EMA Busines Plus September 2012 by mediaweb

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Publicatio n o f t h e E m p l o ye 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

Huge benefits possible from tax fix

Issue 96 - September 2012

Proform’s

remarkable story

Three women business owners living true Aussie & NZ employment law are different!

In this issue: • Business continuity more than backup • Part 6A of ERA causing havoc! • Why we should cut the co. tax rate • Literacy: The big OH&S issue

Contents 1

Business Plus is published by :

On the cover...

The Employers and Manufacturers Association (Northern) Inc

The growth story of Proform Plastics Ltd has been remarkable. The company supplies auto accessories to 65 countries from its HO in Hamilton. For the full story go to page 26

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

Advocacy 02 EMA: Advocacy at Work 03 Are we ready when Australia cuts its company tax rate With EMA CEO Kim Campbell

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 Max McGowan 09 570 1289

mob 027 203 0694 mob 021 686 621 mob 027 241 4608

Bay of Plenty Terry Arnold 07 575 8401

mob 021 662 656

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

08 Literacy, the workplace accident ‘elephant in the room’ 14

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 ISSN No. 1176-4953

Planning for growth from exports from Phil O’Reilly CEO BusinessNZ

News 04 Bulk tenders save EMA members $1.07 million 04 EMA members benefit from fuel card as prices spike 05 Trans-Tasman economy would benefit hugely from tax fix

06 Comparing apples with apples: Australian and NZ employment law are different! 10 Eco Smart Business programme delivers: survey 11

Business Plus

The havoc that is Part 6A of the ERA

18 Women business owners working and living true to themselves 21

Indonesia forum coming

Proud Moments - LanzaTech - Kiwibank - Rocket - Glidepath - Port of Tauranga - OfficeMax

Advice 12 Can I just fire this person who’s cost us heaps? And the Facebook blues. Employment Chat

Technology 16 Understanding business continuity. Take the journey.

28 29

Our Vision. Your Success

2 Advocacy

EMA: advocacy at work Chief negotiator update on TPP ew Zealand’s chief negotiator for the Trans Pacific Partnership (TPP), David Walker, addressed EMA’s Trade and Foreign Policy Committee last David Walker month. He said the TPP is a big deal with 11 economies at the negotiating table and two others considering joining, with a combined GDP of about US$18 trillion. Four of the group buy 40% of our exports. It is also large in terms of its coverage: goods, including market access such as rules of origin, Customs, technical barriers to trade, sanitary and phytosanitary compliance, as well as services and investment including procurement, intellectual property, competition, labour and the environment. Documents on the issues under discussion are available at the Ministry of Foreign Affairs and Trade (MFAT) website under ‘TPP Talk’. After four years the TPP is coming up to its 14th round – in the US this month with Canada and Mexico involved for the first time. Mr Walker negotiated the P4, which he said always aimed to be a platform for the Asia-Pacific region. He also stressed the NZ government will not negotiate away fundamentals of our health system such as the Pharmac (medicine buying) model, or IP.

The MFAT negotiating team welcomes discussion and the views of business at tpp@mfat.govt.nz Mining green lighted MA members questioned Energy and Resources Minister Phil Heatley at his lunch presentation: “Responsible Development of New Zealand’s Energy Resources” last month.

Private debt taking long time to resolve farewell event held for Dr Alan Bollard by EMA heard from the Reserve Bank Governor at a Policy Forum on the subject of debt. Dr Bollard said New Zealand may be dealing with the aftermath of the recent large increase in private debt for quite some time. “As yet, not much of the expected rebalancing of the economy, particularly towards exports, seems to Dr Alan Bollard have happened Perhaps this should not be too surprising in view of the persistently high real exchange rate, itself partly influenced by the adverse international climate,” he said. The full speech is on the Reserve Bank website www.rbnz.govt.nz Dr Bollard’s replacement is Graeme Wheeler, a New Zealander living in the US. He was formerly at the World Bank (1997 to 2010) and prior to that deputy secretary and treasurer of the Debt Management Office at the New Zealand Treasury.

Book launch cocktails MA hosted the launch of the book, Corporate Governance A Practical Handbook with guests interested in the topic. The book published by CCH New Zealand Ltd features New Zealand experts explaining the strategic, legislative and practical requirements facing directors in the New Zealand environment. BusinessNZ CEO Phil

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O’Reilly is a contributor. Good governance is essential for the guidance not just of listed companies but any kind of organisation. Photos of those attending are on our ‘Out and About’ page 28. Visit to New Zealand’s transport control centre MA’s Regional Infrastructure and Local Government Committee checked out how Auckland traffic flow is managed on a visit to the Joint Transport Operations Centre (JTOC) on the North Shore. JTOC is a joint venture between Auckland Council and the New Zealand Transport Agency with 80 staff whose job it is to monitor and coordinate all traffic movements across the Auckland metropolitan region and beyond. The two-hour visit coincided with the operations room dealing with a motorway accident and several breakdowns. State of the art SCAT software coordinates traffic signals and signage 24/7 across the network to smooth traffic flow on Auckland’s motorways and arterials. Committee members were highly impressed, and were congratulated by their hosts as the collaboration making this possible would not have been possible without Auckland’s super city reform for which EMA played a crucial role.

Local govt changes backed MA has lately been contributing to BusinessNZ submissions on electricity allocation for 2013 and beyond, and on proposed changes to the Local Government Act 2002 Amendment Bill. EMA lodged a separate submission in respect of the latter Bill. We’re also opposing the Lobbying Disclosures Bill recently introduced.

By Kim Campbell, Chief Executive, EMA

Advocacy 3

Are we ready when Australia cuts its company tax rate (First published in NBR, 25/8/2012)

Australia is preparing to cut its company tax rate and trump us again in the business investment stakes. We’ll have to match their rate cut, so the question is why shouldn’t we stay ahead by dropping ours first?

he signal their company tax rate cut is coming is plainly made in the Australian Treasury Discussion Paper released on August 13th by the Business Tax Working Group. Recommendations from an earlier report on the tax treatment of company losses by the same group have just been adopted. The latest report explains this is their response to the government’s request for the group to ‘prioritise’ such a tax cut, and accompany it with measures that offset the costs of doing so. The report under discussion also follows one in 2009 from Australia’s Future Tax System (AFTS) Review to the Australian Treasury which said their tax rate should be cut to 25% in the short to medium term at the same time as a new tax is imposed on non-renewable resources. The AFTS paper said the company tax cut would help Australia attract investment while reducing incentives to shift profits offshore. All very sensible and orthodox for a country like theirs, and ours, relying as we both do for growth on foreign direct investment. So it’s clear Australia will cut its company tax rate; it’s just a matter of how soon. We have argued over the past decade New Zealand should head down the same track for the same reasons now finding favour. Successive governments haven’t wanted a bar of it. Changing the tax rate was too hard ideologically for Labour, and for the present government, well there is hope yet they will move ahead of the

hindmost foot, though such a change may require structural adjustments amongst their rural constituency. Let me rehearse some of the reasons we should drop our company tax rate as low as, say Ireland’s 12.5%, which is where the likes of Google and Apple end up paying most of their tax. The reasons are handily canvassed in the Australian report, so I may as well use the case put up by their Treasury.

“...once Australia cuts its rate from 30 to say 25%, the disparity between them and us will offer all companies with trans-Tasman business an inducement to report their taxable profits in Australia. .”

