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...

Cases of being able to successfully justify a dismissal for reasons of incompatibility between employees are rare.

How does the employer resolve the situation where an employee has a serious breakdown in the relationship where another employee has acted badly, or who is acting badly towards them, despite warnings to stop their bad behaviour, and where attempts to resolve the situation between the two have been unsuccessful?

The starting point is that the onus is on the employer to establish that the employee was substantially responsible in the breakdown, that the relationship was beyond repair and that the dismissal was carried out in a procedurally fair manner.

The cost of not meeting this standard may be high. In the recent appeal to the Employment Court in Ashby v NIWA Vessel Management Limited the Employment Court substantially increased the remedies awarded to the dismissed employee from three months’ wages to 12 months’ wages and compensation from $20,000 to $35,000.

Kim Ashby was employed in 1996 as a cook on a large research vessel operated for NIWA by a subsidiary company. The ship operates two alternating crews with approximately a month on/month off roster. The crews live in confined quarters 24 hours a day, seven days a week at sea. In 2009 Ms Ashby made a formal complaint alleging sexual harassment by the (then) First Mate. Ms Ashby claimed the First Mate made inappropriate comments to her and put inappropriate pictures on her computer. Ms Ashby’s complaint was investigated and upheld and the First Mate was issued with a warning and apologised to Ms Ashby. He also offered to be moved to the second shift if NIWA felt it was in the best interests of all concerned.

The First Mate was then promoted to Master in 2011 and Ms Ashby reported to him. In 2014 Ms Ashby confidentially raised bullying concerns about the (now) Master’s behaviour towards her. She asked to be moved to the second shift. NIWA spoke to the cook on the other shift about a possible swap but as he was happy where he was the swap did not occur. Read more....