When asking Kiwis what their entitlements are when it comes to annual leave, holidays and resignation, the responses are generally vague. Government statistics show that over 50% of working Kiwis have held their current employment position for less than 18 months, therefore, it is imperative for them to be familiar with employment law and employee rights.

Resigning
An Employment Agreement ("Agreement") generally allows for employees to resign at any point in employment given they provide notice of resignation ("Notice"). Notice can be given in the manner specified in the Agreement or in writing at a minimum.
When resigning there are various options available; however, for the purposes of this article, two options are discussed in detail: Gardening leave, or an Agreement.
Firstly, employees may take what is often known as Garden Leave. Garden Leave allows for employees to be bound by their employment obligations and be paid as normal, whilst not undertaking work for the remainder of their Notice.
Granting Garden Leave requires mutual agreement by the employee and employer, although this agreement may be given under the Agreement. Gardening Leave is often used where employers wish to restrict the departing employee's access to clients or confidential information.
Secondly, an Agreement can be reached between the employee and employer to terminate employment immediately rather than at the expiry of the Notice. If an employee does leave prior to the Notice period finishing, without the consent of the employer, the employer is entitled to seek damages or losses in the Employment Relations Authority or Employment Court. These damages may include the costs of hiring additional staff for the period of the Notice or the loss of work opportunities due to the lack of staff available.
In light of the potential repercussions outlined above, it is imperative that any agreement of this nature is documented in writing.
Final Pay
An employee is entitled to request their final pay on the last day of work rather than the following payday.
The final pay must include:
* All hours worked since the last payday until the end of employment;
* Any annual holidays, public and alternative holidays accrued; and
* Any additional lump sum or other payments owing which may be included in the Agreement or negotiated as part of leaving.
If the final pay does not include the bulleted points above, employees are encouraged to, in the first instance, seek any entitlements in arrears from their employer. If a dispute arises, other options available include making a claim for a breach under the Agreement or the Employment Relations Act 2000. In the event of such a dispute, it is recommended to seek legal advice.
 

Holidays
Under the Holidays Act 2003, employees in New Zealand are entitled to a minimum of 4 weeks paid annual leave ("Leave") per year with the opportunity to take at least 2 of the 4 weeks Leave continuously. Unless otherwise agreed, leave entitlements are subject to the employee working 12 months for the same employer.
Leave pay must be the greater of the ordinary weekly pay or the average weekly earnings over a 12-month period, prior to the Leave. The latter may be more relevant for employees who work on a commission basis or non-periodic schedules.
If an employee has worked for a 12-month period for the same employer, the employee may agree with their employer to either:
* Take all Leave accrued that year; or
* Take a portion of Leave accrued as soon as possible and carry over the remaining Leave into the next year; or
* Be compensated financially for up to one week of Leave.
On resignation, if an employee has not reached 12 months of employment; they are still entitled to payment for annual holidays being calculated at 8% of their gross earnings during employment.
Employees are entitled to request unpaid leave in addition to their leave entitlements.
Summary
It is recommended that before resigning from a position, the Agreement's terms and conditions are read and understood. Understanding your entitlements and the right to request or demand an act or information as an employee is tremendously beneficial. This knowledge provides protection and ensures employees are informed, and treated fairly by their employer.
 

Easter Sunday is not a public holiday, yet most businesses used to have to be closed on this particular day. However, changes to the Shop Trading Hours Act 1990 (the "Act") that came into effect in August 2016 mean that all territorial authorities (city and district councils) now have the power to have a local Easter Sunday shop trading policy to permit shops to open on Easter Sunday in areas comprising the whole or part(s) of an authority's district. At least 25 of the 67 local councils in the country have already passed bylaws allowing shops to open on Easter Sunday.
The changes to the Act stipulate that employers who plan to open on Easter Sunday must notify their employees of their right to refuse to work on Easter Sunday ("Notice"). The Notice itself may be in the form of a letter or memo delivered in person, or by email or via group email or in a way that is specified in the employment agreement ("Agreement"). Notice must be provided to the employee between four and eight weeks in advance of the relevant Easter Sunday. The employer is required to repeat this practise each year they would like an employee to work on Easter Sunday.
In the event an employee has commenced employment within four weeks of the relevant Easter Sunday, the employer is required to give this employee Notice as close to the start date of their employment as possible.
Please note that the process described above cannot simply be written into an Agreement. New legislation makes any provision in an Agreement which requires an employee to work or be available to accept work on Easter Sunday, unenforceable.
If a business is prohibited from operating on Easter Sunday (due to the relevant territorial authority not having a local policy or the business falling outside the existing exemption categories) but they would still like their employees to work on Easter Sunday, for instance, to stack shelves or do a stock take, they are still required to follow the practice of written notification as would have been done if the business had been open to the public for the day.
Employees who have received Notice and intend to exercise their right to refuse to work are required to inform their employer by a notice in writing within 14 days of the date they received the Notice. This can be by letter or email or in a way specified in their Agreement.