But first a burning issue from the Kiwi perspective. While our headline company tax rate at 28% is not particularly competitive in attracting FDI, once Australia cuts its rate from 30 to say 25%, the disparity between them and us will offer all companies with trans-Tasman business an inducement to report their taxable profits in Australia. Our Treasury might naively contend such discretionary investment is captured by IRD’s transfer pricing regimes, but our research in 2002 from Infometrics showed this effect to be very substantial, and most companies paying significant taxes in this country also do business in Australia. The Australian report is unequivocal. It says: “improving productivity is crucial to ensuring Australia’s future prosperity. The company tax rate impacts on productivity through its effects on both the quantity

and quality of investment. … a lower statutory corporate tax rate would increase Australia’s ability to attract foreign investment and increase the quantity of the capital stock for greater productivity. Over Kim Campbell time it would generally be expected that the economic benefits of greater productivity will be distributed between capital owners and labour through higher real wages.” Hurrah, and ditto for New Zealand! Other common knowledge amongst business circles include: “As multinationals can choose where to locate their production, they are more sensitive to the tax rates which apply to them than a purely domestic firm… (and they) have an even wider choice in where to locate their profits.” While there is a cost to government in making the transition to the lower rate, the incentive from it to business is to retain for re-investment more of the money otherwise paid out as dividends. Ultimately, as the 2002 Infometrics study showed, the total tax take would increase as the economy became more productive with more people employed, and with more of them with higher skills. The transitional cost can also be seen as part of a temporary compensation for, in Australia, the carbon tax and here the ETS, along with other impediments to competitiveness. To pay for it, in fact fully fund it, the report suggests amongst other things the removal of accelerated depreciation for many industries, reducing the generosity of their tax treatment of R&D, and limiting the deductibility of costs incurred in relation to debt financing. It states overall that a ‘lower rate broader base’ reform approach offers significant benefits with the overall imperative to lift productivity and compete for global capital. That’s the challenge. Will we meet it?

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4 News

Bulk tenders save EMA members $1.07 million

ulk energy, gas and waste services tenders have cut EMA members’ bills by a total of $1.07 million since Total Utilities Management Group and EMA set up the arrangement early in 2010. Managed by expert analysts at TUMG, the tenders have delivered the savings by taking members’ utility requirements to

market in aggregated groups to increase individual company buying power. Nearly 100 individual RFPs have been bundled in this way to bid on a series of bulk tenders. Many businesses have opted for TUMG to handle more than one utility on their behalf. Overall members’ consensus has been that the bulk tender process is

‘easy, convenient and allows a clear comparison of the supplier contracts on offer’ – as well as offering substantial cost savings in most cases. EMA and TUMG manage the ongoing bulk utilities tenders on behalf of members on a ‘no savings, no fee’ basis. Go to EMA Rewards (www.ema.co.nz)

EMA members benefit from fuel card as prices spike

he EMA Starcard continues to go from strength to strength. Since the release of the new offer two months ago the fuel card uptake has jumped 30%. Last month, August, saw EMA members

save an average of $213 each on their fuel costs for the month using the EMA Starcard! EMA Starcard members pumped over 2.5 million litres of fuel into their company vehicles in the past 12 months.

“Engineering/construction companies dominate the user profile for the EMA Starcard possibly as Chevron’s offer on diesel under it is truly outstanding,” said Simon Lister, EMA’s sponsorship manager.

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News 5

Trans-Tasman economy would benefit hugely from tax fix A report by two leading economist firms shows changes to tax laws in New Zealand and Australia could benefit the economies of both by billions of dollars.

urrently, companies based in either Australia or New Zealand with operations in the other country have their profits taxed twice, because neither country recognises the other’s system for offsetting tax credits. NZIER and the Centre for International Economics in Sydney have calculated that if the double taxation was removed the trans-Tasman economy would see additional growth of more than $5 billion over the next 20 years. “The research numbers stack up highly in favour of doing this,” said EMA’s chief executive Kim Campbell. “The report by Sydney’s Centre for International Economics and the New Zealand Institute of Economic Research shows mutual recognition would propel the trans-Tasman economy upwards by $A5.3 billion or $NZ6.9 billion by 2030. “The reported short-term hit to

tax revenues to achieve this would be just $NZ494 million for Australia and $NZ156 million for New Zealand. “Currently a trans-Tasman imputation regime permits trans-Tasman companies to allocate franking or imputation credits

“If each country recognised the other’s system for offsetting tax credits, then investors in both countries would get a fairer outcome...”

but shareholders are only able to use credits from their domestic jurisdiction, rather than receiving a full credit for the company tax paid in either country.” BusinessNZ has also strongly advocated the change. Chief Executive Phil O’Reilly says earnings, investment and saving would all be enhanced. “If each country recognised the other’s system for offsetting tax credits, then

investors in both countries would get a fairer outcome from their investment,” Mr O’Reilly said. “Those dividends rightfully belong to those who invested in those companies and should not be dissipated through double taxation. “Mutual recognition of franking and imputation credits would slightly reduce the tax take in both countries, which would be more than offset by the greater profits circulating in the economies of countries, boosting savings, investment and growth.” There would also be further significant benefit from removing the disincentive to invest, the report says. The NZIER-CIE report has been forwarded to the Productivity Commissions of New Zealand and Australia as they consider the issue. The Commissions are expected to report later this month, and both EMA and BusinessNZ hope the Commissions will recommend that both countries change their respective tax laws to fix the problem. The costs & benefits of mutual recognition of imputation & franking credits by NZIER and CIE can be downloaded at www.businessnz.org.nz

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6 News

Comparing apples with apples: Australian Australian employers are not required to have written employment agreements with staff though they are compulsory in New Zealand.

erbal agreements, company policies, and regulation do the job across the ditch. The major legislation stipulating Australian employers’ rights and responsibilities nationally is contained in the Fair Work Act 2009.Then there are state-by-state variations on many aspects of employment – especially for long service leave and occupational health and safety. These are highlights from EMA’s Australian Employment Law Seminar held in Auckland last month. Presenting the seminar was Nicola Street, employment services manager at the NSW office of EMA’s trans-Tasman equivalent, the Australian Industry Group (AIG). There are plenty of similarities between us, eg, paid annual leave is four weeks and able to be accrued if not taken, unpaid maternity leave is 52 weeks for employees who have worked for their employer for a year, and privacy, harassment and antidiscrimination law is well regulated and similar. But there’s a list of differences in Australia

too, such as: • The Fair Work Act stipulates the National Employment Standards (NES). These outline minimum employment conditions in 10 areas such as leave, hours of work, the minimum hourly pay level and termination. • Awards contain minimum employment conditions (and must be no worse than NES conditions) for certain occupational groups eg, the Clerical Award and Manufacturing Industries Award.These determine penalty rates (usually 1.5 times the ordinary hourly rate for the first two hours, then double time after that). Senior professional occupations are generally outside the Awards scheme, although IT professionals and engineers are included. • Enterprise Agreements (EAs) made between the employer and his/her workforce are voluntary and set terms and conditions typically for two to three years.They must at least meet the NES or any relevant Award. Industries where these often apply are in manufacturing, construction, logistics, finance and aviation. EAs are complicated to set up and often attract union involvement. • Trial employment periods are for six months and can be terminated at any time with a reason (three months in New Zealand with good faith obligations required). • The minimum wage is A$15.96/hour

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Nicola Street, AIG, compulsory super payments are 9% rising to 12%.

