Issue 108 – October 2013
Publ i ca tio n o f th e E m p lo y e rs & M a n u f a c t u re rs A s s o c i a t i o n In c
New moves on business internet risk Export earners turned into tax refugees Heat rises over stiffer claw back rules
In this issue: • • • •
Your immigration guide to recruiting off shore New law facilitates crowd funding What the Australian change of government means for tax Are you wasting your money owning a smart phone?
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Together with KiwiBank, members receive a 20% discount on transactional banking and 3% on business MasterCard interest rates, this is on top of KiwiBanks exciting range of business products and servcies. Genesis Energy Genesis Energy wants to help members get the best deal on their energy usage. With a great understanding of energy needs, they are committed to giving better, simpler and smarter ways to manage your energy needs. Members can receive a 12% prompt payment discount on a fixed term Power Freeze electricity account. Telecom NZ As members, Telecom can work with your individual business in one-to-one meetings and recommend the right communications solutions for you. Telecom provide a full range of Internet, data, voice, mobile and fixed line calling services for customers in Australia and New Zealand Caltex - StarCard Last year members saved over $600,000 in fuel costs. Take advantage of your EMA membership and minimize your fuel expenses with a StarCard account from Caltex. Save 5.2 cents per litre on regular and premium petrol at Caltex service stations Save 10.5 cents per litre on diesel at unmanned Caltex diesel stops. Buy NZ Made Get an exclusive 20% discount on membership to the Buy NZ Made programme. Buy NZ Made is a great marketing tool for businesses, providing a unique selling point and value add for your brand. If your product carries the iconic Kiwi symbol, your customers can be certain they’re buying local.
Horizon Recruitment As an EMA member you can receive upto $300 as a reward when referring a temporary contract or permanent staff vacancy. Also ask about Horizon Recruitment’s new super low ‘Temp to Perm’ rates. Vero Receive upto 30% off your Quotable Value (QV) valuations with Vero. Vero, are not above showing preferential treatment – particularly to our members. Because Vero is our preferred supplier of general insurance, members enjoy preferential valuation rates year after year. Total Utilities Collaborate with fellow members in bulk buying tenders for electricity, natural gas/LPG and waste services. Receive an additional 20% discount on all service fees by just being a member. Members have saved over $3 million dollars from their power, gas and waste bills since 2010. Southern Cross Investing in the health and wellbeing of your employees can have a positive effect on productivity and profitability. With over 50 years of experience looking after the health insurance needs of New Zealanders, Southern Cross Health Society can help tailor the right solution for your business. Custom Fleet Together we have negotiated exclusive discounts for members across a vast array of models. No matter the size, Custom Fleet have a solution for your business.
For more information on these great offers and to ensure you don’t miss out on the latest exclusive member only discounts, simply search ‘rewards’ on our website: www.ema.co.nz All information is correct at time of printing and subject to change. Individual partner terms and conditions and/or service fees may apply.
BusinessPlus is published by : The Employers and Manufacturers Association (Northern) Inc 159 Khyber Pass Rd, Grafton, Private Bag 92066, Victoria Street West, Auckland 1142 Ph: 09 367 0909 or 0800 800 362 Email: firstname.lastname@example.org Website: www.ema.co.nz Chief Executive: Kim Campbell Advocacy Manager: Bruce Goldsworthy Manager, Employment: David Lowe Manager EMA Learning: David Foley Manager EMA Membership & Marketing: Mauro Barsi Waikato Denis Quigan 07 823 9311 Russell Drake 07 838 0018
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ADVOCACY 04 EMA Advocacy at work 05 UFB roll out defies communications skills – By Kim Campbell, EMA CEO
Compensation and the RMA BusinessNZ
NEWS 06 Crowd funding facilitated 06 MBIE learns from EMA members 07 Claw back rules tighten
08 Gimme, gimme, gimme - selling on line
08 Tonga call centre service offered 23
Export earners forced to become tax refugees
26 PROFILE Five companies combine
to make pizza trays and beat China
ADVICE Bay of Plenty Terry Arnold 07 575 8401
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10 What a fair and reasonable
employer could do when making an employee redundant
Rotorua / Taupo / South Waikato / Whakatane Clive Thomson 07 348 0334 mob 0274 372 808
TAX TIPS - What Australia’s change of government will mean
Editor Gilbert Peterson Ph: 09 367 0916 email@example.com
20 Are you wasting your money owning a smartphone?
21 Back up for Internet security
Writer Mary MacKinven firstname.lastname@example.org
19 Need skilled workers?
Published by Mediaweb
Designer Bex Mikaere
Immigration New Zealand offers suite of services
24 Aerosol contract filler boosts certifications
24 Piloting vehicle and driver safety initiative
Advertising Sales Colin Gestro (09) 444 9158 email@example.com
25 Bold approach pays off for Mi
ISSN No. 1176-4953
27 SPRING BRIEFINGS SCHEDULE: Free to EMA members
28 29 On the cover... Businesses with sensitive intellectual property need to have a strategy to protect themselves. Netsafe offers some simple guidelines to help you back up for your internet security. The story is on page 21.
Issue 108 – October 2013
P ublication of the Employers & Manufacturers Association Inc
New moves on business internet risk Export earners turned into tax refugees Heat rises over stiffer claw back rules
In this issue: • • • •
Your immigration guide to recruiting off shore New law facilitates crowd funding What the Australian change of government means for tax Are you wasting your money owning a smart phone?
Advocacy at Work WINSTON PETERS, ON THE ECONOMY
Leader of New Zealand First, Winston Peters, discussed his party’s economic policy and in particular the future of manufacturing, with members of EMA’s Policy Forum last month. He said New Zealand First is a centrist, common sense party; not blinded by ideology, and motivated by what works in practice. He suggested a tax break for exporters, aid for failing businesses and a change to currency management. The party has a Member’s Bill ready to give the Reserve Bank the wider legislative framework it needs to tackle the exchange rate. Other policy settings designed to support manufacturing include: • An accelerated depreciation regime for plant and equipment; • Giving preference to New Zealand firms when Government agencies and local bodies buy goods and services; • A regional development policy; • A royalties scheme that required 25% of the wealth generated from oil, gas and minerals extraction in a region remain in the source region. • Support for Foreign Direct Investment (FDI) when it adds new capacity and technology to the manufacturing sector. REDUCING CAR PARKING’S WASTED SPACES
The NZ Green party is considering a policy to limit parking in the CBD to encourage people to use public transport rather than cars. The party’s transport spokesperson Julie Anne Genter explained the policy with EMA. She said freeing up land used by parking could make it available for more productive uses. A vigorous discussion ensued with agreement that the RMA should be amended to remove parking requirements for developers.
GOVT PROCUREMENT CONCERNS
EMA has had complaints regarding the current vogue of whole of Government contracts, which result in bulk purchasing by government on behalf of several of its departments. The concerns are over the way these are run and administered by officials. This matter has been referred to Business NZ for taking up with government. PUZZLING RESTRICTIONS ON PORT GROWTH
EMA is alarmed that Auckland Council intends to place severe restrictions on Ports of Auckland’s ability to undertake reclamation activity anywhere within the port precinct. The Council intends to make all reclamation in the port basin non-complying. It seems incongruous that the Ports owner, Auckland Council, expects the port to operate in an extremely competitive environment up against the Port of Tauranga then introduce a measure like this which effectively restricts the port’s ability to compete. EMA is asking Auckland Council to act urgently to reverse this decision. MEDIA COMMENTARY
EMA recently dispatched media statements supporting proposed employment law changes, the expansion of study-to-work schemes, Government funding to build a cable across the Pacific to improve Internet speeds, and more. We said the present employment law changes before Parliament are part of the catch up process needed to reflect common practices already in place in today’s workplaces. “It’s sensible that anyone can ask for flexible work hours for any reason, as proposed by one of the amendments,” said David Lowe, Employment Services Manager. “Another proposed change seeks to repeal precisely when coffee breaks can be taken. This is unworkable and openly flouted by employees and employers alike. “The law should simply require that
reasonable breaks are provided then let those involved work out the details how it should apply to them. This is what happens now - the amendment is just catching up with the modern workplace. “Employers acknowledge and accept union bargaining is central to our employment law. But a change is needed for when, despite everyone’s best efforts, the bargaining becomes destructive. “It is absolute nonsense to suggest any of these changes will decrease wages,” Mr Lowe said. EMAs submission can be found at www.ema.co.nz YOUTH FOR WORK
EMA also said the Youth Guarantee and other skills training schemes are getting traction so it’s great they’re being expanded and added to. “We’re much encouraged by the government focus on getting younger people either into skills training or work,” said EMA chief executive Kim Campbell said in commenting on a new Government training package. “Their success is registered in the fall in the youth unemployment rate – amongst 15 to 19 year olds it was 27.6% two years ago at the end of the June quarter and is down to 24.1% this year. “Expanding these schemes is the right response, and will also help ensure their success by encouraging employers to take on younger workers at every opportunity.” GOVERNMENT HEARD FROM US ON YOUR BEHALF ON:
• Boosting Productivity in the Services Sector – the First Interim Report of the Productivity Commission; and • R&D Tax Losses, An Inland Revenue Officials’ Issues Paper. We also have other submissions underway including on the review of the Telecommunications Act 2001 and the Productivity Commission’s Enquiry into the Design and Operation of Government Regulatory Regimes in New Zealand.
