Sixty Hewlett-Packard staff are pursuing a personal grievance claim against the company, after it withdrew a superannuation fund, according to current and former staff.
At issue is the company’s plan to close down a superannuation scheme provided as part of the employment package of many long-term staff.
“The company paid contributions into the fund and [matched] the employees’ [payments] dollar for a dollar, or even better in some instances, and then they decided to close the fund down… and wouldn’t compensate [the employees] when withdrawing that scheme,” says one HP employee.
According to another industry source, the original HP staff in New Zealand were offered lower salaries plus 12.5% of their salary in superannuation. Now the fund has been closed, they consider themselves out-of-pocket.
HP’s spokesman Stephen Robertson said last week that “after lengthy conversations” the company had no comment.
According to a HP staff member, the claim has been in mediation for some time and negotiations have now reached an impasse.
“The company is taking a really hard line,” they say.
HP has offered one year’s payment as a form of compensation, says the employee, but only if all 60 employees agree to take it — if not, no one can take it.
“But what we are talking about is a 12.5% reduction in salary,” the employee says.
Specific superannuation legislation could apply to the case, says Joanne Watson, partner of Ruby Law in Hamilton, and a member of the Law Society’s Employment Law Committee.
Under employment law, if the superannuation fund was a term and condition of employment and a part of the employees’ total remuneration, the employer can’t just withdraw the scheme, she says. Most superannuation schemes are governed by trustees under specific terms.
There is also the issue of the money that has been paid into the fund to date, says Watson. A lot of employers give employees a choice — employees might have a car or a superannuation scheme, or that money could be part of the salary.
“If [the money] has been going into a super scheme and the [employees] have not received the benefit of the amount that has been paid into [the fund], the employer could well be liable to pay all that back,” she says.
But, to some employees there might be a disadvantage in that solution because it would take them into a different tax bracket, she says.
If an employer plans to withdraw a superannuation scheme, the employer should consult the employees, she says.
“Under the [Employment Relations] Act — and just in basic terms of good faith — if the employer plans anything that could affect an employee’s job or the terms and conditions of employment, employers are obligated to consult before they make these changes.”
Watson says that, generally, if it was a genuine, internal scheme, and the employer was struggling with it, one would expect consultation, and expect the employer to be out looking to try to transfer the superannuation to another scheme.
If a superannuation scheme is withdrawn, it would depend on the scheme and the deeds what happened to the money in the fund, she says, but she would be “shocked” to see that the employer could access it.
When asked about the condition that a whole group must accept a compensation offer, or no one will get it, Watson says that this could be a way of pitting employees against each other.
“For some people a year’s [pay] might be fine, and for those longer-standing employees, it might be quite damaging for them to accept that,” she says.