(compared to NZ$13.50). • M any employers fund parental leave alongside the Government-funded Parental Leave Pay, which is set at the national minimum wage for a maximum of 18 weeks. Also, the Government funding is administered via the employer. New Zealand has Government-funded paid parental leave only, for 14 weeks at a maximum of $475 gross per week calculated on a range of factors. A father’s leave is unpaid, allowing him three works leave simultaneously with his spouse/partner after the birth or adoption of a child. But from January 1, Government-funded Partner Pay for two weeks is being introduced. • Flexible work requests can only be for caring for children aged less than five years. In New Zealand it can be for any dependent and it is to be extended further to all employees). • Australian employers have to provide pay

www.acepay.co.nz

News 7

and NZ employment law are different! slips, but Kiwis don’t. • S ick pay is for 10 days a year minimum and accumulated if not taken (five in New Zealand and accumulated), with two extra days of ‘unpaid carer leave’ or compassionate leave each year compared to New Zealand’s three days paid bereavement leave. • The ordinary working week is defined as 38 hours (its not prescribed in New Zealand) but employers are free to require reasonable additional hours to be worked with any additional payments being as agreed. The ordinary working week definition is primarily used for payroll calculations, such as superannuation payments. • Employer superannuation contributions are called ‘Superannuation Guarantee Contributions’.These are compulsory

in pay packets, currently 9% and rising by 0.25% a year from 1 July 2013 until they reach 12%. • Notice of termination is scaled, eg,

“...Trial employment periods are for six months and can be terminated at any time with a reason”

someone employed less than a year must be given at least one week’s notice, after two-three years, two weeks’ notice and so on up to four weeks for five or more years’ service. Most employers provide

four week’ notice. Employees aged 45 years or older who have worked more than two years for an employer must be given an additional week’s notice. • Redundancy is compulsory and based on years of service, eg, 16 weeks’ severance pay for up to nine years’ service (in addition to notice, untaken annual leave and long service leave); but for more than 10 years’ service, 12 weeks’ pay (assuming long service leave is considerable). If you are thinking of operating in Australia, or employing or contracting project workers, seek advice to get it right. New Zealand companies can belong to the AIG for support in Australia, just as Australian companies join EMA.

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8 Advocacy

Literacy, the workplace accident ‘elephant in the room’ Business leaders and literacy experts say more needs to be done to improve adult literacy if New Zealand is to reduce our workplace accident record.

very year more than 200,000 New Zealanders are seriously harmed and more than 100 killed in workplace accidents. Paul Jarvie, Manager of Occupational Health and Safety for EMA, and National Manager for the NZ Institute of Safety Management (NZISM), says the Ministry’s Workplace Health and Safety Strategy is a step in the right direction, but literacy and numeracy are “the elephants in the room”. Research has found most New Zealand adults can read and write straight forward information but around half of adults have significant literacy and/or numeracy gaps that compromise their ability to handle more complex work demands. Mr Jarvie says literacy issues undermine efforts to reduce workplace accidents because people don’t understand written information about hazards. Many people are also unable to correctly fill in the health and safety incident forms that provide valuable information to employers and the authorities. “It’s widely agreed that more research is needed to understand where and why workplace accidents are happening, and in what kinds of businesses, but getting good data requires workplaces to supply accurate information about incidents,” Mr Jarvie said. “Achieving this requires people to fully and accurately complete workplace accident reports and return them to the Ministry of Business Innovation and Employment. This is not happening at the moment.” Katherine Percy, chief executive of adult literacy, numeracy and

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communication support provider, Workbase, agrees. “Little meaningful headway is being made to reduce workplace accidents in New Zealand and our experience working with hundreds of businesses shows that literacy issues play a big part,” she said. Both Mr Jarvie and Ms Percy believe New Zealand’s workplace safety statistics are unlikely to improve significantly unless employers take steps to address literacy issues amongst their employees.

“...literacy issues undermine efforts to reduce workplace accidents because people don’t understand written information about hazards.”

“Employers need to understand the health and safety risks and impacts arising from low literacy and provide training that builds employees’ knowledge and skills,” Ms Percy said. “This will also have positive flow on effects to their general job performance. “It’s also vital that employers take time to check that people have actually understood the messages they are given.” Mr Jarvie says that, in addition to training, employers need to strongly signal to employees that health and safety matters. “All too often employees pick up the implicit message that their priority is to get the job done quickly. This can make

Paul Jarvie

them reluctant to take time to follow safety procedures and instructions.” Mr Jarvie and Ms Percy warn that quick fixes such as putting up warning signs will achieve little because health and safety involves understanding concepts around risk identification and mitigation: “there’s no quick fix”. They note that employers worry about the training and downtime costs involved in improving employees’ literacy skills, but those addressing the issue gain many benefits, including improved workplace health and safety. Trainees also gain skills and participate more fully in workplace activities such as meetings. Ms Percy adds that many businesses don’t realise they can access governmentsubsidisies to undertake workplace literacy training programmes. Case study: Transpacific Industries Workplace literacy training has made a big difference to Transpacific Industries’ in developing a health and safety culture throughout its business. A large part of the company’s recycling, waste management and industrial services involve working in high risk environments such as confined spaces, at height, and around heavy machinery and energy systems. Managing Director Tom Nickels says the company places employee safety above all other objectives yet it struggled to get some team members to comply with the more complex documentation requirements.

“Reading and writing issues hindered our progress towards developing a safety culture and we knew that literacy and numeracy were an important part of the cultural change jigsaw,” he said. The company put 25 employees on one site through a literacy training programme, including operators, general duties staff, managers and employees with English as a second language. Participants grew their confidence far more as a result. Now they actively participate in the company’s toolbox meetings and monthly health and safety meetings. “Before the literacy and numeracy course it was difficult to get them interested in these vital employee communication avenues,” says Mr Nickels. “Now we have people volunteering to deliver tool box talks to their colleagues

“Reading and writing issues hindered our progress towards developing a safety culture.” - Transpacific Industries

and they are more confident in letting managers know if they have safety questions or concerns.” Mr Nickels says the literacy and numeracy programme did more than reduce accidents and incidents; the workforce started regarding health and safety as part of life and overcoming their fear of paperwork.

“Employees who would once run a mile from a booklet or printed page now carry safety tool-kit pads with them and plan the task’s safety aspects before they begin.” He notes that employees with literacy and numeracy problems expend a lot of energy on working out how to hide the problem and try to justify why they should not have to ‘fill in all this stupid paperwork’. “These same people now proactively ask management for the correct documents such as permits before they start a job. We have found literacy and numeracy training to be a powerful tool for changing the health and safety culture at this site.” As a result, Transpacific Industries has introduced the workplace literacy training programme to other sites.

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10 News

Eco Smart Business programme delivers: survey The companies taking part in EMA’s Eco Smart Business programme are finding it very helpful for developing an environmental management system (EMS) and gaining independent accreditation.

ut the biggest benefit of the programme is reported to be the one-onone help and personal support provided during and between workshops. Most of the 23 companies who we surveyed informally on programme said the best aspects of it were: • the amount of personal help and support to use the measurement software and

understand environmental management; • the programme is affordable; • the five half-day workshops were manageable time-wise; • the clear presentation on how to use the programme to get more customers and save money. Most signed up to the programme to show their customers they are committed to being environmentally friendly, as well as wanting to do the right thing. And they wanted to save money on waste and/or power and/or water. Most also signed up for the opportunity to hear and see what other organisations are doing in this sphere of business, and learn from them. For one, a major benefit is that the Eco Warranty certification is a stepping stone to the ISO 14001 environmental standard.

Sorted offers free workplace seminars

talked last time about the value of personal financial education in the workplace: there are plenty of benefits for employers in having staff who aren’t distracted by their personal money matters. A more complex question for employers may be on how to make financial education occur in a busy workplace. Sorted is a free independent money guide we provide through the Commission for Financial Literacy & Retirement Income. Most people will be familiar with the Sorted mouse and our Sorted website. But we also offer Sorted seminars – designed especially for workplaces like yours. These one hour seminars can be downloaded from sorted.org.nz. Each of them includes a comprehensive facilitators’ guide, as well as presentation. The materials are intended for any manager or facilitator to deliver. There’s the introductory seminar ‘Think, Shrink & Grow’ as well as seminars on different topics from budgeting and

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managing debt to KiwiSaver. Participants get our free Sorted booklets to take away. We’ve piloted these seminars to ensure they work well, and the feedback we get is extremely positive. Kelley O’Dwyer, National Wealth Sales Manager from Kiwibank ran our ‘Think, Shrink & Grow’ seminar with staff recently. She said: “What a great programme.You don’t have to be an expert to deliver it as the programme is so well constructed the Commission will give you all the tools you need. “It’s also really exciting that in one hour you can really make a difference to the participants lives who attend the programme and help them get their finances sorted.” If you’re not able to run a seminar just yet, but thinking about how to make financial literacy happen in your workplace, why not become a ‘Sorted employer’? We can email you a Sorted toolkit

Participants said other advantages are: “It’s great meeting other participants and sharing ideas and successes.” “The timeframe between sessions allows us to implement [an EMS], and there’s great support.” “It’s a great way to gain more knowledge on environmental issues.” “It’s structured, step by step, walks you through.” “Eco Smart Business is subsidized!” “The programme is flexible, applying to many types of business.” The most common source of information about becoming involved with Eco Smart Business was by an EMA email notice sent to members.

