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Courts empower employees

first_img–Every New Zealand employee is afforded protection from unfair dismissal. –Australia has introduced laws to protect employees from arbitrary dismissal.–Loophole closed over employing contractors and temps. In New Zealand, courtscan extend legal rights to them.–Protracted dismissal process includes a series of oral and written warnings andreasonable time to improve performance.–Hiring staff on a trial or probationary basis is no longer a defence if thatemployee is dismissed. Courts empower employeesOn 1 Jun 2001 in Personnel Today Employersin Australia and New Zealand are facing an uphill struggle to recruit andretain good staff against a background of mounting employment legislation.Richard Rudman reportsTheseare good times for recruitment consultants in Australia and New Zealand. Demandfor skilled and experienced staff remains high in relatively buoyant andconfident economies. And perhaps most significant for consultants, employersare making much greater use of external providers for the recruit and selectionprocesses. Atthe same time globalisation has arrived with a bang. Mergers, takeovers andalliances are no longer hot news, and most of the world’s big players are nowparticipating or represented in the Australasian market place.Internationallink-ups can bring new services, better technologies and access to worldwidenetworks. Yet, according to a New Zealand consultant who is resisting offshoresuitors, many agencies are still “body shops” staffed byinexperienced recruiters driven by commission-based earnings. By keeping intouch with the individuals they place in jobs, recruiters can add to theemployer’s problem of employee “churn” in a tight labour market. Theseare also good times for Internet recruitment sites. Australians and NewZealanders have always taken enthusiastically to new technologies – and thepopularity of e-recruitment is clear from the ANZ Bank’s job advertisementssurveys. Internet advertising in Australia has grown from a monthly average of20,000 adverts two years ago to 90,000 today, while newspaper advert numbershave fallen from 26,000 to 22,000. In New Zealand, Internet job advert numbershave risen by one-third in the past year to a monthly average of 14,000, whilenewspaper advert numbers have remained steady at around 29,000.Theseare good times too for job applicants. Demand for skilled labour remains high.Which means employers have to bid up salaries and benefits for those whoseskills and experience are in demand. Plus the law offers ever-increasingprotection for employees.Sothese may not be such good times for employers. Fuelled by a job boom in IT ande-commerce, and international shortages in other occupations, the”churn-and-burn” rate for many staff is rising. Some employers areresponding by shifting their focus from recruitment to retention, reckoningthat it will cost less – and prove easier – to keep hold of their current goodperformers than to find, hire and train replacements.However,these efforts by employers can be thwarted. Earlier this year, for example, theNew Zealand government became concerned that the non-taxable status (as capitalsums) of so-called restrictive covenant and inducement payments was threateningthe tax base. These payments are now taxable as income, and are thus lesseffective as incentives for staff.Employeesin both countries seem to be enjoying greater legal protection of theircontracted rights and privileges. New Zealand, for example, has had a statutoryremedy for unfair dismissal for 30 years. Originally, it applied only to staffcovered by collective instruments or to union members. Now, it applies to everyemployee – regardless of level or position in the organisation. Laws to protectemployees from arbitrary dismissal were introduced in Australia during the1990s.  Inboth countries these laws may have gone further than intended, often givingmore weight to procedure than substance, and thus giving inefficient andunder-performing workers a means to contest their dismissal. Employers oftenfound it easier to pay up than to fight these cases through the employmenttribunals.Facingthis risk, many companies adopted defensive strategies which still influencetheir recruitment and employment practices. Letters of appointment, forexample, which set out employment terms and job requirements in minute andlegalistic detail are common. Someprefer not to employ any permanent staff, relying instead on contractors andstaff from temp agencies. Research reported in Australia’s Business ReviewWeekly indicates that 11% of Australian companies now hire more temporary andcontract staff, and 5% have cancelled or suspended plans to recruit morepermanent staff – all because of the unfair dismissal rules.Onething is clear in both countries – bad recruitment decisions can be verycostly. This is especially true if an employer attempts dismissal withoutgiving the staff member a series of oral and written warnings and a reasonableopportunity to improve performance. Oneway around this problem is to hire a temporary employee or contractor from arecruitment company and later offer that person full-time employment if thereis a good match. But care is needed. In New Zealand, new employment relationslegislation empowers the courts to determine whether a so-called contractor is,in reality, an employee and thus entitled to the benefits of being an employeeregardless of the label the parties might give their relationship. Moreover,hiring people on a trial or probationary basis is no longer a defence if theemployer tries to dismiss a short-term employee who proves unsuitable. Inaddition, all prospective employees must be given written details of a proposedemployment agreement – and time to take advice on it. As a result, bothcountries have seen an upsurge in detailed employment contracts and, at seniorexecutive levels, so-called “pre-nuptial” agreements providing heftypayouts for individual employees who don’t make it.Theseare good times indeed for employment lawyers and consultants.Changingthe face of employment legislation–New Zealand government taxes inducement payments to retain staff. Comments are closed. center_img Previous Article Next Article Related posts:No related photos.last_img read more