ADVOCACY By Kim Campbell, Chief Executive, EMA
UFB roll out defies communications skills In the eight year rush to replace our legacy copper network with the transformative power of fibre, while keeping the economic and technical viability of copper, there were bound to be big risks. Over the past week or so we have witnessed one of the biggest. Ironically the risk, of a loss of confidence in the project, turned out to be much more about communication in the non-technical sense, less about technology. The stakeholders footing the bill, especially those representing the users and consumers of ultrafast broadband (UFB) have not been kept well informed of the challenges inherent in managing the transition from copper to fibre, or on how it could and should proceed in our unique geographic and regulatory environment. The loud cries of foul – that the cut price for copper proposed by the Commerce Commission would result in a ‘tax’ or subsidy to bolster Chorus share price - were based largely on a totally understandable misunderstanding on what our Commerce Commission is charged to do. In fact we think the pricing proposed, if undertaken by a commercial enterprise, would normally be held to be price fixing under the Commerce Act. However the once in a generation UFB rollout is far from normal. The Commerce Commission has jurisdiction over the pricing of the copper network which it exercises from time to time, whereas the pricing of the fibre network roll out has been fixed by Crown Fibre Holdings on behalf of the government until 2020. It seems no one in government or Chorus appears to have had the foresight to consider how this tension might be overcome, or if our regulatory system, when confronted with the UFB rollout, could be excused for the duration.
When Telecom was separated from the wholesale network provider Chorus, the Commission was called on to regulate a new cost based wholesale price for broadband products running over the copper network. In its draft determination the Commission was required to take into account the cost of investing in new technologies and infrastructure such as UFB; the Commission advised it was unable to do this. As part of the review the Commission compared New Zealand with Sweden and Denmark, two countries whose telecoms providers are vertically integrated and therefore unlike ours.
(First published in the NBR 27/9/2013)
of the existing copper network. Ultimately we can be confident the price set for the services delivered on fibre will be market driven, not prescribed by regulatory intervention, but ‘ultimately’ in this context is likely to be post 2020, once the fibre roll out is up and running. We still fail to understand why the copper network is not being written down faster under a cost minus model. The potential loss of value from copper, all the latest technical refinements notwithstanding, against the benefits in the long term of the fibre business should be recognised. REVIEW PAPER FAILS
WHY DROP THE PRICE FOR COPPER?
Inexplicably the Commerce Commission decided the price for copper should be well below that for fibre, which the Government’s August 7th discussion paper proposes to overturn with a price for copper approximating that for fibre. Hence the claims about the $600 million subsidy for Chorus. The Commerce Commission price, if introduced, would have had a major impact on Chorus’ revenues directly after it had signed with CFH to build the new UFB network; it is clear Chorus will need those revenues to help fund the roll out. There is no question that reliable, attractively priced telecommunication and internet connectivity systems are fundamental for the long term success of our businesses, and they must be delivered in a competitive environment with minimal government regulatory intervention. But no comparable country has undertaken what New Zealand must be successful at doing, which is to expeditiously roll out UFB while maintaining the viability
A criticism is that the paper doesn’t address these issues. For example, vastly higher speeds over copper are becoming possible, speeds which are close to matching the initial offerings to be made available under UFB. Then there’s the price competition coming up from wireless. Already a growing percentage of households choose not to have a hard wired connection or phone number, and the possibilities of wireless broadband are still in their infancy. Another point is though many CBD businesses already utilise high speed fibre, smaller businesses connectivity outside of CBD areas are not yet in the queue for it though they stand to benefit strongly provided the speed is competitively priced to copper. Perhaps the villainy of this unenlightened episode should be sheeted back to the government’s review paper, a highly technical document by nature, and a challenge for any knowledgeable party to comprehend, let alone a lay person. Nevertheless a determined effort should have been made to decipher its complexity. firstname.lastname@example.org BusinessPlus
Law facilitates crowd funding The Financial Markets Conduct Bill which comes into effect next year will introduces six new types of licences including for intermediary service providers of crowd funding and peer-to-peer lending platforms. Crowd funding offers firms a way to raise relatively small amounts of equity by accessing large numbers of investors willing to invest small amounts. Peerto-peer (P2P) lending facilitates lending and borrowing small amounts between people. Online platforms in common
use act as intermediaries for both, and in the case of P2P lending often offer to undertake credit checks and collect repayments. The new law provides licensing of these intermediary platforms as a straightforward way to protect investors seeking to fund businesses but unable to raise the capital they need at an appropriate cost. The NZX is reported as seeing the new sources of capital as stepping stones toward listing on NZX’s main board. Online crowd funding platforms
include PledgeMe, Boosted and GiveALittle. Crowd sourcing is well known and works successfully in several countries. The crowd funding platform Kickstarter in the United States for example claims to have assisted 4.8 million people with pledges of US$796 million, to fund 48,000 creative projects since launch in 2009. The new law limits the size of P2P and crowd-funding loans to $50,000 and the amount a person can lend to $10,000 a year.
MBIE people learn from grass roots EMA members recently hosted staff from the employment standards policy team at the Ministry of Business, Innovation and Employment(MBIE). The visits were to show how they apply the minimum employment standards (including Holidays Act and parental leave) and discuss other employment relations issues. ASB Bank and JA Russell Ltd hosted Kate Lynch and Laine Fisher. Thermosash, OCS and Cannon Hygiene hosted Tina Jamieson and Robert Haig. Manager of Employment Standards Policy, Gerard Clark said: “It’s great to see first-hand some of the issues that different
(l-r): Daneka Nuttall, HR Manager, JA Russell with MBIE’s Kate Lynch and Laine Fisher.
businesses deal with to ensure they comply and of course to hear about ideas for improvements. “It can only improve the policy advice produced in our team. MBIE needs to maintain good
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relationships with businesses and others, and to understand the realworld impacts its policies have, and these visits have been great on both counts. We’re grateful to the EMA members who met with us.”
Claw back rules tighten: Seller beware! An appeal is being mounted to challenge a Court of Appeal ruling that would see contractors forced to pay back money for goods they supplied to companies that subsequently went insolvent. The ruling threatens to require contractors and suppliers who received late payments for work or supplies in the two years leading up to an insolvency to return the money to a liquidator. Under the ruling the claw back can apply: • Even where there is no argument that fair market value was supplied. • The contractor/supplier had no knowledge or reason to know about the financial difficulties • They used the money to pay operating costs such as for their sub-contractors. The only payments that contractors and suppliers may not
be required to repay are monies that an insolvent company made in advance of a job being done or that provided ‘real value’. The inference is that if a contractor accepted late payments (payment in arrears) they may have known the company was insolvent and the payment was therefore invalid. In addition, proving the matter could now be more difficult. This is all bad news for construction contractors in particular, who frequently issue invoices in arrears for work done. Construction contractors with ‘progress payment contracts’ could still be protected, and there are some other technical exceptions. Where payment was routinely late it could be hard for a contractor to show their work had only continued because of the previous payment they received, ie, that they genuinely worked on a
progress payment basis. The case (Farrell v Fences and Kerbs Ltd) relates to ‘voidable transactions’ (transactions that can be annulled under certain circumstances) centres on when liquidators can reverse payments that a developer/contractor made in arrears (late payments after the job was done) in the two years leading up to the developer’s insolvency. The precautionary cost of doing business is likely to increase for all parties to a contract. New Zealand law in this area is now very different from Australia’s where payments from the insolvent company made in the ordinary course of business can only be reversed or clawed back for up to six months. An appeal to the Supreme Court is likely. EMA will be taking a close interest in the proceedings.
