EMA Business Plus November 2012

BusinessPlus news

|

advice

|

learning

|

networking

P ublicatio n o f t h e E m p l o y e r s & M a n u f a c t u r e r s A s s o c i a t i o n Inc

Issue 98 - November 2012

Educators focus on business skills

Is it mad to be a company director?

In this issue: • Overtime calculations up in the air

• EMA member Award winners

• Starting out wage proven to work

• RMB trades accelerate

Contents 1

14 Business Plus 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: ema@ema.co.nz 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 Whangarei Louise Morrison 09 459 1501 mob 027 6870604 Waikato Denis Quigan 07 823 9311 Russell Drake 07 838 0018 Bay of Plenty Terry Arnold 07 575 8401

mob 027 203 0694 mob 021 686 621

mob 021 662 656

Rotorua / Taupo / South Waikato / Whakatane Clive Thomson 07 348 0334 mob 0274 372 808

Business Plus Editor Gilbert Peterson Ph: 09 367 0916 gilbert.peterson@ema.co.nz Writer Mary MacKinven mary.mackinven@ema.co.nz Published by Mediaweb Project Manager Anthony Stead 021 215 9632 Advertising Sales Colin Gestro (09) 444 9158 colin@affinityads.com

On the cover...

WelTec Trades Academy student Davine Hune was last year engaged in developing her automotive skills and knowledge, and an example of the way our education system is responding much more to the needs of the economy and business. The full story is on page 14

Advocacy 02 EMA: advocacy at work 04 Starting-out wage proven With EMA CEO Kim Campbell

14

Educators focus on business

16

New legislation affecting business

22

from Phil O’Reilly CEO BusinessNZ

News 05 Changes to Employment Relations Act imminent 06

Land and water fast tracked

06

Labour demand cuts migration

07

Is it mad to be a company director?

08

Court overturns over time calculations

22 Comvita, EMA members win Excellence in Business Support Awards, Overland Footwear Best Place to Work 25

Eco Smart trailblazer - Case study

26

RWB cross border use accelerates

27

Innovest designed to attract investors

27

Trash 4th largest US export earner

Advice 11

Every employees right to privacy

12

Managing your manager’s performance?

- Employment Chat

Technology 19 Understanding business continuity - part 3 21

Reduced ICT costs just part of the story

28 29

22

ISSN No. 1176-4953

Our Vision. Your Success

2 Advocacy

EMA: advocacy at work D

etails of the long term The major issue for TGH has development of an inland been regulatory challenges, port at Ruakura in Hamilton essentially around process. was one project presented by More than 80% of TGH Tainui Group Holdings assets are in property, most (TGH) chief executive Mike notably The Base retail centre Pohio to the EMA Policy at Te Rapa, the Huntington Mike Pohio of Tainui Forum last month. He noted Residential Estate and the the inland port is critical to new hotel at Auckland the economic development of International Airport. the Waikato.

Freight in and out of Hamilton hy the Pacific Fibre Cable project over the next 30-50 years will more did not succeed, and where than double. The project fits within to from here for NZ international the Hamilton Urban Growth Strategy connectivity? And why is business paying (HUGS) and will be TGH’s biggest exorbitant rates for international data roaming and what can we do about it? project to date. The Stage 1 proposal up These were some of the issues to 2021 includes 80 ha for the inland TUANZ CEO Paul Brislen covered port with a further 17 ha for residential, in his address to EMA’s Regional of which 5 ha will be high density.

Infrastructure & Local Government The Hamilton City Council is Committee. expected to write the development Why, when you go overseas on into their long term plan in late 2012.

W

business, 1GB of data costs between $500 and $10,000 depending on the provider while the same amount of data on your smart phone or tablet in NZ might cost $20 or less?

Both businesses and consumers have major problems with the pricing of international mobile roaming, particularly mobile data. Excessive charges like these are a drag on business and an impediment to increasing the productivity of our exporters.

Ut doesn’t have to be, Paul said. If our incumbent telcos are willing, a more rational and affordable international data roaming regime can be established.

He put up a similar argument for international roaming charges for voice calls.

Our high profile broadband fibre rollout, and the hopes for it to improve productivity across health, education, business, and the public sector depend

Handing over EMA’s AGM held on November 1st saw the following directors voted onto the EMA Board PRESIDENT Laurie MARGRAIN, Chairman, Open Country Dairy Ltd IMMEDIATE PAST PRESIDENT Graham MOUNTFORT, Consultant, Permark Industries Ltd EMPLOYERS FORUM BOARD MEMBERS Margaret BROWN, Director, COGITA Holdings Ltd Andrew HUNT, Chief Executive, Kinetics Group Ltd Simon O’BRIEN, General Manager Regulatory Affairs, ASB Bank Ltd Richard PEARSON, Chairman, Ports of Auckland Derek RANKIN, Managing Director, Rankin Treasury Advisory Ltd Colleen STAIRMAND, Consultant, SWL Plumbing Geoff WHITCHER, Commercial Director, UoA Developments, University of Auckland MANUFACTURERS FORUM BOARD MEMBERS Charles BLACK, General Manager, Goodwood Industries Ltd Andrew CORBETT, Consultant, Insite Aluminium Ltd Chris DAVIS, Director, Rinnai New Zealand Ltd Bob FENWICK, Managing Director, Planhorse Systems Ltd Scott FULLER, Vice President Sales & Marketing, New Zealand Steel Ltd Les KENDALL, Governing Director, Temperzone Ltd David THOMAS, General Manage, Winstone Wallboards Ltd Business Plus – Exclusive news, advice, learning and networking

Newly elected EMA President Laurie Margrain, right, was congratulated by his predecessor Graham Mountfort at the association’s AGM on November 1st. The Annual Report of the association is available at www.ema.co.nz.

Advocacy 3

Philippines President addresses Auckland business upon a second fibre cable across to the US. But it turns out there is no shortage of capacity on the existing Southern Cross cable, a monopoly, so no competitive market pressures will come to bear.

G

uest speaker at EMA’s AGM David Smol, chief executive of the Ministry of Business, Innovation and Environment (MBIE), covered the challenges of bringing together four former government agencies and the business growth agenda that it was charged with delivering.

Philippines President Benigno Aquino III addressed an Auckland business forum presented by EMA on his visit to New Zealand on October 23rd. Following his speech he took questions from the floor joined

by Auckland Mayor Len Brown (left) and representing the Government, Maurice Williamson, Minister of Customs.

David Smol

Government has been advised EMA recently contributed to the following BusinessNZ submissions.

• Education and Science Committee on the Advanced Technology Institute Bill; • Government Administration Select Committee on Lobbying Disclosure Bill.

EMA also lodged submissions directly on the following: • Trans-Tasman Mobile Roaming Communications and Information Technology Group, on Trans-Tasman Roaming Charges; • Commerce Select Committee on the Commerce Amendment Bill – Review of Productivity Findings A submission on behalf of the NZ Hot Water Association on E3 Heat Pump Hot Water MEPS AMETI East West Project explored meeting at EMA between NZTA, Auckland Transport and a group of EMA members discussed the AMETI

A

East West project in Auckland. The present work there is restricted and does not address East West connectivity.

A major concern is that a 10 stage multi-agency three-year planning process is proposed for it by Auckland Transport before any decision is made on whether to proceed. The urgency of the congestion problem in Church Street highlights the concerns. EMA says the need for the project is already well established and there is no need for a prolonged planning process. The project should just move directly into the design phase. The response by Auckland Transport to this proposition was disappointing.

Immigration policy under the spotlight mmigration NZ, an agency absorbed into the Ministry of Business, Innovation and Employment set up this this year, visited EMA to discuss immigrants and skills.

Manager of policy

Christine Hyndman and operations support senior adviser, Lynne White covered the Accredited Employer Scheme, Pacific Access Category, Skilled Migrant Category, Migrant Investment Category, temporary visas and the Shortand Long-Term Skills Shortage Lists.

Some policy is under review to ensure immigrant numbers and criteria match job availability without putting Kiwis out of work or inadvertently facilitating poor working conditions.

Business is to be consulted next year if and when any policy changes are deemed necessary.

(See story on page 6).

I

EMA’s Mike Burgess with Immigration NZ’s Christine Hyndman and Lynne White and EMA’s Mary MacKinven.

Business Plus – Exclusive news, advice, learning and networking

By Kim Campbell, Chief Executive, EMA

4 Advocacy

Starting-out wage proven Everyone concerned about our alarming rates of youth unemployment should be celebrating the recent announcement on the startingout wage. Instead we heard a lot about the sky falling in.

A

starting out wage is proven to work.

Or rather, when Sue Bradford abolished it in 2008, our youth unemployment rate ballooned. It was a disaster, as we predicted it would be at the time.

We said the abolition of youth rates would hurt the very people its supporters were trying to help. Two researchers, Eric Crampton and Gail Pacheco, independently arrived at the same conclusion. They found that job opportunities for youth would fall and youth unemployment would rise precipitately for all teenagers if youth rates were abolished. Gail Pacheco’s work indicated the increase would be 20%; that turned out to be very conservative.

By June in 2011 nearly one in three of all 15 to 19 year olds not in education were unemployed, on the dole and looking for something – anything - to keep them occupied.