Watch out for next year’s programme!

By Diana Crossan, Retirement Commissioner

Diana Crossan

three to four times a year. Each toolkit includes free, practical resources – posters, seminars and articles – for you to help your staff to become financially sorted. Simply send an email to employers@ sorted.org.nz with ‘Yes I’d like to become a Sortedemployer’ to subscribe. It’s an easy way to get started on making financial literacy happen in your workplace, and ensuring your staff are more focused on the work at hand. The Commission for Financial Literacy & Retirement Income is an autonomous Crown entity, and we provide free, independent and impartial information about money matters. Our vision is for all New Zealanders to be financially sorted.

News 11

By EMA staff

The havoc that is Part 6A of the ERA The Courts are starting to see a raft of litigation arising from Part 6A of the Employment Relations Act 2000 as businesses find it a source of contention and dispute.

art 6A relates to how employees are transferred to a new employer following the loss of a contract when there is a change to the service provider in the cleaning and catering industries. The ERA mandates that employees will transfer with continuous service even though there are no contractual or legislative rules about how that transfer is to take place. Because the rules brought in under the previous Labour government are ill-defined, the employers involved and their affected employees must often resort to litigation in the Employment Relations Authority, the Employment Court or other Courts to establish where their rights and liabilities are to fall. Part 6A Employment Relations Act 2000 Part 6A of the Employment Relations Act 2000 extends the concept of employee transfers in a business sale situation to other non-contractual situations where work is done by another provider. It applies not only in a sale of business, but more problematically, to “subsequent contracting” where the work remains on site but becomes the responsibility of a new contractor and its employees. Part 6A applies to employees set out in “Schedule 1A” - those engaged in providing food catering and cleaning services. Certain specific industries are included, such as aviation and hospitals but a catch-all ensures it applies also to any other place of work as defined by the Health and Safety in Employment Act 1992. If caught by Schedule 1A, the employees involved have a right to elect to transfer to the new employer with continuous service applying and on the same terms and

conditions of employment as under their previous employer. Who pays? The 2006 Amendment which extended the law to “subsequent contracting” did not set out who would pay for the cost of the entitlements transferred when the employees changed employer. These can be substantial, they may have accrued over time, and it may be unclear what liabilities they represent. They include: • annual leave which becomes payable either to the employee when taking the leave, or on termination; • sick leave entitlements which become payable when the employee takes the leave; • possible contractual redundancy compensation, which only becomes payable on termination for redundancy reasons. In the absence of specific provision, the 2006 Amendment provides that the new employer is required to pick up the cost of these entitlements, even though the entitlements were not earned while in the employ of that employer. Some employers are seeking common law remedies for these added costs since they are obliged to pay them though they have received no benefit. Employee terms and conditions The Act is silent on how the new employer is to determine the employees’ terms and conditions of employment and their accrued entitlements. There is no requirement obliging the outgoing employer to provide accurate records to the new employer, access to personnel records, or employment agreements. The new employer may have no way of knowing what the employee’s terms and conditions were. Competition and co-operation? All of this means that the parties involved need to play nicely. Some parties have recognised the incoming contractor should not be out of pocket in taking

over the employees. But this is not always the case. After all these are situations where there is no contractual relationship. Transferring employees and their entitlements in a subsequent contracting situation requires that competitors cooperate with each other. Yet we know that competition and cooperation are concepts that don’t always go hand in hand. The transfer of employees in these circumstances is notably different from a sale of a business transfer where the parties are in a contractual relationship and can, and do negotiate over whether employees will transfer. The costs and benefits of the transferred employees become part of the deal, and the parties can reach agreement on indemnities to cover costs that may arise subsequently. Not so in subsequent contracting situations. Protection for whom? The law was drafted with the best intentions to protect a group of employees commonly subject to restructuring and redundancies following the loss of cleaning and catering contracts. Its intention was to protect this group from a perceived deterioration in their terms and conditions each time a contract was lost. But when these so called vulnerable employees become the meat in the sandwich and caught up in commercial transactions and disputes, they are frequently disadvantaged, not protected at all. Summary Part 6A law is difficult and unwieldy. Many complex issues are now surfacing as employers in the affected industries test the boundaries of this law. It’s also failing to provide adequate protection to those directly affected; and it is unclear who could possibly benefit from it. EMA understands that changes imminent to the Employment Relations Act as announced by Labour Minister Kate Wilkinson last May will include a solution to Part 6A.

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12 EMPLOYMENT CHAT

Can I just fire this person who’s cost us heaps... Q. We have just discovered our manager of intellectual property made a mistake in trademarking our company name. We find out a new competitor in one of our markets is using the same name and theirs is registered, and ours ain’t. I am so furious…can I fire the guy on the spot?! – Tom Dear Tom My first reaction is total sympathy for any loss you sustain in the market. But it’s a shame his work wasn’t checked when he filed for the trademark. On the firing issue I would recommend caution. You should never just dismiss someone on the spot. Any action should only follow a full and fair investigation and formal procedure. Everyone makes mistakes. Some are more damaging than others. While negligence may sometimes justify dismissal the threshold is high. If you believe the employee was negligent you need to consider what he did, or failed to do, and all the relevant circumstances. And take further advice. You need to take a fair and reasonable approach to this (as dictated by employment law), even though you might have felt like screaming. Find out how the error occurred and put procedures in place to make sure it can’t happen again.

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If there is a pattern of poor performance you need to undertake a formal “performance review”. Phone our AdviceLine to find out how.

“...You should never just dismiss someone on the spot. Any action should only follow a full and fair investigation and formal procedure. Everyone makes mistakes...”

Q. One of my staff has complained we put a photo of her (in a group) on Facebook at a work do and she looked terrible in the photo. Her appearance is key to her role and future career prospects. We took it down because she was so insistent, but did I need to? What’s the story about this sort of posting? – Julie-Ann

Dear Julie-Ann Managing privacy is an issue in the public domain and you must be careful what you post about other people on the Internet – Facebook, your own website or in emails. You need to be sure you have permission and everyone understands the use of information about them. Information includes photos of course. I have to say that ‘not looking one’s best’ seems a bit oversensitive and unrealistic - what if a photo of you as a wedding guest was shown around and you didn’t like it? I mean to say…... But Facebook is very public, very social, and very much about presentation, compared to hard copy photos shown to a small group. Furthermore, a work photo is more formal and presents the person pictured in a flattering light. So she does have a valid point. Apart from privacy/permission issues, it pays to let staff know that you plan to upload photos of events – or even just team photos - so they can celebrate the sharing of fun or the success it represents. Perhaps you could take another happy photo including this staff member so she (and anyone else affected) feels suitably loved! Giving people plenty of notice also allows them to dress their best for the camera.

WHAT EMPLOYERS ARE ASKING ADVICELINE THIS MONTH

...and the Facebook blues Q. I paid my new boy with a cheque and he’s moaning that he wants it paid online. I want to stick with cheques – is there a problem about that? – Ted Dear Ted Yes it sounds like you didn’t get an agreement from your employee about the method of payment. Check what your Employment Agreement with him says about pay. If you don’t have a written agreement you are breaking the law and need to get one done quick smart. Call our AdviceLine for detailed advice and as an EMA member you can download a template from our website – if you are happy with that template, which has the minimum required information, you can use it, or add clauses and add other arrangements. Back to the payment method: generally people don’t like going to banks to deposit cheques then waiting for them to clear. The Wages Protection Act provides, unless otherwise agreed, for payment in money, which is defined as coins or banknotes. However, payment in cash would be rare these days with most people getting paid directly into their bank account so the money becomes available immediately. Employees should be made aware when and how they will be paid, and

payment needs to be made on the day agreed.

