Shining the Light on Naughty Employers: Now There's an Idea!

And indeed the Canadians have already thought of it. David Doorey's Workplace Blog- to which there is a link in the side bar-reports that "The Conservative government in Alberta has followed the Ontario lead by publishing Bad Employers on a government website." These sites only list the worst employers- those who have been prosecuted for labour law violations and have refused to pay resulting fines. The lists also appear to cover only government prosecutions, not for example enforcement actions for unpaid damages (such as unpaid damages in personal grievance cases).

However a start has to be made somewhere and the Department of Labour might consider this a useful addition to the web information it provides!

Employees, Contractors and Sham Contracts

The problem of distinguishing between an employee and other workers who are required to provide personal performance is one that most employment lawyers have been aware of, if not since time immemorial at least shortly thereafter.  In New Zealand the approach to this question is now subject to the statutory direction in s 6 of the ER Act that the Authority or Court must determine the “real nature of the relationship” taking into account all relevant matters that indicate the intention of the parties and that any statement of intention is not to be treated as determinative.  This direction and its effect has been considered in a number of cases including the Supreme Court in Bryson v Three Foot Six Ltd [2005] NZSC 34.

The issue of the employee-contractor distinction was, in mid-2011 also considered by the United Kingdom Supreme Court in Autoclenz Limited v Belcher [2011] UKSC 41.  This case, a unanimous decision of the Court, was notable for its very realistic approach to employment contracts and for its willingness to cut through the legal sleight of hand to determine the true nature of the relationship.

The facts of the case were relatively typical and straightforward.  Autoclenz, who provided car-cleaning services to various companies, decided to change the employment status of its valeters to that of contractor.  This was done by means of a contract that placed great emphasis on the workers being “self-employed independent contractors”, that contractors were free to sub-contract to approved persons and that they were free to refuse to provide their services on any particular occasion. These contracts were offered on a take it or leave it basis, the workers having little or no input into the terms. In practice of course little changed and valeters worked much the same as previously although the nature of paying for the work, liability for taxes etc changed as a result of the change in employment status.

It is not necessary here to provide a detailed legal analysis but rather to highlight some of the more interesting points of the Supreme Court’s decision.

The first is that a clear line was drawn between commercial contracts and employment contracts and the Court was very clear in pointing out that “Nothing in this judgment is intended in any way to alter those principles, which apply to ordinary contracts and, in particular, to commercial contracts.”   In the case of employment contracts, said the Court:

“the circumstances in which contracts relating to work or services are concluded are often very different from those in which commercial contracts between parties of equal bargaining power are agreed. I accept that, frequently, organisations which are offering work or requiring services to be provided by individuals are in a position to dictate the written terms which the other party has to accept. In practice, in this area of the law, it may be more common for a court or tribunal to have to investigate allegations that the written contract does not represent the actual terms agreed  and the court or tribunal must be realistic and worldly wise when it does so. ...”

It was accepted that one of the factors that the worldly-wise courts should take into account was

“The concern to which tribunals must be alive is that armies of lawyers will simply place substitution clauses, or clauses denying any obligation to accept or provide work in employment contracts, as a matter of form, even where such terms do not begin to reflect the real relationship.”

Employment Court judges in New Zealand, to whom the statement is equally applicable, might take heart from the Court’s quote from Sedley L J where he stated the following “with characteristic clarity and brevity”: ‘Employment judges have a good knowledge of the world of work and a sense, derived from experience, of what is real there and what is window-dressing’.”

New Zealand readers, alert to TNT Worldwide Express (NZ) Ltd v Cunningham [1993] 3 NZLR 681 (CA), might note that the Supreme Court expressly doubted the view that contractual documents are to be regarded as expressing the true intentions of the parties unless there was a sham intended to deceive third parties.  Statements of intention, and particularly those effectively dictated by the employer, must give way to the reality of the actual working relationship. The impact of Autoclenz in New Zealand is perhaps limited given the presence of the statutory direction but it does serve as a common law reinforcement of that direction and of the need to discern the reality of the “working” rather than the legal intention. 

The importance of this case is twofold.  First it reinforces the view that what is critical in determining the true nature of an employment relationship is the real, on-the ground, operation of the relationship: the real nature of the relationship to use the New Zealand parlance.

