Newsletter - June 2024
There is something about reaching the half-way point, that gives you both a bit of hope and also a good reason to stop and take a breath. No doubt there will be a fair few of us out there, looking forward to a break and hoping that the next six months in 2024 improves on the first. With all that is going on, perhaps now is a good opportunity to rug up in the cooler climate and think about how you can weather the months to come. Times are indeed challenging, but there are also plenty of good news stories out there as well, and certainly plenty of good advice available if you need it.
In this month’s newsletter we try and tackle a few of those more challenging issues, particularly for businesses considering a restructure (as things tighten up) as well as looking at how you can get on top of your debtors, to ensure you have the cashflow to stay afloat. While things are tough, we want to ensure that businesses have as many of the right tools available to see them through to the other side. We also look at how you might tackle the issue of social media commentary (by your employees) when it may impact on your business.
Survive until 25 (2025 that is), seems to be the motto of the day and our team is here to assist you in your personal or commercial legal matters and to give you the expertise and assistance you need to make it to not only survive but also to thrive.
Employee Facebook Posts - Are They Really Private?
Social media - love it or loathe it, it is everywhere and used by almost everyone in some way shape or form. This includes being used in and around the workplace, where sometimes the workplace becomes the star attraction. With people having virtually unlimited and instant access to social media channels that in turn give an unlimited amount of people access to the information being shared, it becomes incredibly difficult to monitor, manage or even contemplate the potential for an employee to discuss your business online.
The question is however, what can a business do in this situation, how much of that information is in fact private and what do you do, when one of your staff decides to take their employment related issues, concerns or thoughts out in to the very public world of social media.
An employee in a previous legal example, who posted comments on her private Facebook account was dismissed for serious misconduct due to the comments being contrary to the employer’s code of conduct and the employer’s interests. The posts related to comments and opinions about COVID vaccines and Muslim immigration into NZ.
The employee claimed the posts were private because they were only accessible to a closed group of her 86 friends on Facebook, however the Employment Court found the posts to such a group were in fact not private. The Court noted some of the Facebook friends were other employees of the employer.
Posts, Likes & Complications
Social media is everywhere and used by almost everyone, but what happens if one of your employees is using it to air their workplace issues?
She therefore should have been aware that the Facebook posts could be the subject of an employment investigation, and the employment investigation and dismissal for serious misconduct was fair.
The Court of Appeal declined her application for leave to appeal.
Any employment investigation in respect of disciplinary issues needs to be conducted fairly and when it comes to traversing the issue of social media commentary, and what is and isn’t within the boundaries a very considered approach is crucial. Our team can guide your business through an investigation, navigating complex issues of privacy, confidentiality, and fairness required for a robust process.
If you are concerned about social media posts or messages relating to any of your employees, we recommend you get legal advice before commencing any investigation or taking disciplinary action.
Our team have the experience to navigate this with you to ensure you reach a fair, sensible and practical outcome.
Tough Times Ahead - Staying Ahead of Debtors
The combination of high inflation and interest rates seems to have created a perfect storm and the general consensus is that the New Zealand economy is facing the toughest times experienced in a generation. Our dealings with our clients and in business generally suggest that many people and businesses are doing it tough right now and this is likely to remain the case for the foreseeable future.
Are Your Debtors Under Control?
When times are tough, one of the first things to be impacted is speed of payment, and of course for most us, how quickly (and regularly) we are paid is the key to staying afloat.
One of the most important things that can be done in an environment like this is to ensure that invoices are paid, and debtors remain under control. How businesses deal with their creditors and debtors could mean the difference between success and failure (or even survival) during these challenging economic times.
The best approach entails both the fence at the top of the cliff and an ambulance at the bottom. By this we mean:-
· Up to date, robust and fit for purpose terms of trade which protect the supplier of goods or services as much as possible; and
· Efficient and proactive debt recovery processes, able to be implemented in the case of default.
Terms of Trade
Turner Hopkins has a great deal of experience in assisting and advising a wide range of clients in preparation of their terms of trade to ensure that they are fit for purpose. In many cases, terms of trade should include the following protection:
Personal Guarantees – where the directors of the customer company accept personal liability for any amounts outstanding in the case of default.
PPSA registration – providing a general security over the assets of the customer company which can be called upon in the case of any default in payment of invoices.
Caveats over property – this places the creditor in a position similar to a mortgagee if there is a default in payment.
Default provisions – providing for a defaulting customer to pay interest on all accounts outstanding and bear responsibility for any legal costs and disbursements incurred.
The specific terms of trade that are suitable for a client will depend very much on the industry and profile of that client’s customers. We are always happy to provide initial advice and recommendations to our clients at no charge and in many cases our clients find that new or revised terms of trade can be implemented very efficiently and economically.
Debt Recovery
For several years Turner Hopkins has been one of New Zealand’s leading providers of high-volume debt recovery services to a number of large companies including a trading bank, one of New Zealand’s largest retailers, several of New Zealand’s most highly regarded specialist debt recovery agencies, financial service businesses and large, medium sized and small clients. Our approach has always been simple and straightforward. Once a debt is referred to us, we approach the defaulting customer and require payment within a short period of time. The cost of this letter of demand is modest and, in many cases, results in a satisfactory conclusion by payment being made.