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Gimme, gimme, gimme Customers want a rapid response to their queries and complaints like never before - because it’s possible in this digital age, said Simon Bennett of Madison Recruitment at the latest Business Intelligence Breakfast Workshop in Auckland. The subject: “Engaging your customers and clients – rejuvenating and maximising the service experience”. It’s all very well having great design, branding and logistics but the real work begins when the customer walks into the store, said Jason Neely, Managing Director of Amazon Surf clothing stores employing 600 staff. “You have to give the customer what they want every day at the right price…” He listed four criteria for exceptional customer service: • having the right people with the right attitude, • who are correctly trained in
policies and procedures, • with an understanding of (Amazon’s) 90-plus brands across 20 categories; and • with specific sales service standards eg to greet a new customer in 45 seconds and give them two brand facts about the product they are looking at. He said it takes two years to train someone and most have gone by then because retail is viewed as a short term stopover. To combat that he developed manuals and procedures but gave up. “Then I had an epiphany: a staff member that believes in our brand and culture will outsell someone who is well trained but
does not have that affiliation. So just get the right kids at the start.” Amazon Surf worked to create something people wanted to be part of. Now their key performance indices are all heading in the right direction and staff retention is up, Mr Neely said. “But we still have a long way to go. Next we are turning retail into a ‘real’ career option, not a stopover on the way to a career.” ONLINE AND MOBILE CHANGE EVERYTHING
Simon Bennett, chief executive of Madison Recruitment, has 80 staff across
Tonga call centre open for business ProComm Services has established Tonga’s first call centre operation with the backing of Japanese investor Suite Pole. The venture became possible once Tonga connected to the Southern Cross cable; Tonga is now a viable alternative venue for locating New Zealand call centre operations. Two directors from the company, Tevita Kilisimasi Ha’apai and Takeshi Tamura pointed out wage costs in Tonga are about a third of those in New Zealand and their Tongan staff are all English speaking with many educated here. The first customer for ProComm was TCC, Tonga’s own phone company. The 24 hour/7 day operation
Takeshi Tamura and Tevita Kilisimasi Ha’apai, directors of ProComm
has 35 staff currently for the local market with ambitions to seat up to 1000 agents. ProComm offers full connectivity for inbound, outbound, back office and full data support. You can Skype to Nuku’alofa. Their promotion says on your behalf they can undertake: • Customer services, sales support and incident management
• Database cleansing, help desk and data entry • Market surveys and lead generation ProComm is at pains to say they “have learnt that to be an effective service provider we ourselves must develop the knowledge and skills that can never be found in your common and standard training manuals…. We must contribute to our clients success.”
“The definition of customer service is very simple: consistently exceed the expectations of your customer by meeting the highest possible standards on time.” – Bruce Cotterill
(l-r): Presenters Bruce Cotterill, Simon Bennett, Jason Neely (Amazon Surf)
f ive locations in New Zealand. Madison declines more candidates (145,000) than they place (5000) per year. The company uses many ways to engage with people than just placing job advertisements: Facebook, Twitter, YouTube, etc “But technology can be used negatively as well as positively” and “We can’t do everything by email and we can’t replace real human interaction.” He reported on a survey that showed 53% of respondents overall said they believe
companies are more responsive to customers when they complain via social media, a figure rising to 57% among Millennials (aged 18-34). Recent survey results indicate consumers expect faster response times via social than email. IT’S SIMPLE
People over complicate the notion of customer service, said Bruce Cotterill, who led one of New Zealand’s biggest debt restructure programmes as CEO of Yellow Pages Group.
He said the definition of customer service was simple: consistently exceed the expectations of your customer by meeting the highest possible standards on time. Customers want eight things: 1. Rapid response: to a complaint, for example; 2. Proactivity: you need to actively help customers; 3. Accuracy: you need to describe your product or service; 4. Communication: keep the customer in the loop on how the service or complaint is proceeding or why it’s delayed; 5. Assistance with the decision: help people buy stuff because their lives are so complex; 6. Make it enjoyable: … because customers have enough struggles in life; 7. Trust: customers want to trust you. 8. Needs met: customers want their needs met in buying your product. Mr Cotterill joked: “It’s real rocket science. We made a big effort to understand what was going wrong and told our people what we were doing about it and the execution was led by example from the top including me as CEO.” Mr Cotterill said getting staff buy-in for change requires communication, communication, communication. “Staff can’t provide good customer service if they don’t know what is going on in the organization. When people know what is expected they get it right.” He recommended giving people permission to be themselves. The fourth workshop is the big debate, on November 6: “That Kiwi businesses don’t have what it takes to succeed globally.” BusinessPlus
ADVICE By Carla Pallant-Drake LLB, EMA AdviceLine Employer Advisor
Redundancy and section 103A: What a when making an employee redundant The Employment Court has released a number of cases this year which have clarified its interpretation of the requirements of section 103A of the Employment Relations Act 2000 in a redundancy situation. When defending the decision to dismiss an employee by reason of redundancy an employer must establish that the decision is both procedurally and substantively justified for it to be upheld as what a fair and reasonable employer could do under section 103A. If a dismissal for redundancy is found to be substantively unjustifiable, either because it is not genuine or the process applied to selecting the employee for redundancy was so flawed that it cannot justify the redundancy of that particular employee, the employee could raise a personal grievance for unjustifiable dismissal. Genuine business reason
The Court’s 2006 determination of Simpsons Farms Ltd v Aberhart, was interpreted in a way that limited the scope of the Authority or Court to inquire into the substantive justification for an employee’s redundancy. As such, all an employer was required to prove was that the redundancy was not a charade and, by doing so, the Court and Authority could not inquire any further into the genuineness of the redundancy. However, Chief Judge Colgan sought to clarify what was meant in the Simpson Farms case in the recent Michael Rittison-Thomas t/a Totara Hills Farm v Davidson case. The Chief Judge made it clear that the Authority and the Court could not substitute its decision for that of an employer, when determining, based on the facts, whether redundancy was a conclusion it would have come to. However, the Chief Judge stated the Authority and Court could inquire into the merits of the genuine business reason an employer sought to rely on to justify its decision. Consequently, there have been a few cases, including the Totara Hills case, where the Court has inquired into an employer’s substantive reasoning behind making an employee redundant.