The naysayers have just advised the latest announcement will see a lot more of our youth heading off to Australia in search of greener job fields.

But a glance over there suggests that’s not likely, unless our would-be emigrants want to compete for scarce jobs with Australia’s 136,000 unemployed youth. Then, if they did find a job, they could expect to be paid about the same as in New Zealand under our new youth rate.

Across the ditch the youth unemployment rate is currently 16.6%, better than our 23% but no less a cause for alarm.

Of course, over there their Labour government might well have made it far harder for their young people to find work, and raised the numbers of them, by abolishing their youth rates of pay.

In Australia an unskilled 17 year old can expect to be paid 57.8% of the minimum wage or $9.20 an hour; an 18 year old might get just 68.3% of the minimum, or $10.90 per hour.

‘Susan’, a 19 year old shop assistant quoted in the Sydney Morning Herald earlier this year put it nicely. She said, “The more experience you have the easier it is to find a job, but you have to start off very small.”

“In Australia an unskilled 17 year old can expect to be paid 57.8% of the minimum wage or $9.20 an hour; an 18 year old might get just 68.3% of the minimum, or $10.90 per hour. “

So you might well ask, what is all the fuss about? It’s not as though most 15-19 year olds have dependents to support, and many are likely to be still living in the family home or with some degree of support.

Business Plus – Exclusive news, advice, learning and networking

The naysayers suffer from the same sort of confusion over the 90 day trial employment law, and the same lack of ideas on what might be done to help, which rather disqualifies Kim Campbell them from commenting at all. But every idea that could help get young people into work is always welcome.

In Australia, and virtually all other jurisdictions, political parties of all casts subscribe to trial employment periods for the young, the inexperienced, and those wanting to get a fresh start.

They’re simply to give people a chance to prove they can add value to an enterprise.

The latest version of our Starting-out wage does something similar but just for young people likely to require considerable supervision during their early months of employment.

Without the incentive of being able to pay an inexperienced young person less than someone with experience an employer will choose experience every time.

‘Susan’, a 19 year old shop assistant quoted in the Sydney Morning Herald earlier this year put it nicely. She said, “The more experience you have the easier it is to find a job, but you have to start off very small.”

Though there is no silver bullet for creating jobs for young people or for anyone at all, the Starting-out wage offers a vital first step up the employment ladder.

Unless there is an incentive for taking on the added issues of employing youth workers, young people will continue to be over represented in the unemployment numbers and place our future at greater risk.

(First published in the NBR, 12/10/2012)

News 5

Changes to Employment Relations Act imminent The changes to employment law announced by the Government late October confirm the package of amendments foreshadowed in May this year.

T

hey include empowering the Employment Relations Authority to declare in certain circumstances that collective bargaining has ended, and will be in a new Bill to come before Parliament this year, the Minister said.

The changes will include improvements to Part 6A. (See BusinessPlus, September – The havoc that is Part 6A) and: • A return to the original position in the Employment Relations Act where the duty of good faith does not require the parties to conclude a collective agreement.

• Empowering the Employment Relations Authority to declare in certain circumstances that collective bargaining has ended. (These two provisions would obviate the situation that held up a resolution to the Ports of Auckland strikes earlier this year.)

• Allowing employers to opt out of multiemployer bargaining.

• Allowing for partial pay reductions in cases of partial strike action.

• Removing the 30-day rule that forces

non-union members to take union terms and conditions.

• Changes around the disclosure of personal information following Employment Court judgments involving Massey University.

The objective of Part 6A is to provide continuity of employment for employees in specific industries when a business is restructured or sold. But there are major operational issues around transferring employees’ entitlements and information to the new employer.

“Cabinet has agreed to exempt small and medium businesses – those with fewer than 20 employees – from the provisions of Part 6A where the SME is the incoming employer,” the Minister said. EMA suggests this change may not remedy the perceived issue.

Changes to Part 6A include: • A requirement for the outgoing employer to forward employees’ information to the incoming employer, such as employment agreements, PAYE, wage and time or leave records.

• A process to help the employers agree how to apportion liabilities for accrued service-related entitlements of employees who are transferring.

• A requirement that employees must decide to transfer to a new employer within five working days (or a longer timeframe if agreed between the outgoing

0800 223 729 Ace Payroll for New Zealand employers.

and incoming employer).

The Review of Part 6A: Continuity of Employment can be found at: http://dol. govt.nz/er/amendments/ EMA responded to the changes saying they will help businesses stay viable and stay in New Zealand by going some way towards keeping them nimble in the current environment though the changes to Part 6A, while welcome, fall well short of what is required.

EMA CEO Kim Campbell said where unions and employers work constructively together for the mutual benefit of the business and its employees there will be little change.

“But unfortunately, because of the rigidity of our labour laws, there are well known examples where businesses needed to adapt but found they could not,” he said.

“The adjustments announced will retain a robust bargaining process between employers and unions but, in the end, businesses will now be able to assure their viability by being able to conclude bargaining over work place conditions even if, after the robust process, they fail to agree.

“Also we have seen examples where changes needed in a workplace have been stymied with the same people who opposed the changes then complain when jobs disappear offshore.

“Employers had been hoping for even more flexibility.

www.acepay.co.nz

Try it for free

Take control on pay day with easy low cost software and great help desk support.

Business Plus – Exclusive news, advice, learning and networking

6 News

Land and water use to be decided by fast new process EMA is pleased with moves by the Minister for the Environment, Amy Adams, to speed up the planning processes required for developing Auckland’s Unitary Plan which covers the rules to be set over the region’s land and water resources.

The fast track process will give investors and in fact all businesses earlier certainty than was possible under the existing arrangements.

E

MA wrote to Minister Adams requesting she streamline the process so that Auckland Council’s Unitary Plan could be implemented more rapidly though still with adequate consultation. Current planning of resource use in Auckland is complex, enfeebling and it fails to provide certainty for business.

The Unitary Plan will be the region’s new planning rule book, setting out what

can be built and where; it will be “a key tool for creating the world’s most liveable city”.

The Council says the Unitary Plan will be New Zealand’s biggest single resource

“...The Unitary Plan will replace the region’s existing district and regional plans and policies of the former eight councils.”

management plan providing the regulations under which the aspirational Auckland Plan is to be implemented over the next 30 years.

Expressly it will replace the region’s existing district and regional plans and policies of the former councils.

Minister Adams has agreed to a one-off, impartial consultation process using an independent hearings panel to speed up the

Plan’s implementation.The aim is to get the Plan into action in three years.

The panel expected to be established later this year will be chaired by a retired High Court or Environment Court judge, similar to a Board of Inquiry, and appointed by the Ministers for the Environment and Conservation.

It will have the power to direct a robust mediation process, including caucusing of witnesses and grouping of issues, and will hear public submissions and evidence through a process which allows for crossexamination and careful testing of evidence.

After considering the Plan, the panel will deliver its recommendations to the Auckland Council and where the council accepts the panel’s decision, these provisions will be immediately operative, subject only to appeals on points of law.

Full appeal rights to the Environment Court will be available.

Public consultation on the Plan will begin in March, with the aim of a final Plan going before Council next September.

Low labour demand cuts worker migration

T

he total number of Skilled Migrants in New Zealand in the year to the end of June was 11% lower than the previous year, according to the Government’s Migration Trends Key Indicators Report.

Skilled workers migrating to New Zealand are increasingly from India rather than other countries, mostly as international students moving into temporary work then permanent residence, according to the Report.

In the year to the end of June 2012, 17% of Skilled Migrants were from India, up 27% on the previous year. A further 17% were from the UK with 13% from the Philippines, 8% from China and 7% from both South Africa and Fiji.

Just under half of all residence approvals were granted for 18,843 skilled migrants.

The numbers of migrants entering New Zealand under the Essential Skills category as listed by the Immigration Service have fallen since the GFC began in 2008, and were still down 1% on last year.

However, more are expected in the coming year as labour demand improves.

The main source countries for migrants with Essential Skills are the UK (15%), the Philippines (13%), India (10%), Fiji and China (each 7%). In total 3345 people received work visas to migrate under the Essential Skills category with an increase of 34% of them heading to Canterbury, the biggest regional increase.

In addition, temporary work visas were issued to 138,218 people, up 2% on the previous year: seasonal workers in horticulture and viticulture increased by

Business Plus – Exclusive news, advice, learning and networking

7% but the number of Working Holidaymakers reduced by 1%.

Temporary workers came from the UK (13%), India (12%), China (9%), Germany (7%) and the US (6%).

68,980 international students were approved to study in New Zealand, a 7% decrease on the previous year. Most were from China (25%), India (13%) and South Korea (10%). Numbers from China are increasing and from the other two countries decreasing (South Korean students were down 24% on the previous year, and students from India down 11%).

The Report refers to the OECD view in its latest report on migration, which is that countries should focus on their long-term labour market needs, skills and policies to prepare for the global economic recovery.

News 7

The Great Debate: Is it mad to be a company director?

The Business Intelligence series of breakfast workshops presented

by Lowndes Associates came to a thought provoking conclusion late October with a Great Debate: That you’d be mad to be company director.

H

ost Mark Lowndes set the scene with the question: Do the risks of being a company director outweigh the benefits?

And should competent directors have nothing to fear?

