Oh come all ye faithful, joyful and compliant

Home Insights Oh come all ye faithful, joyful and compliant

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Contributed by: Richard McIlraith and Kylie Dunn

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Published on: December 11, 2015


Christmas is just around the corner, Old Saint Nick is filling up his sleigh, and that means it’s time for Christmas parties and functions. With that in mind we have drawn up our Christmas list of things to watch out for over the holiday season to ensure that the New Year gets off to a smooth start and you don’t get labelled the Christmas Grinch! 

For guidance on leave entitlements see our November update.

Gifts of Christmas cheer

Gift giving (and, of course, receiving) is an enjoyable part of Christmas. However, when it comes to the giving and receiving gifts in the workplace, there are a few things that you should be aware of during the festive season. In particular:

Christmas bonuses

Christmas marks the end of the working year and a time when many employees are expecting (or hoping for) a Christmas bonus. When considering your obligations to employees in this regard, the first question to answer is whether a bonus is a contractual entitlement or discretionary benefit. Where a bonus is contained in an employee’s employment agreement and any criteria are fulfilled, you will be obliged to pay it. 

Alternatively, a bonus may be ‘discretionary’. Discretionary bonuses must be treated with caution. Even if a particular bonus or gift is expressed in discretionary terms, it may arguably have become contractual if you have a custom or practice of paying an end of year bonus every year and have promised that this practice will continue. In these circumstances you may need to consult with staff if you are contemplating tightening the purse strings this year.

Receiving gifts from clients

Many companies have policies regarding the giving/receiving of gifts in relation to customers or suppliers. Now is a good time to publicise employee obligations. 

In addition, the little-known Secret Commissions Act 1910 applies to all employees. It makes it a criminal offence to “corruptly” give a gift to an agent (and for an agent to accept a gift) without the consent of his/her employer if the gift is an inducement or reward for doing or not doing something in relation to the employer’s affairs or business. This could be triggered if the gift is in exchange for a favourable consideration of a tender, contract or proposal. As recently as last month, the penalty for this was changed from a fine (of up to $2,000) to imprisonment (of up to 7 years). The perception of such treatment could also give rise to conflict of interest issues. 

While it is, of course, unlikely that you will be prosecuted for giving or receiving the odd bottle of wine this Christmas, it may be prudent to put in place guidelines to help protect your business and your employees. This could include developing a gift register for employees to disclose gifts received from third parties, or the implementation of a company-wide gifts policy.

Keeping control of the reins on a not so silent night

Christmas functions are a good opportunity to reward employees for a year of hard work. However, without forward planning and consideration, there is the potential for things to go awry.  

Here are some tips for minimising the chance of your Christmas function requiring a call to your employment lawyers:

  • Whether a Christmas function is held during or after work hours, onsite or offsite, as an employer you are obliged to ensure the health and safety of employees. This includes a duty to ensure employees do not harm themselves, but also do not harm others.
  • If alcohol is being served, offer substantial food and perhaps schedule a break in festivities to ensure employees eat.
  • Have someone (sober) ‘in charge’ of the function.
  • Provide alternatives to alcohol – and make sure these alternatives are available throughout the night.
  • Prevent intoxication through steps such as placing a limited tab on the bar and setting clear expectations around the consumption of alcohol in the lead up to the Christmas function.
  • Consider organising transport to and from a central location if the venue is offsite – or providing taxi chits to ensure that everyone gets home safely.
  • Ensure that those under 18 are able to be identified, and are not served alcohol.
  • Check your policies to refresh your memory about disciplinary procedures and any rules regarding behavioural expectations.

Despite your best efforts, work events do not always go off without a hitch. Should an employee misbehave at the Christmas party, disciplinary action is a possibility. An employer will need to establish a sufficient connection between the breach and employment. This can often be established by attendance at a company function, even if it is outside of work hours and off company property. 

If you do find yourself in the position of having to investigate possible misconduct, an investigation should be carried out as promptly as is feasible. This may need to be after the Christmas break, depending on the timing of the incident and any company closedown. It is also important to follow company policies and procedures in relation to misconduct and inappropriate behaviour. Employees should be treated consistently and in a fair and reasonable manner.

Unpaid internships

Unpaid internships are becoming increasingly common in New Zealand, especially over school and university holidays. 

In order for an intern to be excluded from the usual definition of an employee under the Employment Relations Act, he/she must genuinely be a “volunteer”. To meet this definition you will need to establish that:

  • the volunteer does not expect to be rewarded for work performed as a volunteer; and
  • receives no reward for work performed as a volunteer. 

The “no reward” aspect is strictly enforced and a recent Employment Court case (The Salad Bowl Limited v Howe-Thornley) has highlighted that such arrangements must be approached with caution. In that case, an intern was not a volunteer (and was therefore an employee) as she received a salad in exchange for her work. 

If an intern does not strictly fall within the definition of a “volunteer”, a court may find that an employment relationship has been established. A court will also look to what the real nature of the arrangement is, including the nature of the work being performed. If the interns are contributing commercially to the business, this may affect the legitimacy of the internship. Therefore, if you do have unpaid interns, we suggest that you take the following precautions:

  • the arrangements should be agreed in writing;
  • the internship should be instigated by the individual, if possible in the context of a course of study (for example, a placement arranged through a tertiary institution);
  • the internship should be short in duration; and
  • there should be no payment or reward of any kind – even giving away produce or a voucher could compromise an intern’s “volunteer” status.

Dressing up your dress code

A lot of workplaces tend to get more casual as the year winds down and temperatures rise. How do you ensure your workplace continues to dress professionally when everyone's heads are at the beach? 

Many workplaces have a dress code or policy. Now is a good time of year to send out a friendly reminder to employees. But what if some individuals do not comply? An employer is able to enforce (if necessary through disciplinary action) its dress code as a lawful and reasonable direction. To constitute such a direction, an instruction must:

  • not require the performance of an illegal task;
  • be within the scope of contractual obligations; and
  • not involve the performance of a dangerous or impossible task. 

It will be important to ensure that there is a contractual foundation for the dress code and that it provides objective guidance for male and female employees. If this is the case, your dress code will form the foundation of a lawful instruction, which could lead to disciplinary action against non-complying employees. 

Please feel free to get in touch with a member of the team to discuss any of these issues.



This publication is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice.

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