A Positive Workplace Culture - What is the Secret?

A Positive Workplace Culture – What is the Secret?

At perhaps no other time has the need for having a strong culture in the workplace been more important for businesses within New Zealand and the rest of the world. 

2020 has not been the year that many of us envisaged, but one with significant challenges for both business owners and employees. Ensuring employees’ wellbeing is prioritised and looked after can be a challenge in itself, particularly when having to make difficult business decisions. So, what is the secret to keeping a strong workplace culture while still have to deal with the impact of the world events and COVID? It may come as a surprise for some, but the answer lies in the law.

What does the law say?

The Employment Relations Act 2000 (“the Act”) in fact provides the foundation for a great workplace culture. The object of the Act is:

“…to build productive employment relationships through the promotion of mutual trust and confidence and good faith in all aspects of the employment environment.”

So, what does that mean?

The Act helpfully provides further guidance on what the duty of good faith is. It is to not do anything likely to mislead or deceive each other. It is wider in scope than the implied mutual obligations of trust and confidence. It also requires parties to be active and communicative in establishing and maintaining a productive employment relationship, in which the parties are, amongst other things, responsive and communicative.

Good faith also requires an employer who is proposing to make a decision which could have an adverse effect on an employee’s employment to: provide access to all relevant information and provide an opportunity for the employee to comment on the information before a final decision is made.

In other words, employers need to be transparent and open with their employees.

The Act also provides a legal test that employers must be able to meet when making decisions that may negatively impact on employees: 

“Whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances.”

What are the building blocks for creating a positive and strong workplace culture?

When taking the definition of good faith and the legal tests provided by the Act, it is evident that the building blocks for creating a positive and strong workplace culture are:

Transparency – the more transparent and honest an employer is with its employees, the better the trust and confidence is likely to be. The failure to provide an employee with all relevant information is going to impact on trust and lead to feeling misled and deceived. A lot of businesses have been faced with needing to restructure. We have found that those employers who are open and honest with their employees about those decisions are normally those that do not have personal grievances. As soon as transparency is lost, so is trust and confidence.

Fairness – it is a legal requirement to consult with staff before making decisions that could impact their employment. Consultation should be genuine and not simply going through the motions.  Employers should genuinely listen to any feedback received and think about whether it impacts on any proposal or whether there are any alternative options to be considering. Provide sufficient time to consult is also important. An employee needs enough time to seek independent legal advice, which means that condensing a consultation timeframe can lead to risk for an employer. An employer must also have genuine reasons for a proposal and have considered alternatives. 

Support – good faith also requires employers to ensure staff are well supported. In order to maintain a productive employment relationship and to ensure obligations in respect of health and safety are met, providing access to Employee Assistance Programmes (EAP), and training on matters like effective leadership and wellbeing, including signs of stress, is important. Being responsive and communicative as also key to ensure staff feel well supported and feel part of a team.

Trust and confidence  - simply put, it is not possible to have a strong workplace culture without reciprocal trust and confidence. If employers genuinely care about the people working for them, staff engagement is likely to be higher and employees will feel positively about their workplace.

What are the consequences of a bad workplace culture?

Besides the possible legal ramifications for having poor workplaces (i.e. personal grievances and other legal claims), so of the other consequences which can have just as great an impact on businesses includes:

• Higher staff turn over
• Higher absentee and sick days
• Loss of talent
• Reduced productivity and lack of engagement
• Impact on wellbeing

Concluding remarks

The law already provides a legal framework for building a good culture within the workplace. While there are many more tips and tricks for engaging staff and improving workplace culture, the key requirements are always going to relate to acting in good faith and ensuring employees and employers have trust and confidence in one another. It is not possible to have a strong workplace culture without these elements.

Our specialist team at DTI Lawyers can assist you in relation to all employment matters, including building and maintaining a positive workplace culture. You can contact our experts on 07 282 0174.