The backdrop to the debate, he noted, is the high number of criminal prosecutions of company directors recently. Several directors have been found culpable though they acted innocently.

Presenting first for the motion was: Professor Peter Watts, a Professor of Law at the University of Auckland.

Peter said he is not a company director and has never been one. He is a theoretician and author, and an academic barrister in Auckland and London.

Peter delved into history to tell a ‘long sad story’ as more and more sanctions and responsibilities have been added to directors’ duties. He traversed cases from pre-Victorian times to the present, making the case that ‘when it comes to money, you’re on your own.’ Each tale meant more legal action, and added more liabilities for the unwary director to take into account.

Then, from the 1987 crash, directors’ liability picked up exponentially. Now he can list 110 offences in the Companies Act that directors can be taken down for.

Rod McGeogh was having none of that. Rod has had a remarkable career at the forefront of business, sports administration and the legal profession.

He is well known as the leader of Sydney’s successful Olympics 2000 bid, a past Chairman of one of Australia’s largest law firms, Chairman of Sky City Entertainment Group Ltd,Vantage Private Equity Group Limited and BGP Investments/Holdings plc and others.

The debaters from left: John Hagen, Rod McGeogh, Prof Peter Watts, Dame Roseanne Meo with host and mediator Mark Lowndes

Rod noted there were 2,237,506 company directors Australia and they couldn’t all be mad. And their companies and employees paid 96% of Australia’s taxes. Only 1.7 million people in Australia are members of a union, he said.

Rod ticked off the basic duties of directors which included their need to act in good faith, to act honestly, that companies had to be set up for a proper purpose, and directors of them had to serve their company’s interests, and keep their company’s secrets. In essence these things are not hard, he said.

He pointed out the duties of a director are no different from what the common law position is, in that directors need to be honest and use reasonable diligence. He did note though, that in Australia, most prosecutions of company directors found in the directors’ favour whereas in recent times in New Zealand that has not been so.

John Hagen, former chairman of Deloitte, and a director of Feltex Carpet for 18 months til September 2006, recounted his troubling experiences with that company with his view based on the debacle and despite otherwise positive experiences with other directorships including of Datacom Group Ltd, Uniservices Ltd and Hughes & Cossar Ltd. In relation to the introduction of IFRS, for example, he said it was unreasonable for directors to be expected to have read

every reporting standard and ridiculous to be prosecuted for relying on advice given to directors by senior company management.

Yet that happened.

He also noted directors were denied access to directors’ liability insurance funds to defend themselves – which was ‘mad.’

John’s view in summary was that the state of the law was so uncertain that if you were advised if you’ve done nothing wrong you’ve got nothing to fear, you should be very afraid.

Dame Rosanne Meo, DNZM, OBE, was amongst the first professional women directors in New Zealand, and also the first woman Chair of the Employers Federation in the early 1990s. She is currently Chairman of Briscoes Group, the Real Estate Institute and others.

She emphasised being a director is a profession, not something to indulge in. She has issues with companies that pay huge bonuses to managers who deliver mediocre results. As a director, she said, you stay in the grandstand, and don’t play in the game.

On recent high profile prosecutions, Dame Roseanne asked: Did we turn a blind eye for too long and bring it on ourselves?

But if the present scrutiny results in more discipline and more professionalism then it may be worthwhile.

Dame Roseanne said for herself she loved the job, its excitement and immediacy, and the rigour that must be applied to the role.

Business Plus – Exclusive news, advice, learning and networking

8 News

By Carla Pallant BA; LLB, EMA AdviceLine Employment Advisor

Court ruling overturns overtime calculations A recently released Court of Appeal decision could impact how employers calculate sick leave, bereavement leave, public holidays and alternative leave where a part of an employee’s employment may include unrostered overtime.

I

n Postal Workers Union of Aotearoa Incorporated & Anor v New Zealand Post Limited the Court was asked to determine whether overtime that is usually unrostered should be considered as payments that “would otherwise have been received” for the purpose of calculating relevant daily pay. The Court also determined when section 9(3) (the pre-April 2011 alternative calculation to relevant daily pay) was triggered.

Before 1 April 2011, section 9 of the Holidays Act 2003 outlined that an employer was required to determine the relevant daily pay as the amount of pay an employee would have received on the day that they took leave, including payments for overtime that would otherwise have been received. If it was not possible to determine an employee’s relevant daily pay, an employer was required to use an alternative calculation which took into account an employee’s gross earnings for the preceding four weeks.

New Zealand Post’s postal delivery workers (“posties”) were required to work 37.5 hours on a rostered basis each week.

However, if a postie was unable to complete their round within the usual rostered hours, they would be required to work reasonable unrostered overtime. Quite often the need for the postie to work overtime would not become apparent until during their delivery round.

NZ Post agreed with the conclusion of the Employment Court when it determined that the onus was on an employee to prove they would have been entitled

to conclude that the level of overtime would have been zero for an employee.

Or, does the fact that an employee did unrostered overtime as a part of their employment mean that the alternative Carla Pallant calculation must be used and relevant daily pay should be disregarded.

It is important to note that the decision of the Court of Appeal was dealing with a section of the Holidays Act 2003 that was amended in April 2011.

Prior to April 2011 the legislation stated employers “must” use the alternative calculation where it was not “possible” to determine relevant daily pay.

Since 1 April 2011, the legislation was amended to read that employers “may” use the alternative calculation in two situations: • Where it is not “possible” or “practical” to determine relevant daily pay; or “...the Court was asked to • Where an employee’s daily pay varies within the pay period that the leave determine whether overtime that falls. is usually unrostered should be It is uncertain whether the principle considered as payments that of the case applies post-April 2011 as ‘would otherwise have been the Court “refrain[ed] from expressing a received’ for the purpose of view” .

The change from “must” to “may” and calculating relevant daily pay.” from “possible” to “possible or practicable” could imply that an employer has the discretion to decide which calculation will be used. It is possible that the introduction of the words “or practicable” union. The Court considered that the could be used by employers who have an onus fell on an employer to determine automated payroll system to justify using the pay that an employee would have the average daily pay calculation. received had they worked on that day.

That being the case, the question that That onus included the obligation on an remains is, subsequent to the amendemployer to “first to establish or attempt ments, does an employer have the ultito establish the amount of unrostered overtime that would otherwise have been mate discretion as to which calculation will be used, or is there an objective test received”. Where that was not possible, the alternative calculation must have been of what is “possible” or “practicable” that is reviewable in a court. used.

The impact of this case on the use of In applying the principle, the question relevant daily pay and average daily pay that remained would be; whether or not post-April 2011 is unclear. it would be acceptable for an employer to an overtime payment on the day concerned. As a result, and since the posties could not prove on any given day that they would have worked overtime, a claim by the Postal Workers Union of Aotearoa (“the union”) failed. The Employment Court considered that if the legislature wanted the alternative calculation to apply in every case where there was an overtime component, the law would have been drafted differently.

In the appeal the union argued that NZ Post must first consider whether it was possible to conclude that an employee would have received a payment for overtime on the day concerned. If it was not possible to form a conclusion, the alternative calculation must be applied.

The Court of Appeal agreed with the

Business Plus – Exclusive news, advice, learning and networking

Advice 11

By Erin Burke, Senior Solicitor, EMA Legal

Every employees right to privacy...

It would be a rare person amongst us who has never once wanted to pry into what someone else was doing. You may have been a suspicious spouse or parent wondering which internet sites were being accessed, which texts were being sent to whom, or just nosey about what your neighbours are doing.

policy in place. These policies need to clearly inform employees that their work email and internet use may be monitored and describe the extent that personal use of the internet, if any, is permissible.

Ensuring employees are fully informed as to what information is being collected, and in what manner, can then give employers a

“...Ensuring employees are fully informed as to what information is being collected, and in what manner, can then give employers a contractual right to collect that information in the manner specified.”

I

n New Zealand we individuals are very protective of our privacy and there are rules about what we can and cannot do, and when a desire to snoop on someone crosses the boundary and becomes an invasion of someone else’s privacy.

For employers these days, the desire to find out what their employees are doing privately in the workplace most frequently arises from wanting to know what purposes they are using their work computer for, and what percentage of an employee’s paid work time is being spent on non-work related internet use.

Be warned. While your employees may be in your premises and using your equipment, there are still limits on what you can, and more importantly what you cannot do.

Most employers should by now have both an internet policy and a social media

contractual right to collect that information in the manner specified.

A recent case note released from the Privacy Commission related to an employer who used keystroke technology to obtain an employee’s personal email password and log in to monitor the employee’s personal email account. The employee was the subject of an employment investigation.

The Commission held that though it

was acceptable for an employer with a relevant internet policy to collect and monitor emails being sent to and from a work computer, the employer breached Principles 1, 3 and 4 of the Privacy Act 1993 by colErin Burke lecting the keystroke information without the knowledge of the employee, then using it to access the employee’s personal email account.

Principle 1 states that the collection of information must be necessary for a lawful purpose related to the collecting agency.

Principle 3 requires a collecting agency to make the individual concerned aware that the information is being collected, and the purpose for its collection. Principle 4 requires that the manner of collection must be lawful, and not unfair or unreasonably intrusive.

Should you find you feel you need to check on your employees’ internet use increasing, tread very cautiously, check thoroughly what your policies allow you to do, and ensure you stay within in the boundaries. If in any doubt, always seek legal advice before acting.

