Public servants have been waiting some time to see some movement in the so-called “pay restraint” imposed on Government agencies following the Covid-19 epidemic. It has been anticipated that the Public Services Commission will shortly issue new guidelines for pay increases in the public service.

While efforts are made to ensure that government workers are fairly compensated their pay often lags behind that of their private sector counterparts. This disparity has become more pronounced since the Government applied a “pay freeze” in 2020, citing the threat of rising Covid-19. The Government softened its 2020 approach slightly in 2021 when the Public Services Commission directed government agencies to ensure that pay increases did not occur unless they met very strict criteria.

Agencies were permitted to provide modest pay increases for staff earning less than $60,000. Agencies could provide for small increases in pay for lower to middle earners by a modest progression within their salary band; or where there was a demonstrable recruitment demand that was not being met. There were to be no increases to salary bands or pay increases for those paid over $100,000. In exceptional circumstances agencies could obtain approval from the Commission.

While the Commission’s current guidelines remain in place, it is widely accepted that New Zealand is going through a “cost of living crisis”. Annual inflation is tracking at 7.2 percent. Stats NZ has reported that increasing prices continued to affect all household groups in the 12 months to December 2022. The cost of living for the average household (as measured by the household living-costs price indexes) increased by 8.2 percent in the 12 months to December 2022.

The basic costs of living have cut significantly into workers’ pay packets. “Higher prices for housing, food, and transport were the main contributors to the increase across all household groups,” NZ Stats consumer prices manager James Mitchell said.

Meanwhile the Ministry of Business, Innovation and Employment has recently provided an updated benchmark of rates that the Governments pays to contractors. It compares 2021 to the 2022 financial year using the average rate for the top 10 commonly reported job categories. It shows that there have been steep rate rises for some contactors of up to 46%, but also drops of up to 15%.

Overall, contractors were getting 8.5% more in 2022, just ahead of inflation and well ahead of most private and public sector wage rises.

IT contractors, as usual, dominate the high rates at up to about $250 an hour and averages about $150. But it is much lower paid public-facing roles, such as helpdesk, contact centre, and customer service contracts, that went up the greatest percentage in the year to July 2022. These average around $50-$60 an hour.

"We have high inflation and a tight labour market, including a skills shortage and low unemployment," said MBIE delivery services director Matt Perkins.

Of course the National Party has been castigating the Government about its spending on contractors. But both the leaders of the Labour Party and National Party have recently talked about increasing in-house core public sector capability to lessen reliance on contractors, though National has at the same time said it wants to cut the 60,000-strong core workforce of the public service.

It has been reported that the Commission’s new guidelines will give weight to a new pay approach called the Public Sector Pay Adjustment (PSPA) that has been used to recently settle some collective bargaining in the public sector. It is understood that the PSPA had been used to settle more than a dozen collective agreements so far, offering a $4000 pay rise in the first year and three percent, or $2000, in the second. But some powerful unions, such as those representing teachers, nurses and senior doctors, have rejected it as putting their workers’ pay behind inflation.

In the Public Service, about a fifth of collective agreements are settled or in a ratification process, while just under a third are in bargaining now or expected to start bargaining soon.

The Commission has declined to comment on what may be in its new guidelines "Because it could impact current bargaining".

What is clear is that the financial pressure on many government employees and their families is going to continue for some time. With high inflation, with higher mortgage costs and rent payments continuing, the cost of living is unlikely to reduce soon. Hopefully the Commission’s new guidelines will provide a well-deserved catchup to ensure we have a public service that retains and attracts talented people that can service us well. Read more

David Burton is an employment law barrister at www.burtonlaw.co.nz

The Public Services Commissioner has written to the Chairs and Chief Executives of the public service reminding them of their obligations to be impartial and that they and their entities are subject to the Code of Conduct for the public service.

This has arisen out of allegations of bias on the part of senior governance figures in the public service.

Rob Campbell, the former chair of Te Whatu Ora/Health NZ and the Environmental Protection Authority criticised the leader of the National Party and likened the National Party's Three Waters policy to a "thin disguise for the dog whistle on co-governance". He refused to accept that he had done anything wrong, even though he is meant to have apologised to the leader of the National Party and the Minister of Health.

Former Labour MP, Steve Maharey, in opinion pieces in the media, has made comments that could be read as politically partial. When the issue arose around Mr Campbell, Mr Maharey front footed the matter and raised it with the Public Service Commission and his Ministers. He offered his resignation as Chair of Pharmac, ACC and Education New Zealand.

Another former Labour MP, Ruth Dyson, is Deputy Chair of the Earthquake Commission and Fire and Emergency New Zealand and has also come under scrutiny for apparently partisan Twitter comments criticising Mr Luxon's speech at Waitangi and for displaying Labour Party connections.

Mr Campbell was removed from his roles by his respective Ministers. Mr Maharey has kept his roles. In a statement last week the Prime Minister said that the advice from the Public Service Commissioner was that Mr Maharey had breached the Code of Conduct, but his actions did not justify his removal from his roles.

