Tax issues

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Channy Mao said under the Employment Relations Act, a volunteer became an employee if they were rewarded for the work they performed.

The line was also crossed when an employer gained an economic benefit from a volunteer’s activity.

Another key test centred on hours of work. People were classed as employees if they had no choice over the hours they worked, and what they did.

‘‘It has to be clear on both parties that there is absolutely no expectation of payment. At the very least there should be no control over hours and types of duties,’’ Mao said.

The value of any payment in the form of accommodation had to be more than the adult minimum wage, she said. Grant Thornton tax partner Geordie Hooft said accommodation businesses should be aware of their tax obligations.

‘‘Even though staff are not being paid cash, the value of accommodation with which they’re being provided is treated as if it was cash. So if the value of the accommodation was $200 a week, they have to pay PAYE on that.’’

Employers also had to do GST returns ‘‘the same as if they’d supplied the accommodation to a regular customer,’’ Hooft said.

Contracts

Businesses taking a casual approach to travellers helping out in return for a free bed were taking a risk according to Chen Palmer employment law specialist Claire English.

She strongly recommends formal written agreements for both employees and genuine volunteers so all parties are clear about what they will get out of the arrangement.

‘‘For the volunteer that could be that they get work experience, that they get contacts, and get to be part of a team …if the volunteer is not happy with not being paid once they have seen the hours you expect in writing, then that is your trigger,’’ she says.

‘‘If there’s nothing in writing, then the business is hugely exposed confidence. Australian pay packets in the first quarter of 2016 have recorded their slowest growth since a wage price index began in 1997. Employees and unions will not be happy with the response from employers to increase wages.

That is because previously, unions had helped employees to annual increases in the order of 5-10 per cent for the last decade or so. That is well ahead of annual increases in New Zealand over the same period of 3-4 per cent.

In both countries, there are other influences at play. Technology advances, particularly from the quest for innovation and so called ‘disruptive technologies’, have seen jobs threatened and business models change in many sectors, from retail and media to hospitality and transport providers.

In the majority of these cases, the unions simply lack the skill and ability to help members do anything about this.

In this new world, the question I am asked regularly, is how do we save jobs?

Also, what can employers, unions and government do to ensure the least amount of economic and social disruption particularly during wage agreement negotiations?

There are no easy or quick answers, but better career education is a good start.

In my experience, the majority of unions in this country and other developed economies have not kept pace with changing technology and labour market dynamics.

Union services are no longer viewed as essential or even necessary for younger and/ or new entrant employees. to either a complaint from the volunteer, or a determination from the Labour Inspectorate that this is not a volunteer arrangement.’’

How long is too long?

Some accommodation businesses advertising on backpacker sites ask volunteers to commit to at least two weeks work, with one Christchurch backpacker hostel wanting a someone to work for a minimum of three months.

English said businesses employing ‘‘volunteers’’ for weeks at a time risked creating an employment relationship.

‘‘More than a month would raise red flags for me.

‘‘There’s a sniff test here. Are you looking for someone to help you out with filing for a few days because they’re a student in your field?

‘‘Or, are you actually looking for someone to do secretarial work, and what you really need is to have someone to help you out for three weeks to a month?’’

Risks for employers

Mason said people with concerns about their situation could contact

This is obvious with the numbers of New Zealanders now on individual, rather than collective employment contracts. Unite and First Union however are the exception and are steadily increasing their membership.

There is evidence that over a 10-year period unionised employees have on average received one or more per cent over and above what non-unionised persons received on similar jobs.

Many employers in NZ adopt the practice of bargaining with their unions first and then passing this on to all other persons in their employ. In effect this further weakens union appeal. Some top NZ bosses, Air New Zealand’s Christopher Luxon being an example, have lead the drive for something different, looking for a shift away from the populist adversarial the Labour Inspectorate and it did not require a complaint from an unhappy volunteer to take enforcement action.

Businesses breaching the Employment Relations Act could be held retrospectively liable for failing to pay minimum wages, holiday pay, sick leave and other benefits normally offered to employees, he said.

‘‘The arrears could be substantial.’’

What about Wwoofers?

Willing Workers on Organic Farms (Wwoof) has a long history in New Zealand and director Andrew Strange is unhappy that the term Wwoofing is increasingly used to refer to any arrangement where work is performed for accommodation in lieu of wages.

He said Wwoofing was a cultural and educational exchange on organic properties where visitors were treated as part of the family, and worked four to six hours a day. bargaining to a more employee centric approach.

He and a couple of other large employers in NZ have revisited the collaborative engagement model first tried in the 1980s.

Given the right company leadership, resources and a favourable political and economic cycle this has potential.

The downside for traditional unions however, is that the more successful this approach is, the less the need exists for any external party to play a role at the bargaining table.

The better organised unions continue to expose ruthless and opportunistic employers in NZ. But on the whole we remain the envy of conservative politicians and business community of Australia.