ISSUE 149 JULY 2017
Hello possum! Possums abound but humans retreat in possum-merino knitwear company. P30
EMA’S 2017 ELECTION POLICY MANIFESTO INSERT EASY TOOL TO GET SUSTAINABILITY UNDER WAY
P8
FIRED FOR SWEARING THEN REINSTATED
P13
WINNERS OF BAY OF PLENTY EXPORTNZ AWARDS 2017
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...AND MUCH MORE!
We Have You Covered Whether you need quick advice right now, someone to come in and visit you or an expert employment lawyer to represent you; at the EMA we have your employment relations covered
AdviceLine
As an EMA member if you need free prompt advice from an employment relations specialist you can call or email the AdviceLine service, operating Monday to Friday from 8am to 8pm.
Legal
Should you need legal advice and/or legal representation EMA Legal is your rst port of call. EMA Legal is a team of highly experienced employment lawyers who solely act for employers at exclusive EMA member rates.
Consultants
If you want someone to come in and work alongside you in your organisation to handle di cult employment relations issues, then an EMA consultant is there to help you.
Call us today and let us help you, 0800 300 362.
On the cover:
BusinessPlus is published by The Employers and Manufacturers Association (Northern) Inc (EMA) EMA is the major shareholder of national lobby group, BusinessNZ. BusinessPlus is attached to EMA’s fortnightly email newsletter, e-report on July 12.
Technology is steadily replacing people in the knitwear industry but Mike Langhorne (pictured) expects that can only go so far at his company, Possumdown Knitwear. But it certainly helps the business grow, as “whole garment technology” blends the plentiful possum fur with merino wool to knit complete garments. See more page 30
Editor: Mary MacKinven T +64 9 367 0939 M +64 21 636 089 E mary.mackinven@ema.co.nz Designer: Ripeka Mikaere
ISSUE 149 JULY 2017
Hello possum! Possums abound but humans retreat in possum-merino knitwear company. P30
EMA’S 2017 ELECTION POLICY MANIFESTO INSERT EASY TOOL TO GET SUSTAINABILITY UNDER WAY
P8
FIRED FOR SWEARING THEN REINSTATED
P13
WINNERS OF BAY OF PLENTY EXPORTNZ AWARDS 2017
P26
...AND MUCH MORE!
Contents
“Helping business succeed”
Printer: MHP Distributor: Orangebox Advertising sales: Colin Gestro, Affinity Ads, M + 64 27 256 8014 E colin@affinityads.com ISSN No. 1176-4953 EMA Head office – Auckland: 145 Khyber Pass Rd, Grafton, Auckland, NZ Private Bag 92066, Victoria St West, Auckland 1142. P +64 9 367 0900 E ema@ema.co.nz Hamilton: EMA/ExportNZ Waikato 103 Tristram Street, Hamilton. PO Box 490 Waikato Mail Centre, Hamilton 3240. P +64 7 839 2713 Tauranga: ExportNZ Bay of Plenty Smart Business Centre, 65 Chapel Street, Bay Central, Tauranga, 3110. PO Box 13202, Tauranga Central, Tauranga 3141. P +64 7 571 0600 AdviceLine: NZ 0800 300 362 AUS 1800 300 362 E advice@ema.co.nz Phone 8am-8pm weekdays for information about employment and more, plus referrals to EMA Legal lawyers and your local EMA consultant in employment relations and/or occupational health and safety. Visit www.ema.co.nz for owner and staff training programmes, conferences and other events, employer guides and templates, manufacturer services, media statements and submissions, export development and more EMA contacts Chief executive: Kim Campbell Membership manager: Kayne Franich External Relations manager: Val Hayes Advocacy & Industry Relations manager: Mark Champion Learning manager: David Foley Enterprises & Strategy manager: Mauro Barsi Industrial Relations & Safety manager: Paul Jarvie Finance & Technology manager: Paul Yeo Corporate & Building Services manager: Sheree Alcock ExportNZ manager: Catherine Lye
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BusinessPlus is free to EMA members
Commentary EMA’s CEO Kim Campbell on: What business wants from the next Government International tool solves sustainability conundrum BusinessNZ CEO Kirk Hope on: Immigration an issue for business in election year Preventing road rage: ATAP explained EMA Election Policy Manifesto 2017 EMA Manifesto to deliver business infrastructure Seen @ EMA events in Auckland
5 8 9 10 11 12
Employment Case Law: Employee fired for swearing at manager wins job back + compensation Overseas postings – hardship for some, opportunity for others
13 14
The Courts and injury reparation Employment Chat – Q and A: Affording the wages, dismissing to keep other staff safe, stopping ex-employee badmouthing us EMA helping school leavers gain skills for work
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Great customer service: what has memory got to do with it?
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16 18
In Business Congratulations Geoff Whitcher for Queen’s Birthday Honour 20 IT: Artificial Intelligence as big brother or game changer 21 Prepare for the 4th industrial revolution - EMA Manufacturers Forum, August 3 Marketing: Mix digital and traditional marketing activity 22 Intellectual property: Where to start?!
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International Trade DIY distribution - key to success for Olivado Congratulations to winners of the 2017 Bay of Plenty ExportNZ Awards Fake news ignores reality of Latin America
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Book now: Winter Member Briefings schedule
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26 28
Member Profile Possumdown Knitwear: Brushtail possum down, and keeping you warm
+ Inside
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Training Plus insert detailing July training courses and EMA Election Policy Manifesto 2017 insert BusinessPlus July 2017
3
ADVERTORIAL
We’d like to get to know you well. At nib, we’re all about partnerships. Partnerships with our customers. Partnerships with our staff. And now, our brand new partnership as the EMA’s health insurer of choice. Our aim is to help make quality healthcare more accessible and affordable for EMA members like you, your business and your employees by truly understanding what’s important to you. So, very simply, when we meet with you, the first thing we do is listen. That’s because, in our experience, no two people or organisations have precisely the same needs. Put simply, the better we know you, the better we can do for you. Then, we work with you to create tailored health and wellness solutions that offer cover, overall launch and ongoing management processes that best suits your wider team. Our approach is built around six key pillars. 1. Choice. With nib you and your employees can choose where you go for treatment based on your preferences, not ours. In other words, you’re in control. 2. People. Our claims and customer care team will always treat you
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BusinessPlus July 2017
and your staff as individual people, not numbers. People matter to us.
A well-structured health cover programme will help you: •
3. Excellence. We always aim to go above and beyond your expectations and deliver the right solution for you, with a smile.
Attract the right people - and retain them;
•
4. Simplicity. We make it easy to customise health cover to the specific needs of each individual. For example, if Dad is the only one who wears glasses, there’s no need for the whole family to have the Optical/Dental option.
Provide your staff with access to the private healthcare system to avoid public hospital waiting lists, which can reduce lost productivity and absenteeism;
•
Give your employees access to our myhealthHQ wellness portal;
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Demonstrate your commitment to your staff beyond their day-today workplace roles and;
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Keep your business and your employees in good, robust, healthy shape.
5. Innovation. We’re always looking for ways to improve. Like our nibSTEP corporate wellness programme. We tested it inhouse with our own staff and they loved it. Now it’s ready to roll-out. 6. Value. Health insurance is an employee benefit of real value. We’ll work with you to communicate the true extent of this value to your team. Beyond these pillars, it’s worth considering some of the key reasons why good quality health insurance is increasingly seen as important by employees. In fact it’s widely viewed as one of the top three staff benefits offered by employers.
We’re looking forward to meeting you and getting to know you a little better at the August Fresh People Breakfast. In the meantime, please remember as an EMA member your business and employees are eligible for a special, preferential offer on any nib plan. If you’d like to discuss your needs or if you have any questions, contact us at grouphealth@nib.co.nz
CEO COMMENTARY BY KIM CAMPBELL
In terms of the specific pieces of legislation, we want to ensure the principles and framework developed to address pay equity are enshrined in the new legislation.
What business wants from the new Government The countdown is on to September 23 when New Zealanders go to the polls in the General Election.
or hinders in this process, and how we can modify it for the needs of New Zealand in the 21st century.
Inserted in this issue of BusinessPlus you will find the EMA Election Policy Manifesto 2017 which outlines the policies and recommended solutions we are advocating for to deliver a better overall business environment.
One of the keys to unlocking this is how local and central government intersect. It is becoming obvious that the current model does not provide the necessary structure, governance, funding and strategic oversight that these nation-building initiatives need.
This Manifesto is driven from what you, as members and business, say are key to helping you succeed. The Manifesto outlines the four key areas we have consistently advocated for on behalf of members, supported by the top 10 policy initiatives to address these areas. You’ll see that this includes the challenges of coping with growth and development for business in particular how this relates to infrastructure investment, transport and the resource management system. We need this critical national infrastructure to enable the uplifts in economic and social wellbeing that New Zealanders expect. For too long, we’ve commissioned reports and reviews on this issue. We need to take some bold steps to truly address what is becoming an infrastructure shortfall, which will ultimately hold New Zealand back. We need to look at where our resource management system helps
Another of the key issues we list in this Manifesto is how we work towards addressing skills development, education and training. We know that this is a growing issue for employers across a range of sectors and a range of roles. In 2015, 67 per cent of employers were struggling to recruit for skilled positions and in 2016 that had risen to 72.8 per cent. Likewise we’ve seen similar trends for technicians and labourers. This is further exacerbated with 65 per cent saying there is, or soon will be, a skills shortage in their industry sector.
Leave, pay equity, ageing workforce Naturally, any EMA manifesto has to look at the wider employment environment and those matters which impact your daily management of your workforce. To the incoming Government, we’ve highlighted two areas in particular.
These are the current and incoming legislation around the Holidays Act and pay equity, along with the growing trend of New Zealand’s ageing population and the subsequent impact of this on the workforce. In terms of the specific pieces of legislation, we want to ensure the principles and framework developed to address pay equity are enshrined in the new legislation. We know that the Holidays Act in its current form is not working for many employers. We believe a working group approach (similar to the approach used for pay equity) should be applied to find a more workable solution. Of course, export growth has got to be part of any business manifesto. External trade is the lifeblood of our economy. This is a huge piece of work. We are extremely supportive, via ExportNZ, of all initiatives which give our exporters better market access and break down the barriers to trade. Over the next couple of months we will bring this Manifesto to life to ensure we have shared it across all main political parties and key influencers, to ensure the needs of business are front and centre for whoever forms the 52nd Government of New Zealand.
Kim Campbell is chief executive of the Employers and Manufacturers Association. Email kim.campbell@ema.co.nz BusinessPlus July 2017
5
A HEART ATTACK MAY NOT BE AS DRAMATIC AS YOU THINK.
If you or someone else experience chest discomfort, nausea, sweating or shortness of breath
CALL 111 IMMEDIATELY The longer you wait, the greater the risk.
Visit heartfoundation.org.nz for more information. The Heart Foundation is the charity fighting New Zealand’s biggest killer, heart disease.
The Kiwi ‘she’ll be right’ attitude can be fatal The Heart Foundation is urging workplaces to help raise heart attack awareness, calling on Kiwis to dial 111 immediately if you suspect you, or someone else is, having a heart attack.
Are your staff at risk?
Make your workplace aware
Research reveals too many New Zealanders are delaying that all-important 111 call, due to barriers such as the Kiwi ‘she’ll be right attitude’ along with a lack of understanding of the symptoms of a heart attack. New Zealanders who don’t take the symptoms of a heart attack seriously, are risking premature death or permanent damage to their hearts.