If the debt remains outstanding, we recommend commencing legal action in the District Court in the case of individuals or by way of statutory demand if the debt is owed by a company.
Surprisingly, it is commercially viable to pursue even very modest debts in this manner. In most cases debts over $1,000 are commercially viable and in almost every case a significant portion (or all) of the costs that have occurred in pursuing the debt will be recoverable against the debtor in the case of a successful outcome, i.e. by way of payment. Often it is necessary to obtain a judgment against a debtor and commence enforcement proceedings (including bankruptcy action) to ultimately recover the amount outstanding. It is almost invariably the case of the squeaking wheel receiving attention.
In the current economic environment, it is also important to get in early to ensure that you have the best prospect of recovery, particularly when a customer is facing financial difficulties.
We are always happy to provide advice as to the strategy to be adopted and our recommendation as to the best course of action, at no charge, and to ensure that our clients have the very best prospect of obtaining a full recovery.
Restructuring - Getting The Process Right
We are getting a lot of enquiries from businesses facing commercial decisions on restructuring their business due to current market struggles. These can be really tough decisions for businesses, as well as unsettling and difficult for employees.
We can guide your business through the process, offering practical advice, assistance in getting your consultation documents together, and advising along the way on procedural requirements under employment law.
It’s easy to get the process wrong, two recent cases highlight what the consultation process really requires in a restructure.
How much information does the employer need to provide to the employees as part of the consultation process in a proposed restructure?
Under section 4 of the Employment Relations Act 2000 the employer is required to provide the employee with access to relevant information about the proposal, however this is limited where there is a good reason to maintain confidentiality of the information. The Court of Appeal recently considered the extent of these obligations and found:
a. The company was not justified in withholding information from its employees due to commercially ‘confidential’ information. A fair and reasonable employer in this case should have considered whether it could maintain the integrity of its commercial position while providing the information about the proposed restructure to its employees. The company should have looked at options or mechanisms getting around the ‘confidentiality’ issues, which it failed to do.
b. Therefore the termination of 5 employees for redundancy was unjustified.
c. The Employment Relations Authority decisions were upheld, awarding the 5 employees:
i. $5,000 - $8,000 each as compensation for unjustified dismissal.
ii. Four weeks’ wages for notice that was unpaid.
Fitting The Pieces Together
Restructuring your business in difficult times can be a complicated and also emotionally challenging process (for all parties). Getting the process right, can ease some of the stress.
If a consultation process is included in an employment agreement then the employer must follow that exact process.
In TVNZ v E Tu Incorporated [2024] NZ Emp C 93 [31 May 2024] TVNZ argued it had complied with the consultation process by generally fulfilling its obligations to consult, and the exact wording stipulated in the agreement should not be read as a prescriptive process. The Employment Court disagreed, and found the process set out in the employment agreement was plain in meaning and must be followed. It ordered TVNZ to comply with the agreement and re-consult as required.
If your business is considering any business changes and restructuring, get in touch with our team, we can guide you through the process and provide you with template communications with your staff.
It’s a tricky process and it is easy to make small mistakes which can be costly for your business.
Turner Hopkins - We Heard You
Feedback is the breakfast of champions…although I think most people might just prefer a good slice of toast. However feedback is a very important part of how we deliver our services and to ensure we are on track, we run net promoter surveys every six months, seeking feedback from our existing and former client database.
A net promoter score (NPS) for those who are unfamiliar with the term is essentially the number left over when you take away the not so good feedback from the positive responses, leaving out those in the middle (neutral). That score gives you an indication as to how your clients are receiving your service and is also a great opportunity to find out where you might be able to improve.
Feeding Back
Our regular Net Promoter Score surveys have been a valuable tool in making sure we are able to provide our current and future clients with the service they expect and deserve.
Our most recent survey, conducted in the first week of June, provided some amazing responses (thank you to all those who took the time) and also gave us some good insights in to areas that we might be able to develop further.
Our end result was a score of 62, which for those of you familiar with the NPS process is an excellent result, particularly within the legal services sectors, where scores are often closer to 30 or even lower. This is consistent with our previous score results from December 2023, which was very encouraging to see.
Achieving these results is however not down to just one person, but a combined effort from every member of the Turner Hopkins team and something we put a lot of energy in to promoting as part of our overall culture.
Again, thank you to those who provided their feedback and particularly the very kind comments that were submitted by individual responders. There was one in particular that stood out and illustrates not only how we feel about our clients and the work we do, but gives us pride in being able to deliver that service the way we hope to.
“We felt listened to and that there was hope”
We will be rolling out our next survey in December 2024, although anyone is welcome to send their feedback at any time using our online feedback form.
That wraps up another month with the Turner Hopkins team as we say farewell to the first half of 2024. In July, and as we start the second half of the year, we will be providing you with some updated family law news, more case studies and examples from our specialist immigration team and a more detailed look at the residential and commercial property markets.
Remember, if you are in need of any legal assistance, particularly in these tougher times, then our team are here to assist.
Stay safe, stay warm and stay tuned.
The Team - Turner Hopkins