Erin Burke, senior solicitor with EMA Legal, is based in Hamilton. She has lectured in employment law at the Department of Law, University of Waikato. erin.burke@ema.co.nz (First published in the Waikato Times).

Specialist Employment Lawyers Our high success rate reflects our expertise. Our lawyers specialise in employment law and only act for employers.

As part of a member-owned organisation, EMA Legal offers services that are excellent value.

A u ck l an d

0800 362 534

JO DOUGLAS Managing Solicitor Mobile: 027 683 7919

Practical solutions

Skilled representation

1800 300 362 for your nearest contact

BRANDON BROWN Solicitor Mobile: 021 515 116

MATTHEW DEARING Solicitor Mobile: 027 284 4042

Wai k at o

Strategic advice

ERIN BURKE Solicitor Mobile: 027 459 3375

Business Plus – Exclusive news, advice, learning and networking

12 EMPLOYMENT CHAT

Managing your manager’s performance?

Q. We seem to have had a bunch of ineffective staff come on board this year.

I wonder if my human resources manager is up to the job. How can I measure that? – Jo Dear Jo Any staff member you suspect of underperforming can be put through a ‘performance review’. Your HR manager will understand this better than anyone!

Was your HR manager checked out for background and qualifications as thoroughly as other staff? You need to have good grounds to make an accusation.

If you have concerns about the quality of new staff you should start by reviewing your recruitment processes.

However the problems might not be at the recruitment stage. Have you investigated the induction and training programmes you offer? Are there any other environmental factors that could be causing any problems, eg, low morale, lack of breaks or recognition, inadequate or inappropriate remuneration or even poor air quality (air conditioning)?

Your new staff might be reacting to a variety of things in the workplace that they weren’t expecting. Perhaps ask your HR manager to help investigate this idea first.

Q. I am friends on Facebook with a number of my staff and I noticed one of them making snide comments about another of our employees. What do I do about that? It’s not acceptable to us.

– Bart

“...It could affect your company’s reputation even if only in the eyes of a few people in the know. Word of mouth is a powerful force.”

Dear Bart Social media sites are a temptation that gregarious people must treat with much care!

If your employees are not identified as your employees, there may not be much you can do. If a ‘Jane Smith’ badmouths

Business Plus – Exclusive news, advice, learning and networking

a ‘Sally Brown’ it is between them and Facebook. Even if their names are more identifiable than that, the world is not to know they work for you. However, depending on the details, the comments may have a detrimental effect on workplace relationships and therefore potentially they may need to be looked into.

If the victim of this exchange has not complained to you, it may be best to leave it alone. If she did complain to you, you could only informally mention it, in private, to the perpetrator that you think it’s unreasonable to bad mouth anyone on Facebook, especially due to the effect it may have, and especially as other colleagues of theirs who work at your firm could be demoralised by such comments. It could affect your company’s reputation even if only in the eyes of a few people in the know.

Word of mouth is a powerful force.

We have to ask, why were you checking up on your staff on Facebook? It might be best to keep the temptation to snoop to yourself, to put your trust in your social media policy and your staff and wait for a complaint to arrive. Employers are encouraged to ensure they have a social media policy so employees are clear on their obligations and potential consequences if issues arise.

WHAT EMPLOYERS ARE ASKING ADVICELINE THIS MONTH

13

...and its just not cricket!

Q. Our school grounds are not being kept up to scratch and our cricket teams are losing their games – they have a terrible practice pitch. Is this something I can discipline the caretaker for? He just won’t listen to complaints… - Eve Dear Eve If an informal process hasn’t worked with your mentioning poor quality, yes you can start a formal performance management procedure.

But on the face of it, his failure to upkeep the grounds adequately may not of itself qualify as misconduct of a magnitude that warrants ‘discipline’ or dismissal.

So here is the process you must follow in good faith. First, check your Employment Agreement cosigned by you and him, review the job description to be sure he knows what his duties are, and that he could be expected to know them. If there are shortcomings in this Agreement, rectify them and co-sign a new document: this way he gets to hear there’s a problem and he gains an opportunity to pick up his act.

Secondly, if the Agreement was fine and didn’t need to be rewritten, write to your caretaker at work by email or by hand-delivered letter inviting him to a meeting at a specific date and time to discuss the state of the cricket grounds. In this letter be fairly specific about what will be covered at the meeting, and invite him to bring a support person. Say you want to discuss how the grounds could be improved. Because of work or private reasons he might need to change that date, and you must negotiate on this.

Thirdly, at the meeting explain the required state of the pitch and ask if he understands and has any problem with achieving that. You must listen to his contribution. He might have valid and sound ideas on how things could be better.

Hopefully the problem will be resolved and a solution agreed for him to try out and for your formal future appraisal within a reasonable and agreed timeframe.

Record all this in writing so you are both on the same page and have

By the EMA Advocacy team in consultation with EMA Advice, and based on real calls to EMA’s AdviceLine.

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 800 362 (within New Zealand), and 1800 300 362 (from Australia), 8am-8pm weekdays.

“...First, check your Employment Agreement co-signed by you and him, review the job description to be sure he knows what his duties are, and that he could be expected to know them. If there are shortcomings in this Agreement, rectify them”

Alternatively, email advice@ema. co.nz 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, please contact EMA Membership at the numbers above or through ema.co.nz.

Hiring Temp Staff Made Easy!

Need skilled, reliable temporary staff?

Temps who will fit in and hit the ground running?

It’s easier than you think when you choose Horizon. As Auckland Temp Specialists for over 20 years, we have built a reputation for: n Exceptional temps n Superb service n Outstanding value Why settle for anything less?

Get the best temporary staffing resource as and when you need it!

a concrete basis for measuring any improvement or otherwise.

If things turn to custard, your next meetings may lead to formal warnings and in case of continuing poor performance, termination. Termination would be on notice as per the Employment Agreement.

For a free consultation, call us on (09) 9667474 www.horizontemps.co.nz

Business Plus – Exclusive news, advice, learning and networking

14 Advocacy

Educators focus on matching learning and Education plays a crucial role in business by providing a skilled workforce that can help drive economic growth. One of the top priorities for Lesley Longstone, Secretary of Education, Ministry of Education is ensuring education makes the maximum contribution possible to New Zealand’s economic prosperity.

E

ducation has a key role to play in lifting labour productivity, driving economic growth and delivering higher wages and living standards for New Zealanders,” says Ms Longstone.

The challenge Abaitia Lomani is an engineering student with WelTec Trades Academy; his tutor is Stephen Hainsworth Phil O’Reilly, Business NZ CEO, has challenged the education sector and the working together to provide solutions gain a greater understanding of busiMinistry of Education in particular, to ness priorities and how we can make it that address the skill gaps that potenensure all students leaving the education tially stop us growing at the rate we easier for you to engage with us.” system have the skills and attitudes to could.” make them good citizens, and that the Improving education outcomes and education received includes career direction New approach practical skills to better meet Ambitious education achievement To tap into businesses and the needs of the economy. He targets have been set by the Government get their perspective and has also suggested the Ministo help ensure young New Zealanders thoughts on education Anne try talks to businesses to get a reach their full potential and can make a Jackson, Deputy Secretary better understanding of what meaningful contribution to the economy:Tertiary, International and they need from the education in 2017 85% of 18 year-olds will have System Performance at the sector. achieved NCEA Level 2 or equivalent Ministry of Education is Anne Jackson “A skilled workforce is qualification (74% in 2011) and 55% of taking the lead on economic critical for a productive, 25-34 year-olds will have a qualification at engagement, and will also growing economy. Employers often Level 4 or above. be working with the new Ministry of have difficulty finding enough staff Employers want a range of skilled young Business, Innovation and Employment, with the right skills – often technical, people who bring knowledge, confidence research institutions and education engineering, IT and other science-based agencies. and a willingness to learn and grow in the skills, says Mr O’Reilly. workplace.

“Businesses have great ideas about “It’s important to keep a focus on the how to work with us to improve educaTo achieve this, education and businesses core skills and key competencies like need to work together to ensure learners tion and work outcomes for students literacy and numeracy skills and other are developing skills and knowledge to and staff,” says Ms Jackson, “but often core skills like problem solving, decision it’s difficult to find the right person meet the future needs of employers. Learnmaking, team work, and self manageing environments also need to cater to within Government to talk to. Within ment – these are distinctly future proof. education part of my role is not only to the needs of all students so they are better “It’s also important that our governprepared for higher learning or relevant provide a one-stop-shop for businesses ment agencies, including Education, are but to proactively engage with you to workplace opportunities.

Business Plus – Exclusive news, advice, learning and networking

Advocacy 15

skills for business programmes.These programmes, school and tertiary partnerships, provide foundation level education to achieve NCEA qualifications.

Secondary-tertiary programmes, such as Youth Guarantee and Trades Academies, provide relevant skills for learners and employers.

Trades Academies Trades Academies engage senior-secondary learners in education and equip tomorrow’s workforce with relevant skills to transition to future employment. Trades and technology programmes for secondary students are created through partnerships between schools, tertiary institutions, industry training organisations and employers.

Matching education pathways with the needs of employers is important but students also need sound careers information, advice and guidance to ensure they find a job that suits them.

