Do they need a new agreement?

Generally speaking, in order to make changes to an individual employment agreement, both parties to the agreement (the employee and the employer) need to consent to any such changes. Therefore, if an employer wishes to change an aspect of an employee’s employment agreement, for example, their hours of work, they must have a genuine reason, must follow a fair and reasonable process, and get the employee’s agreement to do this.

But sometimes employment agreements change by mutual agreement between an employer and employee – for instance your full-time chef has now gone back to study and as a result (at their request) you have

agreed to a change of their work role and hours. If by mutual agreement the terms of your employee’s employment have changed, their employment agreement should be amended. This will not usually require you to issue a whole new employment agreement, rather a “variation to the employment agreement” can be provided and signed by both parties, amending the parts of your employee’s employment terms that have changed.

The Restaurant Association has a variation to employment template that we can provide you to use in this situation.

My employee has asked for two weeks leave right during our busy season -can I decline?

Yes. If the employee has not continuously worked for the business for twelve months then according to the Holidays Act their entitlement to take leave has not  become available. To clarify, this does not mean that if the employee resigned and left the business they would not be entitled to be paid out their holiday pay. What it means, is that the employee is not eligible to take leave from the business. Many payroll systems do not represent this correctly and show the annual leave entitlement in days as they accumulate, but in reality until the employee does twelve months service leave is not available to them. Many employers will allow employees to take leave in advance of their entitlement but you are under no obligation to approve this.

However, when they have completed twelve months service, you must allow them to take leave within the following twelve months if they request it. The time when they take the leave must be agreed upon by both parties.

This means that you can deny leave if an employee asks to take leave during a busy period but you must allow them to take the leave at another time.

What is reasonable depends on the context. For example, it may depend on the business’s needs, the seasonal nature of the work and other factors that should be considered are the nature of the leave for the employee. Employees must also have the opportunity to take two weeks of that leave continuously.

If leave cannot be agreed upon, an employer can direct an employee to take leave (this might happen in a closedown situation) but you must provide fourteen days’ notice to the employee, preferably in writing. As a business owner, it is a good idea to let employees know when they are going through the recruitment process if there are any times of the year that the business shuts down, or periods during which leave will not be approved. This should also be outlined in your house rules.

Another point to add to your house rules is the leave request process. For example, how much notice you require for a leave request.

Silver Fern Farms Premier Selection Awards Winners Announced

Chameleon Restaurant, Wellington has taken out the title of Premier Master of Fine Cuisine at the annual Silver Fern Farms Premier Selection Awards, held in Auckland.

The restaurant also won awards for Best Beef Dish and Best Metropolitan restaurant.

Chef de Cuisine at the Chameleon Restaurant InterContinental Wellington, Paul Limacher, impressed judges with his dish: Silver Fern Farms beef tenderloin, mushroom ragout, roast Parmesan gnocchi, button onion & asparagus. Judging coordinator Kerry Tyack described Limacher’s dish as ‘consistent and faultless’.

“Elegant and visually appealing it was clear every detail had been considered and attended to – plenty of rich, savoury aromas, a perfectly cooked tenderloin and a combination of complementary textures that allowed the meat reign supreme,” said Tyack.

Other Silver Fern Farms Premier Selection Awards winners are:

• Daniel Hill, head chef at Pitches Café and Restaurant, Ophir is runner-up to Premier Master of Fine Cuisine and also won Best Regional Restaurant. Daniel won this award in the 2015 Awards.
• Geoff, Ngan, head chef Shed 5, Wellington for Best Lamb Dish
• Greg Piner, group chef, Vault 21, Dunedin for Best Venison Dish

Tyack said, “ This has been another exciting year in the ongoing development of the Silver Fern Farms Premier Selection Awards. Each year there are improvements, refinements, innovations and discoveries. The judges were delighted to see chefs opting for less conventional cuts, using Asian ingredients to deliver dishes that reflect Kiwis growing fascination with that region of the world and opting to take up the less is more mantra. We also noted that chefs had taken on board feedback from previous years about letting the meat remain the focus of the dish and ensuring the chosen cooking techniques brought out the textural qualities of the Silver Fern Farms products. Overall the standard was very high with another collection of exceptional culinary creations.”

Silver Fern Farms general manager marketing, Sharon Angus, says she was excited to see how chefs continued to innovate with our lamb, beef and venison this year.  They have inspired our imagination with their creativity – ensuring the meat is the hero, but subtly enhancing with bursts of flavor through fresh herbs and spices.  Generally, we see food trends beginning in foodservice, and then they filter down to home cooks.  The finalist’s entries will certainly inspire New Zealand’s imaginative home cooks.