In the Totara Hills case, Mr RittisonThomas had stated that the reason for disestablishing Mr Davidson’s role was to reduce expenditure by 10%. However, Mr Rittison-Thomas hired a junior shepherd following Mr Davidson’s termination, with an actual annual saving of $6,000 which fell below the 10% that Mr Davidson’s redundancy was intended to save. The Court considered this, among other things, cast doubt on the genuineness and justification of Mr Davidson’s redundancy. In the Brake v Grace Team Accounting Ltd case, the Court considered whether the redundancy could be justified when based on misinformation. Grace Team Accounting Ltd (“GTA”) disestablished Ms Brake’s role for economic reasons following a report that GTA had a $100,000 decrease in turnover. However, after Ms Brake’s termination, GTA discovered that it had relied on incorrect figures during the redundancy process and the firm actually recorded a profit of $59,568. Despite the decision to make Ms Brake redundant being based on a genuinely held belief that the firm had suffered a decrease in turnover, the Court determined that evidence could not be produced to prove that GTA had a genuine business reason for making Ms Brake redundant. As a result, the redundancy could not be justified. A third case in this area is the Tan v Morningstar Institute of Education Ltd t/a Morningstar Preschool case. Ms Tan was made redundant on the grounds that Morningstar Institute of Education Ltd (“Morningstar”) was suffering serious financial problems. However, following her termination, the directors of Morningstar purchased the property it operated in for $1.52 million. Also, Morningstar recorded a profit of over $63,000 and hired one of the director’s wives to perform Ms Tan’s duties. The Court determined Ms Tan’s termination resulted in only a modest saving for Morningstar which did not
address the forecasted financial loss on which Ms Tan’s redundancy was based. The Court considered that the redundancy was based on misleading information which was known to be incorrect by Morningstar and therefore said the redundancy was unjustifiable on substantive grounds. These Employment Court cases outline that a fair and reasonable employer should be able to prove it has a genuine business reason based on accurate information, to substantively justify disestablishing an employee’s role. Appropriate selection criteria
In the Gilbert v Transfield Services (New Zealand) Limited case, (“Transfield”) it was not the decision to disestablish roles that the Court took issue with, it was the decision to select Mr Gilbert’s role that was substantively unjustified. Mr Gilbert was selected for redundancy following a three-stage process which included psychometric testing and interviews. The Court considered the use of psychometric testing as a selection method to be fraught with difficulty because Transfield was not privy to the questions asked or answers given. Consequently, the testing results could not be fully explained and justified. Mr Gilbert’s role was as an indoor plant technician but Transfield had considered his role a part of a wider group of “field staff” when determining which employee’s roles would be considered for disestablishment. The Court considered the incorrect categorisation of roles to be a fundamental flaw. Transfield also misinterpreted its obligations under the collective employment agreement to apply a selection criteria of “skills and attributes” which lead Transfield to disregard Mr Gilbert’s performance record. The Court considered the approach of Transfield to the selection process and its implementation to be so flawed
fair and reasonable employer could do that it could not be considered to be fair and reasonable. The Transfield case establishes that a fair and reasonable employer ability to justify the decision to make an employee redundant, from a substantive perspective, is dependent on correctly interpreting and applying redundancy terms that are outlined in an employment agreement. Redeployment
The question of whether an employer must offer redeployment options before terminating an employee’s employment by reason of redundancy was also considered in the Totara Hills case. After Mr Davidson’s role was disestablished, he was invited to apply for a newly created junior shepherd role. The role had a remuneration package 18% less than Mr Davidson was on however he would have had
adequate skills and experience for the role. The Court determined that it was not enough for Totara Hills to simply invite Mr Davidson to apply for the role. The Court concluded that a fair and reasonable employer would have “at the least” offered the junior role to Mr Davidson. Consequently, it is arguable that, based on the Totara Hill case, if an employee has been selected for redundancy but the employee has the skills and experience needed to perform another role with the company, a fair and reasonable employer should offer the role to the employee. What this means for employers
Justifying the decision to disestablish an employee’s role requires more than just complying with procedural requirements. These recent Employment Court
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cases illustrate the level of substantive justification needed for it to be fair and reasonable. The cases also indicate how far the Court’s and Authority will probe into the substantive reasoning for a company’s redundancy decisions. In our view, it is key for employers to ensure that; • They can justify the reasons behind the decision to disestablish a role • The outcome of the redundancy process satisfies the genuine business reason • They comply with your good faith obligations • Redeployment options are considered before terminating. For more information, please contact the AdviceLine on 0800 300 362.
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Should I employ someone on a trial? What And can I oblige staff to take leave? Q. A woman dropped by and offered to work for us on a two day trial hopeful that we would give her a permanent job. Should we do this? – Beth Dear Beth
In short, probably not. The option of trying out potential employees could be a thing of the past following a recent landmark employment case about a brief trial at a small lunch shop in Nelson. After a woman worked there for two days she texted to ask if there was more work and the manager texted back saying (to paraphrase) ‘no because you have stolen from the till’. She won her case in the Employment Court. Employment law specialists say the case also has implications and questions around unpaid internships or training as part of a qualification. But you could still ask prospective employees to undertake tasks as part of the recruitment process. However, they should not be permitted to get any economic gain from those tasks. For example, a barista could make a coffee for their employer and a chef could make her interviewer’s lunch to show they were capable at their jobs.
If you want to “try out” potential employees it might be best to engage them under the up to 90-day trial period provided by the Employment Relations Act, and not by informal work trials.
Relations Act, and not by informal work trials. Although this approach imposes greater compliance costs, it would offer some protections to employees and you by allowing you to terminate the arrangement without the risk of a personal grievance claim for an unjustified dismissal. Q. One of my staff is really rough with gear and has caused a lot of damage and need for replacements and repairs. I’ve really had enough – is this a discipline issue? – Gerry Dear Gerry
However, the coffee or lunch could not be sold. If the prospective employee did tasks that potentially benefited your business there is a risk that an (unintended) employment relationship is in effect. If you want to “try out” potential employees it might be best to engage them under the up to 90-day trial period provided by the Employment
Damn nuisance that, and I sympathise. Has he been properly trained to handle the equipment he’s required to? Does he actually know what he is meant to do, and when and where the crossover might be with other people? If this has been pointed out and you have all your ducks in a row and he is still clumsy or careless, you can take him aside and raise it as a serious concern on the basis of the actual costs and/or downtime caused by his actions. You need to have some evidence to overcome any possible prejudice that may be claimed.
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does it take to discipline someone? See what he says are the reasons they might be fixable. On his side, it might be that he is left-handed using right-handed tools or has eyesight or literacy problems…. If he has an attitude problem and unreasonable grievances, or is plain vexatious, you will need to take disciplinary action. If he is well intentioned but really costing more than your business can bear, you could try and give him other duties or instigate formal procedures. Q. With the year-end in sight, I’m thinking about closing down for two weeks. What do I need to do? – Ben Dear Ben
You can close down, that is insist your employees in all or some areas of your business do not work for particular dates but you can do this no more than for once a year. During a closedown people have to take their annual leave if they have some, or otherwise take it unpaid unless you agree to their taking leave in advance. Those who have been with you for less than a year use any accumulated leave and get their next four-week holiday entitlement at the
December closedown next year or 12 months from the start of the last (2013) closedown. You must give at least 14 working days’ notice of your mandatory closing down period. Even if you don’t close down, summer can be a good time to ask people to reduce outstanding leave (unless it’s your peak season of course!). And yes, you can insist they take a break. It is of course better to get their agreement, but if you’re getting fobbed off you can set their holiday dates by giving 14 days’ notice and making sure the holiday is a minimum of two weeks long. By the EMA Advocacy 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 AdviceLine team at phone 09-367 0909 or 0800 300 362 (within New Zealand), and 1800 300 362 (from Australia), 8am-8pm weekdays. Alternatively, email firstname.lastname@example.org or read or
print information such as the A-Z of Employing – a manager’s guide on more than 100 specific employment topics, at www.ema.co.nz To inquire about becoming a member to gain access to this free AdviceLine service for employers, please contact EMA Membership at the numbers above or through EMA.co.nz.
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By John Carnegie
Compensation for taking property would better support the environment for all The Government’s recently released changes to the Resource Management Act (RMA) are a step in the right direction, especially if they result in higher quality decision-making and a greater reliance on property owners to use their resources in an environmentally responsible way. Acknowledgement of the right to compensation is a fundamental part of respecting property rights in the face of regulation. This is why BusinessNZ believes the RMA needs to strengthen its compensation provisions where property is taken, or its use or value is restricted. So, it would be good to see a willingness to change section 85 of the Act, which currently rules that if you lose control of how your land can be used, you are not likely to be compensated for this loss. Under the Act as it stands, the only ability to challenge this absence of
compensation is if you, the landowner, can prove that the rule would render your land incapable of reasonable use. Only then, if you are successful in proving this high burden of proof, can the rule be set aside. If you fail to prove the rule would make your land incapable of reasonable use, you lose the use of your property and get nothing in return. It’s black or white – there’s no grey area. The fact that the new changes to the Act fail to include a compensation scheme is a major flaw in an otherwise good package.
The very popular Employer Guide series is now even better.
It makes sense to include a more robust compensation regime now, and avoid the need for yet another set of amendments in the future. Opponents to this change say it would be “unworkable”. We are told that “arguably any rule at all is a limit on what you can do ...any rule at all would trigger a requirement for compensation.” We agree with this statement in that the impact on property would need to be non-trivial, but it still upholds the ‘black or white’ situation. Compensation for regulatory takings is already used successfully
A valuable employment resource kit for payroll, HR/ER practitioners, and those new to staff management. We have reviewed and updated our 12 EMA Employer Guides. The changes include the addition of: • A guide to employees and technology, including chapters on the use of computers and cell phones, GPS, CCTV and more • A guide to Diversity, including information on Human Rights, EEO, Older Employees and Retirement Make sure you and your set of guides are up to date! Information such as the meal breaks law, changes to KiwiSaver, transferring public holidays as well as many other issues are covered. Also available is our Engaging Contractors CD with template contracts for engaging contractor individuals or companies. This disk contains: Sample 1: Contract for engaging an individuals as a contractor. Sample 2: Contract for engaging a company or other legal entity as a contractor.
