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Public Disclosure Of Your Payment Terms

September 19, 2023

The Business Payment Practices Act requires certain entities to publicly disclose information about their payment terms and timeframes.


KEY POINTS ABOUT THE ACT 

• Public and private entities with more than $33 million in annual revenue and $10 million third party expenditure will be required to disclose information about their payment practices every six months. 

• Reporting entities will need to disclose how long it takes to pay invoices, and their payment terms. 

• The disclosed information will be published on a publicly available and searchable register that is administered by MBIE. There will be no charge for users to provide and access disclosed information. 


WHO THE DISCLOSURE REQUIREMENTS APPLY TO 

The Act’s definition of “entity” includes but is not limited to companies (including overseas companies that carry on business here), trusts, partnerships, incorporated societies, government departments, Crown entities and local authorities. 


A reporting entity under the Act is an entity which, in each of its two preceding financial years (excl. GST): 

• had total revenue of more than $33 million, and 

• had total operating expenditure of more than $10 million (excluding wages and salaries, and payments to entities within the same group). 


WHEN DISCLOSURE PERIODS START 

• The first disclosure period will run from 1 July 2024 to 31 December 2024. This start date applies to reporting entities that have had total annual revenue (GST excl.) of more than $100 million in each of their two financial years before the beginning of the disclosure period. 

• The second disclosure period will run from 1 January 2025 to 30 June 2025. All reporting entities will need to disclose payment practices information for this disclosure period, and onwards. 

• Following each disclosure period, reporting entities will have three months to upload the necessary information onto the Business Payment Practices register. 


INFORMATION THAT MUST BE REPORTED 

Reporting entities will need to disclose the following information, as set out in the Act’s regulations. 

1. Average time to pay an invoice 

2. Percentage of the total number of invoices paid within specified time periods 

3. Percentage of the total value of invoices paid within specified time periods 

4. Whether the entity allows eInvoicing as an option for its suppliers 

5. Whether the entity uses standard payment terms and if so, what those are 


TRANSACTIONS THAT NEED NOT BE INCLUDED IN THE CALCULATIONS 

The Act sets out that reporting is not required for invoices that relate to: 

• salary or wages to employees or office holders 

• income tax, goods and services tax, or any other form of tax 

• rent or a lease 

• charges related to electricity, gas, telecommunications services, or other utilities 

• local body rates and charges

• settling a credit card statement that was issued by a bank 

• invoices paid in foreign currency 

• payments for goods and services supplied by members of the same corporate group 

• royalty payments to the Crown 

• invoices that don't require payment due to a credit note. 


MBIE will develop detailed practitioners’ guidance, including web content on how to use the register and upload information. In due course, this information will be available here: https://www.companiesoffice.govt.nz/all-registers/business-payment-practices/.

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How can I try to prevent a personal grievance being raised against me?

