Brian Fletcher and Quentin Davies, of Gascoigne Wicks in Blenheim, outline when the Employment Relations Act applies.

Introduction

The Employment Relations Act 2000 ("ERA") governs the relationship between an employee and employer. Not all contracts for services are employment relationships. To ascertain whether or not a particular relationship is in fact employment, one must look to the definitions under the Act.

Central to this is the definition of the employee. If someone is an employee, it is generally straight forward to determine who the employer is.

Given the internationalisation of work many employees work outside New Zealand as well as inside New Zealand either for foreign or local companies. The Employment Relations Act will be the Act that governs New Zealand employment agreements. In some cases the Court may decide that some other country should determine the rights and obligations of the parties to an employment agreement.

Defining employee and employer

Who is an employee?

An employee is any person of any age employed by an employer to do work for hire or reward under a contract of service.

This includes a person who does work for another person in a dwelling house, such as domestic cleaning. It also includes those people who have been offered and accepted work as an employee.

It does not include volunteers.

Whether a person is an employee is not decided by the label that any particular agreement ascribes to the relationship. The Court will take into account matters that indicate the intention of the parties entering into that relationship. Matters to be taken into account in making this decision may include:
1. the written terms of the contract;
2. the degree of control which an alleged employer exercises over the operation of a contract;
3. whether or not the provider of the services employs his or her own staff;
4. the degree of financial risk the provider takes;
5. what degree of responsibility for investment and management the provider has; and
6. whether or not the provider has the opportunity of profiting from sound management and performance of the task.

Any alleged employee has the ability to apply to the Authority to have the question of whether or not that person is an employee determined. A third party can bring this action with the consent of the employee.

Rights of an employee

An employee has:
1. access to personal grievance and disputes procedures;
2. the right to holiday pay;
3. the ability to claim penalties against employers and their agents in certain circumstances;
4. the ability to enforce compliance with the terms of an employment agreement;
5. the right to obtain a copy of the employment agreement in writing;
6. the right to retain employment conditions until new conditions are agreed to;
7. the right to retain a representative for the purpose of negotiation of an employment agreement;
8. the right to challenge an employment agreement on the grounds that it is harsh and oppressive;
9. the right to obtain an injunction to prevent unlawful lockouts;
10. the right to protection against discrimination in employment;
11. employment protection while voluntarily serving or training in the Armed Forces;
12. the right to health and safety provisions, although some of these provisions cover contractors as well as employees;
13. the ability to bind the employer for some actions taken by its employees;
14. the right to paid statutory holiday and annual leave;
15. the right to special leave; and
16. employment protection while taking parental leave.

Who is an employer?

An employer is a person employing any employee or employees and includes a person engaging or employing a home worker (being a person who works in a dwelling house such as a home help).

Application of the ERA to New Zealand agreements

If your employees are working in a foreign country or alternatively you are a foreign employer who is employing workers in New Zealand it may be arguable that the relevant jurisdiction is that other than New Zealand's. While it would not be conclusive it is best to place within the employment agreement a statement as to which country's law applies. However, the Court will also look at what is the most relevant employment law to the case, the intentions of the parties, and the most convenient location to have the matter heard.

Copyright The Lawlink Group Ltd 2000

Every effort has been made to ensure that this information is accurate. However, it is general introductory information only. It does not constitute legal advice and should not be relied on as such. Specialist legal advice should be sought in particular matters.

Brian Fletcher is a partner in the Lawlink firm of Gascoigne Wicks. Brian practises in litigation and general legal work. Quentin Davies is a solicitor with the firm who practises in litigation.

Web site: Gascoigne Wicks
Email: gwbfletc@gascwick.co.nz

September 2000