“...Employees should be made aware when and how they will be paid, and payment needs to be made on the day agreed.”

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

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Planning for growth from exports Government has much power to advance or hinder business growth and the business sector is sensitive to whether any government is business-friendly or not.

year ago business was expressing concern that the Government was not promoting a specific plan to help advance business growth. Since then it has done a lot of planning work, coming up with a business growth agenda that aims to substantially lift New Zealand’s economic performance. This agenda covers six critical areas exports, innovation, skills, infrastructure, natural resources and capital markets. A progress report on exports – Building Export Markets – was released recently, setting out recent export achievements and outlining the Government’s thinking

on how this sector can become a larger part of the economy. It revolves around a fairly hefty goal – increasing exports as a proportion of GDP from 30% to 40% by 2025. (See page 21 for EMA’s view on the report). The thinking behind this big goal is the economic reality that the only way to significantly grow our economy is to sell more overseas. Increasing our exports in a major way will rely on the actions of New Zealand businesses over the next twelve or so years – a tall order. But the Government is also planning a range of initiatives to support exporters in this quest, and to develop new areas of endeavour from which export dollars can be earned. The prime example of new development is the opening of more petroleum and mineral resources. The review of the Crown Minerals Act, currently underway, will facilitate this. The payback from

developing these resources will largely be in export dollars. In the critical area of high value manufacturing, key actions in support of the goal include the delivery of ultra-fast broadband to most new Zealand businesses Phil O’Reilly and the establishment of the Advanced Technology Institute – due to be underway by the end of this year – to fulfil the function of New Zealand’s ‘high-tech headquarters’, enabling the clustering of knowledge-intensive businesses so they can better innovate and take on overseas markets. One area of concern for many is the high and volatile kiwi dollar that puts pressures on the returns of many exporters. While acknowledging that there is no silver bullet to stabilise a floating exchange rate, the Government has pledged to get its accounts back into surplus to help reduce upward pressure on interest and exchange rates. Another thrust is getting more free trade

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deals with more countries. Already, 46% of our exports now go to countries that we have negotiated FTAs with, meaning that our exports to those countries return greater value than our exports to countries that still erect trade barriers. Negotiations are underway for more FTAs, including the Trans Pacific Partnership that may eventually include the US, Canada and Mexico along with other Pacific countries; and FTAs with Russia, Belarus and Kazakhstan; India; Korea; and the Gulf States. More air links to more countries will help exporters, including more flights to China and Japan and the negotiations for more with South America and South East Asia Undertaking trade missions and setting up strategic alliances and collaborative working arrangements with other countries is another area of endeavour - the Indian aviation industry and the US wine and health IT industries are prime targets.

The Government is also well placed to leverage value from upcoming major events to be staged in New Zealand, including the FIFA Under-20’s World Cup in 2015 and the World Masters Games 2017. The development of major convention centres in Auckland and Christchurch will also aid in events and tourism. And developing ‘the New Zealand story’ – marketing support provided by brand attributes, images and a ‘back story’, for New Zealand exporters whose branding relies on the New Zealand brand – will help many as a first point of entry to overseas markets. These are some of many initiatives planned and underway to support New Zealand exporters. BusinessNZ believes they are a fairly robust collection of undertakings that should help many to export more. Further development of some initiatives – for example more detailed work around cluster development – will be required.

The actual task of developing and growing exports falls to New Zealand businesses, whether they are at present exporting or not. To deliver on the goal of a greater share of GDP supplied by exports, it will be necessary for companies currently servicing the domestic market to branch out into exporting, and for new companies to consider export strategies at the time of their establishment. The challenges for New Zealand companies include achieving more valueadded manufacturing, developing greater exports of services, and getting into more international supply chains. At the end of the day, it will be up to business to take advantage of the Government’s initiatives. Providing feedback to Government on which initiatives are useful and which are not, will help New Zealand develop an environment that is both business-friendly and conducive to growing exports.

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16 Technology

By Andrew Charlesworth

Understanding business continuity... In the following months we are taking a journey to discover and explore business continuity. To start, what is it?

usiness continuity is not DR (Disaster recovery). As the name suggests Business Continuity is to keep your business running with minimal impact or down time whereas disaster recovery is after an event has impacted your business negatively. Time is critical and without a business continuity plan down time can turn an event or disaster into a crisis. According to Wikipedia business continuity is defined as activities undertaken to ensure critical business functions will always remain available to customers, suppliers, and other entities… It is not something implemented at the time of a disaster but refers to those daily activities that maintain service, consistency, and recoverability. Why do you need it? Business continuity is needed, but often not highly prioritised unless required due to audit or regulatory compliance. But should this really be the case, just to meet a regulatory requirement?

annoyed, frustrated and even drop your business in hours or days. As you are far more likely to experience a localised “disaster” - an air-conditioning fault, electrical or IT system outage, Andrew Charlesworth fire or temporary loss of access What are the chances? to buildings - you need to be During a widespread prepared. event like the Christchurch earthquake And just having your data backed up won’t cut it. As a responsible business owner or manager, you may have ensured your data is backed up and “...just having your data stored offsite, but have you actually backed up won’t cut it. tested it? What if your critical business Are we protecting our most applications couldn’t run? valuable asset, our data, at Sure there are IT tasks that support a Business Continuity plan and ensure the lowest cost and assuming things happen like backups, remote it will be OK? access, etc. But if the wider team hasn’t ...have you actually tested taken the time to determine priorities your backup?” or understand the bigger picture then the plan is flawed from the start. Some facts: • 43% of NZ SME business owners have experienced a business crisis in the last 5 years • 96% of NZ businesses admit they have not tested or proven they could continue in a crisis • A recent UK research study showed 70% of companies that had proactively tested their plans discovered issues that would have been a problem in a real crisis situation. What about protecting your business, its capital value, revenue and reputation, your customers and your valued staff? Aren’t these the real requirements?

people were more tolerant of service interruption because everyone was in the same boat. But if something happens to just your business due to a water leak or power outage, customers can get Business Plus – Exclusive news, advice, learning and networking

Business Continuity is an IT department issue! Really? The common thinking is its the IT department that looks after your back up! That’s good, but are we protecting our most valuable asset, our data, at the lowest cost and assuming it will be OK? Let’s compare your business data to say, your fleet of company cars. Typically these will be insured to replacement value. For your cars this is fine as you can go to your nearest vehicle dealer

Technology 17

Take the journey. and replace a car the same day. Not so for your data – your customer records, data base, intellectual property, HR records, financial records and so on. How do you replace data like this if it is lost as a result of an event such as a server failure, loss of back up tape or natural disaster? You can’t go down the road and buy it. It’s yours and took years and years to build up. So ask yourself whether business continuity is just having a backup. You need to question the quality of the backup, the recoverability of your data, and the testing regime you use to make sure the backup works, is complete and your data is secure. What would happen to your business if you lost its data? This is why business continuity is not solely an IT issue. IT managers and departments role The IT role in business continuity is to make sure your data is backed up correctly. The business role beyond that is to make sure the IT department makes backup a priority and is given the budget to do the job correctly.

Take this example. The IT manager turns up at work to find the backup from the night before failed and needs attention, and at the same time a user calls the help desk to say “my email is not working.” Which gets attention first? The backup failure, or the user with no email? Will the backup get fixed that day? Will it fail again that night? If it does you have two days of data loss exposure, two days of transactions at risk. Your business and staff need to understand the value of data and that the IT department is empowered to protect it well. Your data is backed up. Is that it? No, you need to test your back up and recovery regularly, to give you peace of mind, so you know your data recovery times (RTO – recovery time objective) and recovery point (RPO – recovery point objective) RTO and RPO are critical factors. RTO is the target amount of time it will take to recover data/systems and applications set by the business as acceptable, while RPO is the point at which data will be backed up to eg last night, every 15 minutes. Your team and business need to set the RTO and RPO for functions and systems in the business then ensure they can be delivered to.

