Warning bells sounded regarding Employment Relations Bill

One of the top legal firms in the country, Munro Leys is sounding warning bells regarding the changes in the Employment Relations Bill where, if passed, the law will allow a court or tribunal to impose criminal liability and severe penalties, including garnishee orders and departure prohibition orders, for contractual issues which are usually civil, not criminal, in nature.

According to the proposed law, employers can now be fined for failing to justify summary dismissal or where an employee suffers workplace sexual harassment.

The law firm says a worker could be sexually harassed by another worker, a customer of the employer or any other person but the employer will pay the fine if they are found to have not done enough to prevent it.

Previously prosecutions had to be brought within 12 months of the offence.

This has now been extended to six years, long after an employer’s management or other witnesses may have left their jobs, meaning it is more difficult for an employer to find the evidence to defend a prosecution for a long-ago event.

At present grievances of this kind are resolved by an employee suing an employer in civil proceedings.

Munro Leys says the current system is undoubtedly inefficient and leave employees waiting a long time for compensation.

They say the solution is to improve the efficiency of that system, it is not to impose poorly-defined criminal offences and civil penalties on employers.

Munro Leys says the Bill would dramatically expand the powers of the Permanent Secretary and labour inspectors through new sections 19 and 19A, including authority to enter and inspect workplaces at any time, demand employment records, issue compliance and penalty notices, and enforce fines without restraint.

The law firm highlights that these expanded powers lack adequate safeguards against potential misuse, potentially breaching constitutional protections against unreasonable search and seizure and the separation of powers by allowing officials to determine breaches and fines, rather than the courts.

They also say an environment of arbitrary enforcement instead of one governed by reason and logic creates the potential for abuse and – usually not far behind it – corruption.

The law firm says the Ministry appears to be particularly fixated on “wage theft”.

They say it is unfair for employees to be short-paid by their employers and no responsible employer would allow it but there are many reasons why short-payments may occur.

Munro Leys says IT systems may fail, a payroll or personnel manager may misunderstand an overtime rule, or a busy SME employer may just make a mathematical error.

It says if the Ministry chooses to prosecute, an innocent mistake is not a defence as absolute liability applies.

Under the Bill, individual employers and directors of corporate employers face fines up of up to $100,000 and imprisonment for up to five years.

The corporate entities face fines of up to $1 million.

Consultations continue on the Employment Relations Bill.