 

Where an employee has started work within 14 days prior to the relevant Easter Sunday and has received Notice and wants to refuse to work, that employee must give the employer their notice as soon as possible after receiving the Notice from the employer.
If the employee does not follow these notice requirements, and their Agreement has a clause stating that they can be required to work on Easter Sunday, the employer can require them to work.
If the employer does not follow the notice requirements and requires an employee to work on Easter Sunday, their actions are likely to be viewed as compulsion and would expose them to a personal grievance claim by the employee.
Scenarios where the employer would be likely to be deemed to have compelled an employee to work include instances where:
They have added working on an Easter Sunday as a condition of the continuing employment of an employee;
They have unfairly influenced the shop employee to try to convince them to work on an Easter Sunday; or
They have required an employee to work on Easter Sunday without giving them the correct Notice as prescribed by the Act.
Employers are barred from treating their employees adversely for exercising their right to refuse to work. Examples of treating an employee adversely may be not offering an employee the same working conditions compared with another employee in similar circumstances, or dismissing or retiring an employee.
If an employee thinks that they have been treated adversely by the employer because they refused to work on Easter Sunday, they can raise a personal grievance claim against them.
If you are an employer and need guidance on the Easter Trading laws, we recommend you seek advice from a lawyer.
 

Family trusts are a practical structure for holding assets, particularly in New Zealand where there are approximately 300,000 to 500,000 trusts operating today. Currently, the Trustee Act 1956 and the Perpetuities Act 1964 contain provisions which need to be read in conjunction with case law regarding their operation, and do not keep up with present-day trust practices. Therefore, the updates regarding trust law under the current Trusts Bill ("Bill") are long overdue, being the first significant reform for at least 60 years. The Bill will replace these Acts, clarify core trust concepts and create more practical trust legislation.

Overview of proposed changes
The underlying principles of the Bill are largely derived from the Law Commission's views in 2013 which recommended that the existing law should be more comprehensible rather than introducing substantial changes. The Bill aims to facilitate the progression of trust law through the courts while also providing:
*  A description of the rights and obligations under an express trust e.g. family trusts;
* Clarity regarding compulsory and default trustee duties (derived from existing legal principles) and the exercise of flexible trustee powers (including trustee agents and delegates) when managing trust property;
*  Requirements for managing trust information and disclosing information to beneficiaries (where applicable) so they are aware of their position;
*  Transparency around establishing, varying and terminating trusts to achieve cost-effective administration of trusts;
*  Alternative dispute resolution mechanisms to pragmatically resolve internal and external trust-related disputes;
*  A description of some of the court's powers and avenues available for court assistance; and
*  The circumstances in which trustees must or may be removed or appointed outside of court.
Trusts subject to the Bill
The Bill will apply to all (including existing) express trusts; however, it can also apply to trusts that are created under an enactment that is consistent with the Bill or as the courts direct.