Running a recovery test every six months on these RTO and RPO actuals will give the business confidence it can meet its agreed objectives following an event. Testing during a normal time is the only way to test them and far better than discovering an issue in a time of need. Your data is backed up and RTO & RPO tested. Is that it? In our next article we will look at getting the business back up and running Now challenge your back up business knowledge • Have you got a backup? • Do you know how you backup? • Has it been tested? • Does it work and the data exists as you intended? • Is it off site? Is it safe and secure? • Have you identified your critical business systems? • How long does it take to get backup and running, and will this be acceptable for your customers? Plan B are Business Continuity experts. For more go to: www. plan-b.co.nz/ema

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Women business owners working and living EMA’s Mary MacKinven talked to three women who own and manage companies (and happen to work alongside their husbands).

e asked about their positions, gender differences, tips for women aspiring to be at the top of their careers – and what it’s like working with husbands. We are grateful to these women for baring their souls! • Christina Box is co-owner and finance director of Aquatica NZ Ltd, manufacturers of tap ware, sinks and laundry tub products. • Robyn de Bruin-Judge is co-founder and director of de Bruin-Judge Furniture, manufacturer of luxury kitchens, bathrooms and bespoke cabinetry. • Vicky Taylor is co-owner and general manager of Smartfoods Ltd, contract food manufacturers.

I’m close enough to production to get excited when a tricky job installs well. Vicky As General Manager I work with the rest of the team to ensure we do the best job possible producing and distributing our cereals, and work on future focused projects such as strategic planning, new product development and new opportunities. The hardest, and easiest tasks Christina Box Christina Vicky The gut-churning stuff is the legal Without a doubt. Men and women are matters and anything to do with unhappy different, and often have different sets of staff. Everything else is easy. competing demands outside work. The best you can have is a supportive partner and network of friends who really get you and your values, as well as mentors “If a woman’s focus is on being as or senior contacts.

good as a man or like a man, she’s not focusing on the right things.” – Christina Box

Responsibilities and roles; a typical week Robyn Christina The hardest thing is juggling family My card says “Finance Director” but since responsibilities with work - I have four employing an accountant, I’m probably babysitters.The easiest is coming up with more operations and personnel. new ideas to develop the company. A typical week includes making sure Vicky everyone’s happy and The hardest thing is fitting their systems are working; everything in! In a growing recruiting and training; legal business you can’t afford to stay and compliance; software still so it is a continuous juggle upgrades; managing and managing the present and the ordering stock; our monthly future. Everything else is easy! customer service excellence award; booking foreign Getting to the top: Is it more exchange; analysing reports. difficult for women? A company our size with Christina Robyn de Bruin-Judge 40 staff can’t justify lots of There is a general belief that managers. men [managers] are masterful and women Robyn are bossy. So a woman has to prove she can I love the huge variety. A typical week do the job, while proving she’s not bossy. includes working with teams on marketing, That leads me to believe a woman has to to environmental projects, reviewing the IT be better than a man to be perceived as infrastructure; overseeing financial and legal. equal! Business Plus – Exclusive news, advice, learning and networking

Comparing women and men in management/operations Christina My husband and I have different leadership styles though I don’t know how much is gender related. He’s the risk-taker, the joker; I’m more cautious and serious. I don’t think my beliefs about behaviour at work are particularly because I’m a woman. I believe in being the same person at work as at home; to uphold integrity in all things. It’s a cop-out to be ruthless at work. Robyn You are so busy focusing on the job you don’t normally see being a woman as significantly different. Our reputation for being accommodating and flexible is partly due to my relating to family responsibility dilemmas. My husband’s and my style and skills are complementary but mainly from our backgrounds rather than our genders. Vicky Every man and woman brings multiple skills and disciplines to their roles. I try to balance the sometimes conflicting needs of

true to themselves the present and future requirements of the business and of the individuals in it. I guess that’s multi-tasking! Personal life and influences Christina Aged 53 with children aged 22, 19 and 16 years. Grew up in Putaruru til age 17. Mum was a homemaker, Dad a taxi-driver, instilling the importance of education, working hard and being a good person. Robyn Aged 46 with a son (18) and a daughter (16) who has a severe intellectual disability. Grew up in Whakatane with parents in business that provided much education and wisdom.

“Developing your own private business is great …you are not captive to anyone else’s boundaries.” - Robyn de Bruin-Judge

Vicky Raising two children. Grew up in Christchurch with both parents in business roles. Working for amazing companies and great people provided opportunities to learn, explore and take risks. I definitely would not be where I am without that huge variety of experiences. Preparing to reach the top Christina I’m an accidental leader.We started Aquatica 13 years ago after my husband was made redundant, and did most roles until the business grew so we could employ others and step back and become a manager as well.You discover that others are better at some roles than you are. To be top of her career a woman has to focus on each job she does and do it to her best. If her focus is on being as good as a man or like a man, she’s not focusing on the right things. Focus on yourself as a ‘person’ and people will respect you for who you are and what you achieve.

Robyn You need to look beyond your own company and understand the broader sector and business environment. Getting involved in groups like the EMA Manufacturers’ and Policy Forums and judging business awards has been useful. I definitely benefited from a five-day residential course for company directors. Vicky I don’t think it is easy for men or women to reach the top – few reach ‘the peak’. But for the Olympics or business the rules are: prepare and train; have different experiences, a good support network and coaches. The main differences for women versus men are the other tradeoffs such as time with children. Decide the right balance for yourselves. Pressure on women to do everything and have it all Christina I sometimes think achieving the right to work and be mothers only made us work twice as hard as our grandmothers. Sometimes I’d love to be a mum at home. My youngest was four when we started the business. She had a desk beside me at the office. At the time I believed I was short-changing the children, but now I don’t think so. Had I been a stay-at-home mum I would have done everything for them. They’ve grown up into lovely, confident, independent people and I’m immensely proud of them. Robyn There is a lot of pressure to do everything, but you have to decide whether or not to buy in to that. I have a lot of fun and would not do what I do just for the sake of it. Decide what’s important to you and your family, draw boundaries and support each other. Vicky There is a lot of pressure – a lot created by examples of ‘successes’ and the pressure women put on themselves. I have had to decide there are things I can’t

fit into my life right now. Working alongside husbands Christina We look after different sides of the business and can go for days Vicky Taylor only catching up at lunchtime. We frequently take work home but owning a business is not 9 to 5. Away from home and work we make an effort to not talk about work, and can do so for days at a time!

“We need to work hard on a relationship outside muesli! We have two young boys who are fabulous for reminding us that life is meant to involve splashing in puddles and eating lollipops.” – Vicky Taylor Robyn I really love working with my husband. We have been in business together for 18.5 of our 21 years of marriage. The key is a genuine mutual respect for each other’s ability, skill and roles (at work and home). We talk about the company most of the time but try to give it a rest on Sundays and holidays. Vicky Our skills complement each other. Working together has a huge upside – both working towards the same goals and strong joint vision of the future. But it does mean working on a relationship outside muesli! Our two young boys are fabulous for resetting our priorities and reminding us life is meant to involve splashing in puddles, eating lollipops and laughing at ridiculous jokes. We also take short breaks as a couple to really get away from it all.