Heart attacks can occur anywhere, including the workplace. The Heart Foundation is encouraging employers to join our heart attack awareness campaign by ensuring your staff know these signs and symptoms. If you would like access to a tool kit of collateral for your workplace, please contact LeeB@heartfoundation.org.nz
Heart Attack Awareness Campaign 9-31 July.
email LeeB@heartfoundation.org.nz for your workplace tool kit.
COMMENTARY BY ABBIE REYNOLDS
International tool helps get business’ sustainability under way The benefits of being a sustainable business are well established. The trouble is: business leaders often tell me they don’t know where to start. Brands that show a clear commitment to sustainability outperform the competition, with four times the average sales growth. And companies that encourage their suppliers to review their use of resources see up to a 45 per cent reduction in operating costs. However, at first glance, sustainability can seem impenetrable. It is a broad term that encompasses every aspect of a business’s social and environmental impact, from the sourcing of raw materials, through to manufacturing and staffing, health and safety, and emissions and waste. But there is a way to cut through all that, by referring to the 17, easyto-understand categories in the Sustainable Development Goals. Also known as the Global Goals, they were developed by the United Nations in partnership with the international business community, governments and civil society. The goals offer a framework for companies to connect to sustainability at a global scale. And I can see an increasing focus on them within New Zealand business: research shows more than half of Australian and New Zealand businesses are mapping their business strategies against the Global Goals.
Local companies take action A survey of our members late last year found their priority goal was number 13 on “climate action”, ie, many of New Zealand’s leading
companies are prioritising climate change in their plans.
businesses, so this work brings great rewards for everyone.
They want to work with the government to develop a longterm vision for the transition to a low emissions economy, with investment, innovation, sciencebased targets and the adoption of low emissions technologies.
Making a start
For example, New Zealand seafood company Sanford has mapped its activities against eight Global Goals, and is now focusing on goal four, “quality education”. Sanford has started a literacy and numeracy programme for its employees titled “Keeping it fresh”, aiming to boost communication skills and confidence. The programme gets staff to identify an area they care about, such as health and safety, and conduct surveys, analyse data, find solutions and present recommendations. Countdown supermarket chain is incorporating those goals most relevant to its business in planning its corporate responsibility and employment. Already it is focusing on goal five, “gender equality”. The chain has launched a pay equity review process of salaried staff, which has resulted in 700 salary adjustments so far. Countdown has also announced a family violence policy, which gives 10 days paid leave and counselling services to affected staff among its 18,000. And its transgender policy offers support to staff who make the transition and wish to be known by a new name. There is a growing body of research that shows more diverse boards and workforces lead to better
For those businesses that are stumped, start by focussing on one or two goals. First review all the goals and identify those that align most closely to your business strategy, product or service. Are you a welding business or a tour operator? Perhaps your business is most closely aligned with goal eight, “good jobs and economic growth”. Or if you are a restaurant, your business might be closely aligned with goal two, “zero hunger”. Go online and look at the targets for each goal. Perhaps you could offer some work experience or take on an intern to help reduce the number of youths not in employment, education or training? Or you could come up with a company policy that promotes sustainable tourism, creating local jobs and promoting local culture. Set and communicate your commitment to those goals, to your staff and to customers, if you can. And in a year’s time review your progress. If you do this you will be working on the same goals as thousands of other businesses around the world. Imagine the impact. The Goals offer an opportunity for business, government and civil society to work together on the really big issues of our time. I see them as a way to make a difference in our own country, not just abroad.
Abbie Reynolds is executive director of the Sustainable Business Council. Visit www.sbc.org.nz 8
BusinessPlus July 2017
COMMENTARY BY KIRK HOPE
Immigration an issue for business in election year Politics can be expected to focus on immigration this year. Both major political parties have now shown the direction of their policies: National is trying to slightly constrain overall immigration; while Labour is focused on restricting overseas students. National’s approach is to tweak the system by restricting low-skilled migrants to three-year visas, limiting skilled worker visas to people earning more than $49,000 a year, and increasing the points needed for skilled migrants to get residency. This would reduce immigration by about 8,500. Labour’s approach is to clamp down on the numbers of overseas students, using tighter entrance criteria for lower-level courses, allowing fewer overseas students to work while studying here, and not allowing work visas for those who’ve completed study here if they don’t already have a job. This would reduce immigration by about 30,000. Tweak the system or restrict foreign students - which is the best approach?
Neither approach ideal Actually, business is not enthusiastic about either. Many employers are experiencing unprecedented demand for their goods and services and want to be able to continue to meet that demand. To do that, we need to increase the size of the workforce. Education alone is currently not enough to fill that gap, which is why we are relying on migrant workers. It would be good if the system allowed more high-skilled workers in, but lower-skilled workers are needed
in many industries too. For example, around 20 per cent of the hospitality workforce (made up of different skill levels) are migrants because there are not enough New Zealanders to fill the jobs, as confirmed by labour market tests. And overseas students are not only good skilled and unskilled labour in many businesses but also contribute greatly to New Zealand’s export earnings. The fear that they are causing a blowout in permanent residency numbers is overblown. Only one in 10 of all migrants, including international students, stays on in New Zealand permanently. Exported education services shouldn’t have to suffer because of concerns over immigration. Export education, now our sixth largest export earner, brings in over $3 billion a year. It’s a young industry that’s grown since the 1989 Education Act first allowed full cost recovery from fee paying students. Since the 1990s many communities in New Zealand have got involved, hosting international students enrolled in secondary schools and tertiary institutions all over the country. I’m proud of our export education sector. It’s a world leader in an internationally-growing industry, developed on the back of our great education and qualifications systems and the skills of our people. Overall, I believe restricting migrant intakes is not in the best interest of the economy. However, there are some aspects of National’s and Labour’s immigration policies that would be helpful for growth.
Helpful policies For example, both parties support policy settings relating to temporary work that have been fairly responsive to changing labour market and economic conditions. Both parties are offering specific policies to get more migrant workers in the regions and to make it easier for the construction industry to gain migrant workers. Regional needs have been overlooked for some time. Skill needs in places like Southland or Taranaki need to be better represented in the occupational shortages list. For regional growth, businesses rely on a mix of skills - some provided by migrants - and it’s important to give regional economies the best chance of success. And Auckland’s construction needs are critical. Policies like letting in skilled tradespeople without a labour market test would help construction firms overcome skill gaps. Such policies should not be encumbered with extra requirements on the businesses concerned, so long as they are appropriately accredited and have demonstrated that they are good employers - policies to help businesses find staff should be easy to comply with, rather than imposing extra regulation. Simplicity is needed for an effective immigration policy. Concerns about immigration levels over recent years have resulted in a system laden with rules that are complex and hard to navigate. This in itself is a constraint on business. The danger in election year is that parties will seek votes by proposing more restrictions on immigration, to the detriment of business and the economy.
Kirk Hope is chief executive of BusinessNZ. Email khope@businessnz.org.nz BusinessPlus July 2017
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EMA’s Election Policy Manifesto 2017 - A business view for the 2017 New Zealand general election Election olicy Mani esto
In summary, these policies are: 1.
Reform the resource management system
2.
Expedite critical national infrastructure
The EMA has developed a 2017 Policy Manifesto outlining the main concerns of members, and proposing recommended actions for the next Government to address.
3.
Increase funding options for local government
4.
Ease Auckland’s congestion
5.
Review Electricity Authority transmission pricing
6.
Speed up the growth of exporting
7.
Encourage innovation
We invite members to use the Manifesto to inform your own voting, and in conversations you may have with politicians, leading up to the general election on September 23.
8.
Manage ageing workforce issues
9.
Update the Holidays Act and enact a workable spay equity law
10. Close the skills and training gaps For all the detail, please see the 2017 Policy Manifesto inside this issue of BusinessPlus.
Explained: the Auckland Transport Alignment Project (ATAP)
Planning to combat road rage ATAP is one of the many acronyms that feature when transport issues are discussed in Auckland. ATAP stands for the Auckland Transport Alignment Project, which was announced in September last year, as the strategic blueprint to guide the $83 billion spend during the next 30 years on transport in Auckland. It prioritises the delivery of both roads and public transport, taking into account and managing population growth and increasing traffic congestion in Auckland. It is a landmark plan, bringing together for the first time central Government (the Ministry of Transport and the New Zealand Transport Agency) and Auckland Council (Auckland Transport) in agreement on: the data predicting population growth and congestion; on the scale of the problem and how to deal with it. The key components of the ATAP strategy are: • •
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To make better use of existing transport networks, Target investment to the most
BusinessPlus July 2017
central and local government the key transport agencies - and is a credit to those politicians involved.
significant challenges, and •
Maximise opportunities to influence travel demand
ATAP is divided into three, decadelong periods. The four critical transport challenges in the first decade are:
•
ATAP delivers both better public and road (private) transport for Auckland.
•
Enabling a faster rate of housing growth,
What the EMA does not like about ATAP
•
Addressing projected declines in access to jobs for people living in the west and south,
•
•
Addressing increasing congestion on the motorway and arterial roads, particularly between peaks,
Despite assurance to the contrary, there are no visible signs of progress. We want a governance group to drive ATAP and address funding shortfalls.
•
30 years is too long to wait. A dedicated governance group given free rein to fund and deliver projects would speed up some action.
•
Congestion on the roads is already critical. De-congestion measures should be introduced sooner rather than in 10 years.
•
Increasing public transport use on congested corridors.
A major issue in this first decade is a $4 billion funding shortfall, as additional projects, most notably a north-western busway, were added to plans. It is also projected that congestion charging is introduced towards the end of this period, depending on available technology. Why the EMA supports ATAP •
It is hugely significant that there is finally agreement between
Our main concern is that ATAP lacks ambition. Its goal is to see congestion become no worse over the next 30 years. That’s not good enough for business and individuals, who are already having to plan every part of their work and home lives to get through Auckland traffic.
EMPLOYMENT BY ALAN MCDONALD
EMA Manifesto to deliver business infrastructure The EMA’s 2017 Election Policy Manifesto, launched with this edition of Business Plus, has a clear emphasis on how any incoming Government could go about delivering new infrastructure that is critical to the success of business. It also has an emphasis on creating more speed in the planning, decisionmaking, funding and delivery of critical national infrastructure, especially in areas where we have traditionally lagged or are failing to keep up with rapid growth. International examples demonstrate that having a national body responsible for infrastructure strategy takes away much of the political argument over individual projects and keeps the focus on delivering what is needed for national success. Similarly there are overseas examples of national agencies charged with ensuring cost-effective delivery of those projects, adding their expertise in procurement, legal and financing requirements to ensure local projects deliver maximum bang for a ratepayer’s buck. Our Policy Manifesto also advocates for the funding burden to be spread across a greater range of tools, especially at local government level where it’s clear rates just can’t deliver the funds necessary for local government to maintain current infrastructure, let alone cope with the growing demand for new infrastructure. A “user pays” approach is the obvious answer to funding Auckland’s road congestion but user pays could also be the answer for local government authorities looking
to upgrade and replace water utilities. A Special Purpose Vehicle (SPV) that has the ability to debt finance would take debt off local council books, while user charges would fund the debt. Urban Development Authorities could oversee projects such as Auckland’s transport fix, or critical housing or water projects in other jurisdictions. More than $2 billion is spent annually in Auckland on transport projects but that level of expenditure can be increased by significant multiples through debt funding, just as many Kiwis buy their homes through debt funding (mortgages). Funds from assets such as Auckland’s port, airport shares or even Watercare could also be utilised to kick start an SPV dedicated to delivering a less congested transport network featuring user pays and a greatly enhanced public transport system.
