Department of Natural Sciences

Consumer and employment law for animal businesses.

CAC; The animal Facility

Today’s lecture

• Employment law• Consumer law• How does the law affect marketing your business?

(discussion exercises)

Our focus:• We are interested in how the law affects animal

businesses, and how we should behave in business

dealings with customers and employees• We imagine that you may some day run a business or

will be employed in one and need to understand a little

of how the law works

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• Our purpose is to outline how the law works for you as both the potential future business person, and a consumer who through your life will purchase many goods…

• This is not a “Law” lecture

• If you ever need real legal advice please consult a lawyer.– Free legal advice; http://www.communitylaw.org.nz/Free-Legal-Advic.101.0.html– Citizen’s Advice Bureau; http://www.cab.org.nz/Pages/home.aspx

• Also public agencies. – Ministry of Business Innovation (Employment); http://www.dol.govt.nz/er/index.asp – Consumer Affairs (Government); http://www.consumeraffairs.govt.nz/– Consumer.org (private); http://www.consumer.org.nz/

• Information for traders, the Commerce Comission– http://www.comcom.govt.nz/

Preliminary disclaimer

Imagine this:

• You just opened a small animal business, what laws affect you in running your business?

• As a private individual what are your rights?

• Employment laws?

• Consumer protections?

• Anything else?

• As an employee

• Buying goods

EMPLOYMENT LAW

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Roles of employment law:

• Provides a framework for employer – employee relationship

• Sets minimum terms and conditions of employment – which cannot be overruled by an employment agreement

• Regulates workplace standards and conditions.

Employment Law• Sources of Employment Law:

– Statutes enacted by Parliament

• Over 20 including the Employment Relations Act, the Health and Safety in Employment Act 1992 and the Holidays Act 2003

– Common Law, i.e. decisions of courtand tribunals

– Employment Agreements

– Other sources

• Long-standing customs and practices or an organisation’s policy manual

• Local government authorities (building codes and environmental standards)

• International Labour Standards

Statutes : Some Examples…

• The Employment Relations Act 2000 (amended 2004)

– Governs all employment agreements

– Establishes the institutional framework and procedures for the negotiation of agreements and the resolution of disputes.

• The Health and Safety in Employment Act 1992

– Aims to provide safe workplace environments for all employers, visitors and customers

• The Holidays Act 2003

– Gives all employees an entitlement to three weeks paid annual holiday, 11 days statutory or public holiday on pay, and periods of sick leave and bereavement leave

• The Injury Prevention, Rehabilitation and Compensation Act 2001

– Provides a no-fault basis for the rehabilitation and compensation of those who suffer accidental personal injury

• The Protected Disclosure Act 2000

– Protects people from retaliation when disclosing wrongdoing by their employing organisation

• The Privacy Act 1993

– Best practice principles to promote and protect individual privacy.

• Minimum wage act 1983

– Sets the statutory minimum wage in NZ

The Employment Relations Act 2000

• (ERA) and amended 2004

• The letter of the law; http://www.legislation.govt.nz/act/public/2000/0024/latest/DLM58317.html

– Governs all employment agreements

– Establishes the institutional framework and procedures for the negotiation of agreements (employment contracts) and the resolution of disputes.

• Employers and employees act in ‘good faith’ in negotiation

• Protects the right to collective bargaining (Unions)

• Enshrines equal employment opportunity ideal

• Provides for equal pay for the same work

In practice

• collective bargaining

• interaction generally between employers, employees and unions

• union access to workplaces, and

• consultation about restructuring

(from the State Services Comission Guide to the ERA)

Precepts:

• Primarily defines ‘Good Faith’ in context of unions and employers– E.g. definition by unions may have been different from

Employers, the latter whom were viewed with possible distrust

– Protect union achieved benefits– Prevent employers from trying to persuade employees

away from collective bargaining

ERA 2004 amendment

• Updated regularly

• Current minimum wage $14.25 (2014)

• Starting-out wage (previously the new entrant wage) $11.40 A starting-out wage

may be paid to:

– 16 and 17 year olds starting out in the workforce with less than 6 months work history;

– 18 and 19 year olds who have been on a benefit for six months or more and not

completed 6 months work; and

– 16 to 19 year olds in training in a recognised industry training course involving at least 40

credits a year, as part of the employment agreement.