ORDER NOW: Email to email@example.com Or go to www.ema.co.nz and search for employer guides and/or contractors CD
in other Acts without being economically disruptive or chaotic. Our Public Works Act is a great example of this. Compensation provisions do not need to be openended – they can be tightly focused on the introduction of new rules that constrain the use of property. Compensation is a vital economic check-and-balance. If regulation costs nothing, the demand for regulation will remain high while the willing supply of property rights will be very low. It encourages examples such as those recently proposed from the Kapiti District Council where property owners of land with outstanding or amenity landscapes might be required to get consents to do such mundane everyday work as fencing and farm tracks. Such landowners face the unfortunate prospect of paying for their land twice, once to buy it and again for the privilege of being told by the local council what they can then do with it. This prevents improved environmental outcomes from being reached.
Opponents to this change say it would be “unworkable”. We are told that “arguably any rule at all is a limit on what you can do ...any rule at all would trigger a requirement for compensation.” The act of compulsion without compensation stifles the opportunity for willing mutually beneficial exchange that would see the environment protected. Without compensation, communities are not required to put their money where their values are, so the need to focus on what is the most important environmental priority is swamped amongst trivial concerns, such as on the location of lounges, garden landscaping and storage sheds. Environmental regulation without compensation has failed to deliver what environmentalists most want – protection of what is important.
Changes to the RMA would be more beneficial for all if they were supported by economic analysis that weighs up all the relevant costs and benefits – environmental, cultural, recreational and economic. These would include the cost of any compensation required for regulatory takings under the Act, and are vital for delivering better overall environmental decisions that all parties – local communities, land owners and businesses – most value. John Carnegie is BusinessNZ’s Manager, Energy, Environment & Infrastructure.
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TAX TIPS By Joanna Doolan
What the change of government in As the tension, elation and the disappointments of the America’s cup recede, today we are back into that exciting three letter word ending in ‘x’, tax of course. The political uncertainty in Australia has moved to a new phase with a change of Government and the new Prime Minister, Tony Abbott, has proudly declared Australia open for business. Yes, there are potential hurdles like not having a majority in the Senate so how will the 19 pieces of new tax legislation ever be passed let alone 100 pieces of the tax legislation back log. What appeared to be a stalemate between business and the previous Australian Government had the potential of doing serious damage to
our nearest trading partner, and the flow on effect of this was never going to be good for New Zealand. On the tax front Australia had started down a slippery path of retrospective tax changes, tax changes by press release and a lack of open dialogue and cooperation between business and taxpayers. None of this makes for happy campers. While New Zealand continues to have business challenges around the over use of the anti-avoidance rules we largely have a very cooperative relationship between the tax office and taxpayers,
and a good track record on consultation. As for headline tax rates when these are lower there is less incentive to save tax. New Zealand has been through a sweet phase of having lower company tax rates than Australia, but from 1 July 2015 this advantage will virtually disappear as Australia reduces its company rate to 28.5%. The likely outcome of the reduced company tax rate in Australia is New Zealand businesses will need to start preparing for a turf war, and have robust pricing and cost policies that can prove the economic case for Australian businesses moving neither profits nor operations back to Australia. Whether we like it or not we have a lower cost structure than Australia so we need to start a reverse trend of encouraging Australian businesses to
Australia will mean base their operations in New Zealand, not the other way around. The other hairy chestnut is finding a potential resolution to the 20 year old challenge of trans-Tasman investors being penalised by a lack of mutual recognition of imputation credits. Despite reports that suggest implementing this would boost economic growth, the odds on bet is it would continue to be a no go zone as the tax revenue cost to Australia of up to $1 billion dollars a year is too high for them. Added to this is the economic benefit to New Zealand is much higher than the benefit to Australia, meaning the incentive for Australia to agree to these changes is virtually zero. The combination of the two factors adds to the pressure for Australian companies to have their profits taxed
in Australia, and for New Zealand companies to have their profits taxed in New Zealand. Other expected changes adding to the Australian tax burden include: • the 1.5% Paid Parental Leave Scheme levy to be imposed on companies with taxable incomes in excess of $5 million (levied on the excess income amount) from 1 July 2015 • the scrapping of the company tax loss carry-back rules (worth $940 million) • the scrapping of the business concessions that were previously funded from the mining tax package, including the small business asset write offs (worth $2.9 billion over four years) and • the accelerated depreciation for motor vehicles.
Research and Development incentives and other innovation incentives are also to be reviewed. The increase in compulsory super contributions to 12% is to be deferred for two years. In addition to promoting the economic cost benefit of basing Australian and other businesses in New Zealand we need to start focussing on the impact of a potential change of Government here. In particular what would the increase in the top tax personal tax rates to 39%, and the introduction of a capital gains tax mean? More about that next time. Joanna Doolan is a Partner with EY the views expressed are her own and do not necessarily represent those of EY Joanna.firstname.lastname@example.org.
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Talk to your accountant, call the tax masters on 0800 829 888 or visit www.tmnz.co.nz/corporates/ EMA/PB/D/HP 2013
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LEARNING By Lucy Crawford
Need skilled workers? Immigration New Zealand offers help Finding the skilled workers you need can sometimes be a challenge. Where there are no suitable New Zealanders available, or where there are particular skill shortages, you may need to look at recruiting workers from overseas. If you find yourself in this situation, Immigration New Zealand (INZ) offers a range of support to help attract and retain the people with the skills your business needs. INZ’s Attraction and Settlement Marketing Manager Greg Forsythe says INZ is always looking for ways to make offshore recruitment an easier process for New Zealand employers. “We recognise the challenges inherent in recruiting offshore and we’ve developed and refined a set of tools to make it as easy as possible for New Zealand employers to quickly find the skilled workers they need.” The cornerstone of INZ’s resources offshore is a database of people who have expressed an interest in coming to New Zealand – there’s over a quarter of a million people in the database and it’s growing each month thanks to an extensive search engine marketing programme targeting people with the skills that are in demand here.
http://skillshortages. immigration.govt.nz/ •
Visa View: If a prospective employee claims to have a New Zealand visa, use this tool to check their immigration status and any conditions attached to their visa www.immigration.govt. nz/visaview
NZ Ready: This is a planning tool, to help prospective migrants build a ‘checklist’ of things they need to do before they come to New Zealand (and once they arrive) http://nzready. immigration.govt.nz/
SkillFinder service: This free tool can help you find overseas workers with the skills and experience you need. It lets you search the INZ database by occupation, experience, academic qualification and
INZ has developed a suite of online tools to assist our businesses and their prospective employees: •
Skill Shortage List Checker: This allows you to check if your job vacancy is on one of INZ’s Skill Shortage Lists, as well as what visa options are available to a potential migrant employee. It also allows migrants to see if their skills are in demand in New Zealand
Visa Options Check: This is an easy way for prospective migrants to check which visa categories they may be eligible to apply under. This tool has extremely high usage, with up to 40,000 visits per month http://visaoptions. immigration.govt.nz/
country of residence.www. immigration.govt.nz/ employers/skillfinder/ Overseas events
INZ provide a range of services for employers considering recruitment from offshore. This includes predeparture support for employers attending offshore recruitment events, and promotion of employer visits to offshore locations via INZ’s ‘New Zealand Now’ Facebook page and database. If employers are attending job fairs in the United Kingdom, INZ’s UK-based team can support them at those job fairs, facilitate private events at New Zealand House in London, and provide interview rooms. Live jobs webcast
In August 2013 INZ piloted a live online event concept with the Stronger Christchurch Infrastructure Rebuild Team (SCIRT), a cross between a jobs expo and a panel-based TV show. It pulled together 50 job vacancies from a dozen employers in the construction sector. The event resulted in over 1,000 CVs being submitted, some of which had been short-listed for interviews at the time of this article going to print. It is likely that INZ will run similar online events with other pro-active sectors in the future. If you want to know more about INZ support for recruiting and retaining skilled migrant workers, please get in touch with one of Immigration New Zealand’s relationship managers based in Auckland. EMA has our own immigration relationship manager, Carl Andrews. You can contact him direct at: Carl.email@example.com or phone 09 914 5793 0274 964719 BusinessPlus
TECHNOLOGY TECHNOLOGY By Debbie Mayo-Smith
By Carla Pallant-Drake LLB, EMA AdviceLine Employer Advisor