“Consumers are becoming more adventurous in their food choices – looking for unique flavors and taste sensations. “

The Silver Fern Farms Premier Selection Awards, now in their fourth year, celebrate the artistry and creativity of New Zealand’s top red meat chefs by inviting them to create an original dish using a Silver Fern Farms cut of lamb, beef or venison.

Seventy-three entrants from Paihia to Winton were narrowed down to twelve finalists, who were re-judged by Kerry Tyack and Tony Adcock, both well-respected critics in the food and beverage industry and experienced judges in national food competitions.

Diners can experience the finalist and winning dishes until the end of February 2017.

I’ve decided to close the business for the holiday weekend. Who do I pay?

This is a common question when there is a block of more than one public holiday, say over Christmas, New Year, or Easter, and an employer decides to close not only on the statutory public holidays, but also some extra days to give their employees a few days off.

As an example, over Easter we noticed some businesses choose to close on Good Friday and Easter Monday (the two public holidays over that period), but also on Easter Sunday (which is not a public holiday). Can you just tell your staff you are closing on that day and that no-one will be rostered on and leave it at that?

Not really. Let’s take this step by step.

1. Who gets paid if you decide to close on a public holiday?

An employee would get paid for the public holiday, even if they don’t work it because you are closed, if that day falls on a “normal day of work for them”. They are entitled to be paid their ‘relevant daily pay’ or ‘average daily pay’ – that’s at normal rates; you only get paid time and a half if you actually work on a public holiday.

You’ll first need to establish whether the public holidays falls on a day that the employee would typically work and our “otherwise working day” article on the pages following goes into this in more detail. Once you’ve established that it is a normal day of work for the employee in question they are entitled to paid for the public holiday. This payment is not to be taken from their annual leave entitlement. Please note, that the same rules apply for an employee who doesn’t work the public holiday if for example they have requested, and you have granted, the day off. If this day falls on a normal day of work for them, they will still be entitled to be paid.

An employee who does not normally work on the day of the week in question, and who does not work on the public holiday day, is not entitled to a payment for that day. For example, a part-time employee who never works on Friday has no entitlement to payment for Good Friday.

2. What if you decide to close an extra day and give everyone the extra day off?

If you decide to close the business for a day that you are usually open, employees who normally work on that day in question (eg, Sundays) would be entitled to be paid for the day as it is the business’ choice to close, not theirs. They had every expectation they would be working that ‘Sunday’ as they usually do!

What are your options then?

You could organise an annual closedown for the business by giving your staff at least 14 days notice and as a result direct employees to take that day off as an annual leave day, or, if they don’t have any annual leave owing, to take the day off as unpaid leave (or pay them leave in advance of their entitlement). Employers may implement one such closure per year. What if you’ve already had your annual closedown this year? If both the employer and the employee agree, employers may close their operation and discontinue the work of employees at other times, but the employer cannot require the employees to take annual holidays for a second closedown. If there are other closedowns the employer and employees will have to agree to the arrangements that will apply (often times you may find that when discussed with employees they will be happy to have the time off as annual leave days).

Any public holidays that fall over the closedown period will still be treated as public holidays however – you can’t direct employees to take a public holiday day as annual leave.

My employee wants to ‘cash up’ some of their leave. Is this legal?

Yes, since 2011 employees can request to swap up to 1 week of their annual leave for cash each year — up to 5 days for a regular 5-day week, or one quarter of their annual entitlement if they don’t.

Cashing up annual holidays can only be at the employee’s request and the request must be made in writing, so an employer can’t pressure an employee to cashing up a portion of their leave, nor can it be part of salary negotiations.

An employee can ask to cash in leave multiple times a year, as long as the total they cash in isn’t more than a quarter of their total leave allowance for the year.

What if you’d prefer that your employees take the leave instead? Employers may have a workplace policy that they will not consider any requests to cash up annual holidays. This can apply to the whole or only some parts of the business.

The policy can only address whether the employer will consider any requests. It cannot be about the amount of annual holidays an employee can cash up or the number of requests an employee may make. If you don’t have such a policy for the workplace, you must consider any request to cash up annual holidays in good faith and consider it in a timely manner. Even if requested you still have the right to decline the request, and you don’t need to give a reason why, but you do have to let them know in writing.

What if the employee wants to cash up more than one week per annum of their statutory annual  leave – can you agree to that? No! Only a maximum of one week can be paid out from the statutory leave entitlement.

