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suspensionKiwiSaver - the gender divide growss did not explain the differences - more men were on suspensions and had withdrawn more money.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....

There is no doubt that the six former Gloriavale women who sued their former religious community worked extremely hard under punishing conditions for years on end.

The women left Gloriavale and made a complaint to the Labour Inspector. The Labour Inspectorate investigated their complaints, it concluded that the women were not employees and that the Inspectorate had no power to take any action on the womens’ behalf.

While the case has raised a number of interesting legal issues, it is not surprising that the Chief Judge of the Employment Court has taken a contrary view and has declared that the women were employees during their working time there.

Gloriavale denied that the women were employees. They claimed that the womens’ work was conducted on a wholly voluntary basis as an expression of religious commitment to live in a communal setting based on shared values, guided by the King James Version of the Bible. They argued that a finding of an employment relationship would be incompatible with the true religious nature of the relationship between the women and Gloriavale.

The Chief Judge instead found that the women were taught from birth that they were to submit to male leadership in all aspects of their life and were primed to work in the community's domestic teams. The women carried out work from a young age, which incrementally increased as they got older. The women progressed to fulltime work preparing food, cooking, cleaning and doing the laundry for Gloriavale's 600 members as soon as they left the community school, around the age of 15.

In a typical week, the Chief Judge noted, the female workforce in the kitchen produced more than 11,000 meals, while laundry workers washed at least 17,000 items. "The evidence clearly established that the work required to produce these outcomes was unrelenting, grinding, hard, and physically and psychologically demanding". Chief Judge Inglis said "I have no difficulty concluding that, when working on the teams, the plaintiffs were not carrying out work for their individual families or some notional big family."

Gloriavale argued that the women were volunteers and a declaration that the women were employees would up-end its communal economy and violate its members' deeply-held religious beliefs. The Employment Relations Act excludes certain categories of worker from the definition of “employee”, including volunteers. In order to fall within the excluded category of volunteer a worker must have no expectation of reward for their work and receive no reward for their work.

The Chief Judge concluded that, in exchange for their work, the women expected to be rewarded for their work. They would be permitted to remain in the community with their family and friends. They would also expect to receive food, shelter, clothing, religious support and guidance; and would receive the promise of spiritual redemption (as against the threat of eternal damnation if they left). The Chief Judge said that it became apparent that the Gloriavale leaders' concern about a finding of employment status was less about incompatibility with religious belief and more about its’ financial capacity to pay for the work the women did.

The Chief Judge also did not accept that a finding that the women were employees would be incompatible with the community’s chosen way of life and/or their rights under the New Zealand Bill of Rights Act. She said freedom of religion is subject to our general laws, including employment law. On the evidence, the Chief Judge noted that some members of the community (including a number of males, teachers and midwives) received payment for their work and this did not appear to raise concerns of the sort that were said to arise if the women had been paid. Nor did the Chief Judge consider that ability to pay was a relevant factor in determining employment status.

Given the findings, the declaration that the women are employees raises the interesting issue of where to next. Obviously, there is the issue of minimum employment standards; minimum wages, statutory entitlements such as annual leave and sick leave and employment protection in the sense of personal grievances and/or discrimination issues such as unpaid workers under the Human Rights Act.

In responding to the judgment, Gloriavale quickly said that they believed the decision is wrong, and they intend to appeal. "The decision has significant and wide-ranging implications beyond just our community. This includes how New Zealand faith-based communities, iwi and whanau choose to live and structure their household responsibilities."

This judgment follows a similar ruling by the Chief Judge last year, in which she found three former Gloriavale men were employees from the age of six, working long hours on farms and in factories of the community. The law in relation to who may be an employee is being given a real shake out in our courts. The Court of Appeal has also recently granted Uber the right to appeal the Employment Court decision that four Uber drivers were employees and not contractors. Read more...

Controversy over Cabinet Minister Kiri Allan’s conduct with staff in her office continues.

Staff in her office will usually be employed by Ministerial Services to provide operational support and advice to the Minister. Other staff are typically seconded into the Minister’s office from the Ministries or Departments that the Minister has accountability for. This raises the interesting question of whether there may be a triangular employment relationship, or whether there is a “controlling third party” that has some responsibility if things go wrong.

Last week the Department of Conservation Director-General confirmed in a statement that a staff member had ended their secondment to Minister Allan’s office early because working relationships were "not running as smoothly" as they might. She said it was bad enough that she had discussed it with Internal Affairs, which manages Ministerial Services, but no further concerns were brought to her attention and she believed relationships had improved.

The Chief Executive of the National Emergency Management Agency said he was also aware of concerns regarding relationships in the Minister’s office with staff seconded from his agency.

It is now reported that further senior public service staff have spoken out about workplace relationships relating to the Minister. The Minister has strongly denied the allegations and has said that no formal allegations have been brought to her attention.

When asked if she was a tough boss, the Minister said she didn’t think so. “I can be a bit of fun. I can be pretty passionate. And I think that I’m definitely not a Wellington politician. I’m from the regions. We do things a little bit differently. But I think I’m fair. I think I have clear expectations, and when those aren’t met, I’m clear about those as well.”

Traditionally, employment relationships involve two parties - the employer and the employee. More recently, changing patterns of work of work have seen the development of potential triangular employment relationships. The most obvious example is where a labour-hire agency agrees to supply a worker to another employer (the host). The host will pay a fee to the agency to cover the cost of the labour, plus a profit for the agency. In turn the agency pays the worker who agrees to work for the host under the host’s control.

