Summer 2010/2011 Newsletter

They Say Good News Travels…

The summer promises some positive news for the Bay of Islands and mid north.  In addition to the World Cup events later in 2011, it is anticipated that the first stages of the coast to coast cycle way will be opened by late February 2011.  The Otiria – Kawakawa and Kaikohe – Okaihau sections are “on track” and the district has high hopes that the cycle way will increase tourism, as well as benefiting the community through jobs and local use of the facility.

Also on the visitor front, 26 cruise ship visits are programmed for the season October 2010 to February 2011.

The Canadian World Cup team is considering using the facilities available at Kerikeri and Kawakawa.  World Cup road shows will be held at the Haruru Falls Resort on 8 December, and have already taken place in Kerikeri at the Kerikeri Sports Complex on 24 November.

90 Day Trial Periods – Get it Right

The Government’s proposed changes to the Employment Relations Act 2000 (‘ERA’) include extending the 90 day trial period to all employers, rather than just those with fewer than 20 employees.  A trial period allows an employer to dismiss an employee within the 90 day trial period without fear of a claim from the employee of unjustified dismissal.

The first decision on the interpretation of the 90 day law, Smith v Stokes Valley Pharmacy (2009) Limited, demonstrates that an employer must comply strictly with the provisions of the legislation.

In this case, Heather Smith was working in the Stokes Valley Pharmacy when it was sold.  Heather was offered a job with the new employer and on 1 October 2009 commenced work for them.  On 2 October 2009, she signed a new employment agreement which contained a 90 day trial period.  The new employer quickly became dissatisfied with Heather’s performance, and relying on the trial period provisions, terminated her employment in December 2009.

Heather commenced proceedings and, despite the existence of the trial period, the Employment Court found that Heather could make a claim for unjustified dismissal.

Under s67A of the ERA, trial periods can only apply to a person who has not previously been employed by the employer.  When Heather signed her employment agreement on 2 October she had already commenced work, even if it was only for a day, and so she was no longer a ‘new employee’.  The employer argued that Heather had, by her conduct, accepted the terms and conditions of the draft employment agreement as it was provided to her on 29 September 2009.  The Court rejected this argument and held that the agreement must be signed and, until it was signed, it remained a draft that could be amended.  The result was that the trial period was void and Heather could claim unjustified dismissal.

This decision also discussed the requirement of good faith in relation to trial periods.  It was found that an employer is not obliged to notify an employee, who is employed under a trial period, of the employer’s intention to dismiss them. Once dismissed, if an employee requests an explanation for the dismissal, good faith requires that they must be given one.

It was also found that if an employer claims reliance on a trial period, the employment agreement must be terminated lawfully and in accordance with s67B (1) of the ERA, which requires notice to be given.  While there is nothing in the ERA determining the length or form of this notice, in this case Heather’s contract required 4 weeks notice.  The court found that the two weeks notice period given was deficient and the agreement was not lawfully terminated.

This decision highlights the need for compliance with procedures and with the provisions of the ERA.


Citizens Advice Bureau – New Service

Citizens Advice Bureau NZ (CABNZ) launched a new website in September giving the public direct online access to a database of approximately 40,000 service providers, community organisations, clubs and societies, as well as access to legal information across a wide range of subject areas.  Kerikeri and the Bay of Islands is well served by an active group of CAB volunteers based in the Proctor Library building, but answers to those practical questions and conundrums may also be found at

Do you need to update your will?

Have you recently married, remarried, or had your marriage dissolved?  If so you may need to urgently review your will.  Marriage or remarriage automatically revokes an existing will, unless it was expressly made in contemplation of that marriage.  If you have separated or your marriage has been dissolved, there is no similar cancellation of an existing will.  To ensure your former spouse or partner does not benefit, a new will is the only way to provide for new beneficiaries and to remove a beneficiary who is no longer that “special person“.


Natural Disasters & Insurance:  Are you Covered?

The consequences of the September earthquake in Canterbury will continue to be felt long after the physical reconstruction has been completed.  The emotional toll will remain and only diminish over a long period of time.

One of the important factors in reducing the personal consequences of tragedy is financial security and we encourage all our clients to review their insurance arrangements.  New businesses are particularly vulnerable because they may not have an earnings history on which to base an insurance claim, despite having insurance in place.  Some insurers are now providing tailor made policies

offering better protection to new businesses.  This includes business earnings protection and income replacement insurance for individual owners working in their businesses.

One of the issues highlighted by the earthquake has been the inability of businesses to trade, not because they suffered crippling damage themselves, but because damage to neighbouring buildings or infrastructure resulted in those streets becoming “no go” areas.

Professional advice about insurance and the meaning of policies can help dispel misunderstandings and confusion about your cover.  Don’t wait until it’s too late!



DNA Collection

From 6 September 2010 the Criminal Investigation (Bodily Samples) Amendment Act 2009 extended police powers, giving them the authority to take DNA samples from individuals who are arrested.  Previously, samples could only be taken with the individual’s consent, or where there was a court order, or police-issued compulsion notice, or the person had already been convicted of an offence.

These new powers are being implemented in two stages:

1)         From 6 September 2010 the police can take DNA samples from individuals who have committed indictable offences, such as those punishable by more than 7 years imprisonment.

2)         At a date yet to be set, these powers will then be extended to include individuals accused of any imprisonable offence.

Justice Minister Hon. Simon Power believes the key benefit will be the ability to solve “cold cases” and identify some of the 8,000 unidentified DNA samples.  It is predicted that stage 1 will result in 4,000 more samples a year and 2,800 links to the crime scene database.

Safeguards have been put in place.  The police have developed guidelines, individuals will be penalised for misusing DNA, and if someone is not convicted DNA samples will be destroyed rather than stored.

Government Response to Canterbury Earthquake

Parliament moved quickly to pass the Canterbury Earthquake Response and Recovery Act 2010 (‘the Act’), which received Royal Assent on 14 September 2010 just 10 days after the earthquake struck. The Act will remain in force until 1 April 2012.

The Act grants the Government wide powers to make Orders in Council (‘Orders’) to relax or suspend provisions in any enactment that:

  • may divert resources away from the effort to respond to the earthquake, or
  • may not be reasonably capable of being complied with as a result of the earthquake.

The Orders may be used to temporarily override almost any law and are likely to be used to authorise such matters as the destruction of buildings, regulate drainage and sanitation, and modify or extend town planning provisions.  Unlike previous earthquake legislation, the Act does not specifically state what financial assistance the Government will provide and it does not create a right to compensation.  Instead it establishes a Recovery Commission that will provide advice to the relevant Minister on Orders in Council and the prioritisation of resources and how funds should be allocated.

The Act has been strongly criticised because of the lack of checks and balances on government and ministerial powers.

Critics claim it is one more piece of legislation in a trend toward overriding usual constitutional safeguards.  The Major Events Management Act 2007, passed with the need for urgency on world cup projects in mind is another Act criticised for a lack of accountability in its process and decision making.


End of Year News

Our accountant/office manager Yvonne Burgham is leaving us to move to Auckland where she will be closer to her family. We will miss Yvonne and wish her well.


All information in this newsletter is to the best of the authors’ knowledge true and accurate.  No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter.  It is recommended that clients should consult a senior representative of the firm before acting upon this information.


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