Are you wasting your money owning a smartphone? I would bet 9 out of 10 of EMA members, as well as their staff, have a smartphone. I’m sure you do. But could you be wasting your money on your smartphone? I say an emphatic yes. Let me explain. With most of my engagements, I cover the topic of smartphones, tablets, mobility. I survey and question and tabulate the results. First of all, from a recent survey of my newsletter readership, almost 600 business people responded to the question on what phone they have. Nine out of ten had a smartphone. These are the results (NZ and Australia combined). As you can see, iPhone and Android phones have the bulk of the business market at 81%. • Blackberry: 3.19% • iPhone: 41.84% • Not a smartphone: 10.64% • Other: 2.84% • Smartphone Android: 38.83% • Windows: 2.66% From over a year of conversations and surveys in many industries and job types, I can say most business people are using their smartphones simply. Just for calls, texts, emails, internet browsing and basic camera. However when it comes down to it the treasure of productivity, money and time savings can be laid not just there, but in the lap of the apps. That’s what is great about the phone. It’s the apps, little programs you can download. Most are free or inexpensive. While I would never claim to be very tech savvy (my husband literally has hundreds of apps, my iPhone screen is barren comparatively). I thought you might be interested in how I used my smartphone over the past three
weeks while on a business trip to the US. Do you use your phone to answer similar needs? Viber (free) to telephone and send/ receive pictures to my husband in Scandinavia (Steve’s on a biking trip); the kids at home Skype free computer calls, low cost phone and mobile calls - to telephone clients. My fitness pal - to find out the calories in meals from several restaurants and try to keep a mental track of calories consumed so as not to go too overboard Maps (me free) use your phones’ GPS rather than mobile bandwidth. I used it to navigate and find my way around Chicago. You download countries (or states). Camera, video - Aside from the normal scenery/people shots. I took screen shots of presentations I participated in. Testimonals (live) of my presentation in Chicago. Photos of maps/directions. Photos of things I needed to remember. Audio Overdrive - this is a free audio book player you download to listen to audiobooks you take out of the library. Before I left Auckland I borrowed a few online from the Auckland library. Airnz mpass - is a free travel app from AirNZ. It keeps all your flight details. Use it to scan instead of the eticket. Tripit - Free travel app. The rest of my reservations and flights I keep in Tripit. You can allow it to read your email and pick up your travel or alternatively and what I do, when you receive by email an itinerary or confirmation you can forward it to trips@tripit. com and it will automatically put it into your account. Updates and changes are automatically loaded. Camcard - is an inexpensive card reader ($4.00). The 50 plus business cards I was handed were scanned during down time at night. The entire list from the phone I then emailed to myself to
add into my Access database (there are other business card readers that are free but the info is trapped on your phone). Facebook - updates and photos to keep friends and family posted with interesting items while abroad Google calendar - because I am not on a networked work server, I have migrated all my appointments, engagements to Google calendar where I can access it from any device and anywhere instead of being tied to my laptop. Gmail - Again like Google Calendar, not having my phone linked directly to Outlook, we map my company emails to Gmail so it picks up EVERYTHING. Again access to all the business correspondence 24/7 from any device, anywhere. Chrome - I favour this web browser over Safari for searching because you can go incognito (not have your searching detected) but more importantly you can type your search directly in the browser instead of having the side Google search box. Alarm clock - on the phone instead of carrying extra weight. Weather - to check on what to bring, what to wear Dropbox - free file sharing. Very, very useful. I used it as backups for presentations. To allow different groups to access and download the different videos I used for their presentations. I stored a lot of files I thought I might need while away that was on the main office computer. I also kept copies of all flight itineraries, passport, tickets etc. for the just in case. NZ Herald, BBC News, CNN - to keep abreast of what was happening at home and abroad. Debbie Mayo-Smith is an international speaker and bestselling author of 16 business books. www.successis.co.nz
TECHNOLOGY By Carla Pallant-Drake LLB, EMA AdviceLine Employer Advisor
“If a business site is hacked, Netsafe will provide a roadmap to get them back up and operating, providing general information, then directing the business to other agencies for help.”
Back up for Internet security Internet safety organisation, Netsafe, is proud to have helped with an exciting proposal to regulate harm done to individuals online, says executive director Martin Cocker. Netsafe helped draw up the Harmful Digital Communications Proposals, spearheaded by the Law Commission, which will soon go to Parliament as a draft bill. The proposals aim to regulate content created by one user to harm another. They set
behaviour parameters in new media, with a focus on remedy rather than punishment. The proposed remedies include an apology, an opportunity for the aggrieved to defend themselves, and to have offending material removed from the Internet. The bill will create a punishable offence for the extreme end of harmful behaviour. Already, laws control child exploitation, for example. Mr Cocker says, “Harmful online behaviour has
traditionally gone uncontrolled so this is a significant step. “It will strengthen the functions Netsafe provides such as educating about a selfresponse and legal response. The bill will create new possibilities for those people wanting help, without destroying freedom of expression.” NetSafe is an independent, non-profit organisation that promotes confident, safe, and responsible use of online technologies and is funded mostly by the Government through the Ministry of Education. It is best known for its work with schools and families. But Netsafe also spends a lot of time on scams and fraud, Mr Cocker says. If a business site is hacked, Netsafe will provide a roadmap to get them back up and operating, providing general information, then directing the business to other agencies for help. He says small businesses don’t know what to do in such cases. “We help people get out of sticky situations rather than solve their problems.” Businesses with sensitive intellectual property need to have a strategy to protect that, starting with understanding who is allowed and who can see the information. Large businesses have
technically complex and specific systems so they need expert help. They can call on the National Cyber Security Centre, which is an offshoot of the Government Communications Security Bureau to protect critical infrastructure. “We should be thankful the
“We help people get out of sticky situations rather than solve their problems.” NSA information has come out to show the level of surveillance that’s possible, There’s a growing realisation that the Internet is a very, very public space viewable by lots of agencies and people, and government agencies aren’t the only ones doing it.” Mr Cocker offers a note to parents who see the digital world and young people’s interest in it hard to understand and even obsessive: “This is their world, they are highly connected, and most manage their safety with input from parents. BusinessPlus
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New Zealand encourages tax refugees By Gilbert Peterson
New Zealand’s strict rules on tax residency are breeding a generation of Kiwi tax refugees. Inland Revenue’s diligent application of our tax rules are ensuring New Zealand tax payers who head overseas to fulfil work contracts often find they have to relocate themselves off-shore, become non-resident, and sever their links here, often never to return. Many New Zealand citizens relocate overseas to take advantage of more lenient tax regulations. Here are some of them: • Barry is a New Zealand based consultant with a long record of working for Australia’s aid programme AusAID. He relocated to Australia to take advantage of their tax exemption given to work with AusAID for assignments of more than 91 days. • Bruce, a New Zealand consultant who returned to New Zealand after many years working in Papua New Guinea, then relocated to Fiji because of the concession offered to foreigners who invest capital there and receive a taxfree status on foreign income. • John is a consultant who has worked long-term overseas though his family is based in New Zealand. He formally separated from his wife of many years to show he had given up access to the family home in order to get around the requirement of having access to a permanent place of abode in New Zealand. • Russell is a long term consultant working offshore in the oil sector. He relocated to Malaysia with his family under The Malaysia My Second Home programme which allows a 10 year
international residency visa. (Foreign source income is not taxable in Malaysia) • Harry, a former New Zealand soldier working in Afghanistan for a private security company sold his Auckland house and relocated to Thailand to gain nonresidency status for tax purposes. Statistics New Zealand estimates there are around a million New Zealand men, women and children living overseas – our tax rules help explain why. Our current tax residency rules for New Zealanders say you are tax resident here and obliged to pay tax here if: • You are in New Zealand more than 183 days in any 12-month period • You have an “enduring relationship” with New Zealand • You are away from New Zealand in the services of the New Zealand government. The crucial test, “enduring relationship”, is where New Zealand has stricter rules than other countries. The IRD uses several criteria to determine whether a person has an enduring relationship with New Zealand. These are listed on IRD 292 NZ Tax Residence – Who is a NZ resident for tax purposes, December 2012. For example a person with a permanent place of abode in New Zealand is deemed to be a tax resident, and a permanent place of abode covers all ties and links with New Zealand - social, physical economic or personal. The criteria mean a person in effect has to sever all ties with New Zealand to become a nonresident for tax.
