2018 Litigation Forecast - Employment Summary

As we anticipated in our 2017 forecast, we are now seeing the Employment Relations Authority and the Employment Court increase compensatory awards for “hurt and humiliation”.  There has also been consideration of compensation “bands”.  While there is no judicial guidance on the approach to compensation bands, it will be an area to watch for 2018.

As noted in our article on cyber security, the long awaited Privacy Act reforms remain stalled and we wait to see where this sits on the new Government’s agenda.  However, there have been developments in this area overseas, due to take effect in 2018.  In particular, the European General Data Protection Regulation, which comes into force in May, is expressed to have extra-territorial effect, which means that New Zealand businesses will need to understand the regulation’s reach and whether it has implications for how they collect or process data.

In the health and safety space, where the focus in recent years has been on individuals’ physical safety and health, the conversation is now extending to mental health.  We expect this to gain momentum in 2018, with more initiatives being led by WorkSafe and big business to support wellbeing in the workplace.

The future of the workforce continues to be a focus for businesses globally. With the changing demands of business and individuals, businesses are considering whether current models, and employment laws, are fit for purpose in the age of the 4th industrial revolution and the “gig-economy”. Global attention continues to be on the employee/contractor tension in the UK after Uber lost its appeal in the Employment Appeal Tribunal. With an appeal to be heard in the Court of Appeal, we are watching this space and its influence on New Zealand businesses.

Global attention continues to be on the employee/contractor tension in the UK after Uber lost its appeal in the Employment Appeal Tribunal.

Scrutiny regarding “equal pay” and “pay equity’ over recent years is set to continue through 2018. During 2017 we saw the settlement of equal pay claims relating to care and support workers, the commencement or continuation of similar litigation by workers in other sectors, and the previous Government’s introduction of the Employment (Pay Equity and Equal Pay) Bill.

The Labour-led Government has halted the progress of that Bill, and signalled it will introduce new legislation to address equal pay and pay equity, which will be in line with the recommendations of the Joint Working Group on Pay Equity Principles.   In the longer term, the introduction of new legislation is likely to have an impact both directly (including equal pay/pay equity claims in a wider range of sectors) and indirectly (such as bargaining for increased pay for unaffected roles, as a flow-on effect of pay equity remuneration increases).

With the change in Government, there is potential for a lot of changes to workplace relations laws over the next three years which will have an impact on how employers and employees engage in the context of employment litigation.  We see three broad themes underpinning the proposed changes: employee entitlements and rights, the role of the unions, and the nature of contractors.

We expect that proposed changes to employee entitlements and rights may encourage employers to favour trying to settle employment disputes over litigation. We also expect increased collective bargaining and intervention by the courts as changes are made to the role of the unions.  The proposal to provide statutory rights, similar to those currently provided to employees, for ‘dependent contractors’ will impact on the nature of contractors and could lead to greater litigation with parties wanting to seek the correct status of a contractor (or employee).

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