Attraction of compatibility Aggregating projects under a development authority would also attract large international infrastructure finance and construction firms speeding up the delivery of projects and providing savings of scale. An authority would also ensure land use and transport plans were compatible, an opportunity missed in the recent Auckland Unitary Plan process where many of the areas earmarked for future density are already subject to congestion and lack of access for public transport. That enables local authorities to retain their oversight and delivery of local projects while also fitting those projects into a larger, nationally-agreed infrastructure
strategy. Local implementation of nationally based frameworks has been the key to the success of the overseas examples the EMA has looked at. When matched with strong governance and the ability to finance and fund, major infrastructure projects are delivered faster, and generally more efficiently in quicker time frames and on budget. To make these changes requires good co-operation between local and central government, as legislative change is also required in a short timeframe to meet these pressing needs. Underpinning the ability for faster, more efficient infrastructure delivery is a complete overhaul of our resource management system. That system goes far beyond the Resource Management Act (RMA) and requires a fundamental look at the interaction between the RMA and multiple other acts. We need to ensure our planning regime achieves the environmental goals of the RMA, which is failing in this critical area, and the demands of growth and change – where the Act has always failed to cope. The EMA’s Policy Manifesto contains recommendations to unlock productivity and growth opportunities for business. It also has a focus on export growth and legislative changes to help unlock the potential of members’ workforces. The EMA policy team will be on the road for our Winter Member Briefing series later this month. We look forward to feedback and thoughts on the Manifesto.
Alan McDonald is EMA’s policy director. Email alan.mcdonald@ema.co.nz BusinessPlus July 2017
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Seen @ EMA events
Megan McLay and Scott Kyle [Countdown]
Kirsty May and Donminique Hayward [Briscoe Group]
Liz Webb and Stuart Manning [CHT]
Terry Shelley and Tony McKenna [Linfox Logistics]
Alice Li and Robert Zhou [Milk NZ Dairy]
Alexander Larsen [Air New Zealand Cargo] and Grant Watson [Fonterra Corporate Centre]
Geoff Popham [Burnard International] and Greg Edmonds [Air New Zealand Cargo]
Roger Carson [EMA] and Kim Andrews [Straker Translations]
Fan Shang and Scott Ballinger [LIC]
David Hallett and Jeremy Hughes [Company-X)
Kim Campbell [EMA] and Hon Michael Woodhouse [Minister of Workplace Relations and Safety, for Immigration and ACC]
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BusinessPlus July 2017
EMPLOYMENT BY MATT DEARING
Employee fired for swearing at manager wins job back + compensation A recent Employment Relations Authority determination serves as a reminder that employers need to ensure that, where they are considering terminating an employee’s employment, their decisions are proportionate and justifiable in the circumstances. The case involved Mr Waihape who was employed by AFFCO at its Napier tannery. He was also the union’s site secretary and as such was responsible for representing the interests of the union’s members on site. His employment was terminated after an incident during which he swore at his manager. He had started with AFFCO as a 19-year-old in 1982 and worked at the plant up until termination for serious misconduct. Mr Waihape claimed he was unjustifiably dismissed, and sought reinstatement. His terms of employment were contained in a collective agreement, which contained a provision saying ‘workers do not complete work other than perishables on Saturdays, other than in exceptional cases’. The events that led to Mr Waihape’s dismissal occurred in August 2016. He said that on Saturday 6 August he and others were asked to complete non-perishable work. This was an issue he had discussed with management only a couple of days earlier and he raised this with the production supervisor who agreed
production should be limited to perishable items and, as a result, staff could finish and go home. At a production meeting the following Thursday, the manager advised there would be work the following Saturday. Mr Waihape told the Authority that he and his team completed the perishable work on the following Saturday and packed up as usual to go home. Then the manager approached Mr Waihape and said, “What the f… are you doing? Get back on the Sammer”. Mr Waihape accepted that he responded by saying, “For f…’s sake Darren, what are you on about?”
approached Mr Waihape when he saw the staff cleaning up. He stated that he asked what was going on and was told “we are finished”. He said he made it clear the hours of work were 7am to 12pm. He went on to say he and Mr Waihape exchanged words before the applicant raised his voice and yelled at him: “Who the f… do you think you are?” He said Mr Waihape repeated this statement again as he walked off. On 17 August, Mr Waihape was given a letter saying he was being summoned to an investigation/ disciplinary meeting on 19 August. It advised the purpose was to discuss four allegations of serious misconduct, which were:
He justified this by saying his manager was well aware staff did not process non-perishable goods on a Saturday.
(a) Mr Waihape was threatening and intimidating towards a person on company premises and deliberately used offensive and abusive language;
Mr Waihape said his manager responded by “ranting and raving and swearing at me”.
(b) He left his work station without authority from his supervisor;
He said he pointed out that all the perishable work had been done and he was therefore finishing for the day, which he subsequently did. Mr Waihape said his manager finished the discussion by saying, “I won’t talk any more, you swore at me”, which he found surprising since swearing is a common practice in their workplace.
(d) He had breached the implied duty of good faith, fidelity and loyalty by instructing other staff to cease production two hours before schedule completion.
The manager’s version of events differed, though the tenor was the same. He said he
(c) He refused to follow his supervisor’s lawful and reasonable instruction; and
Following a disciplinary process, Mr Waihape was dismissed for serious misconduct. Continued pg24
Matt Dearing is a senior solicitor at EMA Legal and a member of the Auckland District Law Society’s Employment Law Committee. Email matt.dearing@ema.co.nz BusinessPlus July 2017
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EMPLOYMENT BY DAVID SHANNON
Overseas postings – hardship for some, opportunity for others Assigning executives to overseas posts is often a challenge for employers when the family of the would-be expatriate assume they will maintain the same style of comfort and consumption they have grown used to in New Zealand. It is this reluctance to change family lifestyles which can make expatriate compensation something of a problem. The idea that the expatriate should “maintain a home consumption pattern” and that the employer should be expected to provide for it, should be challenged from the outset. Human resource managers of organisations that routinely post executives overseas are probably familiar with those employees’ expectations of payment for every last disruption, alteration and inconvenience they might experience while offshore. Besides a higher salary for the posting, they often demand compensation for a higher cost of living, perceived hardship and hazards, mid-tour rest and recreation trips and a range of other benefits not provided to their colleagues back in New Zealand. And then, they expect an “overseas allowance” just for going. My personal recommendation in such a case would be that such an executive not be sent overseas at all – ever. There are executives who view the overseas posting, first, as an inconvenience, and secondly, as a good way to bump up their income. They clearly do not see it as an opportunity to grow or learn. People with this attitude have no business going overseas, as they will spend the entire time demanding compensation for every little
inconvenience not experienced in Takapuna or Karori suburbs.
Cultural adaptability An overseas assignment should be seen as an opportunity to grow as a citizen of the world. If the intent is to construct an artificial “New Zealand way of life” in another culture, why bother going? Stay home. Employers might as well give the chance to someone who will appreciate it.
Most New Zealanders have done an “OE,” and we did not do it for the money. We did it for the experience – the thrill of learning about other places and peoples. An overseas posting offers the opportunity to experience another culture. While expatriate executives may not be expected to actually “pay” for that opportunity, they should at least not expect their employers to “pay” them additionally for the privilege. Of course, travel, housing, medical coverage and such costs should be covered, but not an “overseas allowance” just for going. An executive’s demanding a “hardship allowance” to go to Hong Kong or Singapore – let alone Australia - only demonstrates a lack
David Shannon is EMA’s remuneration consultant. Email david.shannon@ema.co.nz 14
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of cultural adaptability. Studies have shown that the highest failure rates of expatriates are among those who are the most “cocooned” in their assignment, ie, those who attempt to maintain their home consumption lifestyle. While my own previous international postings may not be to everyone’s taste (in Iran, Niger, Haiti and Nepal), the experiences gained cannot be replicated in New Zealand (which I
have to admit is another expatriate experience for me). Certainly the cost of maintaining a Western lifestyle in those places is higher, if not impossible, but where else can you experience anything remotely resembling the ruins of Persepolis, a Tuareg Nomad camp, Henri Christophe’s Citadel or dinner with (the late) Sir Edmund Hillary? No employer should be expected to pay extra for making those privileges possible. The gains from an overseas posting include incredible sights and experiences in fascinating cultures. Anyone who feels their employer should be compensating additionally for that opportunity is clearly not the person for the assignment.
EMPLOYMENT BY PAUL JARVIE
The Courts and injury reparation New Zealand’s “no fault, no liability” Accident Compensation Corporation (ACC) scheme was launched in 1974 but there have been changes since. The foundation for “no fault, no liability” was enshrined in the social contract whereby every person was guaranteed cover and entitlement from ACC after they suffered an injury accident event, while losing their right and need to seek legal redress subsequent to the accident (the right to sue). The no fault/no liability scheme remained intact for some time until “experience rating” was introduced that increased levies for poorperforming employers because they were a poor risk in ACC’s eyes. The Sentencing Act and legislation in the human resources and safety spheres acknowledged the ACC scheme and its limitations on payments: claimants only receive 80 per cent of earnings lost. This claims position was tested in 2009 when a cyclist was injured by a mattress that had come free from a trailer being towed by a car. The accident victim received compensation, medical treatment costs, rehabilitation plus other injury-related allowances from ACC. However, the injured cyclist was still short of the 20 per cent of their pay that ACC was not able, by law, to pay. The car driver was convicted of careless use of a vehicle (not tying down the mattress), and was disqualified from driving for six months plus ordered to pay $20,500 of which $11,555 was to reimburse the victim for the 20 per cent in lost wages. The driver appealed this decision both in the High Court and Court of Appeal, but lost on both occasions. However, the Supreme Court overturned the previous appeals and clearly restated that “reparation
The “reparation top up” can only occur under a criminal process and is not available under a civil process. This creates a two-tier system of compensation in New Zealand.
sentences cannot top up weekly compensation under the ACC scheme”. Then along came the Sentencing Amendment Act 2014 which: • Allows the Courts to impose the shortfall in a victim’s ACC compensation; • Only impacts criminal cases including occupational health and safety breaches; • Reparations would likely rise given the increased scope of losses; • eparation is covered under the statutory liability clauses of private insurance policies. The ACC shortfall is problematic in that it is based on the claimant’s earnings before the injury. For example, compare a pilot and a machine operator both suffering a severe and permanent injury: the 20 per cent shortfall for the machine operator on $50,000 p a during 40 years equals $250,000; the pilot on $150,000 pa equal $1.2 million.
Compensation for earnings shortfall Just recently the Sentencing Act was used again. Last month a company and its director were ordered to pay a work injury victim $226,300 to top up the loss of earnings after the ACC entitlements. The injuries were serious and permanent.