Work is currently underway to improve the information available for students, and their families and whanau, to help them decide what to do when they finish school or other training. Barriers and improvements to effective provision of careers information and guidance within schools are being identified, including barriers that may exist between schools and industry.

Engineering is attracting more attention amongst students with the help of Industry Training Organisation COMPETENZ.

The Skilled and Safe Workplaces Report, one of six reports covering the Government’s Business Growth Agenda, focuses on creating a more productive and innovative workforce and a more responsive labour market.The Ministry is actively working to support these goals by lifting the education achievement of young people, strengthening tertiary education and delivering vocational education and training that improves skills.

The Youth Guarantee initiative provides motivating learning environments in nonschool settings (for example: polytechnics, wananga and private training establishments) where students who are not catered for by the traditional school environment

can achieve both NCEA qualifications and vocational education.

Vocational Pathways are a central element of the Youth Guarantee initiative and are designed to make it easier for students to transition from education and training into the workforce. Five new sector-based pathways have been developed, through a partnership between educators and industry representatives.These five sector pathways include construction and infrastructure, manufacturing and technology, primary industries, services industries, and social and community services.

Students can also access these sectorbased pathways through secondary-tertiary

New opportunities These changes provide the Ministry of Education and the business community with the opportunity to work together to create a workforce that is fit for purpose and helping to drive the economic growth of the country.

“We’re looking forward to working with the New Zealand business community to ensure New Zealanders achieve education success and enter the workforce with the right skills to do the job right,” says Ms Jackson.

For more information, please contact Suze Strowger, Business Relationship Manager on (04) 463 7009.

Business Plus – Exclusive news, advice, learning and networking

16

By Business NZ’s CEO Phil O’Reilly

New legislation affecting business Part of BusinessNZ’s work on behalf of enterprise involves making recommendations to select committees on proposed new laws that could affect New Zealand businesses.

A

s the legislative programme for 2012 comes to an end, there are numerous Bills under consideration by Parliament, several of which would introduce changes for business.

Some - like the Advanced Technology Institute Bill and the Crown Minerals Bill - are useful pieces of legislation that would help advance innovative business in New Zealand.

Others would have negative effects - like

the Lobbying Disclosure Bill, which would discriminate against business and harm freedom of speech.

Often, draft legislation may be generally positive, but contain parts that would have potential negative outcomes for business, such as the Consumer Law Reform Bill.

Consumer Law Reform Bill The purpose of this Government Bill is to update consumer protection regulation, and most parts of the Bill are useful and sensible, with the exception of enforcement provisions on ‘unfair contracts’.

The Bill would place restrictions on contracts deemed unfair to one of the parties to a contract. BusinessNZ believes these provisions are unnecessary and the use of a subjective term like ‘unfair’ would

Business Plus – Exclusive news, advice, learning and networking

create uncertainty.

‘Unfair contract’ provisions are unnecessary because a contract is something signed between willing parties. It is up to the parties involved to decide whether they believe a contract is in their Phil O’Reilly interests or not and a party who thought a deal was unfair would not sign up to it.

There is no evidence of problems in New Zealand from ‘unfair contracts’ and the main justification given for including it in the Bill is to ensure New Zealand’s consumer laws are consistent with those in Australia.

Australian law should be introduced here only if it is of net benefit to New Zealand.

While BusinessNZ opposes any unethical business conduct, it is not clear that having ‘unfair contract’ terms in legislation would help prevent it.There is already strong incentive for businesses to comply with

17

regulation, not least to protect their business image and brand.

BusinessNZ’s submission supports most of the Consumer Law Reform Bill, but recommends that the provisions relating to unfair contracts be struck out.

Advanced Technology Institute Bill This Government Bill would establish the Advanced Technology Institute (ATI) – an institute that will take over some of the functions of the Crown Research Institute IRL along with some new functions to support business innovation.

The Institute’s purpose will be to support and foster business research and development.

The ATI will connect businesses with scientists, technologists and researchers, and promote commercialisation of research discoveries. It will also promote business clusters in knowledge-based industries.

We support the focus of the ATI being directed by business needs, solving business-identified R&D problems, challenges or opportunities.

Business leaders around the world have identified talent-driven innovation as the number one factor that determines global competitiveness. Significant change is required for New Zealand to grow its innovative exports, move up the value chain and become more internationally competitive.

I promoted the establishment of the ATI in the 2011 Powering Innovation taskforce report, and the Advanced Technology Institute Bill advances the recommendations of that taskforce.

BusinessNZ has recommended that the legislation should proceed.

Crown Minerals (Permitting and Crown Land) Bill This Government Bill will help promote competitiveness and growth through accessing New Zealand’s petroleum and mineral resources.

The Crown Minerals (Permitting and Crown Land) Bill updates the legal

regime for mining and promotes the environmentally responsible exploration and production of oil, gas and mineral resources.

The legislation will create a two-tiered system for permits, with more regulation of complex, high-return activities, and a simpler regulation for smaller-scale operations.

Both will have varying requirements for achieving good industry practice and health, safety and environmental standards.

BusinessNZ has made a submission in support of the Bill overall with some small changes.

Lobbying Disclosure Bill The purpose of this Green Party Bill is to regulate lobbying and advocacy.

Under it anyone who might

“We support the focus of the ATI being directed by business needs, solving business-identified R&D problems, challenges or opportunities.”

The Bill’s definition of ‘lobbyist’ is so wide that it would catch potentially thousands of people and organisations, requiring a great deal of bureaucratic compliance in reporting on every advocacy activity to the Auditor General.

However, the Bill’s limiting the definition of ‘lobbyist’ to someone who is in a paid position would mean that those advocating on business issues would be more likely to be caught by the legislation, while those, for example with an anti-business agenda, might not.

The effect of this legislation, if passed, would be a chilling effect on the freedom of speech, less advocacy for business issues and more advocacy in opposition to business and growth issues.

BusinessNZ’s submission has recommended that the Bill not proceed.

These are examples of some of the issues that BusinessNZ engages in to promote a better environment for New Zealand business.

You are welcome to contact us on any issues requiring advocacy for business: Manufacturing, exporting: Catherine Beard cbeard@businessnz.org.nz 04-4966560

communicate with an MP about MP business and who is in a paid position would be deemed a lobbyist and would have to be registered with the Auditor General and report on every advocacy activity undertaken. There would be fines up to $20,000 for someone not on the register who communicates with an MP in this way.

BusinessNZ believes this legislation is unnecessary.There is no evidence of corruption or other problem in New Zealand that would require this sort of regulation.

The proposed legislation, by discouraging communication with elected representatives, would reduce the information available to MPs to the detriment of informed decisionmaking.

Infrastructure, energy, environment: John Carnegie jcarnegie@businessnz.org.nz 04-4966562 Employment & industrial relations: Paul Mackay pmackay@businessnz.org. nz 04-4966553 Tax, regulation, research: Stephen Summers ssummers@businessnz.org.nz 04-4966564 Economics, local government, water, waste: John Pask jpask@businessnz.org. nz 04-4966563 Skills, training, trade: Carrie Murdoch cmurdoch@businessnz.org.nz 04-4966566 Sustainability: Penny Nelson pnelson@ businessnz.org.nz 04 4966 285 Legal & international: Barbara Burton bburton@businessnz.org.nz 04-4966561

Business Plus – Exclusive news, advice, learning and networking

By Andrew Charlesworth

Technology - Planning for a disaster 19

Understanding business continuity...

Take the journey Part 3

In our previous two articles we defined the meaning of business continuity then investigated common potential impacts and scenarios that a business may encounter.

W

e highlighted the considerations you need to take on board when dealing with planning for uncommon events.

Now we look at how a business can develop higher comfort levels by developing an ability to react and deal with a critical event and ultimately reducing their exposure and level of risk.

The key area here is assurance, by which we mean testing and proving. Put simply the more tested and rehearsed a business continuity plan is, the faster and more complete any recovery will be - it is the speed of recovery that differentiates an interruption from a disaster.

What do you need to test?

1. Backup You must regularly test your backup data and the ability to recover the data. This test process gives confidence that your valuable data is safe and recoverable, and it makes sure your team or service provider are familiar and rehearsed at recovery.

It also provides a regular check on the business’s ability to meet pre-established RTO (recovery time objectives) and RPO (recovery point objectives) ensuring the business is able to meet customer needs.

A recovery test should ideally be conducted every quarter or at an absolute minimum, annually. If your business environment changes constantly you need to increase the frequency of your test recovery regime to match.

By doing this, if and when recovery and backup proof is requested by customers or auditors you can easily provide proof and answer the question with confidence.

2. Continue working The Christchurch earthquakes provided many examples of businesses that sent

equipment failure, how long can employees home to work but we wait for a replacement? found that impractical. They found telephone calls were being 3. Continued supply missed and there was a lack of Identify the components that team meetings at a time when are key to making your business people had a lot of planning operate. Ensure you test these. to do and needed maximum Andrew Charlesworth Don’t forget to check your support. supply line –do your suppliers If you find you cannot access have a plan and have they tested their your building or your IT hardware ability to continue operations? has failed, you should rehearse various scenarios to decide how to deal with such Assumptions can hurt events.