– http://www.dol.govt.nz/er/pay/starting-out-wage/index.asp

• A trainee 20 years or over doing at least 60 credits of study is also able to be paid

the starting out wage, if the training is part of the employment agreement.

Minimum wage act 1983

CONTRACTSA focus on…

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• Contract of employment:

Employee undertakes service or work in return for payment by- employer. Legal aspects have been developed over the centuries through common law principles.

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Principles

• Provide work as agreed

• To pay fair and reasonable wage instructions

• To provide a safe place of work, free of hazards

• To compensate employees for expenses incurred

• To be (present) at work

• To be lawful and reasonable

• To exercise the skill and care

• To work faithfully and honestly

Human resource manager

Selecting job analyses

Selecting and recruiting staff

Analyse the need for training

Completing exit interviews

Health & Safety

Appraisal systems

HR manager

roles

Team building and advice on motivation

HOW DOES CONSIDERATION OF THE LAW AFFECT YOUR BUSINESS?

Discussion exercises

Questions; Default employment rights

• You have a job and get paid weekly but there is no contract signed between you and your employer. What legal protections do you have under NZ Employment law?

• Do you require a contract to protect your rights?

• Why would you want a contract?

• What is the 90-day trial period??

• Since 1 July 2001 it has been compulsory for employers to provide contracts. The employer must keep a copy of the contract. The employer should make the contract available to the employee if required.

Employment contracts

I need a contract please

Safety and OSH compliance…

• What is the consequence of not having a safety policy and manual for your business?

• What is the likely impact of a serious accident or death under the above circumstances?

• Why do you need to record accidents and incidents (near misses)?

CONSUMER LAW

The Consumer Guarantees act and Fair Trading acts were reviewed (passed into Law on 17 December 2013). These changes are summarised in this presentation where applicable. The law changes are mostly active from 17 June 2014 which allowed a 6-month ‘grace period’ for businesses to get ready for the changes.

These changes are all about looking after consumers in the changing environment and affect online trading, auctions and second hand sales (ie- they reach Trade-Me and other new trading environments) in particular…

Laws changing on 17 June 2014

Consumer Guarantees Act

“Consumer”• consumer means a person who—

• (a) acquires from a supplier goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption; and

• (b) does not acquire the goods or services, or hold himself or herself out as acquiring the goods or services, for the purpose of—– (i) resupplying them in trade; or– (ii) consuming them in the course of a process of

production or manufacture; or– (iii) in the case of goods, repairing or treating in trade

other goods or fixtures on land

S2(1)

• trade means any trade, business, industry, profession, occupation, activity of commerce, or undertaking relating to the supply or acquisition of goods or services. S2(1)

“trade”

But note exceptions:

• (Section 2)– resupply in trade– consume in process– repair/treat other – goods in trade

• (Section41)– Not “in trade”– Charities– Auctions*

*From 17 June 2014 auctions will be covered

Are these goods covered?

Are these services covered?

Guarantees Implied : Goods

Title (s5) : The seller has a right to sell the goods and they are free from any undisclosed security

Acceptable Quality (s6): Defined in the Act (s7)… basically, what a reasonable consumer, aware of any defects, would find acceptable

Fitness for Particular Purpose (s8): any purpose that the consumer makes known to the supplier or the supplier represents to the consumer

Comply with Description (s9)

Guarantees Implied : Goods …

Guarantees Implied : Services

Guarantees Implied : Services …

• Reasonable Care and Skill: (s28)

• Fitness for Particular Purpose: (s29)

• Completion within Reasonable Time: (s30)

• Reasonable Price: (s31)

A closer look at Goods : If failure can be remedied…..