To decide whether the worker was an employee of the agency or the host, the courts have applied a number of traditional tests, such as the intentions of the parties, to what extent the worker was integrated or controlled in the host’s business and who was responsible for disciplinary issues.

Since June 2020 the Employment Relations Authority has also been given the power to join a “controlling third party” to a personal grievance claim that relates to an action that is alleged to have occurred while the employee was working under the control or direction of the controlling third party. If the grievance is made out, the Authority is required to consider to what extent the controlling third party caused or contributed to the grievance and appropriately apportion remedies between the “employer” and the controlling third party.

Public Service Minister Andrew Little has noted Minister Allan has not been the subject of any formal complaints. "There hasn't been the opportunity to investigate what has happened and, although there are new allegations coming out now, it's hard to know where the truth lies”. "Senior public servants - they know what the process is if they've got staff who they don't think are being properly treated in a Minister's office." Little added the situation was unusual, given the usual process was for such allegations to be reported to the Public Service Commission and the Prime Minister's office "it appears, from what everybody is saying - including the Prime Minister - that that simply hasn't happened. That's surprising in this situation".

Should it ever get to the stage that a personal grievance is claimed by a worker in the Minister’s office, it does raise the interesting issue of where responsibility may lie. There is no absolute right for a Minister to be indemnified by the Crown for their actions, other than legal proceedings taken against them in the course of their official ministerial duties. 

As the situation stands, it is hard not to feel sympathy for Minister Allan. Natural justice would require that she is provided with the details of any complaints. So far, she is being exposed to unspecific claims in the media with little substance being provided. Read more....

It is well known that the Department of Corrections has a big shortage of staff. According to figures provided by Corrections last month 76 of the 1438 community corrections jobs are vacant and 415 of the 4060 prison-based roles are vacant.

It is also fairly well known that it is difficult for an employer to justify terminating the employment of an employee for medical incapacity. In the recruitment void that Corrections has been in it is hard to understand why Ms Tyer, a Corrections Officer with 28 years experience, was dismissed on medical grounds.

The recent Employment Relations Authority decision of Tyer v Chief Executive of the Department of Corrections found that the dismissal of Ms Tyer was unjustified. The Authority awarded her 3 months lost remuneration and $20,000 compensation.

Ms Tyer suffered a non-work injury when she fractured her ankle in 2019 after she fell on some stairs. Rehabilitation was not straight forward and there were various medical interventions to address a series of issues that hindered her recovery. After two years, she was advised that ankle fusion surgery was her best treatment option and also her best chance at getting back to her full duties. It was during this period while Ms Tyer was awaiting surgery that she was dismissed.

At the time of her dismissal, Ms Tyer had been on light duties for eight months in the Kaupapa Māori Pathway Unit. Ms Tyer said Corrections could have awaited the outcome of her ankle fusion surgery and estimated recovery time before making a final decision.

The Collective Employment Agreement that Ms Tyer was employed on required a decision to dismiss on medical grounds be based on two medical assessments from independent medical practitioners. Corrections relied on letters from Ms Tyer’s surgeon and a report from her general practitioner. Ms Tyer thought that the information they provided was positive because the ankle fusion surgery provided the best option to be able to get back to work fully within four to six months. She said that it was usual practice to be allowed approximately 12 months after a return to light duties, to pass the Physical Readiness Test (a requirement for all Corrections staff in a custodial environment).

Corrections on the other hand formed the view that the medical information supported its decision to medically retire Ms Tyer on the basis it was likely her medical condition would continue into the foreseeable future, there was no certainty as to when Ms Tyer would return to work, and an absence of a further six months could no longer be sustained.

Dismissing an employee for medical incapacity is fraught with difficulties. The starting point is an old vague caselaw driven test as to whether an employer “can fairly cry halt”. More recent cases have provided some guidance on what that might mean. Some factors include the type of position held by the employee (is it a key position); the nature of the illness or injury, how long the incapacity has continued and the prospects of recovery; the possibility of a graduated return to work; the length of service of the employee; and whether reasonable interim arrangements can be made (such as light duties or employing a temporary worker).

Corrections said it was in a position to “fairly cry halt” in all the circumstances including Ms Tyer’s inability to do her job for a lengthy period, her upcoming operation and further necessary rehabilitation. Further, she was accommodated on light duties for a three month and then eight-month period and redeployment was open to her through a contestable recruitment process. She applied for one position but was unsuccessful. Corrections was in the position of needing to fill her substantive role and faced challenges that impacted on the running of the prison in finding cover for her in her substantive role. Read more....

Ms Tyer said she could still perform work for Corrections while she was injured given the nature of the organisation, and the practice of time allowed to do the Physical Readiness Test should have meant she was allowed extra time from the point she was signed off as fully fit. She said the medical evidence indicated she would be able to return to full duties within a reasonable time after her ankle fusion surgery.

The medical prognosis was said to be central to Corrections decision making. The Authority said the advice provided needed to be carefully and objectively considered given the decision to terminate Ms Tyer’s employment predominantly turned on that advice. The Authority agreed with Ms Tyer that the medical prognosis could be viewed as favourable, despite Corrections’ view that it was not.

In reaching its decision concluding that Ms Tyer was unjustifiably dismissed, the Authority also took into account the nature of Corrections as an employer and Ms Tyer’s length of service. The Authority said Corrections is a large employer with such size and resources that it could have accommodated Ms Tyer and considered her more carefully for redeployment before deciding to terminate her employment.

With 28 years of experience and so many vacancies surely Corrections could have found an alternative role for Ms Tyer. However, the irony in this case is that even six months after her surgery Ms Tyer still was not fully fit to return to full duties. There surely must be an easier and more certain path for employers to “fairly cry halt”?