I have an employee who calls in sick all the time. What should I do?

Dealing with absenteeism is a major challenge in our industry. When absenteeism rates are high, wage costs go up and service levels are negatively affected. There are also intangible costs to the business such as increased stress levels for the team and a decrease in morale, along with increased administration. So what should you do if you have an employee who continually calls in sick?

Addressing absenteeism in your business does not only require that you deal with the individual who frequently calls in sick, it also requires you to  clearly communicate your expectations and policies concerning sick leave to your whole team. It is important that you discuss the issue of absenteeism with the whole team if it is starting to negatively impact the business. Staff meetings are an ideal time to do this. The following tips will help you manage absenteeism within your business.

1. Have a sickness / attendance policy

You should have a policy detailing what staff need to do if they are unable to work because of illness. For example, is a text okay, or do they need to phone you? Do they need to contact you directly or is it okay to contact the manager/supervisor on duty? How far in advance would you expect an employee to call you to let you know that they are sick? When may an employee be expected to provide proof of illness/injury? This policy should clearly set out your expectations and should be explained to each employee before they begin working with you.

2. Keep track of attendance / follow up with staff

Be sure to keep track of attendance and follow-up with your staff about their absences. If you see a pattern developing, be sure to speak to the employee in question. It is important to nip these emerging issues in the bud, before they become a real problem.

3. Ask for proof of sickness

The Holidays Act 2003 gives employers the legal right to request proof of sickness or injury (ie a medical certificate) from an employee if they have been away from work for a period of three or more calendar days (not necessarily working days). You can also request a medical certificate within the three days using the following provisions: you must inform the employee as early as possible that proof is required and you must also meet the employee’s reasonable expenses in obtaining the proof (eg. you pay for their GP visit). If you have concerns that the employee’s sickness claim is ingenuine, you may wish to exercise this right.

4. Meet with employees individually

If an employee is taking a large amount of sick days or their sick leave has a “pattern” to it (for example, they call in sick every second Sunday), you should meet with him/her to discuss this. Show him/her the attendance records that you have kept and get their feedback on this. You are entitled to seek information about whether they have an on-going health concern. If the sick days are not genuine, then letting the employee know that you are keeping track of attendance should have a positive impact on the situation, as the employee is less likely to continue to pull “sickies.” If the employee does have genuine health concerns, it is important that you discuss these with the employee and try and work out a way forward that works for both parties. If your employee does have an on-going health concern that means that they are frequently absent and this is in turn affecting your business, you may be dealing with an “incapacity” situation. To address such a situation, you will need to follow a formal process, involving several meetings with the employee in question.

Please call the Restaurant Association Helpline on 0800 737 827 if you a dealing with a situation like this. 

What breaks do I need to give my staff now?

Since March 2016 legislation around meal and rest breaks was amended to allow for more flexibility for workplaces around when employees take their breaks. It has meant however that some businesses are now unsure about when and how best to deal with breaks in their operation.

Before, the law was prescriptive: employees were entitled to a set number of breaks for specified durations depending on the number of hours worked. Now that prescribed number and duration of breaks has been removed. The obligation on an employer is instead to provide rest and meal breaks that provide a ‘reasonable opportunity during an employee’s work period for rest, refreshment, and attention to personal matters’, and which are appropriate for the length of time they have been at work.

Employees still get breaks but you can agree when and how long these breaks are (and importantly, ensure that breaks don’t coincide with busy service periods).

While the Restaurant Association’s newest employment agreement template has been amended to emphasize this flexibility, the new rules around breaks can’t be enforced unless existing rest and meal break provisions in older employment agreements are varied. The Restaurant Association can provide you with a one page employment agreement variation to do this.

Like all employment matters, employers and employees should negotiate in good faith, so if an employee wants to discuss the workplace’s break policy and propose an alternative, try to come to a reasonable agreement. However, if you cannot agree, the employer has the right to set reasonable times and lengths of breaks for their employees.

What is appropriate now?

Good practice for determining what breaks are provided, when and for how long, takes into account:

• how long the employee’s work period is
• the nature of the employee’s work
• any health and safety issues related to the work, for example fatigue
• the time of day or night that the employee’s work period starts
• the interests of the employee – e.g. to allow enough time for rest, refreshment and to take care of personal matters
• the employer’s operational environment or resources – eg does the employer need employees to take their breaks in stages or according to a roster, in order to continue production or services?