Thebulbs

blown.

And…if the failure can’t be remedied

Extra or Consequential Losses...

The Act (s18) provides that:If the failure can be remedied…• the consumer may require a supplier to remedy the failure within a

reasonable time

If the failure can’t be remedied…• Or is of a “Substantial Character” (e.g. the goods would not have

been purchased by a reasonable consumer fully acquainted with the nature of the failure) then the consumer has the option of rejecting the goods and obtaining a full refund in cash

• Extra Damages: In both cases the consumer may obtain from the supplier damages for any loss to the consumer resulting from the failure which was reasonably foreseeable

Contracting Out of the Act is illegal…*

NO REFUNDS

* By a “trader” in a transaction with a consumer

• Will cover auctions (includes Trade-Me) and auctioneer licensing

• Stronger protection for online purchases (Q: what is an online trader?)

• New processes for second hand transactions– If you buy second hand goods you will need a good record of the product, any

claims by the seller, record of payment, condition of goods claimed at sale or advertised.

• For more information see:– http://www.comcom.govt.nz/fair-trading/changes-to-the-fair-trading-act/– http://www.consumeraffairs.govt.nz/legislation-policy/changes-to-consumer-

laws

Amendments from June 17 2014

Image: www.consumeraffairs.govt.nz

Fair Trading Act 1986

NOT

Key Section… section 9

• Prohibits “misleading or deceptive” conduct “in trade”

…examples?

It will not be misleading if no one would believe it.

e.g. …

• It needs to be actually misleading or “likely” to mislead…

• e.g. (a real legal case)…

Likely to mislead who?

• A reasonable person to whom the advertising is directed at.

Commerce Commission

• Promotion & Education

Enforcement

Section 9

• Prohibiting “misleading or deceptive” conduct “in trade”

• Has civil remedies only (NOT criminal) i.e. no fine or imprisonment … could still cost you though!

• The civil remedies are…

Section 41

Civil Remedies :

Injunctionse.g. cease trading

Section 42

Civil Remedies Order to Publish

e.g. a retraction

Section 43

Civil Remedies : Other Orders s43

–Repair–Refund–Replace

However…there are more particular sections which impose criminal

liability as well as civil. These include…

Section 10 goods

Section 11 services

Section 12 employment

Criminal Liability?

• The Commerce Commission can issue fines where Criminal actions are demonstrated [breach of the Fair Trading act]

• Up to $200,000 for a body corporate ($600,000 from June 17, 2014)

• Up to $60,000 for an individual ($200,000 from June 17, 2014)

Defences?I made an

honest mistake.

• Ignorance of the law is not a defence

• An honest trader is aware of the law and their responsibilities.

Is there such a thing as an ‘honest mistake’?

• Extended warranties; will have to explain what they offer that is not already a component of the CGA

• Unsubstantiated claims; law clarified, any claim about a service or product must be self-evident

• Unsolicited goods; customer must clearly request a product

• Online sales; a business must identify themselves as a trader if selling online

• Lay-by sales; redefined

Law changes 17 June 2014

Advertising Claims?

Evaluate the following slogans or claims for their possible impact on your business. Will they land you in court?

• “We guarantee to fix your dog’s behaviour”

• “Your animal won’t suffer side effects from vaccination”

• Discuss

…and what else do businesses need to worry about?

• Keeping accounts (7 years) [discussed next week]– Transactions (cash register)– Cash book (record cash transactions)– Receipts and invoices– Cheque and deposit books, bank statements

• Tax [discussed next week]– Company tax– GST– Payee tax

…and what else do businesses need to worry about?

Credits

• Original material J Fulcher, 2007

• Edited and updated; S Chambers, 2008-2014

• Images, clipart unless stated otherwise