Impact on New Zealand’s Competiveness
Our tax rules impact on our international competitiveness in several ways, and particularly on the export of services and the flow of foreign exchange to New Zealand generated by New Zealanders working overseas. They are far more stringent than those applied by the UK, the US, and Australia whose consultants ours compete against for international work assignments. Examples are: • A New Zealand engineering consultancy is disadvantaged because the tax regulations for its staff working overseas mean they can’t keep their New Zealand place of abode. Hence to attract staff to work overseas companies must offer more incentive thereby adding to their costs. • High earning New Zealanders selling their services internationally who spend most of their time away become inclined to relocate off-shore permanently, thereby ceasing to repatriate their earnings here. • The finality and strictness of the non-residency rules makes it difficult to eventually return after establishing careers overseas. • A million expatriate New Zealanders represents a flight of human resources and capital with a disproportionate number of our best and brightest we can least afford to lose. More competitive tax residency rules would encourage some to return with their capital. Next issue: How lenient are the tax rules for exporters in other countries? BusinessPlus
PROUD MOMENTS EMA MEMBERS NOTICEBOARD
Aerosol contract filler boosts certifications Otaua, south of Waiuku in the country is an unlikely place to come across an industrial enterprise such as an aerosol contract filler. Bream Aerosol Packaging Ltd find the rural quiet to their liking, and its not really so far to the port where much of their output is shipped. The location has also proven secure for their extensive hazardous, and valuable, chemical storage facility. Bream is a contract manufacturer with the capacity to fill up to 500 cans an hour, mainly on behalf of clients, though they produce two of their own branded lines, and air freshener and an insecticide. The biggest order was 75,000 cans filled in 8 days for shipping to the US, but orders can be for as few as 100. Other export destinations required by customers typically include Canada, France and the UK. Its all managed under the strictest hazardous goods licensing requirements - their certifications, Standards and other permits line an
office wall. The range within Bream’s capability includes nearly every product normally found in an aerosol using CO2 and LPG propellants: paint, silicone, CRC, car care products, fly spray and other insecticides, cleaning products, fragrances – though not food products. “The nearest we come to food is cooking oil,” says company manager Roger Woodman. Clients include household names BASF, ICI, MAC and Pacer. Roger clearly relishes the challenge of his small tight operation. He has previously worked in plastics as a tool maker – he set up the first polyurethane reaction moulding plant in Auckland. Prior to that he designed machinery and formulated chemicals in the UK, in one role as ICI’s UK international sales manager.
Breem Aerosole manager Roger Woodman
Roger says customers often ask if their product can be put in a can and the answer is frequently ‘yes’, which can come as a surprise partly since “99% of the products we fill are classified as dangerous goods.. Different products require different gases as propellants and under different pressures. “The hardest part in doing it (putting products in an aerosol) is trying to find out what regulations might apply.” “There’s a complexity in this business,” Roger says, “that I took several years to fully understand.” Contact him on: 09 235 2881 firstname.lastname@example.org
Piloting vehicle and driver safety initiative AMS Group advises its driver training safety courses are now available at seven VTNZ vehicle testing stations in Auckland. AMS provides a range of driver training courses around the country for individuals and businesses covering truck licenses, forklift licenses, dangerous goods endorsement, and operator training for cranes such as overhead gantry and truck loader cranes. It also provides workplace safety training for areas such as confined spaces and working at heights. Aucklanders can pre-book the
driver training safety courses either online on the AMS Group website or at any of the participating VTNZ stations: in Takanini, Kingsland, Glenfield, Sylvia Park, New Lynn, Wiri and Pukekohe. “VTNZ is very much focused on
vehicle safety and AMS Group is focused on producing the best possible drivers,” said AMS Managing Director Kevin Wall. He says improving the skills of drivers and specifically truck drivers on the roads is positive for all road users. AMS Group is a New Zealand owned driver training and workplace safety training company. With a support office in Hamilton and operating nationwide, the company is NZQA accredited with over 10 years’ experience and is an approved New Zealand Transport Agency license provider.
AMS Group’s Managing Director Kevin Wall
PROUD MOMENTS EMA MEMBERS NOTICEBOARD
Some of the Mi Business team (from left): Trish Knight, Phil Holland, Josh Beckett, Jonathan Mountfort and Chris Andrew.
Bold approach pays off A wild card approach to business is paying off for digital services company Media Interactive Ltd (Mi Business) in the Bay of Plenty. Owner Jonathan Mountfort decided to shift focus to midlevel, aggressive businesses as target customers not because they potentially had more to spend, but because they were in a better position to grow and had a greater desire to win. He says, “We partner with our clients to identify and implement digital solutions that enable them to gain competitive advantage, expand into new markets, and take a market leader position while becoming more efficient and profitable. “Previously it was frustrating that smaller firms often had no strategy or care for what it was, no understanding of marketing and little awareness of the challenges they had to face in order to succeed.” Mi Business specialises in custom software, web based platforms, mobile applications, and also provides digital marketing and digital reporting and analytics to drive a higher return on investment, profitability and efficiency throughout customers’ businesses.
After much groundwork the company secured some key customers and partnerships that provided the foundation for their own growth. It is growing at 400% a year and accelerating, due to increased demand from manufacturing and distribution-based businesses that want to expand and become more efficient. “We’re currently finding many businesses need to step back and ask ‘why’: why is that part of the business so hard or why is this task inefficient? Isolate the factors to identify the best coherent solution. “For example, many businesses want to generate high return on investment from their digital marketing and web platforms, and they haven’t thought about how to convert traffic into sales volumes or thought about the areas of digital reporting to deliver comprehensive insight about their customers’ user experience. “The growing amount of education required in these areas is huge; the technology industry is rapidly changing the way we live and make decisions; even we are
learning all the time. “Solid management here combined with young innovators give us our advantage. “It is impossible to succeed without a good strategy and the right people.” Mountfort started out in 2009 as a home office, sole trading web developer and now the 12-person company has multi-million-dollar revenue. He finds that New Zealand is a challenging business environment with high thresholds for delivery, innovation and establishing clearly a unique value proposition. Mi Business also says they face a general lack of awareness and education in areas of digital/ technology. But in the end what counts is having something of value, and delivering. “Businesses that don’t excel in delivering high value to the customer are destined to fail.” In the next issue of Business Plus (November) Mi Business will explain Internet trends that are helping businesses grow. BusinessPlus
PROFILE In our regular snapshots of EMA members, we profile Kimberley Tool & Design by Andrea Fox
Five companies combine to make pizza trays and beat China Waihi engineering firm Kimberley Tool & Design has discovered a little Kiwi collaboration can slay the Chinese manufacturing price dragon. Fresh from helping corner one of New Zealand’s biggest steel production contracts for several years, the company’s principal, Jon-Brian Parker, is calling for more Kiwi companies to co-operate when tendering for manufacturing jobs. Kimberley Tool and Design, owned and operated by the Parker family, collaborated with four other companies to beat Chinese bidders for the contract to make more than 115,000 pizza trays for an Australian chain. The other four were Vulcan Steel, NZ Steel, transport company STL Linehaul, and Basil Jones Metal Spinners. Parker said NZ Steel made the required 120 tonnes of steel, Vulcan Steel of Auckland cut it, Kimberley Tool and Design punched the tray circles, and STL transported the goods to Basil Jones in Lower Hutt, which spun the trays’ metal sides. Parker said the Australian company invited Basil Jones to go for the job, and Vulcan was the catalyst in the deal in that it had a relationship with all the participating companies. He said that given the steady erosion of New Zealand’s steel industry by cheap overseas manufacturing, the job was a ray of sunshine. “I’m tremendously proud of our little bit of it. It’s a sign New Zealand could be changing its philosophy. We have to work with our suppliers. I’ve always advocated having good relationships with key suppliers.” Parker reckons collaboration doesn’t come easily to New Zealand
companies, and that if they stopped competing against other Kiwis and worked with their freight providers and suppliers, more such deals could be done, to the benefit of all. But he fears many companies look on their materials suppliers as “enemies”. Kimberley Tool and Design’s relationship with steel supplier Vulcan goes back 20 years. Parker thinks Kimberley Tool and Design was approached to participate because of this long and trusted association and “likemindedness”. Keith Boyd, of Vulcan in Auckland, says the two companies share a mutual respect. He cites Kimberley’s reliability and technical expertise and said selecting the right partner was important for Vulcan in fulfilling the requirements for quality and timeliness. Boyd says the lesson was that New Zealand can be competitive in this type of contract. Aussie contract fulfilled, Parker and his 32 staff are back making components for other companies’ products on a country side road in Waihi. Parker is Kimberley Tool and Design operations manager. His dad Brian is technical director and mum Marilyn, finance director or, as their son puts it: “Dad’s the brain, Mum’s the chequebook”. The couple founded Kimberley 27 years ago next month, says Parker, who lives in Waihi two blocks from where he was born. “I’ve grown up with the gear and the equipment and the suppliers and the customers. I cut my teeth on these things.” Dad Brian, an engineer, says Kimberley has a reputation for componentry accuracy and problem-solving. He says 90% of its components end up being exported
Making blanks for the pizza trays. Kimberley’s Henry Pere on the job.
in other companies’ products. His son says new technology will determine the company’s path in the next five years. Components such as big firehose jointings were once painstakingly hand-machined. Now they are turned out in five minutes through use of a computer programme. In the past three years the company has invested more than $250,000 in new technology, Parker says, and more will come on site in the next five years. Kimberley Tool and Design came through the global economic downturn in relatively good shape because its customers did. But 2013 has been tougher, Parker says. “It’s a new world. We’re a small country in a small market with lots of niche manufacturers. We don’t want to be just another supplier. The value of the relationship has greater interest for me than the value of the part. Anyone can do this but what I keep hearing from our customers is they want the relationship.” (Reproduced with permission of Andrea Fox and the Waikato Times.)