And second, that an employer should not be able to draft your way around this reality.

Readers interested in an analysis of the case might refer to Julie McClelland “A Purposive Approach to Employment Protection or a Missed Opportunity?” (2012) 75(3) MLR 387–436.

Employer access to your Facebook: how lawful are such requests??

Readers have no doubt seen the reports that a number of potential employers seem to be asking potential employees for access to their Facebook pages. Prof David Doorey in his blog on Canadian workplace law has pointed out that such requests may prove something of a legal minefield for employers. David's argument is relevant to New Zealand as well, he essentially argues that such requests will probably fall foul of anti-discrimination law as indicating an intention to discriminate.

In the New Zealand context section 23 of the Human Rights Act provides that:

It shall be unlawful for any person to use or circulate any form of application for employment or to make any inquiry of or about any applicant for employment which indicates, or could reasonably be understood as indicating, an intention to commit a breach of section 22 of this Act [s 22 provides that it is unlawful to refuse or omit to employee an applicant by reason of the prohibited grounds of discrimination]

Most employers are by now well aware they should not ask question about such matters as age, family status, sexual orientation and so on - asking for access to Facebook is essentially a request for such information.

Account might also need to be taken of the privacy principles set out in the Privacy Act. Principle 1 requires that the information be necessary and principle 4 that the means of obtaining the information "must not intrude to an unreasonable extent upon the personal affairs of the individual concerned."

Modern employers seem only to ready to pry into all aspects of the lives of their employees-this might at least inhibit one form of intrusion.

Lord Wedderburn of Charlton: born 13 April 1927; died 9 March 2012

Lord Wedderburn, one of the great British labour law academics, has died aged 84.  Bill Wedderburn would have been well known to all labour lawyers. His work was immensely infuential particularly for those of us who were educated in labour law in the first decade or so when the subject was first formally recognised and taught in law schools.  His book, The Worker and the Law (1965), was a classic of labour law scholarship and one of the foundational texts of the subject. Bill's contribution was not only academic, at a level that most of us can only dream of achieving, but he also made major political and practical contributions to labour law. As with all the greatest labour lawyers his work reflected a strong sense of social justice.

Bill's achievements are best described by others but on a personal note I would mention that I met Bill several times. He was always hospitable and welcoming and prepared to assist to open the odd doorway in Britain.

A full obituary may be read at The Guardian

I've Been Publishing

A must have item for those interested in New Zealand labour and employment law  Reconstructing New Zealand's Labour Law: Consensus or Divergence has been recently published.  It can be purchased from Victoria University Press

New Zealand’s first labour law system, the conciliation and arbitration system was a stable and balanced model that served New Zealand well for most of the twentieth century.  However from the mid-1960s this system slowly collapsed under the weight of political and economic pressures.  In 1991, after a two decades of attempted reform, a new era in labour law was heralded by the Employment Contracts Act 1991.  This Act, strongly influenced by neo-liberal ideology, was unashamedly anti-union and anti-pluralist.  It was intended to deunionise workplaces and replace the arbitration system’s pluralist ethos with the individualised and subordinate employment relationship common law.  A decade later these reforms were in turn modified by the Employment Relations Act 2000 which attempted a return to a more pluralist legal  model centred on a statutory duty of good faith applicable to both individual and collective employment relationships.  A little more than a decade later,

including one term of National government, there appears to be at least some consensus on the broad structure of labour law and therefore a new period of labour law stability may have developed.

The first part of this book traces the evolution of New Zealand labour law from colonisation to the present day and in particular the turbulent period between 1970 and 2000 when our contemporary system of labour law developed.  In the second part it describes that system of law and asks whether a new consensus has developed or whether there is merely a lull before a new storm.