There is no clear process to determine the loss of earnings and it would appear the courts have used their own internal system. Do calculations include a cost of living figure and increments of pay due to tenure and possible job promotions? There is no agreed process. The Courts did recognise that the victim was also entitled to a lump sum given the nature of the injuries. This is a major risk to businesses following a workplace injury and a prosecution (a criminal conviction). The “reparation top up” can only occur under a criminal process and is not available under a civil process. This creates a two-tier system of compensation in New Zealand. Many people are injured in criminal acts but often the perpetrator is not convicted, thus no criminal process, and while the victims still have ACC coverage they have no ability to seek any top up. This new OSH case should prompt businesses to re-examine their insurance policies to ensure there is enough cover for possible future claims. Insurers likewise may look at their premiums to offset any major claims made against their policies. The foundation of our no fault/ no liability scheme has again been chipped away, however, it is still far preferable to the former litigious process where only the lawyers and medical specialists won. The ACC scheme remains viable, affordable and largely fair but there are tensions about the compensation it pays. These reparation orders may be one way of making it more equitable for the victims of injury. Obviously prevention pays. The absence of injury equates to no fine, no reparation, no legal fee, no reputational damage …the list goes on.
Paul Jarvie is EMA’s manager of employment relations and safety. Email paul.jarvie@ema.co.nz BusinessPlus July 2017
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EMPLOYMENT
Affording the wages, dismissing to keep other staff safe, stopping ex-employee badmouthing us Q. My business is collapsing around my ears and I will have to start letting staff go, though I don’t have time to deal with that while scrambling to sort our suppliers and customers’ overdue orders. What do I have to tell staff and what if I can’t afford to pay them wages and holiday pay at the end? – Mal Dear Mal Sorry to hear things are so tough. However, there is no getting around your legal obligation to undergo the formalities of a restructure, which involves consultation with staff and justifying why you have to let them go. If you don’t have time, hire an EMA employment relations consultant. Or a lawyer from our Legal team, which charges member rates.
will decide how the business will be dealt with, including the sale of any assets the business owns. The Official Assignee will try to recover your business records including the wage books - so he can help employees collect their evidence to file claims for any salary, wages, holiday pay and/or redundancy they are owed against the bankruptcy. Their claims may be considered preferential, which means they will be paid out before the unsecured creditors, if there are funds available. Is you have a company registered with the New Zealand Companies Office, the company is responsible for the debts.
You are obliged to pay wages and holiday pay that are owed, when letting people go.
Q. Our employee has been in court for beating up his wife, so I don’t want him on staff, even though the details were suppressed. Can we fire him? – Eddie
If you are bankrupted as a sole trader or partnership, the Official Assignee
Dear Eddie The answer to your question is, as
BEST E H T EST YOU WE T R O F .. .
for most employment matters: it depends. If your employee held a role connected to safety and wellbeing of others, then yes, you could instigate a disciplinary process. That process involves investigating, with the employee, the known charge and court case, and discussing the implications for your ability to trust him to do his job and protect staff who also knew of the case, to feel safe working with him. The process can lead to warnings and termination. It can be acceptable for you to take action even though the details are suppressed, because you could have a real interest in knowing about this employee’s violent behaviour. In a recent case that started at the District Court in relation to a security guard who admitted assaulting his wife, the employer found out and attended the Court proceedings. The Court imposed a suppression order and discharged the man without conviction.
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The employer then told other key staff, suspended the security guard while they investigated the issue of his violence, and ultimately dismissed him after a final written warning. The employee took his personal grievance for “unjustifiable disadvantaged by the issuing of a final written warning and by his suspension from work”, all the way through the Employment Relations Authority, Employment Court, Appeal Court and Supreme Court – which dismissed the employee’s appeal and vindicated the employer for the suspension, but not the warning. One of the employee’s complaints was about the employer’s sharing of supressed information. The courts found in favour of the employer on this matter, noting that he/she had a genuine interest in knowing this information; and that the employer had told a small group, all of whom could be said to have had a need to know. Q. We settled with an employee at mediation when he left and subsequently he has been badmouthing us in an email including to a staff member, although we explicitly signed an agreement not to. What are our chances of stopping this? – Ted Dear Ted You need to serve him with a statement of the problem, and
arrange to discuss it with him. Hopefully he will agree to cease such disparaging behaviour. If he does not respond or comply then you can file with the Employment Relations Authority. In a recent similar case the Authority went ahead with an investigation meeting – even in the employee’s absence because he didn’t show up. The Authority considered whether the former employee breached the record of settlement, and if so whether a compliance order and/or penalty was appropriate. The Authority made an order that the man comply with the settlement, and commented that this kind of “flagrant behaviour” should not be condoned. The Authority concluded that a penalty should be imposed based on the nature of the breach and the need for deterrence. A breach of settlement incurs a maximum penalty of $10,000. In this case the breach was deliberate and designed to cause loss to the company, however, the narrow audience limited the extent of the damage to a potential penalty of $5,000. But the Authority then considered any mitigating factors, and found that the employee had suffered during his employment and was attending counselling, so reduced the potential penalty to $4,000.
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The Authority then looked at similar cases, settling on a penalty of $2,000. Of that, $1,500 was to be paid to the company and the remaining $500 to the Crown. In addition, the former employee was ordered to pay $1,800 towards the company’s costs. You decide how far to pursue the matter in terms of whether it is worth it.
• By the EMA communications team in consultation with EMA Advice, and loosely based on real calls to EMA’s AdviceLine. All names are fictional. The information in this article is a guide only and not to be used as business advice without further consultation. EMA members can start with our free AdviceLine team at phone 09-367 0909 or 0800 300 362 (within New Zealand), and 1800 300 362 (from Australia), 8am-8pm weekdays NZ time; or email advice@ema.co.nz You can also find information at www.ema.co.nz such as the A-Z of Employing – a manager’s guide on more than 100 specific employment topics, or the detailed Employer Guides on 12 popular topics.
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EMPLOYMENT
EMA helping school leavers gain skills for work Young people often face difficulties succeeding in the workplace when they do not have “soft”, work readiness skills. So EMA has been partnering with the Auckland Council’s council controlled organisation, COMET Auckland, to tackle this problem. The organisations have developed the Youth Employability Programme and EMA is funding a trial of it in Manurewa High School in Auckland. The Programme provides an explicit sequence of learning activities to build the competencies that businesses want young people to display. The process includes students attending workshops, extensive work experience and accreditation of their skill levels by an employer. Manurewa High School has embraced the Programme to prepare students for the workplace. The school is using it as a way to mentor youth into tertiary education as well as trade apprenticeships, and to build connections with local businesses. As part of the Programme, senior secondary students participate in at least 20 hours of community work and at least 80 hours of work with local business in the year. Manurewa High equips trade
The school has also collaborated with local businesses to train and mentor young adults within its 280-place trade academy, one of the biggest trade academies in New Zealand. A specific work experience project is the Auckland Airport Jobs and Skills Hub, “Ara”. In addition, Manurewa High is part of a cluster of local schools including Papakura High School, James Cook High School and Alfriston College that works closely with nearby Manukau Institute of Technology to teach technical knowledge, from hospitality and catering to construction and engineering. Manurewa High School trade academy manage Steve Perks helps students foster a workplace mindset, finding work experiences that fit with the students’ interests. Steve says experience in the workplace is valuable learning for the students. When the Youth Employability Programme is completed, students
Inoke Payne (left) and Tevita Mailangi in the workshop.
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attain a Licence to Work that details their performance, providing extra insight into these new potential employees. The Licence enables an employer to see how he/she could use the employee skills in their workplace.
students with appropriate gear, including safety boots, a hard hat, “site safe” and first aid certification, through funding from EMA’s Pathways to Employment Trust, which is a way for business to contribute to future youth opportunities.
The Programme also encourages employers to look at their own employment practices and realise how important soft skills are in developing staff with leadership potential. One employer involved in the Programme last year stated that being involved had “given me time to reflect on how I can grow my business, be more productive in the workplace, be a better employer and support my employees.” Another employer mentioned: “The more that young people have the opportunity for some real-life experience, the better – they get to determine where their career might lead to, who they are as individuals, and it gives them a glimpse into the real work world. There is nothing better than practical experience!” If you would like to find out more about the Youth Employability Programme and how you can offer work experience placements for students, please visit www. cometauckland.org.nz
Ronil Chandra (left) and Tevita Mailangi building a benchseat
EMPLOYMENT BY CARYN LEITGEB
Great customer service: what has memory got to do with it? Great customer service is vital to organisational success. One single bad customer experience could have farreaching and disastrous consequences for a business. On average, people experience many more good things than bad. However, when we experience an unpleasant event, we humans do not forget it easily. In fact, we tend to remember negative events in the finest detail, and much more accurately than good ones. There are both physiological and psychological reasons for that. According to Professor Nass, the co-author of The Man Who Lied to His Laptop: What Machines Teach Us about Human Relationships, negative emotions involve more thinking, so the information is processed more carefully. We then tend to deliberate more about these negative events, and use stronger words to describe them to someone else. A bad experience will also wear off a lot more slowly than a good one. In fact, you may have noticed how receiving criticism has a much deeper and longer-lasting impact on you than receiving praise. It turns out that the greater impact of negative events is necessary for the survival of our species. If we aren’t able to remember situations that put us in danger, we would quickly
become extinct. For example, our ancestors quickly learned that they had to protect themselves from their predators. They also learned that if they ate poisonous berries, they would feel very bad, and would possibly die. Remembering more pleasant learning experiences was unlikely to have any significant impact on our survival.
The impact of good experiences So what has this got to do with customer service? Well, we all know that bad impressions are quicker to form, and much more difficult to change, than good ones. A poor experience will thus have a long lasting effect on a customer, and it is unlikely that person will want to return to your business. Not only is it possible you have lost that customer, but that customer would likely have shared the bad experience with their friends, relatives, colleagues and acquaintances, and to anyone who may be listening or reading about it on social media platforms, who in turn would spread the bad news to their own friends, relatives, colleagues and acquaintances, and to anyone who may be listening or reading about it on social media platforms! This could cause a devastating ripple
effect for your organisation that would be very difficult, if not impossible, to repair. A professor of social psychology at Florida State University, Roy F Baumeister, states that many good events can overcome the psychological effects of a bad event. In fact Ruby Newell-Legner suggests in her book, Understanding Customers, that at least 12 positive experiences are needed to overcome one bad event. That is a lot of very hard work to correct a mistake that could have been easily prevented in the first place. Serotonin is a neurotransmitter that is thought to be a contributor to feelings of happiness and well-being. According to an article in Psychology Today, remembering bad events can decrease your serotonin levels. However, remembering good events keeps you from thinking about negative events, and it increases serotonin levels. If that is so, creating a unique customer experience will help you to attract new customers and retain loyal ones. Your USP (unique selling proposition) can differentiate you from your competitors, which is why each and every experience with your company should be memorable. We can help you develop excellent customer service.
Caryn Leitgeb is EMA’s portfolio manager – training and events in Waikato/Bay of Plenty. Email caryn.leitgeb@ema.co.nz
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Congratulations Geoff Whitcher: Queen’s Birthday Honour EMA congratulates Geoff Whitcher (pictured) on being appointed an Officer of the New Zealand Order of Merit (ONZM) for services to business and education, in the Queen’s Birthday Honours 2017. Geoff was a long standing member of the EMA board of directors till he retired in 2014. EMA’s chief executive Kim Campbell says, “All of us in the EMA family can bask in the reflected glory of Geoff Whitcher’s elevation. “The awarding of the Officer of the NZ Order of Merit comes at the end of a distinguished career in manufacturing and mentoring.
New Zealand business well past when most people would be retired and on the golf course. “Those of us who worked with him at EMA have been deeply enriched by his wisdom and passion for business. “Let us together congratulate Geoff on his well-deserved recognition.” Geoff’s official biography describes his as instrumental in driving a number of successful business initiatives and as New Zealand’s first Equity Management Director, he pioneered capital market approaches that have advantaged a number of New Zealand enterprises.