“I am in the cloud/data centre” So what Take advantage of your next fire drill is their Business Continuity Plan?

- rather than let everyone straight back Include your data centre supplier in your into the building take the chance to test plan and recovery testing. Ask get them to your alternate working location strategy. demonstrate it. Never assume.

Monitor performance: How long did it Cloud providers or data centres may say take for people to get to the location; how they run backups and can recover your did they get there, did everyone know data, but how long will this take and how what to do? often are the backups run?

When at the alternate location(s) how long did it take for systems to become accessible, and phone diversions to become Business Continuity as a competitive advantage – a developing trend live?

In the past 10 weeks we have seen eight What could your staff do and not do businesses requested to provide statements in terms of work, what impact did it and in some cases test results to confirm have on your customers? How did you they have proven and tested business communicate with your staff and was it continuity arrangements in place. effective?

These requests are from customers, and All of the learnings provide for continual they have also seen a clause in contracts improvement to your plan to ensure the required as part of tender and RFP business and your staff are prepared and responses. know what to do.

Some of these businesses scramble to The business continuity plan should respond while others that have made be included as part of staff induction and the investment in business continuity, embedded into company culture so your confidently insert their content to answer people know what to do and are trained the request or question. on the processes.

The businesses that have made the Create some scenarios and run them investment in business continuity now through a test. It could be a paper based proactively promote that they have proven desktop “walkthrough” (eg: server fails – is and tested business continuity as a further it under warranty? Is there a service level? differentiator to their competitors.

Can you get parts? How long to get parts?

Can you get another server? How long to get it and make it operational?

To run a free self assessment on how Don’t assume you can easily get another your business measures up and for more piece of hardware; less stock is held locally these days and often ordered from offshore. information about this article go to www. plan-b.co.nz/ema Ask yourself: if we have a critical Business Plus – Exclusive news, advice, learning and networking

1909_zeroplan_ad_177x260

Business Association Zero

0¢

calls between your mobiles Have three or more mobiles on a Business Association Zero Plan, and get free calls between those mobiles.

Fair Use Policy applies.

Business Association Zero plan includes (minimum 3 connections required)

• $28 +GST monthly access • $0.28 +GST per minute for national calls1 • 0c team calling to on account mobiles and 2 frequently called numbers. Fair Use Policy applies • Minimum 24 month term

Nokia E5

$216.52 +GST on A 24 month Business AssociAtion Zero plAn

• Preloaded with Instant Messenger and push email to stay in the loop

• Free navigation with Ovi Maps to know where you’re going • Thousands of apps and games from Ovi • Create your perfect smartphone. nokia.com.

Mobile only RRP $433.91 +GST

Find out more Call us on 126 or visit telecom.co.nz/find to find a Telecom Business Hub near you Telecom terms, conditions and charges apply. Early termination charges or repayment of some of the mobile subsidy may apply if your plan ends early. 1Excludes special chargeable numbers. Must have a minimum of 3 mobiles under the same account number. 0c calling to Frequently Called Numbers applies to all national calls made from a mobile under the same account number on the Business Association Zero plan. Customer must be a current member of an eligible Association.

Technology 21

Reduced ICT costs just part of the story Telecommunications case study Zespri has just bucked the trend.

At a time when New Zealand companies of all sizes are being hit by rising fixed costs and reduced margins, the kiwi fruit marketing business has managed to cut their phone, data and networking costs by almost a third.

B

ut surprisingly the cost reduction hasn’t been the best outcome from their recent contract negotiations, according to Zespri Information Systems Manager, Andrew Goodin.

Running a global supply chain that markets and delivers New Zealand’s flagship fruit to four corners of the planet all year round is a complex business that relies heavily on the latest telecommunications solutions to connect growers to markets.

“The big challenge for us was to find a way to improve our use of ICT while managing the associated costs,” Goodin said.

“The technological environment moves so quickly that plans operating well for us three years ago were no longer valid by the time we hit the contract expiry date. Both the technology and the way we were using it had changed.”

“When our (telecoms) contract came up for renewal, we needed a clear understanding around how and why our telecoms usage patterns had changed.We also needed to question and analyse what benefits that change was bringing our growers. As a management team, we can’t make sound decisions without that sort of detailed information.”

Due to the complexity of Zespri’s requirements – which include international networking, mobile phone and mobile data

worth around $2.4 million over a three year period – getting the structure and scope of the RFP right is critical.

The company needed to identify the Cinderella among its supply options.There was only one glass slipper – the fit had to be right.

“Procurement is a specialist discipline,” said Goodin. “Knowing what break points to embed in the final agreement could prevent us from getting locked into a contract that we would quickly out-grow.

We needed to factor in what the penalties would be if we had to change the terms of the contract before it was due for re-negotiation.”

Zespri brought in utilities procurement

specialists,Total Utilities Management Group (TUMG) to help shape the tender process.

“TUMG were not only focused on reducing costs,” Andrew said. “They became an extension of our business to manage the RFP process.”

Zespri selected key criteria against which to measure the different supplier offers and the combined team then developed a weighting for each criteria (and sub-criteria) taking into account any technological developments on the horizon.

The Zespri/TUMG team started work on the RFP at the end of December 2011

and by the end of February a new threeyear ICT supply contract had been agreed and signed off until 2014.

“The approach was genuinely collaborative,” says Goodin. “Not just between Zespri and TUMG but also between us and the short-listed suppliers.”

Having clear benchmarks in place against which to measure technology usage and performance against cost was essential.

“This in-depth information can only come directly from the telecommunications supplier, so reporting became one of our key requirements from the successful bidder. In many ways reporting was more important to us than straight cost savings.

We needed to make sure that the partner we selected could provide the information to help us continue to get the best from our investments.”

Goodin likened the RFP process to building a house. “You don’t just throw it up.You plan the rooms, the aspect and the functionality. Along the way you make minor adjustments but you do it methodically.”

The successful supplier delivered 28% savings year on year, plus some usage savings and a better engagement model than its competitors.

“TUMG worked with us to develop a robust and repeatable process that will have on-going value to our business,” Goodin said.

The reduction in telecommunications costs was great, he said, but with Zespri’s ICT usage currently growing 30% yearon-year, the real value of the company’s engagement with TUMG lay in establishing benchmarks that would enable Zespri to continually improve its telecoms use.

“Going forward, the selected criteria and weightings we established will act as a set of checks and measures against which we can chart the performance of our supplier partner and track changes in our own technology use.That way we can make sure that we are able to maintain the value of our investments and retain our place as world leader in kiwifruit.”

Business Plus – Exclusive news, advice, learning and networking

22 EMA MEMBER PROUD MOMENTS NOTICEBOARD

EMA members win AUT University Excellence in Business Support Awards 2012 Winner of the $5m-$10m turnover company:Advanced Security dvanced Security is a highly specialised company providing electronic security services to the corporate and Government sectors. Services include access control systems, intruder detection systems, closed circuit television systems, and off-site monitoring.

The business is committed to staying at the forefront of security technology and providing an unsurpassed level of service.

of a wide range of industries, the 750 strong team in New Zealand provide a wide range of services through six business units including Custom Fleet and Equipment Finance. In 2011 GE Capital lent $750 million to New Zealand businesses.

A

ANZ ANZ provides support to businesses

at all stages through its national network of 320 branches.With a team of 600 dedicated business banking staff, each customer is assigned a dedicated Business Manager.Tangible support is also provided by having empowered, trained staff across the country who understand business and by investing in sponsorships which support grass-roots businesses across the country.

Winner of the large business category between $10-$50m: Banklink ankLink’s purpose is to streamline accountancy. It was the first company in the world to develop a small business accounting solution based on the automated processing of electronic bank transaction records.

The BankLink service is now provided to more than 4,700 accountants in New Zealand, Australia and the UK and 300,000 of their small business clients. The business provides transactional data from banks to accountants who then use the company’s software products such as “BankLink Practice” to code these transactions and convert them into the required accounting information.

B

BankLink and the Giltrap Group have presented Rowing New Zealand’s Olympic gold medallists with new Audi Q5s in recognition of their Olympic Gold medals.

Single sculler Mahé Drysdale, coxless pair Eric Murray and Hamish Bond, and the heavyweight double scull duo including Joseph Sullivan have each received the keys to their new cars.

Joint winners of the large business category ($200m plus): GE Capital and the ANZ Bank GE Capital GE Capital is a specialist finance provider to Kiwi businesses. With global knowhow and a deep knowledge

Richard Reese for BankLink said; “BankLink is a long-time supporter of Rowing New Zealand and we wanted to recognise and celebrate the exceptional success of our Olympic gold medallists.”

Honey empire grows

G

lobal natural health and beauty products company Comvita has acquired the apiary business of Whanganui-based Kiwi Honey Ltd to strengthen its supply of manuka (Leptospermum) honey. Kiwi Honey has 3,500 beehives in the region.

Comvita chief executive Brett Hewlett said the acquisition will provide Comvita with additional security of supply of Manuka honey and is its fourth wholly-owned apiary business.

Hewlett says the Whanganui region

Business Plus – Exclusive news, advice, learning and networking

is renowned for its production of UMF (unique manuka factor) honey. UMF is the antibacterial property found in some strains of manuka honey making it useful for wound dressing and other therapeutic uses.

23

Best Workplace (according to staff): Overland Footwear!