The Prime Minister said the Commissioner has characterised Mr Maharey's actions as 'unwise', but at the 'lower end of the spectrum’. He said there was a "clear distinction" between Mr Maharey's breach and Mr Campbell's. "In Mr Maharey's case, he proactively acknowledged the error, has undertaken to stop writing the column and apologised".

When Ms Dyson was pulled into the affray and her defence appears to have been that she had not read the Code of Conduct. But she has now said that she will read the Code and she was rethinking her social media use.

The Prime Minister last week said he had confidence in Dyson "She's a very competent and able chairperson, board member, contributor". However, he expected her to have read the Code of Conduct.

Mr Luxon has said Ms Dyson would be gone under National. "I think, you know, when you see Ruth Dyson saying she signed a code of conduct that she didn't read, I just say to you it's not a great start to a governance career."

Campbell, Maharey and Dyson certainly are not employees in their governance roles but they are subject to the Code of Conduct; as are public servants who are generally employees.

In the employment law jurisdiction there is a perception that employers should treat like cases alike when dealing with disciplinary matters.  However, a fairly recent decision of the Employment Court shows that treating "like for like" is not always the right outcome.

In Smith v Director General of MPI, Clive Smith and another employee (called Mr X) were involved in a physical altercation during a colleague's leaving function at a bar on Courtenay Place.  MPI conducted a disciplinary investigation into the incident and found that both empDisparity of treatment - is it justified?loyees had engaged in serious misconduct. Mr X only received a warning while Mr Smith was dismissed.

Mr Smith subsequently alleged that there had been an unjustified disparity of treatment between himself and Mr X. He said that during the investigation he took agreed leave while Mr X continued to work; he was dismissed while Mr X was only issued with a warning; he referred to an earlier incident at a work-related social function where MPI had not investigated the incident and had not imposed a disciplinary sanction in respect of it; MPI failed to take disciplinary action in respect of other similar incidents.

The Employment Court held that while there had been a disparity of treatment in this case it could be adequately explained.  This is because the investigation revealed that even though Mr X had engaged in the altercation with Mr Smith, Mr Smith was the protagonist and Mr X had acted in self-defence. In addition, the Court was of the opinion that MPI was not bound by its previously lenient treatment.  Mr Smith could not reasonably expect that any subsequent behaviour would be ignored.  

While there is a world of difference between the physical violence that Mr Smith was involved in and the social media commentary Campbell, Maharey and Dyson have engaged in, the Government has exercised its judgement in relation to the three governance leaders differently.

You can argue that the three senior and very experienced governance leaders have clearly engaged in some conduct that appears to have a political bias and is contrary to the Code of Conduct that they are tasked with upholding in their respective roles. Conversely, you can argue that they brought entirely different approaches to the issue when it was raised. It will be the court of public opinion and not the Employment Court that will decide whether the disparity of treatment was justified. Read more....

While six former ex-Gloriavale women are engaged in a lengthy litigation case in the Employment Court arguing that they were employees and not volunteers a group of dancers are picketing outside Wellington’s Calendar Girls strip club and are looking to lobby Parliament over their rights as independent contractors.

It is reported that nineteen dancers working at Wellington's Calendar Girls were told not to come back to work by a Facebook post after requesting better work contracts.

On 30 January, 35 dancers from the Club decided to bargain collectively. The dancers have asked Calendar Girls management for two things; clear income records and a 60 percent cut of their earnings. It is understood that currently Calendar Girls dancers may pay up to 56 percent of their earnings back to their employer.

The dancers sent an email asking for changes. They say that the next day over half of them were told by the proprietor in a Facebook group post to "clear out their lockers".

Immediately after the proprietor's post asking the dancers to clear their lockers, his account made another Facebook post seeking accommodation for what appeared to be their replacements. In a statement, Calendar Girls management said 12 of the 19 dancers asked to clear their locker had already moved away or stopped working for the club.

The 19 dancers have formed a group called the Fired Up Stilettos and are seeking improved industry standards and better independent contractor protection. They say that, nationwide, dancer contracts are predatory by nature and are riddled with fines, retainer bonds and clauses forbidding work at competing venues and media engagement.

The dancers say that although they are treated as employees, as independent contractors they lack the employment protections of the Employment Relations Act. It is alleged that some clubs have really bad management and a culture of bullying.

Aotearoa NZ Sex Workers' Collective founder and national coordinator Dame Catherine Healy said there were many coercive practices across the industry. If they were properly scrutinised, many would not hold up under law.

Unfortunately, the cost of enforcing rights, whether as an employee, volunteer or contractor can be prohibitively expensive. The protracted Gloriavale case has seen Gloriavale apply to the Employment Court to represent itself because it cannot afford to continue to pay its lawyers to represent it.