“Geoff’s lasting legacy will be almost a generation of young New Zealanders from the University of Auckland Business School who he encouraged, taught and mentored with his own brand of enthusiasm and experience.
In the early 2000s Mr Whitcher was a key organiser of the Knowledge Wave Conferences, which was pivotal to the establishment of KEA, a global network of expatriate New Zealanders with more than one million members.
“He continued with his enthusiasm for innovation and entrepreneurship in
As the Commercial Director of the University of Auckland
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Developments he argued for the addition of a business incubator to the new International Centre for Entrepreneurship (ICEHOUSE). He served on the Board of ICEHOUSE for nearly a decade and was heavily involved in its expansion. He established and chaired the steering programme for Spark, now Velocity, the University’s Entrepreneurship Programme. Since 2003 Velocity Alumni have launched 107 ventures, attracted more than $212 million in investment, created more than 535 jobs, and have sold products and services into 37 countries. As a founding director of the University of Auckland Business School’s Centre for Innovation and Entrepreneurship, Mr Whitcher was closely involved with the design and operation of the Master of Bioscience Enterprise and the Master of Commercialisation and Entrepreneurship.
Artificial Intelligence as big brother or game changer A decade or more ago I used to defeat chess-playing computers for a small wager. It was simple stuff really – just find a weakness and ruthlessly exploit it: in my mind, computers were basically binary and thus “stupid”. My party trick is ancient history and I am frankly a little scared about what happens when computers can outsmart humankind. Some would argue that we have nothing to fear from artificial intelligence (AI). Others feel the opposite. UK physicist Stephen Hawking recently wrote, “The full development of AI could spell the end for the human race.” US-based entrepreneur/inventor Elon Musk, founder of PayPal, Solarcity and Tesla, called it “summoning the demon.” Putting aside visions of Arnie and terminators, we should also look at the impact AI might have on business.
IN BUSINESS BY DAVID SPRATT
Most Kiwi business owners and leaders are constantly aware of the need to innovate, optimise and seek competitive advantage by being cleverer than the guy overseas. Thus, we find ourselves asking: • How do we get the best out of what we have? • How do we employ better people and make them more effective? • How do we use the limited space we have at our disposal? • How do we get the machines that we paid heaps for, to be more efficient?
Don’t believe me? How do you think Amazon remembers your book purchases and even title searches and then suggests others that may be of interest? AI also allows Amazon to identify your location, match it to the right supply chain service to execute the sale and delivery of goods.
I cannot count the number of times I have spoken to business people who know what needs to be done to make companies better or quicker but simply don’t have the spare time to do it.
We have always had AI; it has just been too expensive to make much of a difference. Now it’s available as a service from the likes of Google (Google AI) and IBM (Watson) and numerous clever start-ups.
Here is where AI comes in. It not only analyses the data to answer the question but it can also act on the insight, often in real time.
The availability of world class AI via Software as a Service model means that we don’t need supercomputers and massive budgets to take advantage of AI in New Zealand.
Amazon’s arrival in Australia is causing tremors across the country’s whole retail industry. It’s not just books they sell; you name it, they have it, at a price too cheap to resist. At the heart of this frighteningly effective, multinational monster is AI.
David Spratt is a director of Total Utilities Management Group. Email david@totalutilities.co.nz
Prepare for the 4th industrial revolution - EMA Manufacturers Forum, August 3 Mention “Industry 4.0” to most manufacturers and you will raise eyebrows. If they’ve heard of it, they are likely to be confused about what it is. And if they haven’t heard of it, they’re likely to be sceptical that it’s just another piece of marketing hype. However, Government policies for Industry 4.0 are gaining momentum throughout the world. In Germany, which coined the term “Industrie 4.0”, it is part of the Government’s “High Tech Strategy 2020”. The US is advanced in its vision of Industry 4.0 with its Advanced Manufacturing Partnership that was introduced as part of the “US Industrial Strategy”. The “Made in China 2025” initiative is designed to upgrade Chinese industry; the UK Government’s “National Innovation Plan” includes its approach to Industry 4.0. The
Australian Prime Minister’s “Industry 4.0 Taskforce” has agreed to cooperate with Germany in this development.
enterprises (SMEs). Support should be made available to help SMEs retrofit their existing machines to become part of Industry 4.0.
The New Zealand Government’s “Business Growth Agenda” has yet to feature Industry 4.0.
The next EMA Manufacturers Forum will focus on these technologies, with a site visit to The University of Auckland’s Newmarket Campus to view the Laboratory for Industry 4.0, and more.
Industry 4.0 is usually referred to as the digitisation and linking of manufacturing processes along the whole global value chain via the internet, with smart manufacturing using cloud computing, the Internet of Things, real time sense and response technologies, big data analysis, robotics, artificial intelligence and 3D printing. Important questions arise about how the revolution will transform the business of many small-to-medium
Manufacturers Forum invitation Date/time: Thurs, August 3, 3pm6pm Venue: The University of Auckland, Newmarket Campus, 314-390 Khyber Pass Rd, Newmarket Charge: Free for EMA/ExportNZ members Read more and register: www.ema.co.nz and search under “Manufacturers Forum” BusinessPlus July 2017
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IN BUSINESS BY ROSINA WEBB
Mix digital and traditional marketing activity Keeping up with trends and demands in the target audience is difficult for business owners or executives, especially when balanced against immediate issues at play such as supplier price increases, staffing or simply earning enough to pay the wages. An important trend is the change in the way customers are shopping for houses, holidays, cars and clothes, and seeking products and services. Therefore the way a product or service is marketed needs to change in line with that. Here we discuss the merits of traditional vs digital marketing activity, and what might be the right mix for business success.
Don’t ignore digital Traditional methods of marketing your brand, product or service such as in print, radio, direct mail and television will still drive awareness and have merits that cannot be ignored. But you might be missing a large portion of your target audience if that is the only way you communicate with it. In 2013 Frost and Sullivan’s new research reported that in New Zealand, more than 65 per cent of New Zealanders aged between 15 and 65 owned a smartphone, with ownership expected to rise to 90 per cent next year in 2018. Essentially we have the internet in our pockets, with the ability to research, share referrals or buy anything with absolute immediacy. And 89 per cent of consumers begin searching for products or services using a search engine. If you have no digital presence or brand, you may not have a brand at all.
It’s crucial to really understand who you are targeting and what their preferences are, such as where they research purchase decisions, how they shop (for products, services) when they are busy and what their purchase influencers are. Know your target audience It’s crucial to really understand who you are targeting and what their preferences are, such as where they research purchase decisions, how they shop (for products, services) when they are busy and what their purchase influencers are. If your target market is baby boomers (born post WWII to 1960s) you may want to consider a mix of traditional media as well as digital. But targeting Generation X, Millennials and Generation Z (born in the 2000s) is a whole new ballgame.
A website is not enough It’s not enough anymore to simply have a company website. Working solo, your website is simply a static billboard that may not have anyone driving by for weeks.
It’s important that website content is updated regularly, the site is easy to navigate both on desktop and on mobile, and that it serves a purpose, ie, actually achieves something. Does your website truly reflect the brand or services you are selling? A good digital strategy will drive your target audience to your website.
The benefits of digital The benefits of digital marketing are many, but the standouts are the cost per reach and instant engagement and interaction with your target audience. You receive feedback and comments on what worked and what didn’t, as soon as you post or update. Sales, clicks and visitation can be tracked immediately, and interaction can be measured easily with online metrics. Continued pg24
Rosina Webb is founder and managing director of Energise and Associates. Visit www.energise.net.nz 22
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IN BUSINESS BY BRIGETTE SHONE AND NATALIE HARRE
Intellectual property – where to start?! The upfront cost of obtaining registered intellectual property (IP) rights can be daunting for many businesses, particularly start-ups and small-medium enterprises.
logos, and your products including electronic drawings and designs. Ensure these are dated and the author and the author’s location are identified.
However, securing such rights, whether it be a trademark, patent or design registration, can be hugely valuable. Registered IP rights secure you a certain monopoly over your competitors, give you more robust legal weapons to enforce your IP, and provide intangible assets that can be sold to third parties.
Importantly, the author of the copyright will be the owner of that copyright unless a contractual relationship shows otherwise, eg, employment. Retain copies of employment agreements or contracts commissioning any works. Having the author sign a deed assigning ownership of copyright at the time the work is created can save you a lot of time and possible heartache later.
No matter the size of your business, it is worthwhile developing an IP protection plan. Consider what your target markets are: are they primarily in New Zealand or elsewhere; and what IP rights do you have or do you hope to have? Depending on the nature of your business you might need to consider trademarks, patents, designs, copyright, trade secrets, confidential information and licensing. Below are some tips to help you maximise your investment. Copyright in NZ arises automatically In New Zealand, copyright arises automatically in an original work. Copyright protects the expression of an idea (rather than an idea itself). Copyright may exist in packaging, a logo, marketing material, and even the product itself. If someone copies your copyright work without permission you may be able to enforce your rights, but you will need to prove that you are the owner of that copyright and that the work is an original work (amongst other things). Good record-keeping is paramount. Retain the original drawings of your packaging, your
Register trademarks in your key markets A registered trademark provides you with a certain monopoly of use of that mark in respect of particular goods or services. A registration also provides notice to the world of your rights, and a confusingly similar mark will not be registrable for similar goods or services. Importantly, you can only sue for trademark infringement if you have a trademark registration. Enforcing rights in a registered trade mark is much simpler than relying on “use” and “reputation” rights in an unregistered mark. At the outset, consider adopting a distinctive name or logo. The more distinctive (and less descriptive of what you do) the stronger your rights will be. The invented name “KODAK” for cameras is an example of a good, distinctive brand name. Make sure you undertake marketplace searches to ensure that someone else does not already have your intended name or brand. Search the trademarks register and
the internet for any similar brands. An IP specialist can undertake thorough “freedom to operate” searches for you. Trademarks are registered in respect of particular goods and services. Think carefully about your current business but also the direction that your business might head in the future. Your trademark registration will be more useful if it covers the full spectrum of goods/services that your business provides and intends to provide. Ensure employment and contractual agreements protect future IP Disputes over IP often arise from employment and contractual relationships. It is imperative to ensure that you adequately protect yourself in writing at the outset of these relationships and make it clear who will own any IP arising from the relationship. Also make sure you include clauses that protect your existing IP, including confidential information and trade secrets. Some important questions include: who will own the IP? Who will bear the cost of ensuring any new IP rights are vested in the appropriate party? Are any other limitations necessary, such as the parties’ rights to use, licence, register, or sell rights in the future? Wrap-up: • Identify your target markets and prepare an IP protection plan. • Good record keeping is essential for copyright. Ensure you own copyright in your logos, packaging designs and products. • Choose distinctive brand names and consider protecting these in your target markets.
Brigette Shone and Natalie Harre are senior associates at Baldwins. Email Brigette.shone@baldwins.com or Natalie.harre@baldwins.com BusinessPlus July 2017
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Continued from pg22
Mix digital and traditional marketing activity Traditional media can be harder and costly to measure. Digital marketing reaches your true target market at a fraction of the cost of a six-month print campaign. You can reach more of your desired consumers, in multiple markets without needing to leave the country. You can even geo-target your consumer online. Digital allows you to have closer engagement with your customers and potential customers. Test ideas, thoughts and new products and services with them first, before investing in development. Receive insights and ideas even from those not currently purchasing from you but on your radar.