By Stuarts Accountants • September 11, 2024
An employee can raise a personal grievance if they feel they have been treated unfairly or unreasonably. For example, if an employee thinks they have been unfairly dismissed or unjustifiably disadvantaged by their employer. Personal grievances handled incorrectly can result in significant costs for an employer. It is therefore important to know your obligations and to take steps to prevent such grievances. Employers have an obligation to act fairly and reasonably. This obligation is really important when an employer undertakes a disciplinary and/or dismissal process, as the employee will feel under real threat at those times, and potentially likely to challenge what has happened and how processes were conducted. When undertaking these processes, it is vital to first look at the employee’s employment agreement. It is likely that the agreement will provide specific steps to take during a disciplinary procedure. If that is so, an employer is required to follow those steps otherwise they will have breached the employment agreement. You should also be sure to communicate with the employee. This is important in all contexts. For example, you should communicate with the employee even if their misconduct was minor. Though this can be informal, it ensures the employee is aware of your expectations. Having a discussion with the employee may also get ahead of the problem and resolve it short of a personal grievance. Make sure that you have a relevant person with you in the discussion who can confirm what took place if needed, and ask them to record a note of what happened that can be referred to later. The employee must also be fully informed if any disciplinary process is being undertaken and they should be aware of its potential outcomes. This includes being informed of any complaints or investigations against them. Employees must also be allowed to have their say throughout any process and be given a chance to explain their side of the story. An employee must also be informed they are allowed a support representative at any formal meetings with the employer. During any of these processes a decision must not be made until all factors are considered. This requires a genuine investigation into any alleged behaviour by the employee, as well as any evidence from the employee themselves. A few extra tips include remaining calm and polite, even when a personal grievance is being raised by an employee. Escalating the situation risks making matters worse. It is absolutely vital not to take short-cuts throughout this process. Personal grievances can result in large costs for an employer who gets the process wrong, even if the employee’s behaviour was serious. The employment landscape is literally littered with employers who reasonably had problems with an employee but got key elements of the processes wrong. It is recommended to implement clear and effective procedures before those processes are required. This ensures that there is a step-by-step process to follow and there are likely to be less issues during the process. It is also recommended to keep a record of any serious interactions or conversations with employees, and that all paperwork is accurate and well organised. These documents will likely be required if a personal grievance is eventually raised against you. Being able to refer the employee to them might show them that the correct processes have been followed, and avoid a personal grievance being raised at all.  If you are confused about your obligations or wish to clarify how you can prevent a personal grievance, it is best to seek legal advice from a professional with experience in the area.

When can I dismiss an employee without notice?

By Stuarts Accountants • September 11, 2024
The process of dismissing an employee usually includes several steps such as:  investigating behaviour,  raising concerns with an employee and,  giving notice. However, there are some limited circumstances in which not all of these requirements are needed. An example of such a case is when an employee’s behaviour is so serious that their employer is not required to give the employee notice. This is known as “summary dismissal” and may be appropriate when an employee has behaved in a way that amounts to serious misconduct. Serious misconduct is conduct which has destroyed the trust and confidence in an employment relationship. Examples of serious misconduct may include (but are not limited to):  theft,  violence,  use of illegal substances,  dishonesty,  bullying and,  workplace harassment. A dismissal without notice is contrasted with a dismissal with notice. For example compare an employee who is to be dismissed without notice for serious misconduct for fraud with an employee who is to be dismissed after another finding of misconduct following a final warning for a breach of timekeeping. Dismissing an employee “without notice” merely means that an employee can be forced to leave the workplace instead of being given their notice period, and the employer is able to cease paying the employee from the date of dismissal as there is no notice period that has to be paid. Not having to give notice does not mean that an employer can dismiss an employee immediately when an issue arises. It is important not to be misled by the term “without notice”. Employment agreements generally include a notice period. This includes the notice period if an employee chooses to leave their job, and/or if they are dismissed from the job. Employers are always required to follow a fair process. Whether there has been serious misconduct or not an employer is required to undertake a number of steps before dismissing an employee. These steps include: 1. Raising any concerns with the employee along with the possibility of dismissal if the concerns are correct; 2. Investigating claims against the employee before making a decision on the facts; 3. Providing the employee with relevant material so they can prepare their response; 4. Advising the employee of their right to have a support person attend meetings and assist with their response; 5. Allowing the employee a reasonable opportunity to respond to the allegations; 6. Considering all the facts, including the response from the employee; 7. Advising the employee of the decision on the allegations, the level of misconduct found, and any preliminary view as to the penalty outcome; 8. Allowing the employee to provide feedback on the preliminary proposed penalty and genuinely considering that feedback; and 9. Advising the employee of the penalty outcome. Failing to undertake these steps is a breach of an employer’s good faith obligations. This can lead to serious and expensive consequences for the employer. Dismissing an employee without notice can be used when the behaviour amounts to serious misconduct that justifies a dismissal without having to give the notice period. However, it is important that employers remain aware of their overall obligations during the dismissal process. If you are confused about your obligations, it pays to seek advice from a professional. Source: Rainey Collins Employment Issues 21.8.24
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