Even when the Gloriavale case ends and there is a decision as to whether the claimants were employees or volunteers that decision may be challenged. In employment law circles, the Lord of the Rings film case of Bryson v Three Foot Six Ltd is notorious. Mr Bryson was a model maker and challenged his status as to whether he was an employee or an independent contractor. In the Employment Relations Authority he was found to be a contractor, in the Employment Court that decision was overturned and he was determined to be an employee. Then on appeal to the Court of Appeal and ultimately the Supreme Court Mr Bryson was found to be a contractor and then an employee respectively.

There is recent precedent for the dancers call to be allowed to bargain collectively. The Screen Industry Workers Act was passed into law last year. It allows workers to bargain collectively; either at the occupational level to cover all work by a particular occupation of screen workers across all screen productions, or at the enterprise level so it covers a single production or company.

An agreed collective contract needs to meet some minimum requirements including rates of pay, entitlements to breaks, and minimum procedural requirements for raising and responding to a complaint relating to bullying, discrimination, or harassment in the workplace.

In announcing the Screen Industry Workers Act the Minister of Workplace Relations and Safety said “All people in New Zealand deserve good jobs, decent work conditions and fair compensation for their work… our Government is delivering better outcomes for workers and continuing to build New Zealand’s reputation as a great place to work”.

It is arguable that the dancers, largely vulnerable young women, are in far greater need than those working on large film productions. Of course there is a huge difference between the film industry that brings in billions of dollars into the economy and the picketing dancers. It is unlikely that the picketing dancers will get any traction with the Government at present. However, the principles expounded by the Minister should be supported by all New Zealanders. Read more

Oranga Tamariki does not receive much positive media coverage. The latest report from the Independent Children's Monitor, Aroturuki Tamariki, says that Oranga Tamariki is still not meeting minimum standards for children in care. It reports that there has been no meaningful improvement since the last report, and the agency is still failing to meet the basic needs of tamariki in state care.

Oranga Tamariki has custody of more than 6000 children and is supposed to meet minimum standards of care that came into force in 2019.

That does not mean that Oranga Tamariki is not trying to improve its standards of care. In the recent decision of the Employment Court in Baillie v Oranga Tamariki the agency argued that a residential youth worker should not be re-instated to his position after he was dismissed.

Mr Baillie was employed in a secure residence for children and young persons run by Oranga Tamariki. In April 2021 there was an incident with a young person over his language and behaviour and Mr Baillie was kicked whilst remonstrating with him. The young person was then placed in a secure unit. The young person made a formal complaint about what happened. In responding to the complaint Oranga Tamariki decided to investigate six allegations about Mr Baillie’s conduct because it was dissatisfied with what happened before he was kicked.

At the conclusion of the investigation Oranga Tamariki was satisfied that Mr Baillie’s conduct was intimidating and aggressive and amounted to serious misconduct. Mr Baillie was summarily dismissed.

Mr Baillie raised a personal grievance for unjustified dismissal and successfully sought interim reinstatement in the Employment Relations Authority. However, the Authority then determined that his dismissal was justified.

Mr Baillie challenged the determination in the Employment Court and again sought reinstatement. Oranga Tamariki again defended its position that it had justifiably dismissed Mr Baillie. As an alternative, it argued that reinstatement was not a reasonable remedy.

Ultimately, the Employment Court concluded that Mr Baillie was unjustifiably dismissed.

Oranga Tamariki argued against reinstatement. It had concerns about the seriousness of the incident, an earlier letter of expectation given to Mr Baillie over a previous matter, and Mr Baillie’s lack of insight or acceptance of wrongdoing. It raised the relatively small size of the secure facility and concerns as to the message Mr Baillie’s reinstatement might convey to children, young persons and staff by downplaying and sanctioning the inappropriate use of force and abuse of power.

In coming to its decision to reinstate Mr Baillie to his former position the Employment Court considered that because it was practicable and reasonable to do so, it must do so because reinstatement is the primary remedy under the Employment Relations Act, and it applies irrespective of what other remedies may be awarded.

The remedy of reinstatement has had a chequered legislative history. Under the Labour Relations Act it was the primary remedy, under the Employment Contracts Act it was just one of the remedies, the original Employment Relations Act made it the primary remedy but that was later amended to make it a discretionary remedy. Most recently it has again been amended to make it the primary remedy.

As a former Chief Judge has noted “reinstatement to a former position in these days is far more valuable and far more important than it was in days not long ago when other employment could be readily obtained”. Another Judge has noted that to routinely award compensation instead of reinstatement is to create a system of licencing unjustifiable dismissal.

While reinstatement is not a commonly awarded remedy, either because it is not asked for by the dismissed employee or that there are solid practical reasons why it should not be awarded, it remains a substantial threat to employers when dismissing an employee. It helps ensure that the employer has good grounds to dismiss an employee and that the employer follows a fair process. Whatever the merits of the case, the serious threat of it remains a source of negotiating strength for an employee.

Mr Baillie has been vindicated by the Employment Court. But maybe it is important to know that Oranga Tamariki took a position, ultimately one that was legally wrong, to try and protect the tamariki in its care. Read more...