Correct digital platform However, you do need the right digital platform for your brand or service.
Facebook isn’t a must for every business; its use depends on who you are trying to reach and the type of business you are in.
messaging is consistent across multiple media.
Is Pinterest right for a car insurance company? It may well be - if this business is trying to recruit Gen Z as they learn to drive.
Don’t dismiss the impact a welldelivered industry event or wellmessaged traditional billboard can have, encompassing a link into a compelling call to action within an online campaign.
Taste and feel still matter
In summary, it’s a mix
Digital activation also can’t be done successfully in isolation because consumers still need the reassurance of authenticity. There is still value in traditional media and methods of marketing; consumers still want to test, taste and experience their preferred services or brand, directly and in real life.
A balanced mix of traditional and digital marketing activity, targeted correctly to your target market can increase your brand or service awareness, engagement levels, reach and ultimately your sales revenue.
Traditional media can and should support a good digital strategy, to form an integrated approach where the brand or service
Don’t be frightened by digital marketing: it has enormous power, is cost effective and has the ability to connect you directly with your target audience.
Rosina Webb is founder and managing director of Energise and Associates. Visit www.energise.net.nz
Continued from pg13
Employee fired for swearing at manager wins job back + compensation Justify dismissal The Authority noted that AFFCO accepted it dismissed Mr Waihape and, in doing so, was required to justify the dismissal. Section 103A of the Employment Relations Act 2000 states the question of whether a dismissal is justifiable: “… must be determined, on an objective basis, [by considering] whether the employer’s actions, and how the employer acted were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal … occurred.” Regarding the swearing, the Authority accepted Mr Waihape’s and other employees’ evidence that it was
the way people normally expressed themselves in this work place and was not designed to intimidate, saying: “It is well established that an employer will fail to justify a dismissal where communications do not appear to be greatly out of character with others apparently condoned by management in the workplace.” The Authority also preferred the evidence of witnesses who claimed that Saturday work was ‘job-andfinish’ rather than working specific hours as claimed by the manager. The Authority went on to say a reasonable employer will not address such an issue by singling out a union delegate for disciplinary action when he was
Matt Dearing is a senior solicitor at EMA Legal and a member of the Auckland District Law Society’s Employment Law Committee. Email matt.dearing@ema.co.nz 24
BusinessPlus July 2017
doing little more than acting on behalf of his membership and pointing out what he understood to be their rights. As a result, the dismissal was found to be unjustified. The Authority granted reinstatement along with reimbursement of lost wages, and AFFCO was ordered to pay Mr Waihape $6000 as compensation for injury to feelings. The take-home point from this case is that employers need to ensure that when they are considering undertaking a disciplinary process and possible termination, any decision will be proportionate to the issue, and be justifiable.
IN BUSINESS BY CATHERINE BEARD
DIY distribution - key to success for Olivado “We learnt the only way to be price competitive was to keep control of our distribution costs.”
Jason Vokes
distribute the product ourselves. The result is that the product is competitive in the local markets against the equivalent quality olive oil.
Supply and distribution are two of the biggest issues Kiwi exporters face, especially when it comes to food and beverage products.
“We learnt the only way to be price competitive was to keep control of our distribution costs.”
I caught up with Jason Vokes, who runs the New Zealand operations of Olivado from Kerikeri, to learn how this company has overcome both supply and distribution issues to grow into the biggest producer of organic avocado oil in the world.
Kenya came about as a source through solving the supply problem: as New Zealand has a relatively small avocado crop, and an irregular supply, in 2010 Olivado looked around the world to find another crop. It opened a factory in Kenya, contracting 1800 local farmers to produce organic avocadoes, which are then pressed for oil.
Olivado was set up in 2000 by a group of guys, including the current chief executive, Gary Hannam. After about five years, it became apparent that the business model needed reviewing. Volumes hadn’t increased a great deal, high costs of sourcing oil and pursuing distributors in each market meant the product had a very high price once on the shelf overseas. Gary had always wanted to go direct to supermarkets, and in 2009 he took over the business. The turnover then was about US$1 million worldwide, and now it’s up to US$10.5m. “He has achieved this through, a) pursuing the bulk oil market and opening up organic sourcing in Kenya, and b) opening our own marketing companies in Europe and the States,” says Jason. “We now have one person in each market who is solely responsible for selling, but we use service warehousing, and we bottle and
Taking control
Olivado is now the largest producer of organic avocado oil globally, making about 96 per cent of the world’s supply. It has produced 150 metric tonnes of conventional avocado oil in New Zealand this year, and 300 metric tonnes of organic oil in Kenya this season. It also bottles organic oil in the UK to supply supermarkets, and has a service warehouse in Finland that supplies European supermarkets.
Says Jason, “People aren’t deep frying like they were, so they aren’t buying cheap, higher volume oils so much. The Olivado brand stands for high quality culinary oils, with health and dietary benefits. We also produce organic and fair trade products where possible.” As for the future, Jason says they could sell three times the amount of oil they currently produce, so are actively looking for a way to increase their supply. Olivado is cultivating a new crop in Tanzania and will be opening a pressing plant there in the next 12 months. It’s also moving into the Australian market, and will continue to grow its customer base in Europe and the US. So, as production expands and mouths around the world need feeding, the global Olivado story looks set to continue well into the future.
Jason’s Tips for Exporters •
If possible, control the distribution chain yourself. You may need to run at a loss for a while, but it means you can compete at the right price in the market, especially if you’re an FMCG [fast moving consumer goods] business.
•
Otherwise choose a distributor that has demonstrated success with a similar product or within the right channels for you, and talk to them openly about costs – theirs and yours.
The other part of the business is bulk oil, selling organic avocado oil to the large cosmetics companies and those that broker oil to other companies. The Kerikeri factory processes New Zealand avocado oil and bottles it for the rest of the world. It’s also where customer service and global sales and marketing is managed with a focus on appealing to the health-conscious and foodie markets.
Catherine Beard is executive director of ManufacturingNZ, and ExportNZ, divisions of BusinessNZ. Email cbeard@businessnz.org.nz BusinessPlus July 2017
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INTERNATIONAL TRADE
Congratulations to winners Bay of Plenty ExportNZ Awa And the winners of the 2017 Bay of Plenty ExportNZ Awards are…. • • •
•
•
YOU Travel Emerging Exporter of the Year Award George & Willy Page Macrae Engineering Innovation in Export Award Steens Honey Beca Export Achievement Award Felipe Aguilera – Oasis Engineering New Zealand Trade & Enterprise Service to Export Award Andy Cameron – Oasis Engineering Sharp Tudhope Lawyers Exporter of the Year Award Dominion Salt
Exporters from across the Bay of Plenty came together last month to celebrate those ‘raising the bar’ to export success, at the 2017 Bay of Plenty ExportNZ Awards, sponsored by Zespri International. Head Judge, Kelvin Trask from Productiv said, “Export Awards judging has been a rewarding experience again for all involved this year. It is so important to recognise and celebrate the achievements of our Bay of Plenty export businesses.” Well-known and respected managing director at Oasis Engineering, Andy Cameron, was recognised for his outstanding contributions within the Bay of Plenty business and export community, receiving the New Zealand Trade and Enterprise Service to Export Award. And Felipe Aguilera, a technical sales engineer at Oasis Engineering, was recognised as an integral cog in the Oasis wheel, winning the Beca Export Achievement Award.
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BusinessPlus July 2017
The company awards went to Dominion Salt, George & Willy and Steens Honey. You can read what the judges had to say about each winner, below.
YOU Travel Emerging Exporter of the Year Award WINNER: George & Willy, a group of creative young individuals, start work at 7.30am every morning in their workshop/warehouse/design studio near the airport in Mount Maunganui, designing or marketing products. They have realised this is their strength and because of this have outsourced the majority of their manufacturing. All of the team work in the same office and talk to customers around the world every day, leading to 65 per cent of their sales being attributable to exports. Judges’ comments: “George and Willy’s entrepreneurial spirit is second to none. With dedication and determination they have developed a well-respected brand with a true New Zealand quality focus. “Their structured design development protocols and clever use of digital platforms have also enabled them to create a unique team environment to optimise the passion, skills and enthusiasm of their valued team around them.”
Page Macrae Engineering Innovation in Export Award WINNER: Steens® Honey, New Zealand producer of high grade UMF Manuka honey. Steens began with a desire to bring a better-quality Manuka to market; one that is raw, unpasteurised and minimally processed. Subjecting Manuka to high temperatures just isn’t in their thinking. They don’t crank up the heat to 70°C and cream their honey like most producers do.
Judges’ comments: “From thorough market research Steens® Honey has translated innovations into digital stories that capture the minds of their consumers. “Track and trace capability has been positioned to enable every consumer to identify where in NZ their pack of honey has come from. “Raw, unprocessed honey has been set up as a point of difference and a sustainable and profitable growth business has ensued.”
Beca Export Achievement Award WINNER: Felipe Aguilera, who has been with Oasis Engineering for nine years after originally being employed on a short term contract to translate a promotional video into Spanish. It was soon discovered he had an engineering background and his contract was extended to promote Oasis products to Spanish-speaking companies in Central and South America. Felipe supports the company’s agents in more than a dozen countries, while also developing new business in new and existing markets. Judges’ comments: “The phrase ‘Jack of all trades, master of none’ doesn’t fit the winner of this category; he is a master of many skills. Felipe is recognised as an important cog in the Oasis Engineering business, credited with playing a strong part in driving volume and value growth, while achieving long term client satisfaction and growth within a declining market. “Responsible for customers throughout South America, Felipe has recently taken over relationship management in Korea, India and China where he continues to shine. “Bringing a unique mix of language
s of the 2017 ards skills, relationship-building strengths, engineering expertise and integrity to his role, the judges were impressed with the extent of Felipe’s involvement in all aspects of the business as diverse as engineering, innovation, technical sales and customer service, and after-sales support.”