SCHEDULE FREE for all EMA members | To register call AdviceLine on 0800 300 362 or email AdviceLine@ema.co.nz
Spring Briefings Schedule 2013 Waikato / BOP Day/Date
Mon. 21st Oct.
9.30am - 11.00am
Thames War Memorial Civic Centre, 200 Mary Street
Mon. 21st Oct.
3.00pm - 4.30pm
Sebel Trinity Wharf, 51 Dive Crescent,
Tues. 22nd Oct.
9.30am - 11.00am
East Bay REAP (Upstairs), Reap House, 21 Pyne Street
Tues. 22nd Oct.
3.00pm - 4.30pm
Huka Falls Resort, Huka Falls Road
Weds. 23rd Oct.
The Holiday Inn, Corner Froude & Tyron Streets
1.30pm - 3.00pm
Central North Island Kindergarten Association, 6 Glenshea Street
5.00pm - 6.30pm
Thurs. 24th Oct.
Claudelands Conference & Exhibition Centre, Brooklyn Road, Claudelands
Thurs. 24th Oct.
2.30pm - 4.00pm
Bruce Pullman Park, Teamsports Centre, Walters Road
Friday 25th Oct
2.00pm - 3.00pm
Mon. 4th Nov.
9.30am - 11.00am
North Harbour Stadium, Davenports Lounge, Appian Way
Mon. 4th Nov.
3.00pm - 4.30pm
Bruce Mason Centre, 1 The Promenade
Tues. 5th Nov.
9.30am - 11.00am
Crowne Plaza, 128 Albert Street
Tues. 5th Nov.
2.00pm - 3.30pm
Waipuna Conference Centre, 58 Waipuna Road
Tues. 5th Nov.
4.00pm - 5.30pm
Waipuna Conference Centre, 58 Waipuna Road
Weds. 6th Nov.
9.30am - 11.00am
Counties Inn, Rata Lounge, 17 Paerata Road
Weds. 6th Nov.
3.00pm - 4.30pm
Greyhound Function Centre, Manukau Sports Bowl, Te Irirangi Drive
Thurs. 7th Nov.
9.30am - 11.00am
Titirangi Golf Club, Links Road
Thurs. 7th Nov.
2.00pm - 3.30pm
Ellerslie Events Centre, 80 Ascot Avenue
EMA AGM or 2nd session for member briefings Ellerslie Event Centre
Thurs. 7th Nov.
Friday 8th Nov.
9.30am - 11.00am
The Trusts Function Centre, 65-67 Central Park Drive
Friday 8th Nov.
3.00pm - 4.30pm
EMA Room 2C, 159 Khyber Pass Road
Mon. 11th Nov.
7.30am - 9.10am
EMA Board Room, 159 Khyber Pass Road
Mon. 11th Nov.
11.00am - 12.40pm
Butterfly Creek, Tom Pearce Drive
Tues. 12th Nov.
2:00pm - 3:00pm
Weds. 13th Nov.
3.00pm - 4.30pm
The Northerner, Corner North Road & Kohuhu Street
Thurs. 14th Nov.
9.30am - 10.30am
Scenic Circle Bay of Islands, Seaview Road
Thurs. 14th Nov.
1:30pm - 3:00pm
Kingsgate Hotel Whangarei, 9 Riverside Drive
Out & About EMAâ€™s CEO Dinner for Bay of Plenty local authorities and economic development agencies
| 1 Aileen Lawry [Opotiki District Council] & Ani Bennett [EMA BoP] | 2 Andrew Coker [Priority One] | 3 Karen Long [EMA BoP & Ben Johnson [EMA Waikato] | 4 Garry Poole [Tauranga City Council] | 5 Geoff Williams [Rotorua District Council] | 6 Miriam Taris [Western Bay of Plenty District Council] & Kim Campbell [EMA] | 7 Mark Rawson [Rotorua District Council] | 8 Su Cammel [Kawerau District Council], Fritz Frohlke [Enterprise Great Lake Taupo] & Clive Thomsom [EMA BoP]
Inaugural Asset Management Conference, Auckland
| 1 Vicky Thompson [Kiwibank] & Grant Sargent [Innovators] | 2 Bruce Stone [Airedale Property Trust] | 3 Jim McCormick [Coca Cola Amatil NZ] & David Barker [Fisher & Paykel Appliances] | 4 Ian Jackson [Beca]
Terms of Trade Seminar, Auckland
| 1 Usha Ballu [Rheem NZ], Kristine Brothers [Foodfirst] and ChingHer Ong [Good Health Products] | 2 Jean Tiran & Paul Johnston [LHF] | 3 Ngaire Currie [YKK Oceania] & Anne Ridgway [Asona] | 4 Nasif Ali & Kerri Ross [Wesfarmers Expresspak] | 5 Paula Woodman [Bream Aerosol Packaging], Christine Wood [Fliway Transport] & Roger Woodman [Bream Aerosol Packaging]
Motivating Individuals & Teams
Leadership An Introduction
Learn how you can help create the right motivational culture to foster high performance teams.
Learning to identify the difference between a leader and a manager will help you to grow on either path in your career.
Auckland | Craig
Auckland | Craig
Health & Safety 30-31 Representative Training (Stage 1) Learn to better manage health and safety issues in your organisation by improving workplace communication and gaining understanding of relevant employment statutes. Auckland | Craig
Business & Report Writing
Improve your business writing skills to ensure your words deliver maximum impact and are heard above the noise. Auckland | Caryn
Time Management Personal Effectiveness
Training Contacts Kevin Chambers | 09 367 0958 | email@example.com
Learn to use the time you have more productively and experience more personal effectiveness and less anxiety.
Craig Garner | 09 367 0907 | firstname.lastname@example.org Deborah Carruthers | 09 367 0947 email@example.com
Nationwide | Deborah
offers you a holistic look at your business and the training needs you have. Whether it be standard training or specialized, we can meet with you, discover your needs, and structure a training plan specifically for you Contact Deborah Carruthers
firstname.lastname@example.org Ph 09 367 0947 | Mob 021 636 799
Communicating With Your Customers
Develop a communication style that will help you form enduring customer relationships and pave the way for career success. Auckland | Deborah
Caryn Leitgeb | 07 839 2710 | caryn.leitgeb.@ema.co.nz
Performance Management The Fundamentals
Gain insight into how you can use employee feedback and performance reviews to help achieve desired outcomes. Auckland | Kevin
14th Annual Procedural Fairness Conference Frustrated with poor performers? Unsure about how to dismiss? Annoyed by deceitful behaviour? Well, it doesn’t have to be that way! It’s time to front foot your response and take control!
Conference Contacts Karen Joe | 09 367 0959 | email@example.com
16th Annual Credit Management & Debt Recovery Conference
Dealing with liquidations and receiverships; Using the Disputes Tribunal; Smarter ways to use technology; Improving cashflow; Case studies from Auckland Transport and BNZ Auckland | Karen
3rd Annual CEO Summit
EMA has asked some of New Zealand’s top leaders to bring you completely up to date with the latest trends and forecasts AND we have asked some leaders to talk about their WAR STORIES – the stuff that has gone down and how they coped with and used it to their benefit. Auckland | Karen
Auckland | Karen
www.ema.co.nz | firstname.lastname@example.org
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Published on Oct 1, 2013