EMA congratulates member company Overland Footwear for being awarded the overall winner and Best Large Workplace in the 2012 Kenexa Best Workplaces Survey.

The survey is run by recruitment and employee solutions company Kenexa (previously the JRA Best Places To Work programme) which invites employees of participating organisations to provide feedback about their workplaces.

Kenexa managing director Sanchia Yonge said employees in the best workplaces feel a great sense of common purpose from their leadership, and receiving good communication about goals. "Employees know how they are tracking and are clear about what they need to do in order to support the organisation's success.”

She said enabling practices such as flexible working also help morale. Overland Footwear gives staff a $350 benefit for their health and well-being and they can spend it how they like - "This makes them feel well looked after.”

There are rewards for staff who step up. Shane Anselmi, CEO of Overland, told Yonge one of the reasons the company needed to go to Australia was to hold on to its talent and create opportunities for them, as well as providing new opportunities for growth.

Kenexa identified several key drivers of engagement among this year's Best Workplaces Survey. The most highly ranked driver of employee satisfaction was that people wanted to feel a sense of belonging at work.

"When you hire people for culture-fit then they feel really aligned to an organisation's values, they can be themselves and they have that authenticity day to day," said Yonge.

Another high ranking performance driver was that people

Making it Lean

By Barry Nolan

“It’s a good and relevant read. I would recommend it to anyone intent on maximising returns for their business” – Peter Townsend, CEO, Canterbury Employers' Chamber of Commerce It shows you how Lean is the way to go to achieve greater productivity and reduce costs.

want to have a sense of personal achievement at work and feel their contribution was valued. There's a difference between recognising and valuing an employee.

"Recognition is typically tied to what we do - not who we are; while valuing is about acknowledging someone not merely for tasks, but for the deeper intrinsic worth they add to an organisation by just being there," she said.

Talking to employees about how their contributions make a difference, promote higher employee ratings of feeling valued.

Best workplace employers are much better at fostering innovation and involving people in decisions than others.

The Southern Cross Medical Society was ranked fourth among the large company finalists.

They said having a good company culture and engaged people put them in a better position to manage change.

The 13th annual survey attracted the largest number of participants this year - 33,000 New Zealand employees from 289 companies.

3rd reprint!

$39.90 incl P&P and GST

“I have been in the IT ERP space for over 30 years and this is the best book that I have seen on Lean. After reading the book I have a better understanding of Lean that I had developed over all the past years. The book presents the concepts and application of Lean very concisely and clearly.” - Michael Ligudzinski, Minneapolis, Minnesota USA

TO ORDER EMAIL:

Gilbert.Peterson@ema.co.nz Business Plus – Exclusive news, advice, learning and networking

Our family of partners includes

Being a member of New Zealand’s pre-eminent business association not only delivers vital support and advice to your business but also entitles you to an exclusive range of products and services.

Principal Partners

All EMA partners from Principal Sponsors through to Preferred Suppliers are engaged and ready to offer your business exclusive, value added benefits and discounts.

These offers are constantly evolving ensuring we can deliver the very best products and services available on the market.

To find out more about how your EMA membership entitles you to save significant dollars on your operational costs simply search keyword “rewards” on our website:

www.ema.co.nz Keep an eye out for new offers in your monthly Business Plus!

Free call on 0800 800 362

Visit us www.ema.co.nz

Preferred Suppliers

Technology 25

Eco Smart trailblazer winning across several fronts After one year EMA’s Eco Smart Business programme has assisted a rnage of businesses to improve their environmental performance by reducing solid waste, and by providing practical advice on how to use energy, water and raw materials more efficiently, and by their purchasing of environmentally sound products and services. As well they achieve an Eco Warranty certification.

O

ne company, Eco Insulation, joined the programme last year and has now rung up impressive key achievements including: • Fleet upgrade resulted in $100,000 fuel savings in one year • The job roster was reassessed to improve staff travel • A 30% reduction in waste to landfill Eco Insulation, established in 2000 has diversified from insulation over the past two years to now include wider home sustainability products for New Zealand homes.

The company employs 150 people who have insulated some 40,000 homes across the country over the past 12 years.

While most of Eco Insulation’s business is in New Zealand other countries purchasing their products include Japan, Korea, and China.

For more information go to www.ecoinsulation.co.nz For Eco Insulation the Eco Smart programme has achieved: Resource Efficiency Eco Insulation assessed how they schedule installations and jobs and this resulted in them reducing the distance their staff travelled, reduced the time spent at a job by having a larger team working together, and increased staff efficiency.

Waste reduction Waste to landfill has been reduced by 30% with increased recycling of plastics and cardboard. Waste separation systems have been implemented on and off site. A plastic baler they purchased bales plastic wrap into 150kg parcels which are sold to a recycler.

Energy efficiency Eco Insulation have made an annual $100,000 in fleet savings while their ‘Switch off ’ programme following EECA’s guidance resulted in a reduction in energy costs with their office design including large windows and the warehouse has clear roofing panels to maximise light.

“...Eco Insulation assessed how they schedule installations and jobs and this resulted in them reducing the distance their staff travelled and reduced the time spent at a job.”

Other benefits As a result of their fleet upgrade, Eco Insulation receive an additional four enquiries per week due to the improved branding on the vehicles with more and more tenders requesting environmental credentials on their materials and services.

While doing this programme the company also underwent an ACC accreditation project following a similar process.

Challenges The company is setting out to create a culture where sustainability is valued by all their staff. So employees are encouraged to make suggestions and participate in the process. These messages are reiterated at each staff meeting.

The future New LED lighting is to be installed in their office and they plan to achieve ISO 14001 accreditation Ongoing improvements Eco Insulation is diversifying their range of products to include solar panels, heat pumps and LED lighting.

Advice for others Eco Insulation’s Commercial Manager, Anthony Thomson recommends companies interested in improving their sustainability credentials to become trained by a specialist who understands sustainability.

“This is where the Eco Smart programme was good, as it got us started and gave us something to improve ourselves with,” he said.

“You need to appoint someone to implement the new initiatives and improvements through the business and with one person as the conduit to drive this through the business.

“This person needs to review what is going into the bins and make sure that people do things such as switch off the lights.”

Commitment from owners and senior management “The person with the cheque book needs to be in favour of the initiatives suggested,” he said.

Commit to continually improving your initiatives “We are never done. This is a long journey, you have to start somewhere and we are still on the road to getting there.”

If you would like more information about the programme, please see the EMA website www.ema.co.nz The Eco Smart Programme is sponsored by Auckland Council, EECA and delivered by the EMA

Business Plus – Exclusive news, advice, learning and networking

26

RMB cross border use accelerating An HSBC survey demonstrates widespread confidence in the future of RMB in China as a major global trade and investment currency amongst mainland Chinese businesses.

T

he survey found most Chinese corporates surveyed (77%) expect a third of all Chinese trade to be conducted in RMB by 2015 compared with 10% at present.

Half of all Chinese corporates indicated they were willing to offer better pricing or terms in return for using RMB to settle trade: 41% said they would offer discounts of up to 3%, with 9% of these willing to offer even greater discounts.

Gary Cross, Head of Global Trade and Receivables Finance for HSBC New Zealand, said: “As mainland authorities develop their regulatory framework to open up and internationalise the currency, the use of RMB in cross-border business has expanded both within trade and beyond.

“New Zealand companies trading with China are increasingly investigating the possibility of settling in RMB and the potential advantages that this may offer. We are seeing a greater number of transactions being undertaken in RMB as well as more enquiries around RMB.” Moves by the Chinese government to increase exchange rate flexibility and simplify transaction processing have changed the dynamics of crossborder RMB business. The proportion of corporates using RMB because they expect the currency to appreciate has fallen dramatically. Only 25% of respondents now say they used RMB in order to benefit from currency appreciation in 2012, compared to a significant 44% in 2011.

The main reasons for choosing RMB

for cross-border transactions were: 72% use it to help manage their foreign exchange risks, a sharp increase from 49% in 2011.

44% stated the currency brought operational and accounting advantages versus 34% in 2011.

“China's total cross-border trade

Business Plus – Exclusive news, advice, learning and networking

“China’s total cross-border trade settled in RMB increased by a factor of 4 in 2011 and now accounts for around 10% of China’s total cross border trade”

Survey Findings: •4 1% Chinese corporates willing to offer discounts of up to 3% on trades in RMB • Chinese corporates expect a third of China’s trade to be settled in RMB by 2015 • RMB usage increases despite slowing appreciation • NZ companies may want to consider discussing with Chinese buyers and sellers about settling in RMB

settled in RMB increased by a factor of 4 in 2011 and now accounts for around 10% of China's total cross border trade,” said Mr Cross.

While import and export transactions were the most Gary Cross common type of RMB business that respondents engaged in (47% and 42%, respectively), the survey revealed 30% plan to use RMB for other purposes in the next 12 months.

15% of corporates said they intend to use RMB for capital injections, 11% for offshore loans and 4% for crossborder acquisitions (vs 11%, 8% and 1% in 2011 respectively).

Montgomery Ho, Head of Commercial Banking HSBC China, said the internationalisation of RMB is a natural process being driven by China's economic growth and trade development and we are confident the Chinese currency is on track to becoming a major trade currency by 2015.

