Knowledge This week we discuss how workplaces with high rates of burnout could be failing to meet their minimum obligations under New Zealand employment law, and the tools available to remedy this.
But first, we look at how employers around the world have responded to burnout and discuss whether these are effective strategies to curb a workplace culture of “busyness”. While these examples go beyond complying with minimum obligations, they are by no means panaceas to long-term or chronic job stress.
Paid time off
We have recently commented on Bumble’s decision to give its staff a week off work. While the terms around that have not been publicised, it is an arrangement Kiwi employers could also put in place. This could be achieved by offering:
- Time off in lieu (TOIL) – an arrangement where employees are compensated with time off for working beyond their contractual hours of work
- Special leave – a voluntary arrangement where the employer agrees to continue paying the employee for time away from the workplace, without the employee using their annual leave or sick leave balance
- Wellness leave – allowing employees to take a number of days off for personal reasons (separate to annual leave, sick leave or bereavement leave entitlements)
These arrangements are often seen as the most effective as they are designed to allow people to fully unplug. If your organisation is considering one of these measures, we recommend that both parties are aware of how it will work before agreeing to it.
It is important to ensure those taking leave are actually able to have a break and do not feel pressure to monitor emails or take work related calls during their time off.
Flexible working
Deloitte has also made the news, for letting staff choose their own hours and “when, where and how they work”. Although these measures have not been cited as a direct response to employee burnout, they represent one possible solution which could allow employees to break up their day or change their work environment, to decrease stress and work when they are most productive.
From an employment law perspective, employers thinking of implementing similar arrangements should be mindful of their obligation to meeting minimum wage obligations and ensuring that employment agreements allow for flexibility across working hours and days.
Fringe benefits, bonus payments or paid overtime
Employers around the globe have offered their employees other benefits such as paid gym memberships or professional development opportunities to promote work-life balance or finding passion and harmony. An example of this is Jeffries Financial Group Incorporated offering its junior bankers a Peloton bike and Apple products in appreciation of their hard work.
Others may offer performance incentive payments or paid overtime to employees who work more than their contracted hours. Although these items go beyond complying with minimum obligations, we question whether they are effective or even appropriate responses to employee burnout resulting from working longer hours. We recommend getting advice around these payments as they are often not made in isolation and impact a number of other obligations, such as holiday pay.
What are the minimum statutory obligations in New Zealand?
The New Zealand employment law framework contains a number of safeguards for employee rights by setting minimum conditions of employment which employers must provide. We discussed these in our article with Umbrella Wellbeing. As well as being a compliance issue, a failure to meet these standards can be an indicator that workplace burnout is present – or imminent.
In our view, these minimum standards can be used as tools for managing and responding to burnout. For example:
- Ensuring employees have the opportunity to take breaks for rest, refreshment and personal matters – the length and timing of these breaks will be determined by the number of hours in the workday, as well as the nature of the work and organisational needs;
- Providing “reasonable consideration” for availability to work additional hours, as discussed below;
- Ensuring compliance with the Minimum Wage Act which states employees (including salaried employees) must be paid at least the minimum wage for every hour worked;
- Ensuring compliance with the Holidays Act – for example, by paying employees correctly for public holidays and honouring annual leave, sick leave and other leave entitlements; and
- Providing a healthy and safe workplace, which is an obligation under the Health and Safety at Work Act 2015. We will be exploring this in more detail in our next article.
What if these minimum obligations are not met?
A breach of any of the above obligations may see employers answering a wage claim or personal grievance from an employee, or being subject of a complaint to the Labour Inspector. The remedies available to an employee, if they are successful, include compensation for lost earnings (retrospectively and in the future), lost benefits and humiliation, loss of dignity and injury to feelings (a remedy designed to compensate non-economic loss).
An employer could also be liable to pay fines or penalties to the Crown, which vary depending on how serious and sustained the breach is found to be.
Employers should also be wary of the human cost of avoiding employment obligations.
The impact on employees should be enough on its own, but add to that a high rate of staff turnover, an inability to get good staff due to reputation of poor employment practices and loss of institutional knowledge and productivity.
The flow-on effects would see profitability reduced and more managerial time spent recruiting, which takes resources away from meaningfully addressing burnout.
What if staff need to work extra hours?
With the push for working longer (or flexible) hours constantly growing, many employers may find their standard employment agreements do not reflect the reality of their staff’s working patterns. As well as being at risk of a breach of contract, this is problematic because the law also requires employees to be reasonably compensated for being available to work outside their agreed hours of work. This is additional to the requirement to pay staff at least minimum wage for every hour worked.
If you are finding staff consistently work over and above their contracted hours, or the organisation needs them to be available outside ordinary working hours, we recommend seeking specialist employment advice regarding remuneration structures and employment agreements to ensure your organisation is complying with the law.
Looking ahead to the next article in our burnout series, we encourage employers to monitor working patterns and consciously measure the impact of their solutions to burnout.
Contact the Black Door Law team for advice around options for responding to workplace burnout, in a way that is aligned with your organisation.