 

The Residential Care Subsidy ("Subsidy") is becoming increasingly topical as New Zealand's 65+ population is projected to increase from 15% in 2016 to over 25% by 2068. The growth in this population will increase the number of Subsidy applications for financial assistance for long-term residential care in a rest home or hospital ("Care"). Despite the predicted growth in applications, many New Zealanders are not aware that their current asset planning has the potential to affect the outcome of a Subsidy application significantly. In light of this, advice surrounding asset planning in consideration of a Subsidy application is essential.
The Ministry of Social Development ("MSD") determines Subsidy applications. When considering an application, they will conduct a financial means assessment to determine whether the applicant qualifies under the prescribed eligibility thresholds. This includes both an asset and an income assessment.
Before the applicant undertakes the income assessment, MSD will first assess whether they qualify under the asset assessment ("Assessment"). The asset thresholds for the Subsidy are as follows:
a)  A single applicant or applicants that have a partner in Care: The total value of their assets must not exceed $224,654.00 including the value of the family home and vehicle;
b) Applicants who have a partner that is not in Care can elect to be assessed under either of the following thresholds:
i. Their assets must not exceed $123,025.00 (not including the value of the family home and vehicle); or
ii. The total value of all their assets (family home and vehicle included) must not exceed $224,654.00.
 

The Gifting Provisions
MSD implemented gifting thresholds to prevent the giving away of assets with the purpose of attempting to qualify under the asset thresholds for the Subsidy.

Gifting thresholds apply to gifting commonly, i.e. birthday gifts, and gifting undertaken to a Family Trust ("Trust"). Gifting to a Trust is when an individual ("Settlor(s)") who owns assets such as houses, cash and shares, sells these assets into a Trust. In return, the Trust owes a debt back to the Settlor(s). The debts are then "forgiven" by the Settlor(s) through a process called gifting.


 

The MSD gifting thresholds are:
* Five years before applying for the Subsidy each person can gift up to $6,000.00 each annually. In this case, those in a qualifying relationship under the Property (Relationship) Act 1976 ("relationship") may gift $6,000.00 each.
*  Beyond five years before the Subsidy application, a couple or individual can gift up to $27,000.00 annually. In this case, those in a relationship may gift up to $13,500.00 each.
Gifting that falls under the prescribed gifting thresholds will not be considered in the Assessment. However, if an applicant has sold an asset into a Trust that exceeds the gifting threshold, MSD will consider the value of the asset that exceeds the gifting thresholds as a personal asset. For example, an applicant sells their house valued at $300,000.00 to their Trust in 2011 and gifts annually until 2016; they apply for the Subsidy in 2017. MSD will subtract the value of the prescribed gifting being $27,000.00 in 2011 and $6,000 annually until 2016. The remaining $243,000.00 will be considered a personal asset under the Assessment. The applicant would not qualify for the Subsidy in this instance.
Please see diagram above which offers a visual aid to the implementation of the MSD gifting thresholds:If the same applicant had a partner who was not in Care, it may have been more beneficial for the applicant to hold the property as a personal asset. If the house was a personal asset, in this case, they could be considered under the eligibility threshold which excludes the value of the family home and vehicle if they chose. The applicant would qualify for the Subsidy in this instance.
Please note MSD will only consider gifting to a Trust that has been completed and will not take into account any entitled gifting that has not been completed.
Recommendations:
1. Plan in advance. If a Subsidy application is likely, and you own a trust; implement a consistent gifting regime so that you can take advantage of MSD's prescribed gifting thresholds.
2. If you already have a trust or are considering forming a trust and may apply for the Subsidy, consider seeking legal advice on your position, including whether you could consider selling your home out of your Trust to meet the Assessment.
Please note that this article only covers aspects of a Subsidy application. For more comprehensive advice, please seek legal counsel.
 

Wacky Christmas Laws and Practises
In the Spirit of Christmas, here are some strange practises and wacky Christmas laws from around the world:
1. In England, it was illegal to eat mince pies on Christmas Day from 1653 to 1658;
2. In America, Christmas was banned from 1659 to 1681;
3. In Caracas, Venezuela, on Christmas Day, the roads are closed, so people roller skate around the city; and
4. On Christmas Eve at noon, the Declaration of Christmas Peace is read in a formal ceremony in South Finland which states that any behaviour which jeopardises the joy of the holiday will be met with the full force of Finnish law.
New Zealand's laws are not as wacky; however, the following is worth a mention. Christmas Day was not considered a public holiday until the Arbitration Act 1894, and the Holidays Act 1910 implemented the legal entitlement to take Christmas Day off.
 

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