Is it time to get employees back into the office?

It has been three years since New Zealand emerged from the first major Covid-19 lockdown. In that time, employers and employees have become increasingly familiar with remote working. The home office was essential in times where we were moving in and out of lockdowns, but we are now operating largely without Covid-19 restrictions and many employers are pushing for a return to the office or implementing hybrid workplace policies. 

However, over the last few years, employees have adapted to working from home and some are resisting requests to return to the office on a regular basis. Employees have found they have greater flexibility in their schedule and their day-to-day life is easier to manage. Many have ditched time-consuming commutes, and feel they are more productive without the noise and activity in a busy office. 

For some employers, there are significant drawbacks in having a large portion of the workforce working from home. Any issues related to performance or productivity can often be worked through, but real personal connection and the benefits of in-person collaboration cannot be recreated via video calls. In particular, junior employees do not benefit from learning through observing their seniors, or develop workplace relationships that build trust and can lead to promotions.

The media has regularly reported on larger multi-national employers’ attempts to get employees back into the workplace. Some employers have adopted policies requiring a minimum number of days in the office, and have implemented attendance tracking and including office attendance as part of employee reviews. Others have gone down an alternative route, offering incentives to encourage employees to return to the office workspace. 

Legally, employees can be instructed to work in the location specified in their employment agreement. Employees are also entitled to make a written “flexible working request” at any time, proposing a change to their place of work (and their hours or days of work). We are seeing a resurgence of requests for flexible working arrangements, and legal disputes arising out of employers refusing such requests.

Employers must consider such requests in good faith and can only decline a flexible working request for one of the reasons defined in the Employment Relations Act. However, the reasons are broad and include the inability to reorganise work among existing staff, detrimental impact on quality or performance, insufficiency of work or additional cost. 

Employers should also be clear as to the duration of any agreed arrangements. Difficulties can arise where an employee makes long-term arrangements, like moving to a different city, on the assumption the arrangement is permanent, only for the arrangement to expire or be revoked. Similarly, the boundaries of a flexible arrangement should be defined. Many remote workers may not see any difference between working remotely at home and working remotely overseas, which can introduce cyber security risks, tax implications and health and safety issues. A remote working policy and clear approval processes will assist defining these boundaries. 

At a higher level, employers should consider how flexible working fits within the workplace culture. For some employers, a hybrid or fully remote working arrangement works well, and has no material impact on output. For others, in-person collaboration across the business is essential to productivity and the development of junior staff. Some workplaces fall in the middle and may benefit from a balance where parts of the business can work partially or fully remotely, and others are on site. Where this arrangement is implemented, it is worth thinking about how to address any perceived unfairness for those required to work on site with less flexibility, or those expected to work remotely who may prefer to work in the office.

It is undeniable that remote working has its benefits. Organisations need to grapple with how they can best reap these benefits while still fostering the interpersonal connection that is essential for a good workplace culture. 

All is fair in love and collective bargaining: Reunited Employees Association Inc v Nelmac Ltd [2013] NZEmpC 74

In a recent case, the Court has given some further guidance on the line between acceptable robust bargaining and a breach of good faith. 

The Reunited Employees Association Union (REA) and Nelmac Ltd were involved in a protracted bargaining process. In April 2021, after an unsuccessful facilitation and almost two years of bargaining, the parties applied to the Employment Relations Authority to decide the terms of the collective agreement for them, on the basis there had been a serious and sustained breach of good faith by the other party. 

The Authority found that REA had breached the duty of good faith, and fixed the terms on the basis proposed by Nelmac (which is pretty significant in itself). REA challenged the determination. 

The Court looked at 10 behaviours which REA claimed amounted to breaches of good faith by Nelmac. Most of the allegations could broadly be categorised as disruptive and hindering behaviours (such as using a laptop in bargaining meetings, being abrasive and confrontational, and ending meetings abruptly). The Court found that each of these claims were either not supported by the evidence or did not amount to a breach of good faith. The Court noted that even if Nelmac’s representatives had been abrasive and combative, this fell “squarely within the category of robust bargaining and nothing more”. 

The duty of good faith does not require bargaining to be done in a courteous or polite manner - the Court has previously held that the use of an inflatable rat, depicted as the employer’s operations manager, in the course of picketing was not a breach of good faith. Where behaviour starts to interfere with progressing bargaining, the case may be different. In the Nelmac case, the Court found that representatives of REA undertook unjustified attacks on the integrity and credibility of Ms Wilkinson, a Nelmac representative. It refused, without justification, to allow Ms Wilkinson to prepare a draft agreement following facilitation, despite the facilitator’s invitation to do so. The Court held that their remarks and refusal to deal with Ms Wilkinson, went beyond robust or combative bargaining and amounted to a breach of good faith. 

The Employment Relations Authority’s First Annual Report 2022

The Employment Relations Authority recently released its first annual report, which covers the period 1 January 2020 to 31 December 2022. It includes some interesting statistics on a range of matters, including the number of successful applications for interim and permanent reinstatement, amounts awarded as compensation for hurt and humiliation (with the highest award being $37,500), and costs awards. 

The Authority has also reported that it issues an overwhelming majority of determinations within 3 months of the date of the investigation meeting, or the date on which the Authority received the last evidence or information from the parties. This information is not broken down into different types of investigation meetings (i.e., interim applications, matters heard on the papers, costs determinations, or unchallenged applications) and so is potentially misleading. In our experience, and anecdotally that of other employment lawyers, it is taking the Authority much longer to issue a determination where the Authority is required to consider evidence provided by multiple witnesses.

Changes in the Health and Safety space: All workers have the right to elect health and safety representatives

The Government has recently fulfilled one of its 2020 election promises to close a long standing and controversial exception to workplace health and safety representation. 

Under the Health and Safety at Work Act, PCBUs are required, when requested by workers, to hold elections for health and safety representatives and committees. Up until recently, PCBUs who have fewer than 20 workers and are not in a prescribed high-risk industry were exempt from this requirement.

This exemption was controversial, and the Labour Party promised to change this to ensure that all workers have the right to elect health and safety representatives, regardless of the size of the PCBU. In June, the Government made good on this promise and passed a bill which would close off this longstanding exception. All businesses and organisations, regardless of their size, must now grant a worker’s request to hold elections for a health and safety representative or committee.

Regardless of whether workers have requested a health and safety representative, the HSW Act requires that PCBUs ensure that workers’ views on matters that could affect their health and safety are sought and taken into account (engagement), and that PCBUs provide reasonable opportunities for workers to participate effectively in improving health and safety in the business (participation).

This newsletter contains contributions from: Renee Butler, Sally Togher and Dan Smith. 

For further information on employment related matters, please visit our Global Employment hub, where you can find updates from many jurisdictions, including New Zealand, or reach out to one of our partners – Charlotte Parkhill, Greg Cain, James Warren or Renee Butler.