Facebook can also bite employers

It appears that it is not only employees that may find Facebook  causing problems in an employment relationship.  A recent Employment Relations Authority decision (Kloeten v Combined Tanning Supplies Ltd [2012] NZERA Auckland 9) indicated that facebook comments may prove counter-productive when defending an allegation of unjustified dismissal.  In this case  the dismissal (by the employee's aunt) shortly after the employee announced she was about to take maternity leave was held to be unjustified.  The employer had claimed the dismissal was for serious misconduct.  The employer's case was not helped by her Facebook status change to  A catastrophic event … is watching everything you’ve worked for, your entire networth, the thing that defines you as who you are & the hopes & dreams you had … all gone which was posted the same evening as the employee announced she was taking maternity leave.  The alleged misconduct, which the Authority did not accept had ocurred, happened a few days later

Labour Law and Human Rights: an interesting Australian development

Those damn Aussies always try to go one better-and in one respect have succeeded.  The Human Rights (Parliamentary Scrutiny) Act 2011 will commence on 4 January 2012. The new Act will is intended to improve parliamentary scrutiny of legislation for consistency with Australia’s human rights obligations through two measures:

• requiring that all new bills and disallowable legislative instruments be accompanied by an assessment of compatibility with human rights, and
• establishing a new Parliamentary Joint Committee on Human Rights.

The definition of human rights is particularly broad and goes well beyond that in the New Zealand Bill of Rights Act 1990.  The scope of the compatibility report will in turn need to be much broader than that provided under s 7 of the New Zealand Act. It also appears that in Australia an assessment will be required for all legislation, not just where there is an apparent inconsistency.

The definition of human rights for the purpose of parliamentary scrutiny is particularly wide as human rights are defined as the rights and freedoms in the seven core United Nations treaties to which Australia is a party:

• International Covenant on Civil and Political Rights
• International Covenant on Economic, Social and Cultural Rights
• International Convention on the Elimination of All Forms of Racial Discrimination
• Convention on the Elimination of All Forms of Discrimination against Women
• Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment
• Convention on the Rights of the Child
• Convention on the Rights of Persons with Disabilities

This should lead to some interesting reading in the assessment statements.  It would have been interesting to see such statements in New Zealand and readers might care to contemplate those on recent labour law changes in the light of the extracts below.The interesting bit  from a labour law perspective is  articles 6 -8  of the International Covenant on Economic, Social and Cultural Rights.

Article 6
1. The States Parties to the present Covenant recognize the right to work, which includes the right of
everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take
appropriate steps to safeguard this right.
2. The steps to be taken by a State Party to the present Covenant to achieve the full realization of this
right shall include technical and vocational guidance and training programmes, policies and techniques
to achieve steady economic, social and cultural development and full and productive employment
under conditions safeguarding fundamental political and economic freedoms to the individual.
 
Article 7
The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just
and favourable conditions of work which ensure, in particular:
(a) Remuneration which provides all workers, as a minimum, with:
(i) Fair wages and equal remuneration for work of equal value without distinction of any kind, in
particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal
pay for equal work;
(ii) A decent living for themselves and their families in accordance with the provisions of the present
Covenant;
(b) Safe and healthy working conditions; (c) Equal opportunity for everyone to be promoted in his
employment to an appropriate higher level, subject to no considerations other than those of seniority
and competence;
(d ) Rest, leisure and reasonable limitation of working hours and periodic holidays with pay, as well as
remuneration for public holidays
 
Article 8
1. The States Parties to the present Covenant undertake to ensure:
(a) The right of everyone to form trade unions and join the trade union of his choice, subject only to
the rules of the organization concerned, for the promotion and protection of his economic and social
interests. No restrictions may be placed on the exercise of this right other than those prescribed by law
and which are necessary in a democratic society in the interests of national security or public order or
for the protection of the rights and freedoms of others;
(b) The right of trade unions to establish national federations or confederations and the right of the
latter to form or join international trade-union organizations;
(c) The right of trade unions to function freely subject to no limitations other than those prescribed by
law and which are necessary in a democratic society in the interests of national security or public order
or for the protection of the rights and freedoms of others;
(d) The right to strike, provided that it is exercised in conformity with the laws of the particular
country.
2. This article shall not prevent the imposition of lawful restrictions on the exercise of these rights by
members of the armed forces or of the police or of the administration of the State. 
3. Nothing in this article shall authorize States Parties to the International Labour Organisation Convention of 1948 concerning Freedom of Association and Protection of the Right to Organize to take legislative measures which would prejudice, or apply the law in such a manner as would prejudice, the guarantees provided
for in that Convention.