunities for the affected employees to be redeployed into other areas of the business (usually known vacancies) then those opportunities must be explored with affected employees as well. Read more.....

The Chief Judge of the Employment Court issued a judgment last week which should send a strong seismic-like wave through the Uber companies and their like, taxi companies, probably the transport industry, and the so-called gig economy in general.

The Chief Judge issued a declaration that four Uber drivers were employees. The Court made it clear that while the judgment does not have immediate legal effect on the broader Uber operations, however it clearly indicates that it could have a broader potential impact on other Uber drivers given the apparent uniformity of the Uber business operation in New Zealand.

The Court explained that the Uber operation works as follows. Riders download the Uber App; they advise Uber (via the App) of where they want to travel to; Uber (via the App) offers the trip to available drivers; an available driver accepts the offer, collects the rider and drives them to their chosen location. Eaters download the Uber App; they select a restaurant and order their food (via the App); Uber (via the App) offers the food pick-up and delivery trip to available drivers; an available driver accepts the offer, collects the food from the restaurant and drives the food to the Eater at their nominated address for delivery. Riders and eaters make payment to Uber; Uber makes payment to the drivers. The five defendants are all separate legal entities but they all operate within the Uber group operation.

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 a purposive approach to determining the status of the drivers, having regard to the applicable legislation and its role in protecting vulnerable workers and ensuring the maintenance of minimum standards. 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 accepted that some of the usual indicators of a traditional employment relationship were missing. However, it was 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. Read more....

Auckland has a new Mayor – Wayne Brown. The Mayor campaigned on a platform of change.

On the campaign trail Mr Brown promised to take back control of the Council-Controlled Organisations (CCOs) and cut $100 million of ratepayer funding for Eke Panuku and the council's economic development and events arm Tātaki Auckland Unlimited. He said if they can survive on their own, well and good. If not, they will be closed down.

During the election campaign, Brown also said as Mayor he planned to pass a resolution to cut the salary pool of staff earning more than $300,000 by 30 per cent, middle management by 20 per cent and lower management by 10 per cent.

Auckland Transport Chair Adrienne Young-Cooper has already stepped down after she learned that he wanted the Board to resign.

The Chair and Board of Eke Panuku Development have not heeded Mr Brown’s call for their resignations.

Having acted for numerous Boards and Chief Executives, in my experience means calls for change at the governance level which often leads to change at Chief Executive and executive management level. Change for executive management then often leads to change further down the organisation. Change often means restructuring, dismissals or performance management. All usually come with a hefty cost (in both time and money).

Employment law requires an employer to demonstrate two things; a justifiable reason for terminating an employee’s employment and to follow a fair process. A fair process will involve the employer having no pre-determined position. The Mayor has created a problem with taking such a public stand on the changes he wants made.

Board members are appointments, they are not employees. Assuming that the changes are made at Board level, how does that play out at Chief Executive level if big changes are required? The Chair then has effectively five options; work with the incumbent Chief Executive, request the resignation of the Chief Executive, restructure the Chief Executive role, dismiss the Chief Executive for serious performance matters already raised, or performance manage the Chief Executive.

The Mayor must have some dissatisfaction with the leadership and structure of the CCOs given his public statements. He wants change.

The top job comes with a top salary. The new Board cannot simply dismiss the Chief Executive. The Chief Executive is unlikely to resign unless the terms of the resignation are favourable. The starting point is the notice period – usually a lengthy period for a Chief Executive (usually starting at 6 months). The Board may be able to pay out the notice period. If so, it may elect to do so. If not, the Chief Executive can expect to work out the notice period. There is then a lame duck Chief Executive in the role for a lengthy period while a new Chief Executive is recruited. Read more...