Jo Douglas discusses the sometimes competing obligations for employers under immigration policy and employment law obligations.

With borders closed, many businesses are focused on retention of staff, and recruitment from the limited available pool of labour in New Zealand.  

In some industries there is a real shortage of skilled labour. Immigration policy has also had a “reset” for the longer term and in the medium term, the borders are being opened on an “exceptions” basis. 

What this tight labour market means is that employers must be very careful around retaining staff, having in place really good employment practices, and being an employer of choice.  

Accessing the current available pool of migrant workers in New Zealand may not be a straightforward process. There is a need to meet sometimes competing obligations under immigration policy and employment law obligations. 

In a recent ERA case, an employer endeavouring to meet their obligations to Immigration NZ was found to have fallen foul of the requirements of the Employment Relations Act 2000.  

Principally, the obligations under the ERA are around clear communication and making sure an employee knows if their ongoing employment may be at risk. These overarching principles apply in almost every case where an employee’s employment may end, including those who are engaged on temporary work visas. 

In Gill v Restaurant Brands Limited, [2021] NZERA 61 the ERA ordered the employer to pay $18,000 compensation for hurt and humiliation to their former employee, who had been engaged as an Assistant Restaurant General Manager and whose employment was terminated based on the fact that his work visa was due to expire. To continue in employment, he needed to obtain an essential skills work visa. 

He was found to have a valid personal grievance because of the way in which his employment was ended, with little communication or advance consultation. He had no clarity that the employer considered it was not in a position to support his visa due to the labour market test – he was simply given notice of termination.   

This decision sets out the Authority’s view of what an employer’s obligations are in relation to the situation where an employee’s work visa may be extended.  

 Employers must let employees know as early as possible if the employer may not be able to support their visa application and the reasons why. For example, it might be that the labour market has changed and there are more skilled people available to do the work now, compared to when the visa was first issued. If it is thought the visa application is unlikely to be successful, this should be discussed with the employee. 

Employers should consult prior to confirming any decisions which may impact on ongoing employment. If it appears that the employer must prefer a local candidate over an employee on a visa, the employee should be given the opportunity to be consulted prior to the decision being confirmed. This might allow, for example, the employer and employee to consider whether the employee may be eligible to get a visa under another visa category and could continue their employment.

It will not be justifiable to terminate an employee on a visa due to expire, prior to the expiry date of the visa, as they still have a right to work up to that time. The employee should be given the full opportunity of this time to obtain a visa which may allow employment to continue. 

One option, touched on but not discussed in this ERA decision, is the use of a fixed term agreement. This may be appropriate in cases where individuals are offered employment on temporary entry visas for the duration of the visa. That then allows the employer to reconsider the labour market test, at the point when they wish to support the individual for both a new visa and a renewal of their employment agreement. Visa and employment documentation can be aligned to the end date for both, and extensions can be consulted over, in light of the obligations to Immigration NZ to check the availability of a New Zealand resident or citizen to perform the job.  

Fixed term agreements are, however, an exception under the ERA and the fixed term must be properly documented in the employment agreement, setting out the genuine reason for the fixed term and how the agreement will end. Fixed term agreements must only be used for proper purposes and cannot be used to test suitability for employment or to avoid employment rights. 

Employers are strongly encouraged to get expert advice when considering hiring or ending employment of migrant employees, so that they can be clear they are meeting their obligations both from an immigration and employment relations perspective.   

We remind employers to think carefully about their policies and procedures around communication and consultation, in all cases, where the employer is considering making a decision that the individual’s employment may end. 

Jo Douglas is a partner at Douglas Erickson, employment lawyers. 

This article is written for the purposes of providing general information only and is not intended to be legal advice.