New Zealand Trade & Enterprise Service to Export Award WINNER: Andy Cameron In 2002 Andy and wife Jane decided it was time to bring their family back to set up roots in New Zealand. Andy used the move back to the motherland as an opportunity for a career change and so the couple set out on finding businesses for sale. They finally settled on a small engineering business specialising in dairy valves; and so Andy’s life at Oasis Engineering began. Today Oasis employs 20 staff, specialising in compressed natural gas products servicing a range of industries with a global reputation. It has gone from producing a handful of product lines to hundreds, exporting to more than 40 countries on every continent except Antarctica. However, it’s not all about business for Andy. A family man, who loves spending time with wife Jane and their four children, Andy has a real zest for life; a love of the ocean, a whiz in the kitchen and always keen for a good dress-up party. Andy is also passionate about giving back and is heavily involved in various facets of our community including Rotary, the Titanium Industry Development Association (TIDA), the ACORN Foundation and NGV Global, as well as fundraising for the annual Daffodil Day, a charity close to Andy’s
heart having lost his father to the disease. Comments about Andy: From Wayne Shadbolt at Sunshine Rotary, Tauranga: “Andy has an amazing community spirit and we have been fortunate to have him involved with Rotary here in Tauranga for over 12 years. During this time he has been Director of International Committee (working with projects from as far as Africa to our local South Pacific Islands) as well as Director of Community Services. “Incredibly pragmatic, entertaining and with great character, Andy has a tendency to exude happiness on others. The community and Rotarians alike are all the better off for having someone of his calibre involved in our community.” From Matt Tustin at ACORN Foundation: “With high integrity and great values, Andy joined the ACORN Foundation in 2012 as a board member. The foundation is an organisation that connects generous people who care, with causes that matter in your local community – forever. “In this role Andy adds real value and brings an interesting and fresh perspective to the table. He’s also a great guy to have a beer with.” From John Gordon at Sharp Tudhope Lawyers: “Congratulations Andy. You are a very worthy recipient of this award. With your intellect, integrity and tenacity you were always going to be a success in business, but it is nice to see you publicly acknowledged for all you have achieved.” From Ian Macrae of Page Macrae Engineering: “Described by his colleagues as an honest and trustworthy quiet achiever, Andy got involved in TIDA as a founding board
member. TIDA is introducing powder metallurgy to the New Zealand industry, a one-stop-shop for design and prototyping from metal powders and with the equipment for physical property testing. “Today he chairs TIDA Trust and also represents the trust on the RAM (Rapid Advanced Manufacturing) board. RAM is a spin off from TIDA for the commercial 3D printing of metal powders with a wide customer base both in New Zealand and overseas, printing everything from parts for Americas Cup yachts, to space. “
Sharp Tudhope Lawyers Exporter of the Year Award WINNER: Dominion Salt, founded by George Skellerup in 1942, the company harvests and refines natural sea-salt into high value, high quality products for its national and global customers in the pharmaceutical, agricultural, food and industrial sectors. The manufacturer and supplier of salt products has facilities at Mount Maunganui and Lake Grassmere in Marlborough that have seen the business expand from agricultural roots, now exporting to a global market, delivering a premium product backed up by excellent customer service. Judges’ comments: “Dominion Salt has re-invented themselves – and are taking salt from being a simple condiment to a range of agricultural, industrial and pharmaceutical applications. “Their Pure Dried Vacuum salts are recognized as the worlds’ most pure, and they are achieving impressive and sustained year on year export growth, led by their high-end pharmaceutical grade salt.”
ExportNZ Bay of Plenty , Waikato and Auckland are divisions of the Employers and Manufacturers Association. BusinessPlus July 2017
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INTERNATIONAL TRADE BY THOMAS MANNING
Fake news ignores reality of Latin America When it comes to selling newspapers or dominating TV ratings. the media’s rule of thumb is “If it bleeds, it leads”, and reporting on Latin America is no exception to the rule. Sensational stories about decapitated drug dealers, banditry and bribery in Latin America are staple media fare around the world. But far from riven by violence and corruption, the daily lives of most of Latin America’s 600 million people are as routine and safe as anyone’s in New Zealand, Europe or the US. The positive news of Latin America’s remarkable economic and social progress in the past 30 years is habitually supplanted by the sensationalism of crime, despite the fact that, even if there’s no denying the parlous security situation in several countries, crime across the region is statistically much less than in New Zealand and in many other western countries. I for one would rather walk alone in Buenos Aires or Mexico City than take my chances in downtown Auckland or Wellington’s Courtenay Place in the small hours of the morning. Another common misconception that’s historical rather than mediadriven is that Latin America is ruled by ruthless, goose-stepping dictators and autocrats. However, with the exception of Cuba, democracy has reigned from the US border to Tierra del Fuego since the fall of the region’s last dictators in Argentina and Brazil in the early 1980s. I’ve been doing business in Latin America since 1986 and I’ve witnessed astounding economic and social changes brought about
But far from riven by violence and corruption, the daily lives of most of Latin America’s 600 million people are as routine and safe as anyone’s in New Zealand, Europe or the US. by democratic reforms in that time, albeit many of the reforms are still works in progress.
Standouts of democracy Mexico is a stand-out for the benefits of democracy. After the land-owning oligarchy’s monolithic Institutional Revolutionary Party lost power in 2000, having ruled Mexico with an iron grip for 71 years, Mexico has emerged to be Latin America’s most open economy after Chile, and the region’s second largest (US$1.046 trillion). The advent of representative, less nationalistic democracy in Mexico led to huge growth in foreign investment and trade, which has significantly improved the lot of the Mexican people across the board albeit, again, much still needs to be done. Brazil is another stand-out as, despite its present recession and tumultuous politics, it has leapt ahead with tens of millions lifted out of poverty since the return of democracy in 1985. The IMF says regional growth in Latin American real GDP will be 1.1 per cent in 2017 and 2.2 per cent in 2018, and notes that charting a course toward higher, sustainable and more equitable growth in the region requires investment in services, infrastructure, food production and education - sectors in which New Zealand business has much to offer. In Argentina, increased infrastructure spending and the removal of foreign investment controls have created opportunities for New Zealand
companies that have expertise in construction, food production and agritech. They have also created bright prospects for tourism, as evidenced by the wildly successful new Air New Zealand route to Buenos Aires (to be the subject of my next column). Brazil, the world’s ninth largest economy (US$1.798 trillion), offers New Zealand companies opportunities in education, tourism, environmental, agricultural and land use services, as well as dairy processing and agritech. Mexico is actively seeking New Zealand’s assistance in water and land use services and, as for Brazil, dairy processing and agritech. Chile is already a significant destination for New Zealand investment, particularly in the agricultural and energy sectors. Peru, which buys $120 million of New Zealand dairy products annually, recently approved the import of New Zealand beef, sheep meat and offal. And there are other opportunities in infrastructure and mining technology. The IMF’s prediction of increasing growth in Latin American GDP during the next two years will be reflected in demand for the goods, services and technologies in which New Zealand excels. New Zealand businesses that can look past the misleading news about Latin America will see not dystopia but rather, beckoning opportunity.
Thomas Manning is governing director of Manning Group Ltd and Transpacific Business Tours, and publisher of the Transpacific Business Digest. Visit www.manninggrouplimited.com 28
BusinessPlus July 2017
Winter Member Briefings 2017 Day/Date
Time
Venue
Waikato / BOP Mon. 24 July
9.30am - 11.00am
The Junction Hotel, 700 Pollen Street, THAMES
Mon. 24 July.
3.00pm - 4.30pm
ASB Baypark, 81 Truman Lane, MT MAUNGANUI
Tues. 25 July
9.30am - 11.00am
Eastbay REAP, Reap House, 21 Pyne Street, WHAKATANE
Tues. 25 July
3.00pm - 4.30pm
Suncourt Hotel & Conference Centre, 14 Northcroft Street, TAUPO
Weds. 26 July
9.30am -11.00am
Holiday Inn, 10 Tryon Street, Whakarewarewa, ROTORUA
Weds. 26 July
2.00pm - 3.30pm
Central Kids Kindergartens, 6 Glenshea Street, PUTARURU
Thurs. 27 July
9.30am - 11.00am
FMG Stadium Waikato, Seddon Road, HAMILTON
Thurs. 27 July
2.30pm - 4.00pm
Bruce Pulman Park, Teamsports Centre, Walters Road, PAPAKURA
Fri. 28 July
9.30am - 11.00am
Quality Hotel Lincoln Green, 159 Lincoln Rd, HENDERSON
Mon. 31 July
9.30am - 11.00am
Titirangi Golf Club, Links Road, NEW LYNN
Mon. 31 July
3.00pm - 4.30pm
Waipuna Conference Centre, 58 Waipuna Road, MT WELLINGTON
Tues. 1 Aug.
9.30am - 11.00am
QBE Stadium, Stadium Drive, ALBANY
Tues. 1 Aug.
3.00pm - 4.30pm
Bruce Mason Centre, 1 The Promenade, TAKAPUNA
Weds. 2 Aug.
9.30am - 11.00am
Rainbows End Conference Centre, Clist Crescent, MANUKAU
Weds. 2 Aug.
3.00pm - 4.30pm
Ellerslie Event Centre, Ellerslie Racecourse, 80 Ascot Avenue, REMUERA
Thurs. 3 Aug.
9.30am - 11.00am
Counties Inn, 17 Paerata Road, PUKEKOHE
Fri. 4 Aug.
7.30am - 9.00am
EMA, Room A&B, 145 Khyber Pass Road, GRAFTON
Fri. 4 Aug.
2.30pm - 4.00pm
EMA, Room A&B, 145 Khyber Pass Road, GRAFTON
Mon. 7 Aug.
9.30am - 11.00am
Butterfly Creek, Tom Pearce Drive, MANGERE
Tues. 8 Aug.
9.30am - 11.00am
Aotea Centre, Limelight Room, Level 3, Mayoral Drive, AUCKLAND CITY
Tues. 8 Aug.
2:00pm - 3:00pm
Webinar: www.ema.webex.com
Thurs. 10 Aug.
9.30am - 11.00am
Woodlands Conference Centre, 126 Kerikeri Road, KERIKERI
Thurs. 10 Aug.
1:30pm - 3:00pm
Distinction Whangarei, 9 Riverside Drive, WHANGAREI
Auckland
Northland
FREE for all EMA members | To register call AdviceLine on 0800 300 362 (from NZ), 1800 300 362 (from Australia) or email advice@ema.co.nz Visit www.ema.co.nz BusinessPlus July 2017
29
MEMBER PROFILE
Brushtail possum down, and keeping you warm The world’s original possum fur clothing designer is on a roll with an endless supply of raw material and increasingly automated technology. Possumdown Knitwear in Auckland recently turned 20 and owner and managing director Mike Langhorne (pictured) celebrated with a party for staff, key suppliers and other contributors to the company’s growth at the Northern Club. Clothing designer and namesake store owner Trish Gregory, and Isabel Harris of Hullabaloo and Thornton Hall fame, were among esteemed guests. 30
BusinessPlus July 2017
Mike says, “We started the whole thing – the first possum garment, designed and made in New Zealand where we still do it.” The knitting plant is in East Tamaki with 45 staff – almost half the number of 20 years ago, as machines get more high-tech. He says, “I have no idea where it will end; change is always around the corner. Whilst we may never be totally automated we will always be on the lookout for new technologies, to improve quality or production. “Fifteen years ago I couldn’t have
imagined or believed it, but this ‘whole garment technology’ is a reality. At some point we won’t have the older technology…but you do get money for parts! “We bought two more machines last year and another one a few months ago - all from Japan, from suppliers who are a pleasure to deal with and where we have a big export market.” The company also exports to Europe, Saudi Arabia, North America, China and the biggest market – Australia, ironically, as possums are protected there.
Fashion garments are for men, women and children; homeware includes blankets and throws; and corporate wear such as uniforms are contract manufactured, amounting to 30 per cent of the business. The possum and merino goods are sold in high end boutiques and tourist retailers, online and in three factory outlet stores. Design ideas are sourced from customers, agents, staff and Emma, Mike’s wife. He says, “You can go to trade shows and read magazines but it’s participation from all of us that is best.”
The first fur Mike joined the founders of the company as a 50 per cent partner originally and has owned the business outright since 2000 when the founders – former high country farmers - retired to Vanuatu. He and his wife also own a Jennian Homes franchise located aside Possumdown. She runs the home building business and he takes care of the knitwear company with “a fantastic commercial manager, manufacturing manager and sales manager.” Says Mike, “The household joke is that I’m in ladies fashion and Emma is in construction. No gender inequality at our place!” All materials are still sourced in New Zealand – from merino wool producers and select collectors of wild brushtail possum fur. Possum fur can be used commercially in New Zealand where the animals are a pest and where they have an ideal food source and no real predators. “They breed like wildfire so we have a secure future!”
“Apart from loving the product, we can love what we do knowing we’re making a difference in ecological terms.
