Changes to health and safety law are dominating a practice area that continues to provide plenty of surprises for its leading lawyers, writes Ben Abbott.
This is because the upcoming changes, due to come into force in April 2016, are ones that have by far the most significant potential impact on the clients of law firms.
“The threat and reality of personal liability for directors and other senior management has sent shock waves through board rooms,” Susan Hornsby-Geluk says.
Founder of Dundas Street Employment Lawyers, one of New Zealand employment law’s boutique success stories which is now seven lawyers strong, Hornsby-Geluk says the health and safety laws are likely to remain “front and centre” in 2016.
“It’s created a great deal more interest and hands on involvement in health and safety issues from the top down,” Hornsby-Geluk says.
Kiely Thompson Caisley is another boutique –albeit, with a sizable 12- lawyer headcount - that has been charting clients through health and safety law changes.
Though the firm handles the full gamut of employment law, IR and health and safety, and immigration law for top tier clients like Air New Zealand, it is the firm’s health and safety practice that that is currently taking up most of its time.
“New Zealand has seen the largest health and safety reform that has been undertaken in over two decades,” partner Peter Kiely says.
“The legislation represents a wide-sweeping and significant reform and will be critical for clients moving forward to ensure compliance with the Act.”
Kiely says many clients are trying to stay “ahead of the curve” in health and safety. The firm was busy with consultation submissions for clients ahead of an October 30 cut off, and has also been advising on the implications and decisions that have been seen in Australia’s regime, on which New Zealand’s new law is closely modelled.
Kiely says a number of concerns have risen to the surface among clients. “The biggest concern by small business, such as farmers in the agricultural sector, is that fines have been so big that they can actually end up closing a business down,” he says. “Our response to that is to make sure that clients have the systems in place and have done the things necessary so there aren’t any accidents in the first place.”
Simpson Grierson partner John Rooney says the firm has done an “awful lot of work” on the health and safety law changes, including “countless” presentations and workshops in industries that include health, education, manufacturing and forestry – some of which have had poorer records in recent years in New Zealand.
Rooney says the focus for many now is on officer’s duties, including senior managers like chief executives and other members of the senior leadership team. “There is going to be new due diligence duties for them with significant personal obligations and potentially significant liability if they don’t comply,” Rooney says. “Local government is one area that is taking particular focus – because of the breadth of their operations they are taking a bit of time to come to terms with it,” he says.
The demand has been so strong the firm has used the opportunity to innovate outside of pure legal advice by launching its own health and safety consultancy.
“We have brought on board a non-lawyer – Terry Johnson, an ex-Fonterra director - to head Health & Safety Advisory Services. We realised that, while we have a strong team and legal expertise, with an advisory service we now have an expert who is able to look at providing services to clients that build on our legal expertise.”
The new offering helps clients implement H&S strategy, including leadership and operational training, and advising on governance, reporting and audit processes.
Though not as controversial as the health and safety changes, firms say the upcoming Employment Standards Bill contains some smaller changes that may affect clients.
“The Employment Standards Bill, if passed, will have a significant impact in relation to matters such as zero hours contracts and unreasonable wage deductions,” says Dundas Street’s Susan Hornsby-Geluk. “The reform of the parental leave regime, which will broaden the categories of workers eligible to receive paid parental leave, will also be significant from a practical perspective,” she says.
Termed an ‘omnibus’ Bill by Peter Kiely, it deals with other issues like prohibiting employers from putting unreasonable restrictions on having a second job.
The Employment Relations Act could also yield developments. “We expect legal challenges to test some new aspects of the Employment Relations Act that came into force in March 2015, such as pay deductions for partial strike action and potential claims of discrimination on the basis of union membership,” Hornsby-Geluk says.
Dyhrberg Drayton Employment Law founder Steph Dyhrberg agrees. “The amendments to the ERA are quite recent, and people haven’t really been placing a lot of attention on it because health and safety is getting all the air time. It’s possible that the ERA might have some unexpected consequences down the line.”
Dyhrberg says restraint of trade is another controversial area, with courts since 2013 having swung back in favour of enforcing such clauses. Employment lawyers agree this ‘pendulum’ is not providing much certainty to either party in these disputes, though they are facilitating “a lot of stroppy letters from lawyers and litigation”.
“If I could fix something that is an unnecessary cost to everyone involved, I’d regulate restraint of trade clearly, to either state when these terms are unlawful or make clear the circumstances under which they can be used and the process for doing that. At the moment, it doesn’t work well for anyone involved.”
Kiely is also seeing more restraint of trade matters, and more action around the keeping of confidential secrets. “These days with technology it is so easy to transfer information, and the law is doing it’s best to keep up with that,” he says.
For SMEs, Dyhrberg says the proper use of trial periods is an area to watch. “We are still seeing people not appreciating the fact they need to sign employees up before they start work,” she says. “It is very clear to us that, unless they are signed up before they start work there will be issues if you get to day 88 or 89 and then tell someone they are not up to scratch. Also, if you don’t raise any issues with people during the trial period and have a good faith conversation, you are likely to get into trouble.”
Collective bargaining will continue to see activity next year, Hornsby-Geluk says. “There has been significant activity in both private and public sector bargaining with employers and unions coming to grips with the new legislation in relation to strikes and how this impacts on the respective parties’ bargaining leverage.”
And while high profile pay equity claims have been put on hold while a government working party gets to grips with the issue, Rooney says it is soon likely to become a hot area. “It involves a lot of dollars, that’s always something that attracts attention.”
Employment law ABCs
Dyhrberg Drayton Employment Law started almost five years ago. Since then, partner Steph Dyhrberg says she has seen clients embrace the firm’s boutique status.
“Clients often like coming to smaller firms, because we are specialists, but we also might be a wee bit more personable and approachable than the larger firm model.”
The firm’s appointment to the All-of-Government legal panel in its first year was a key win, though only about 70 per cent of its work now comes from government. Currently housing three lawyers in total, Dyhrberg says the firm may scale up slightly, but the firm’s partnership wants to keep things manageably small.
This year, the firm acted on behalf of two ambulance officers who were reinstated on an interim basis by Wellington Free Ambulance, after the Employment Relations Authority found they had an arguable case that they were unjustifiably dismissed.
Dyhrberg says there are many cases where employers get basics like performance management, disciplinary processes and investigations wrong, often because they are under pressure to run a process too quickly and to achieve a certain outcome. Often, she says employers will avoid a problem, until they are forced into rash action.
“You would have thought after all these years these things would be the ABCs of employment practice,” she says. “But lawyers forget that managers going through these processes are human – they get stressed, have all the same fears and insecurities, and will avoid things if they can. We are all dealing with human nature.”
However, it is just this that makes employment law such an interesting practice area to work in. “We seem to see all of life’s rich tapestry. The variety of things that people can get up to at work never ceases to amaze me,” she says.