It is still up to the individual business, however common practice would still be for a rest break to be for a duration of between 10 – 15 minutes and occur when an employee has worked for between 2-4 hours. Rest breaks are typically paid. Meal breaks are longer and typically unpaid. Employees would usually receive a 30 minute meal break (along with a 10 minute rest break) after working for 4-6 hours. It is best to emphasize that this will vary if any of these timings fall over the busy service periods (unless you can accommodate their absence over this time). Often times the break between split shifts allows an adequate meal break.

An employer does not have to give breaks if breaks cannot reasonably be given, considering the nature of an employee’s work. However employers must compensate employees if this happens. As there are generally ebbs and flows over the length of a shift, we are not of the view that you would be able to argue that a hospitality worker cannot reasonably be given a break because the business is busy.

One of the key things to note is that employees do still remain entitled to breaks and from a health and safety perspective it is important they take them. The changes have not taken breaks away but allow you to decide when is the most appropriate time for them to be taken, and for how long, for your business.

As 2018 rolls into gear, we’ve taken some time to reflect on the successes and challenges for the hospitality industry over the past year to help with our planning for the next 12 months and to address areas of focus.

Certainly, the hospitality industry has a very important role to play in New Zealand’s economy, not only in the social fabric of kiwis, but also as a huge part of the tourism offering, which generates a direct contribution to GDP of $14.7 billion (5.9 percent of GDP).

The first half of this year saw buoyant sales performance for the hospitality industry, with growth of 8.2 per cent for the year ended March 2017 and forecasts to exceed $10 billion in annual sales in 2018.  Combined, hospitality and tourism expenditure was $36.0 billion in 2017, an increase of 1.9 percent from the previous year.

Strong tourism growth was achieved in 2017 for both international arrivals and spend in New Zealand, driven by strong growth in Asian markets, especially China, and in established markets such as the US and the UK. Overseas visitor arrivals to New Zealand increased 8.9 percent. International tourism expenditure was $14.5 billion (contributing 20.7 percent to New Zealand’s total exports of goods and services), while domestic tourism expenditure increased 4.0 percent ($820 million) to $21.4 billion.

While hospitality and tourism is in healthy shape, the industry is not without challenge however, as a recent survey of our members indicates. More than 230,00 people are directly employed in tourism (8.4 percent of the total number of people employed in New Zealand). More than 120,000 of those are employed in the hospitality sector. It is therefore a huge challenge to encourage and retain workers to the industry and as such a labour intensive industry the lack of skilled employees is ranked as the number one challenge for hospitality business owners. Closely following this is managing wage costs, while the third top challenge is building and maintaining sales volume. These challenges are consistently positioned at the top in this annual survey and are also forecast by members to rank first, second and third in 2018.

The Restaurant Association also measures business confidence and over the next twelve months 27.47 percent of the industry is feeling optimistic about 2018, 42.86 percent are neutral and 29.67 percent have decreased business confidence for the year. Many of our members express concern about proposed legislation changes, in particular the prospect that the new Government will clamp down on employers’ ability to access overseas labour.

In addition, plans to lift the minimum wage by around 6 percent per annum over coming years are a major concern to a number of businesses.  This would leave New Zealand with the highest minimum wage relative to average income in the OECD. The main impact will be to improve New Zealand’s lowest-paid workers, at the expense of business profits. While other industries may be able to alleviate labour cost increases by further automating their service, the personal connections made as part of the hospitality service offering come with a heavy reliability on labour. Many members are concerned that they will simply not be able to afford the roll on effect of the increase.

Last year the Ministry of Business Innovation and Employment (MBIE) estimated that a 5 percent lift in the minimum wage would reduce employment by around 3,500 jobs, which would add around 0.1 percentage point to the unemployment rate. The unemployment effect of minimum wages is a contentious issue in economics, but the consensus is that there is some impact. It is small when the minimum wage is low, but gets larger the higher the minimum wage is relative to market determined wages.

We’re also looking at other significant changes in the policy environment over the coming years. This includes the coming introduction of a suite of policies that will dampen the housing market and which will likely have flow-on downside impacts for consumption spending. However, in recent commentary from Westpac, it was outlined that the economy had shown resilience through late 2017 leading us to firmer ground as we start the New Year.  Among the more notable developments has been the downturn in net migration, which we expect to continue for some time and which will weigh on economic growth. At the same time, construction activity has flattened off in the face of difficulties sourcing finance, challenges accessing skilled labour, and rising costs.

One thing is clear, 2018 will introduce a number of changes and challenges to hospitality businesses. The Restaurant Association will be strongly advocating on the industry’s behalf for strategies that address the needs of our flourishing industry and promote economic and business growth.

~ Marisa Bidois