Possumdown processes the fibre, which is an intricate operation taking account of the air and water temperature, the time of day and year and the condition of the handplucked fur.
“But for sales volume, you have to look further afield. Possumdown exports to 15 countries and this is a big push because New Zealand is small. “
The yarn is spun and dyed offsite then returned on cones to Possumdown for knitting, sewing, adding buttons and zips and any other accessories.
Mike has joined the EMA for networking, to find customers and collaborators. He says, “What pays off best is word of mouth and rubbing shoulders and doing favours.”
“The result is a garment that does not shed or pill as much as other brands and lasts in great condition for a long time. “The company has plenty of growth potential: we have a unique and beautiful product and a fantastic team, the latest technology and wonderful, long-standing customers. “And it’s fun because the people you meet in the fashion trade are so interesting! And the colours and styles never stand still.” The best thing about doing business in New Zealand, he says, is actively engaging in social responsibility as a natural consequence of the fundamental business ethos.
And his advice to a newbie in business? “You have to have a strategy. I plan 10 years ahead. “Plus, you need good people, and try to get a good mentor. Be very selective to find people who share your vision and stay on the journey long term. “And most of all, have fun doing it. There’s no place quite New Zealand,” Mike says.
each 6000
business decision makers Advertise in E As monthly free mem ers maga ine or rates visit our e site ema co n newsandmedia
Contact Colin estro E colin a nityads com BusinessPlus July 2017
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usiness raining At ts est Whether you need to up skill your managers, get ealth and a ety eps up to speed or help your sales team improve their skills, the EMA has something or all areas o your usiness and o ers usiness training at its est
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raining events presented each year
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eople learn through EMA courses each year
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Companies attended EMA training
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or the latest training courses, visit ema.co.n
Election Policy Manifesto 2017
A business view for the 2017 New Zealand general election The EMA’s 2017 Policy Manifesto is a reflection of the views of many of our 4100 members in the region from Taupo to the Far North gathered through surveys, forums, focus groups, briefings, meetings and conversations with members. It also reflects the findings of various research projects and represents EMA views in the key policy areas defined as critical to the success of our member businesses. They are the EMA’s priorities for the next Government to address.
In summary, those policies are: 1. Reform the resource management system
6. Speed up the growth of exporting
2. Expedite critical national infrastructure
7. Encourage innovation
3. Increase funding options for local government
8. Manage ageing workforce issues
4. Ease Auckland’s congestion
9. Update the Holidays Act and enact a workable pay equity law
5. Review Electricity Authority transmission pricing
10. Close the skills and training gaps
1. Reform the resource management system
The EMA agrees with the Prime Minister that the Resource Management Act (RMA) is past its use-by date and needs a complete overhaul. Since replacing the Town and Country Planning Act 25 years ago the RMA has proved to be a handbrake on growth and economic development, failing to cope with rapid urban growth and requiring multiple workarounds to cope with natural disasters and progress large-scale projects. The EMA’s recent joint research project also found the Act is failing to protect New Zealand’s environment. However, the changes and challenges required to manage growth and economic development while protecting our environment are far more difficult than just RMA reform. The RMA is part of a hugely complex system of resource management that also includes its interactions with the Local Government Act, the Land Transport Management Act, Unitary Plans and even the latest proposals for Urban Development Authorities. There is growing recognition across political parties and stakeholder groups that the current environmental and planning systems in New Zealand are failing.
Recommendation Given the complexity and scale of the issues facing our resource management planning systems, and the need for wide stakeholder agreement on a future pathway to managing environmental and development agendas, the EMA recommends convening a Royal Commission or similar inquiry. This national conversation would then lead to binding recommendations on how the country goes about reforming its planning and related environmental protection systems.
2. Expedite critical national infrastructure The EMA believes infrastructure leads economic development. The EMA is supportive of the current $110 billion infrastructure plan for the next 10 years and was further encouraged by Government’s recently-announced, additional $11 billion in infrastructure spending over the next four years. However, these plans and projects remain subject to possible ongoing political tinkering and suffer from implementation issues as central government ministries and agencies and a multitude of local government authorities are responsible for their delivery. Delivery of these plans and projects is inconsistent, with the construction industry also concerned about a sporadic project pipeline. The use of various alternative funding and financing tools remains politically contentious.
Recommendation The EMA wants New Zealand to adapt and adopt international models that create independent strategic planning and delivery vehicles for the provision of critical national infrastructure to support economic growth and social wellbeing. While reporting to the Government of the day, a recommended National Infrastructure Group would be given the independence and accountability to develop a national infrastructure strategy for the next 30 years and then be charged with its governance, delivery and funding. This group should be structured in such a way as to provide continuity through changes of Government and could perhaps combine and build on the current resources of the National Infrastructure Advisory Board and Treasury’s National Infrastructure and PPP units. Like similar models in the UK and Canada, it would be a centre of excellence in financing (including attracting significant international financing), funding and procurement of major infrastructure projects and a shared resource across national and local government bodies.
3. Increase funding options for local government The pressure on local government to fund its share of infrastructure is becoming intense. Rapidly-growing cities and centres can’t find the funds to build infrastructure for new and future growth, while towns and regions with stagnant, ageing populations or decreasing ratepayers’ bases are struggling to maintain critical existing infrastructure. Auckland’s funding situation highlights the problem, but it is clear that local authorities can no longer rely on rates as the basis for their revenue if they are to keep up with growth or maintain their current infrastructure. Recommendation Give local authorities the legislative changes they need to allow them to widen their fundraising capabilities. Adapt for New Zealand use, some of the various international models such as Municipal Utilities Districts (MUDs) in the United States, Tax Incremental Finance (TIFs) in the United Kingdom, greater use of internationally financed PPPs, aggregation of regional districts into Hubs to assist developing, financing and implementing a pipeline of infrastructure projects, infrastructure bonds, targeted rates, and value capture mechanisms such as development taxes and infrastructure taxes.
4. Ease Auckland’s congestion The EMA and various partners have identified that the Auckland economy stands to benefit by at least $1 billion annually through decongesting the city’s roads. This is a prize the city, region and country cannot wait to capture. Auckland businesses are losing significant annual productivity while they wait for promised decongestion of the roading network. Staff can’t get to work and businesses reliant on mobility around the city are failing to make deliveries or meet their service time frames. The Auckland Transport Alignment Project (ATAP) currently focuses on a 10-year timeframe to introduce decongestion measures, while the plan’s overall premise is that congestion will get no worse over the next 30 years. But both the significant costs and the significant upsides from decongestion are apparent now and there are gains to be made for the liveability of the city, and the environment, from decreased congestion and enhanced productivity.
Recommendation Speed up the timeframe for introducing decongestion measures by appointing a governing body charged with delivering and funding the Auckland Transport Alignment Project (ATAP). Introduce decongestion charging and other available measures such as debt funding and PPPs to hasten the delivery of ATAP to get Auckland moving now, not in 10-30 years’ time. Ensure transport planning and land use planning are aligned in the near future to better plan for managing traffic flows and congestion.
5. Review Electricity Authority transmission pricing
The EMA has a concern that regulation in New Zealand has moved away from the previous light-handed touch to a prescriptive, heavy-handed approach that ignores or pays little attention to its impact on industry and consumers, and seems impervious to checks and balances. This is exemplified by the Electricity Authority (EA) and its dogged pursuit of changes to the existing transmission pricing regime. As a result the EA has lost the confidence of many in the industry. The EA drove a solution to a problem the industry couldn’t agree existed, and appeared to ignore both the weight of internationally recognised expert opinion against the proposals and the potential negative impacts on costs for residential and business customers. Recommendation Examine the Electricity Authority, questioning the need for an additional regulatory body that could well be encompassed in the Commerce Commission, and test its capabilities, resources and performance.
6. Speed up the growth of exporting
Trade and exporting is New Zealand’s life blood. While the United States has exited the Trans Pacific Partnership Agreement (TPP) and the United Kingdom has exited the European Union, many opportunities remain for expansion of New Zealand’s trade horizons.
Recommendation The EMA and its sister organisation, Export New Zealand, support the Government’s goal to have more than 90 per cent of exports covered by free trade agreements (FTAs), and all efforts to revive the TPP with the remaining 11 signatories to the original partnership agreement. The EMA also encourages the rapid resolution of a free trade deal with the European Union (EU), the pursuit of a similar agreement with the United Kingdom as it exits the EU, and welcomes any steps to speed up the finalising of the Regional Comprehensive Economic Partnership (RCEP) agreement among 16 Asia-Pacific economies.
7. Encouraging innovation
The Government’s 2015 Business Growth Agenda (BGA) had a revised target of 1 per cent of GDP being spent annually by business on research and development (R&D). At that stage the R&D spend was just over 0.5 per cent and has climbed slowly since, to be around 0.7 per cent - still well behind Australia and even further behind the OECD average. The Government’s R&D funding model does not appear to be providing the impetus required to take New Zealand to the 1 per cent target outlined in the 2015 BGA, nor is there any timeframe in the BGA for reaching that target. Recommendation The EMA recommends Government seeks an R&D funding model, perhaps in consultation with business, which will prove accessible to all levels of business and adds a hard target date to the BGA for reaching the 1 per cent R&D investment goal.
8. Manage ageing workforce issues
Coping with the needs and issues created by an ageing workforce is becoming a major concern for EMA employers. The ageing workforce will put further pressure on the skills gap, and employers will need to manage demands as key staff reorder their priorities or need re-training. During its research on the issue the EMA discovered multiple agencies working on similar projects. Clearly a co-ordinated and coherent approach is needed to develop a national approach to this critical workplace issue. Recommendation Create a Commissioner to coordinate the resources already being poured into this area of concern for the future of the country. This Commissioner would give direction to, and manage, the resources of the various groups already working on this issue to develop a national plan for managing our ageing workforce.
9. Update the Holidays Act and enact a workable pay equity law
The EMA supported and took part in the Working Group that developed the framework that is now being used to process claims in the vexed and complex area of pay equity. That framework underpins developing legislation likely to go before the house ahead of the current election. But the Holidays Act remains a similarly confusing and vexatious piece of legislation for employers. Recommendation The EMA wants to ensure the principles and framework developed by the Pay Equity Working Group are enshrined in the new legislation. Key areas must remain such as an enterprise-based approach to agreements on pay equity and no ability to make retrospective claims. The EMA also wants a working group approach applied to solving the many issues in the current Holidays Act.
10. Close the skills and training gaps
Attracting and retaining staff, finding the talent to fill skills gaps and dealing with the issues that will inevitably arise from our ageing workforce are issues confronting our employer members on a daily basis. The EMA was disappointed that a number of recommendations included in the Productivity Commission’s Report on Tertiary Education were rejected. The EMA believes there must be better links between business and the education sector, with a greater focus on the trades and providing workers with new skills as they progress through the workforce. Students leaving school need to be work-ready and have the soft skills that employers’ value. Recommendation Apply more funding to filling the skills gaps in the trade sector, and take an employer-based approach – outside the traditional bricks-and-mortar-led approach – to providing future skills training. Employers know and can predict where they will be lacking skills in the future and can respond far more rapidly to changing work patterns and skill requirements than our institutions. Policies need to reflect lifelong career development with continuation of funding and support for Workplace Literacy programmes. The immigration process should also be less complicated, having greater emphasis on the points system to meet the skills required by employers. Automatic extension of temporary work visas should be granted in sectors placed on the Skills Shortages List.
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