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Authorities on trade, education, engineering lined up for forum on SE Asia giant Trade has determined the fortunes of Indonesia since about 800 BC so New Zealand has a lot to catch up with.

o help accelerate the development of our relationships with the region’s giant, a major forum (www. indonesiaforum.co.nz) is scheduled for September 28th in Auckland. The event is being hosted by Export New Zealand and the ASEAN NZ Combined Business Council. “We have a first world free trade agreement with Indonesia and its a great time to pick up on the opportunities being presented by it,” said Stuart Walbridge, Chairman of the ANZCBC. “They want our first world food and beverages, engineering and education services and we want access to the spending power of their rapidly emerging middle classes.” There are over 35 million people in Indonesia with western living standards. “Indonesia is a natural trade partner for New Zealand, but our business relationships there have been underperforming,” Mr Walbridge said. “Major themes of the day will focus on trade, education, and how to access procurement business in Indonesia’s

infrastructure, engineering and geothermal projects. The Forum will feature: • Prime Minister John Key, • Indonesia’s Deputy Minister of Trade Dr Bayu Khrisnamurthi, • HE Agus Sriyono, Indonesian Ambassador to NZ, • Sir Graeme Harrison, • NZ’s Trade Commissioner to Indonesia Fiona Acheson, and a strong group of authorities on S E Asia’s largest economy. The ASEAN NZ Combined Business Council is joining Export New Zealand to present the event with strong support from the Indonesian Embassy, NZ’s Ministry of Beca project Signature Tower Jakarta. Photo: Courtesy of Smallwood Foreign Affairs and Trade, Reynolds Architects and NZTE. “There’s tonnes of “Two sessions will be devoted to each latent good will in Indonesia for New of the Forum’s themes. Other topics Zealand as the PM discovered in April to be canvassed include New Zealand on the trade mission he led there, “Mr aid and business, and importing from Walbridge said. Indonesia.” “The PM will provide the government’s perspective on relations For the full programme go to: with Indonesia from that trade mission. www.indonesiaforum.co.nz

Building Export Markets report all positive with caveats

xports targeted to reach 40% of GDP by 2025. The work to boost exports outlined in the government’s first growth agenda report – Building Export Markets - is positive and very pleasing as it demonstrates government’s commitment to growing the economy EMA said on the launch of the report. The ambition to lift New Zealand’s exports from 30 to 40% of GDP by 2025 is exactly the sort of goal we need to aspire to, said EMA chief executive Kim Campbell. “But we can’t tell, and there’s no way

of knowing from the report if the policies and measures outlined in it can, or will deliver the target. “Since the report is a statement largely of current government policies and New Zealand’s attributes it can only deliver more of the same performance we’re already achieving. “We will likely need some game changing policies if our businesses are to be galvanized into more exporting and reach their potential. “Nonetheless, we firmly believe if all government ministers got out and backed

this package loudly and strongly and frequently, their leadership for exporting could trigger something of an exporting renaissance. “Otherwise, and in the absence of a sustained national exporting campaign, a significantly better economic growth performance which will require a greatly improved export performance, will require preferential tax rates for exporters and/or some other game changing measures that will attract foreign investment and offset the strong $NZ, the ETS, the RMA and other obstacles to our business competitiveness.”

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Recycling giant LanzaTech named ‘technology pioneer’

anzaTech biotech company founded in Auckland has been recognised as “an industry-changing company” by the World Economic Forum - the latest in a string of global accolades. Past recipients have included Twitter, blog search engine Technorati and Wikipedia parent the WikiMedia Foundation. LanzaTech’s technology uses bacteria to convert waste gases from industrial processes into ethanol and other chemicals, for instance, for biofuel.

LanzaTech said earlier this month that it had signed a deal with an American nylon producer to make bio-based butadiene, a chemical used in the production of synthetic rubber and various plastics. The firm, founded in 2005 by Sean Simpson and Richard Forster is now headquartered in Illinois. It raised US$55.8 million (NZ$69m) in funding from new investors in January it said would be used to boost research and development. It had since hired about 25 new staff

in Auckland, taking its R&D headcount there to about 90. LanzaTech recently teamed up also with big Chinese steel maker Baosteel to begin producing ethanol from waste at a plant in Shanghai.

Kiwibank reports record profit

Paul Brock, Kiwibank CEO

iwibank achieved an after-tax profit of $79.1 million for the year ended 30 June 2012, up from the previous year’s profit of $21.2 million. The 10-year-old bank has also been named the Sunday Star-Times Bank of the Year 2012. In the last year, Kiwibank: • Increased loans and advances by 8% from $11.5 billion to $12.4 billion; • Increased customer deposits by 9% from $10.6 billion to $11.6 billion; • Customers now exceed 800,000 with customer deposits 83% of all bank funding.

Kiwibank chief executive Paul Brock said the end of year result was very satisfying. He said Kiwibank “stirred up the market” with short term home loan specials including four-year and six-month specials. The one-year fixed rate of 4.99% offered in May required hiring new staff to take phone calls from customers and competitors’ customers. Kiwibank and New Zealand Post have been piloting a new shop layout as part of a three-year programme to change how both New Zealand Post and Kiwibank interact with customers.

new brand launch for Crombie Lockwood insurance company offices was a closely guarded secret, even internally. When the Rocket production team turned up for the installation at the company’s office in Newmarket, it was the first time the new brand had been exposed. The project kicked off about three months earlier with a site survey, design layouts and artwork. The production team then printed canvases and laid up sign panels in-house, ready for the scheduled installation. The rebrand was timed to coincide

with an internal Crombie Lockwood conference; the staff walked out of the old style offices and back into the fresh new branding. “About 200 signs, 100m of printed window graphics and 75m of canvas prints later, we had one very happy client.”

33 shops rebranded in 3 days

ocket brand designers met the challenge to rebrand 33 insurance company offices from Kaitaia to Invercargill, in just three days. Rocket director Ross Hall says the

David Wright ( aka “Laffe”) of Rocket finishes a rebranding installation.

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Glidepath turns 40

day of celebrations at the Auckland headquarters of Glidepath Group marked its 40th birthday last month. More than 100 guests attended alongside staff and their families. The company has specialised in airport baggage handling systems since 1972, including planning, designing and installing conveyer systems and integrated security screening. Glidepath has completed more than 550 projects in more than 60 countries. It has two fully integrated manufacturing facilities, one in Dallas, Texas, and the other in Auckland. In addition it has subsidiaries in Canada, Latin America, India, South Africa, China and Australia. Glidepath founder and chairman Ken Stevens is also national chair of Export New Zealand. He was awarded Exporters Champion for Exemplary Services to Export at this year’s Air New Zealand Cargo ExportNZ Auckland Awards.

The cake!

Port of Tauranga earns record profit

ort of Tauranga marked its 20th year as a publicly listed company by posting a record annual result. Highlights included: • Net Profit After Tax for the year to 30 June 2012 rose 26% to a record of $73.5 million. • Final dividend of 27 cents per share – the total year’s dividend was 39 cents per share - up 26%). • Total container volumes increased 35% to 796,024 TEUs. • Trade volumes rose 20% to 18.5 million tonnes from 15.4m. • Log volumes rose 11% to 4.9 million cubic metres.

• D airy volumes up 126% to 1.33m tonnes. Ceo Mark Cairns said freight traffic diverted to Port of Tauranga following industrial action at Ports of Auckland contributed less than a third of the increase during the year.

But KiwiRail was pivotal. “At short notice, it stepped up with increased services from MetroPort in Auckland to Sulphur Point from four to six trains per day giving capacity of up to 636 TEUs per day each way and continues to offer this service,” Mr Cairns said.

OfficeMax named most ethical office supply company EMA Rewards partner OfficeMax has been named one of the World’s Most Ethical Companies 2012. The list is compiled by the Ethisphere Institute, an international think-tank based in the US dedicated to the creation, advancement and sharing of best practices in business ethics, corporate social responsibility, anticorruption and sustainability. This year a record 145 companies

made the list. OfficeMax is the only office product supplier on it and also in the specialty retail category. Its win recognises OfficeMax’s global efforts in sourcing sustainable products, social accountability, audit of suppliers, and community initiatives. Last year OfficeMax introduced the programme “A Day Made Better” to New Zealand to recognise exceptional primary and intermediate school

teachers across the country. In 2011 OfficeMax was awarded ISO 14001 environmental certification and the EnviroCare label. OfficeMax New Zealand is a Packaging Council of New Zealand member and the Council’s voluntary Packaging Product Stewardship Scheme which began in 2010.

