Business briefs

Privacy law changes

The Privacy Act 2020 was passed on 30 June 2020 and comes into force on 1 December 2020. It will repeal and replace the current Privacy Act 1993, and will update the law to reflect the continually-evolving needs of the digital age.

Some of the key changes are:

• Overseas agencies: The legislation will apply to any person or organisation (known as ‘agencies’ in the Act) located overseas who are ‘carrying on business’ in New Zealand
• Mandatory reporting of privacy breaches: If an agency believes a privacy breach has caused, or is likely to cause, serious harm, then it must notify the Privacy Commissioner and affected individuals
• Compliance notices: The Commissioner can issue a compliance notice to an agency that has failed to adequately respond and remedy a privacy breach requiring them to do something or stop doing something
• Storing information overseas: An agency will remain responsible for information sent overseas or stored on overseas servers
• Criminal offences and penalties: It is a criminal offence to mislead an agency to obtain someone else’s personal information, or destroy evidence where the Commissioner has requested it, and
• Penalties: The maximum fine for a privacy breach has increased from $2,000 to $10,000.

We recommend you review your privacy policies before the new legislation comes into force. You must also have clear procedures in place to ensure you and your organisation can comply with these additional privacy obligations.

Remote working: the new normal

As a result of the COVID lockdown, many employees were required to work remotely, and some are continuing this arrangement.
Working remotely comes with some important considerations, particularly in terms of health and safety. If you are an employer, you should be:

• Meeting your obligations under the Health and Safety at Work Act 2015, and your duty to ensure employee safety, so far as is reasonably practicable
• Ensuring your employees are taking adequate rest and meal breaks (as if they were in the workplace) in order to meet your obligations under the Employment Relations Act 2000
• Making sure your employees continue to report any injuries, accidents or near-misses that take place in their remote working space (these could be considered a work-related injury), and
• Ensuring your employees’ remote working set-up is ergonomically-sound and free from any hazards.

These obligations are best set out in your organisation’s health and safety policy and/or a remote working policy for your employees to refer to. It is important these obligations are not just followed in the usual place of work, but also when your employees are working remotely.

Know your contracts

One of New Zealand’s largest olive oil companies is facing liquidation after failing to fulfil its contractual obligations.

In April 2018, Matapiro Olives (2008) Ltd and The Olive Press Ltd exchanged emails discussing the supply of olives to make olive oil for the 2018, 2019 and 2020 seasons. As part of that discussion, Matapiro agreed to consign at least 250 tonnes of olives per season to Olive Press, which Olive Press would turn into olive oil for Matapiro.

During the 2018 season, Matapiro supplied approximately 350 tonnes of olives. In 2019, however, Matapiro had a very low yield which resulted in no olives for processing. Olive Press issued an invoice to Matapiro in September 2019 for 250 tonnes of olives at the normal processing rate, but Matapiro refused to pay as they had not used Olive Press’ service during that season.

The High Court^[1] found that the email exchange between the parties in April 2018 amounted to a binding contract and that Matapiro was liable to pay over $150,000 to Olive Press.
A simple condition inserted into a formal agreement would have prevented this issue from arising.

This case demonstrates how important it is to get legal advice when negotiating or entering into any contract or agreement so that you properly understand your legal obligations, particularly when large sums are involved.

‘Safe harbour’ for directors to expire

Earlier this year, the government made changes to the Companies Act 1993 to provide company directors with a temporary ‘safe harbour’ from certain duties if the company was facing liquidity problems because of COVID.

The safe harbour provision will expire on 30 September 2020. This means company directors will again have duties under sections 135 and 136 of the Companies Act. Under these sections a director must not:

1. Carry on the business of the company in a manner likely to cause serious loss to company creditors, or
2. Agree to the company incurring an obligation the company cannot perform.

We recommend that directors start preparing now for when their duties will resume and to talk with us if there are any concerns about complying with these duties.

^[1] Matapiro Olives (2008) Ltd v Olive Press Ltd [2020] NZHC 1394.

Disclaimer: All the information published in Commercial eSpeaking is true and accurate to the best of the author’s knowledge. It should not be substituted for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are the views of the authors individually and do not necessarily reflect the view of this firm. Articles appearing in Commercial eSpeaking may be reproduced with prior approval from the editor and credit being given to the source. 

Content Copyright © NZ LAW Limited, 2020. Editor Adrienne Olsen, e. adrienne@adroite.co.nz  p. 029 286 3650