Posted by Dew James on April 21 2021 in News

The recent Employment Relations Authority (ERA) decision in Dilshaad Gill v Restaurant Brands Ltd [2021] NZERA 61 3069072 highlights the importance for employers to thoughtfully balance their seemingly competing obligations under New Zealand Employment and Immigration Law.

This decision brought into sharp relief the tension between an employer’s obligation to act in good faith[1] and the requirement to not continue employing someone who loses their right to work in New Zealand[2]. The ERA’s decision, which has garnered some criticism from the bar, demonstrates the general confusion which exists around this topic and the best way to manage it.

In this article, we provide a practical guide for employers to help manage staff on temporary visas.

Step 1 – Obtain evidence of right to work in New Zealand

Unwittingly employing a person who does not have the right to work in New Zealand is not a defence unless the employer can demonstrate that it “took reasonable precautions and exercised due diligence”[3] to make relevant inquiries.

One simple way to establish the immigration status of a prospective employee is by requesting a copy of their passport and/or visa. Alternatively, use Immigration New Zealand’s (INZ) online VisaView tool.

Keep a copy of this evidence with the employee’s personnel file.

It is also prudent to make any offers of employment or continued employment conditional on employees maintaining their legal right to work in New Zealand.

Step 2 – Diarise key dates

It is critical for employers to diarise the expiry dates of employees’ visas.

It is equally important to diarise a ‘reminder’ three to six months before the visa is due to expire. This should provide sufficient time for employers and employees to make a plan.

Step 3 – Meet and make a plan

The three-to-six-month reminder should act as a trigger for employers to schedule a meeting with affected employees to discuss their plan for obtaining a new visa.

During this meeting: ­

  1. Encourage the employee to seek independent immigration advice. This will enable them to explore the visa options available as well as understand the risks and limitations associated with each one. Employers unfamiliar with the immigration and/or employment process should themselves get independent legal advice.
  2. If applicable, communicate the business’ intention to support or not support the employee in their next visa application. Clear reasons must be provided for any decisions made, particularly if the decision is to discontinue support.

An employer may struggle to justify a decision to refuse to support a permanent employee with applying for a subsequent work visa given the pervasive obligation to act in good faith.

Step 4 – Labour market testing

This step only applies to employers supporting employees with Essential Skills Work Visa (ESWV) applications.

Employers must check the local labour market before offering employment (or continued employment) to non-New Zealanders.

Commence labour market testing (LMT) as early as possible before an employee’s visa expires to allow sufficient time to:

  1. prepare and post the job advertisements including securing a Skills Match Report from WINZ (if necessary).
  2. review and consider applications received.
  3. undertake interviews with job applicants.
  4. consider the options you and your employee have if the LMT produces New Zealand citizens and/or residence class visa holders (New Zealanders) who are available to take up the role on offer.

A New Zealander will be deemed "available" by INZ if s/he has the requisite qualification(s), skills and/or experience to take up the role on offer or can be readily trained to do that work.[4]

Note that the migrant employee is not required to re-apply for their own job as part of the LMT process.

Step 5 – Discuss outcome of the LMT

This step also only applies to employers supporting employees with ESWV applications.

Employers should keep affected employees updated on the outcome of the LMT. This is particularly important if the employer discovers New Zealanders available to take up the role being performed by that migrant employee. This is because INZ will not grant an ESWV if New Zealanders are available to do the work.

That said, the discovery of New Zealanders is not necessarily fatal to the migrant employee’s ability to secure a further work visa or continue working for their New Zealand employer.

As such, although there is no case law clarifying the extent of an employer’s duty of good faith in situations where an employee’s visa is expiring, best practice may be for employers to consider whether there are alternative options for retaining the migrant employee.

For example:

  1. Review other vacancies available within the organisation and consider if the New Zealander would be more suited to that alternative role.
  2. Review the organisational structure and business needs of the team within which the migrant employee currently works, and consider whether:

 - it would be more appropriate to create a new either more senior or junior role than the one advertised for the New Zealander; or

 - a job-sharing arrangement between the migrant employee and the New Zealander is necessary to meet demand.[5]

  1. Consider the possibility of redeploying the migrant employee into another position within the organisation. Note however that redeployment must follow a fair process and could trigger the need for a separate, new LMT.
  2. Consider whether the migrant employee could work remotely from offshore.
  3. Check with the migrant employee if they have received advice on any alternative immigration options. For example, eligibility to apply for a work visa under a different category.

Employers should also keep in mind that they are not compelled under Immigration or Employment Law to offer employment to New Zealanders discovered during the LMT process. That decision remains the employer’s prerogative.

Step 6 – Terminate the employment relationship

Employers should promptly advise migrant employees as soon as it becomes clear that it will not be possible to continue supporting them to submit an ESWV or other work visa type.

This will allow the employee time to get further legal advice and consider their options.

An employee may decide to try for an ESWV despite an unfavourable LMT outcome. In that case, an employer may need to supply the LMT results to INZ even if it will likely be fatal to the employee’s application. If INZ declines the employee’s ESWV application, the employer can terminate the employment relationship at that point.

In most other cases, if by the expiry date of the existing work visa, the employee has not secured a further work visa, employers are within their rights – and are indeed compelled – to terminate the employment relationship. This is to ensure that the employee does not continue working in the business without the legal right to do so.[6]

This legal requirement does not however vitiate an employer’s ongoing duty to act in good faith, as reflected at section 350(7) of the Immigration Act 2009 which states [emphasis added]:

No employer is liable for an offence against this section in respect of any period during which the employer continues to allow any person to work in the employer’s service in compliance with the minimum requirements of any employment agreement (within the meaning of the Employment Relations Act 2000) relating to the giving of notice on termination of employment.

As such, a perceived but incorrect fear of committing an offence under the Immigration Act 2009 will not protect employers who fail to follow due process and act in good faith in bringing the employment relationship to an end owing to the employee’s inability to secure a further work visa.

For the risk averse employer who wishes to avoid allowing an employee to work beyond their visa expiry date (even if it is to work out the notice period), consider placing the employee on garden leave[7] or reaching an agreement to pay the employee for the notice period without requiring them to work during that period.

Food for thought

INZ is on the cusp of releasing its much-anticipated new Accredited Employer policy which shifts the responsibility of managing the immigration process from employees to employers[8].

As such, it has never been more important for employers who employ non-New Zealanders to keep abreast of their obligations under both Employment and Immigration Law, and to understand the intersection between the two.

Not all Employment Law experts understand or appreciate the complexities of Immigration Law. The same is true in reverse. It is up to employers to ask the right questions and seek help from a variety of experts to protect their interests.

Get in touch with our team of Employment and Immigration Law experts for advice and guidance on any employment and/or immigration issues you are facing within your business.

Kalev Crossland | Partner | Kalev.Crossland@shieffangland.co.nz

Dew James | Solicitor | Dew.James@shieffangland

Tony Sung | Associate | Tony.Sung@shieffangland.co.nz

Author: Dew James

[1] Employment Relations Act 2000, section 4.

[2] Immigration Act 2009, section 350(1).

[3] Immigration Act 2009, section 350(3).

[4] Immigration New Zealand Operational Manual, Instruction WK3.10(a).

[5] Note that some visa categories mandate minimum weekly hours of work.

[6] Immigration Act 2009, section 350(1)(a).

[7] This is only permissible if the employment agreement contains a garden leave clause or if the employee agrees.

[8] For details on the upcoming new framework, read our previous article linked here.

This paper gives a general overview of the topics covered and is not intended to be relied upon as legal advice.