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IN OUR REGULAR SNAPSHOTS OF EMA MEMBER COMPANIES WE DESCRIBE THE BUSINESS OF PROFORM LTD BASED IN HAMILTON.

Proforma: Responding to what the When they wrote their first business plan for Proform Plastics Ltd in 1994, founders Tony Smith and Ferris Townsend hoped to make and sell perhaps 2000 moulded polyethylene bed or tray liners a year for utility trucks. They thought if they could do that they might be able to turn a profit. 18 years later the company employs 120 people making 140,000 bed liners a year, among related other products, distributing them to 65 countries.

his year will be the biggest yet, though Tony admits to a dip in sales after 2008. The first really big break came when Tony and Ferris decided in 1998 to take a stand at the world’s biggest auto accessories trade show, SEMA, in Las Vegas. Interest far exceeded their hopes. Two clients even pursued them back to their home base in Hamilton, New Zealand.

Proform’s reputation for precision and quality are amongst their competitive strengths

One reason was that theirs was a solution for the times. Nick Smith explains Proform was the first company anywhere to tool up to supply polyethylene bed liners for utility vehicles outside the US. US vehicle makers had adopted them, but they were not previously available for Japanese utes, or makes or models from other countries. And utes were rapidly much more than just the tradesman and farmer’s work-

horse; they were becoming the life styler’s vehicle of choice. Appearance was, and is important. Relationships vital Soon Proform was forging relationships with Toyota, Nissan,Volkswagen and Mitsubishi. Over 75% of their products are supplied to original equipment makers (OEM). Proform is currently a Tier One supplier to GM, their bedliner an integral part of the

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“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.

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customer wants Holden Commodore ute’s structure. The investment in tooling to keep pace with the new range of models and types coming forward is commensurately huge; Proform maintains a large warehouse stacked high with liner moulds, and is constantly developing new models. Twelve dedicated staff work fulltime on expanding the product range. Investment in product development and R&D exceeds 5% of company turnover. Since the heady, early days focused solely on bed liners, now Proform makes sport lids for utes, canopies, cargo liners, in fact liners for any large container to extend or enhance its life or appearance. They even find favour in horse trailers and for other animal enclosures. Trade shows To test their ideas and seek more intelligence on their competitors – including two in Thailand - Tony and Nick return to SEMA and go to several other key trade shows every year. It’s where they can keep an eye on trends and gather market intelligence. “With car makers starting to globally source accessories our competitors have a huge advantage over us,” Nick says. “They have proximity to market, and New Zealand is never going to be a low cost country. Competitive strengths So I ask the obvious question: What does Proform attribute its success to? Nick’s reply captures the strengths of New Zealand manufacturing. He says they make a wide range of products, are very flexible, will do short runs, will put others’ brands on their products, and will tool up for unusual and short production runs. “We also pack containers with a mix of various liners,” he said. “Our competitors typically sell only by the container packed with a single type.” In short Proform proves the case for agile, short run, niche manufacturing. Nick says: “We’re not the cheapest; but

Sam King designs in a cab’s specifications

we are the most flexible. We have to be; Hamilton is not the ideal place to be making liners. “But our biggest asset is our distribution networks. We have the relationships needed to make our business work.” Quality, precision Tony Smith added they made sure their product quality was first class too. “Some of the other liners used to be terrible,” he said. By 2004 the Smith family bought out partner and friend Ferris Townsend. Proforma upgraded their ISO9000 certification and were granted the automotive industry’s holy grail, QS9000. Today the company is focused on the future. They are obsessive about IP, and “we

love R&D,” Nick says.They run a Lean programme and count New Zealand Trade and Enterprise amongst their blessings. In the early days NZTE researched markets on their behalf, and helped set them up, Nick said, and they work a lot with NZTE still. The biggest challenge? Nick responds: “Its in developing new products, and finding ways to fund that. “If we were to look to government for anything it would be in R&D. Delivering value from our R&D investment is the biggest barrier, that and finding staff with the skills we need. “But for that matter, we also have trouble finding unskilled staff that meet our basic requirements.”

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Out & About Launch of Corporate Governance – a practical handbook that includes contributions by Phil O’Reilly, CEO of BusinessNZ – Auckland

| 1 Alan Brookbanks [Auckland Council] and Kevin McCaffrey [Effective Governance] | 2 Johan Swanepoel [ Auckland Council] and Marnus Beylefeld [WHK] | 3 Kathleen Lyne [Effective Governance] and Simon Telfer [Appoint Better Boards] | 4 Kevin Reilly [ASB Bank] | 5 Grant Taylor [Auckland Council] and Karen Martyn [book editor] | 6 Rob O’Neill [Sunday Star-Times] | 7 Dione Kimpton [CCH] and Lesley Whyte [Women on Boards] | 8 Jo Douglas [EMA Legal], Mark Goodsell and Nicola Street [ Australian Industry Group] | 9 Kathryn Asare [BusinessNZ] and Brian Emery [Te Roopu Taurimu o Manukau] | 10 Greg Sequeira [Auckland Council]

Lunch with Minister of Energy and Resources Phil Heatley on the Future of Mining in NZ – Auckland

|1 Gary Gray [ASB Bank], Peter Atkinson [EMA] and Marshall Hudson [EHome Global (NZ)] |2 Julie Rowland (The University of Auckland] |3 David Foley [EMA] and Keith Tremlow [Transdiesel] |4 James Carmichael [Vector] |5 Hector Furtado [Supreme Steel Products], Bruce Jackson [Nicholl Jackson] and John Lauer [Patten Brumby CA] |6 Vinod Hira and Mark Booth [Mitsubishi] |7 Nicholas Albrecht [Vector]

SEPTEMBER

EMA Alert

Payroll Legislation Essentials

Taking Charge of an 26 Accident Investigation

Gain a comprehensive working knowledge of wage related law applicable to the wage function. When you combine this course with Managing Employee Leave you will have the complete payroll legislation package.

Confusion over what is a performance issue or what is a disciplinary issue can be both disruptive and costly to your company. This practical guide shows you steps to keep substandard or unacceptable employee behaviour out of your business.

With this half day toolkit, find out what you need to know and do when the unthinkable happens in your workplace; and how best to deal with the investigation consequences.

Auckland | Contact Craig

Auckland | Contact Deborah

NZICA, Auckland | Contact Karen

Customer Service Skills for Call Centres

This workshop covers the fundamental ideas and competencies required to solve problems, build trust, increase repeat business, exceed expectations and develop great customer relationships. Auckland | Contact Luclia

Team Leader Toolbox – Getting the Work Done

1-2

Implementing and Running Effective Safety Committees

Committee meetings must be structured from the meeting itself to the reporting back to all those concerned. Learn how to construct an agenda, write minutes, produce a recommendation, and report back to people in the workplace. Hamilton | Contact Craig

Auckland | Contact Deborah

Your communication style can make or break the relationship you have with your customers. Using the TetraMap© you will learn how to enhance your communication style for greater customer satisfaction. Rotorua | Contact Lucila

Conference Contacts Karen Joe | 09 367 0959 | conferences@ema.co.nz

Hamilton | Contact Deborah

How resolution of conflict, or more specifically conflict prevention, is the most important skill in the modern workplace and in life itself. Achieve more with keys to resolving inevitable difference between humans.

Communicating with Your Customers

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.

Conflict Resolution

OCTOBER

To Performance Manage or Discipline?

Governance

10-11

Governance skills have become increasingly critical for directors, trustees and managers. Understanding the role of being a director, the value of a board, why it exist and how it should operate are essential for today’s companies. Auckland | Contact Deborah

The Ultimate Sales Professional This programme will take you on a developmental journey that will help you become a high performing sales professional. It is run one day a month for 10 months and due to popular demand, we have added new course dates. Auckland | Contact Deborah

Did you know, EMA Tailored Training can deliver a wide range of workshops fully customized to reflect your workplace… at your workplace? Contact Rhonda Spence rhonda.spence@ema.co.nz Mobile 021 664 321

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

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