An exciting and scary development in Artificial Intelligence (AI), Chat GPT is affecting us all in the workplace. Recently, I ventured into the abyss and tried it for the first time. I asked it to “Write an article on the impact of Chat GPT on employment in New Zealand.
What is work? It may seem a simple question however the answer is surprisingly complex.
We are likely to all agree that once an employee is at work and being productive, they are working and therefore entitled to be paid. The question becomes more contentious when considering less clear-cut circumstances such as the time traveling to and from work, having to sleep over somewhere because of work, being on-call but not actually at work, or being at work but not being as productive as expected.
There are now a number of Employment Relations Authority (ERA), Employment Court and Court of Appeal cases that help us define which scenarios are deemed to be work. The importance of the distinction is an employer’s obligation to pay for ‘work’ at least at the minimum wage or the rate specified in the Employment Agreement. Failure to meet this requirement raises the possibility of a financial penalty being imposed as well as the back pay which includes all amounts owing going back six years.
The case of the Anaesthetic Technicians and the South Canterbury DHB focused on whether being ‘on call’ was work. The Court decided that for the Technicians it was work. There were considerable restrictions on the employees while they were on call, particularly the requirement to be at work within 10 minutes of being called. The Court applied three criteria to help determine whether being on call was work.
- The constraints placed on the freedom the employee would otherwise have, to do as she or he pleases.
- The nature and extent of the responsibilities placed on the employee.
- The benefit to the employer of having the employee perform the role.
Not all ‘on call’ situations will meet the criteria and there have been cases where the employer’s requirements were not considered to be ‘work’. Review your organisation’s circumstances against the criteria to identify if there might be a risk.
The Dickson v Idea Services Limited case had a significant impact on New Zealand employment law. It was the first case that outlined the three criteria for defining work that are listed above. If an employee is required to ‘sleepover’ somewhere other than their usual residence, are they entitled to be paid for all of the time they are away from home, including when they are asleep? For an employee going to a conference or training that requires an overnight stay, some aspects of the event may be considered work but other aspects not. Once the conference is completed and the employee is free to do what they like, the time is unlikely to be considered work. However, if you required the employee to attend the evening function to network then that is likely to be deemed work. The time to travel to and from the event is also likely to be deemed work.
Determining if travel time is ‘work’ was addressed in the case of the Labour Inspector v Silviculture Solutions Ltd (SSL). Again, the three criteria were applied. The company provided transport to remote forestry sites but didn’t pay their employees while travelling. The ERA determined that “travelling to work in the work van involved constraints on the freedom of the worker to do as he or she pleased during that time and the time was spent for the benefit of the employer, that is getting labour into a position and place to carry out tasks necessary for the company’s business.” As such the travel time was ruled as being work.
The same analysis applied to time spent on arrival at the day’s work site in preparing equipment and taking part in a safety briefing, which did not appear to be included as part of the ‘productive’ hours for which SSL paid. The company also breached minimum wage requirements when paying piece rates and deducting pay for any rework needed.
The penalty awarded against the employer for breaching the Minimum Wages Act in this case was $35,000. This was in addition to the back pay owed. A rough calculation of this was made based on owing each employee $2000 per year, with 150 employees per year multiplied by six years – a staggering $1.6 million.
It is essential to get this right. In the first instance review your own practices and if in any doubt, seek some professional assistance.