Chinese corporates also reported their counterparts overseas are finding it increasingly convenient to use RMB. Only 15% reported that their counterparts encountered insufficient RMB service or support from their bank overseas, down from 23% per cent in 2011.

Overseas business also experienced increasingly easy access to RMB liquidity over the past year; only 14% reported their overseas counterparts lacked sources of RMB, or lacked use for RMB funds received, compared to 21% in 2011.

HSBC China surveyed 692 Mainland corporate customers in August 2012 to gauge current usage and future outlook of the RMB in cross-border businesses.

A similar survey was conducted in March 2011.

27

NZ Inc backs innovest approach to push for more investment from offshore A new event taking a New Zealand Inc approach to securing investment in Kiwi companies is scheduled for February 1st 2013 in Auckland.

I

nnovest is to be hosted by Auckland, Tourism, Events & Economic Development (ATEED) as an investment forum for local businesses and international investors to meet face-to-face.

The event is designed to provide a forum where investment ready, innovative, privately owned New Zealand businesses can be introduced to international and local investors, distributors and commercial businesses.

Sponsors include NZ Trade & Enterprise, Immigration NZ, the Ministry of

Business, Innovation & Employment, Vodafone, Fairfax Media, and EMA. ATEED spokesman Darren Grant said collaboration between all the New Zealand interests is important because New Zealand often lacked the scale needed to get on the radar of some international investors.

Innovest will be limited to 120 invitation-only companies ranging from early stage to more mature businesses which have revenues up to $50 million.

Target participant business types are: • Early stage businesses with a proven core offer or technology that are seeking partners to commercialise; • Developing innovative businesses with a significant business domestically that want to go global; and • Successful, privately-owned businesses where the owners are seeking to exit or find succession partners.

The event is being promoted through the Kiwi Expatriate Abroad (KEA) network globally, with all New Zealand’s major banks, international accounting firms and the like.

More details are at: www.innovestauckland.com.

Money in trash

T

rade Fact of the Week from Progressive Economy reports scrap and surplus goods are the US’ fourth largest export earner.

It says in total the top US export product categories in 2011 were: • Aerospace: $56 billion • Grains/oilseeds: $43 billion • Software: $34 billion • Scrap/waste: $33 billion • Agricultural machinery: $21 billion According to the US Environmental Protection Agency most recent (2011) report, recycling rates have risen from 10% of trash in 1990 to 31.6% in 2005, and 34% in 2010 representing 65 million of a total 250 million total tons of trash, not counting industrial recyclers.

Over the past decade the prices of copper and tin have risen five-fold, the price of rubber six-fold, and the price of iron ten-fold.

China is the largest buyer of America’s old newspapers; Canada, of used clothes. Vietnam’s 47,000ton purchase tops the list for scrap rubber, and the UK’s 162,000 tons lead for sawdust; China again leads in scrap metal.

Last year’s US exports were worth $50 million for recycled cans, and 28,000 tons of broken glass earned $13 million.

Mexicans and Koreans bought most of the old cans, while the big buyers of broken glass were Canada, France, and Taiwan.

Used clothes: Americans ship just under a million tons of used clothing earning roughly $600 million a year.

(By comparison, the US imports 4 million tons of new clothes a year, costing $80 billion.) Canada is the top

used-clothing buyer at about 205,000 tons last year. India is next at 100,000.

The rest goes to 189 developing countries.

Scrap Metals: Scrap metal is the heaviest and most valuable recycled export product, earning $20 billion in 2011. Half goes to China, with Turkey, Korea, and Taiwan next. “Waste” gold and platinum, mostly shipped to Switzerland, brought $8 billion and $1.5 billion respectively.

Business Plus – Exclusive news, advice, learning and networking

Out & About EMA Annual General Meeting

2

1

4

3

5

7

6

9

8

| 1 Graham Kearns [York Paper Co], Les Kendall [Temperzone Ltd] & Graeme Squire [Dulux Powder Coatings] | 2 Simon O’Brien [ASB Bank ], Derek Rankin [Rankin Treasury Advisory] & Kevin Reilly [ASB Bank ] | 3 Angela Freeth, Mike Burgess & Christine Hills [EMA] | 4 Kim Campbell, Zoe Timbrell [EMA] & Marshall Hudson [eHome Global ] | 5 Steve Bullock [ Rheem New Zealand Ltd] | 6 Anil Kunjunny & Paul Yeo [EMA] | 7 Louise Mountfort, Chris Davis [Rinnai NZ Ltd], Janet King, Bob Fenwick [Planhorse Systems], Diane Fenwick [Planhorse Systems] | 8 Graham Mountfort [Retiring President] & Laurie Margrain [President] | 9 Jeff Williamson [Mainprice King], Sir William Gallagher [Gallagher Group Ltd], Don McNicol [Pacific Life] & Lady Judi Gallagher [Gallagher Group Ltd]

Opening of new EMALegal premises in Auckland

1

2

3

| 1 Jo Douglas [EMALegal] & Jo McMahon [Burger King] | 2 David Lowe [EMA] | 3 Craig Garner [EMA], John Jury [EMA consultant] and Matthew Dearing [EMALegal] | 4 Ronni Cabraal [EMALegal] | 5 Sean Hanna & Ashleigh Nelson [EMA] | 6 Jenni Trotman [Trotman Law]

4

5

6

International Trade Documentation & Processes

20

Procedural 21-22 Fairness Conference

This workshop will give you a comprehensive understanding of the minimum requirements for documentation so that your goods are not left unattended on the wharf or confiscated due to not having the right documents.

This two-day conference explores the procedural fairness issues of the day.

We focus on practical tools and important employment law obligations that will ensure you are current with ‘Best Practice’ and all the necessary legal and practical developments in the field.

Hamilton | Lotta

Auckland | Karen

Kate Wilkinson Lunch

22

The upcoming changes to NZ labour laws and what the Government hopes to achieve: Join us and have lunch with the Minister of Labour Kate Wilkinson and hear of coming key changes to the Employment Relations Act. Auckland | Karen

Contact Rhonda Spence rhonda.spence@ema.co.nz Mobile 021 664 321

Supervision – An Introduction

7

Gain the essential knowledge and skills that every new Supervisor/ Team Leader needs for managing people. This course covers leadership, motivation, and clear and simple ways to communicate goals and objectives to a team.

Auckland | Deborah

Review and build upon the competencies developed in previous stages and increase your knowledge, skills and confidence in the role as a Health and Safety Representative.

Auckland | Craig

Train the Trainer 26-28 – Delivering Effective Training Programmes

Tax Series FBT & Christmas Expenses

Leading a team means extra responsibility and with that challenges to not only get your work done but ensure your team also achieves its tasks. Learn how to delegate and adapt your leadership style.

You will examine and compare theories of adult learning that will teach you how to build, deliver and review workplace training events for individuals and groups.

In the season of giving, how much should the IRD be getting? Find out what tax, if any, you should be paying on all your Christmas expenses.

Plus hear about the latest changes to FBT.

Auckland | Deborah

Did you know, EMA Tailored Training can deliver a wide range of workshops fully customized to reflect your workplace… at your workplace?

Health & Safety 21-22 Representative Training - Stage 3

Team Leader 23 Toolbox – Getting the Work Done

DECEMBER

NOVEMBER

EMA Alert

Auckland | Deborah

Health & Safety 3-4 Representative Training - Stage 3 Review and build upon the competencies developed in previous stages and increase your knowledge, skills and confidence in the role as a Health and Safety Representative.

Tauranga | Craig

28

Auckland | Karen

Managing Leave Toolkit

4

Many recent changes to the Holidays Act include cashing-up and Monday-ising of leave entitlements.

Make sure you’re paying the right amount for all the different types of leave. Learn what is fair, and what leave is discretionary.

Auckland | Karen

Health & Safety Representative Training - Stage 2

12-13

Review and build upon the skills, knowledge and competencies developed in Stage 1 and the role of the representative. Focus on specific hazard identification and control including the use of Approved Codes of Practice.

Auckland | Craig

Conference Contacts Karen Joe | 09 367 0959 | conferences@ema.co.nz Training Contacts Lotta Bryant | 07 839 2710 | lotta.bryant@ema.co.nz Kevin Chambers | 09 367 0958 | kevin.chambers@ema.co.nz Craig Garner | 09 367 0907 | craig.garner@ema.co.nz Deborah Law-Carruthers | 09 367 0947 deborah.lawcarruthers@ema.co.nz Lucila Marquisio | 09 367 0961 | lucila.marquisio@ema.co.nz

www.ema.co.nz | learn@ema.co.nz

MADE TO FIT Your business has unique energy needs, which is why Meridian has a range of power plans tailored to fit a variety of industries.

Your business gets to benefit by becoming more efficient and effective in the way it uses power, which ultimately means you can be best dressed for success.

The savings don’t stop there – if you’re an EMA member, you’ll also receive a 12% prompt payment discount off your total energy bill, 2% more than the standard discount.*

Talk to Meridian today about changing into a plan that’s the right fit for you.

Email: ema@meridianenergy.co.nz Fax: 0800 496 222 Call: 0800 496 777 meridian.co.nz/industry * The 12% discount does not apply to automatic recurring credit card payment and only applies if paid in full by the due date.

MER2917-004