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EARTHQUAKE COMMISSION

REVIEW REPORT

CHRISTCHURCH 2012 RECRUITMENT PROCESSES

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Table of Contents

TERMS OF REFERENCE .................................................................................................................... 3

EXECUTIVE SUMMARY .................................................................................................................... 4

METHODOLOGY ................................................................................................................................. 5

BACKGROUND TO THE 2012 RECRUITMENT PROCESS ...................................................... 6

WORKFORCE ...................................................................................................................................... 8 EMPLOYMENT STATUS OF 2011 FIELD STAFF ............................................................................................ 8 EXPECTATION OF ON-GOING EMPLOYMENT ................................................................................................. 8 WORKFORCE FOR 2012 .................................................................................................................................. 9

ADVERTISING ...................................................................................................................................10

SELECTION CRITERIA ....................................................................................................................11

SELECTION PROCESS .....................................................................................................................13 PROCESS .......................................................................................................................................................... 13 PROCESS STRENGTHS .................................................................................................................................... 15 PROCESS WEAKNESS ..................................................................................................................................... 15

TIMEFRAME ......................................................................................................................................16

FAVOURITISM, BIAS AND NEPOTISM ......................................................................................17 CLAIMS OF FAVOURITISM AND A BIAS TOWARDS POLICE, MILITARY, REAL ESTATE AGENTS AND OR

AUSTRALIANS................................................................................................................................................. 17 CLAIMS OF NEPOTISM ................................................................................................................................... 17

CONCLUSIONS ..................................................................................................................................19

RECOMMENDATIONS.....................................................................................................................20

APPENDIX A ......................................................................................................................................21

APPENDIX B ......................................................................................................................................24

APPENDIX C ......................................................................................................................................25

APPENDIX D ......................................................................................................................................26

APPENDIX E ......................................................................................................................................27

APPENDIX F ......................................................................................................................................32

APPENDIX G ......................................................................................................................................36

APPENDIX H ......................................................................................................................................39

APPENDIX I .......................................................................................................................................43

APPENDIX J .......................................................................................................................................57

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1. TERMS OF REFERENCE 1.1 The terms of reference for the review of the processes used to select

individuals for Earthquake Commission (EQC) Canterbury Field Staff roles in 2012 were prepared by EQC and emailed to KSJ Associates on 13 December 2011. The Terms of reference are attached as Appendix A. The EQC wished to authorise an independent review due to the nature of the criticisms and allegations about the recruitment process carried out by EQC. These concerns originated from field staff in Canterbury and also from media commentators.

1.2 The terms of reference required us to “investigate the Earthquake

Commission’s management and application of the selection process for 2012 field staff, to determine the fairness of the policies and processes that were used”.

1.3 The review was to take into account and report on:

The workforce; Advertising; Selection criteria; Selection process; Timeframe; and Favouritism, bias and nepotism.

1.4 Specifically, we were to provide advice to the EQC Board with:

Conclusions in respect of the overall fairness, or otherwise, of the

processes and procedures used;

Advice on whether or not we considered there to be any major causes

for concern about the processes used, and if so, what they are; and

Any evidence found that would suggest that undue and inappropriate

influence was brought to bear, negatively or positively, in respect of the

selection or non-selection of any individual applicant or group of

applicants.

1.5 EQC Chief Executive Ian Simpson stated that the reviewers were to report their findings directly to the EQC Board, to ensure transparency.

1.6 The terms of reference and the report on the review of recruitment processes for the 2012 field staff for 2012, is to be made public.

1.7 The EQC Board will provide a copy of the report, to the State Services Commission.

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2. EXECUTIVE SUMMARY 2.1 Our conclusions in respect to the overall fairness, or otherwise, of the

processes and procedures used is that, given the environment they were operating in throughout 2011, the processes adopted where the logical ones to use. EQC went to some lengths to ensure the processes were as fair as could be.

2.2 It is our view there are no major causes for concern about the processes

used. 2.3 We were unable to find any evidence that would suggest that undue and

inappropriate influence was brought to bear, negatively or positively, in respect of the selection or non-selection of any individual applicant or group of applicants. It is our judgement, based on the lack of documentary evidence to the contrary, combined with the candour, openness and corroborative nature of the conversations we have held with EQC management in Christchurch, that there was no undue bias or inappropriate influence used in the selection process.

2.4 When EQC are faced with similar situations or are in similar

circumstances (i.e. having contractors or staff in positions where they are required to assess the on-the-job performance of others) we recommend EQC:

A. Provide contractors in such a role with thorough training in

performance management, performance assessment and the use of rating scales.

B. Ensure Field Office management (e.g. Field Office Managers and Field

Office Supervisors) have their Pod Leaders carry out their performance management roles appropriately.

C. Adopt as standard practice the use of a communications plan when

managing change events D. Ensure communication to the field staff is timely and appropriate.

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3. METHODOLOGY 3.1 We began in early January by reviewing all documentation and

correspondence identified as relevant to the recruitment and selection process carried out for the 2012 field staff in Canterbury. This documentation is listed in Appendix B

3.2 The principle part of the investigation comprised interviews of all those

directly involved in the recruitment and selection process. Over a period of one week, 17 people were interviewed. They are listed, by designation, in Appendix C. We conducted all of the interviews in Christchurch, unless otherwise stated.

3.3 To assist us in reaching informed judgments about the recruitment and

selection process, and in addition to reviewing all policy and process documentation relevant to EQC’s recruitment practices, we received instruction in the use of COMET software (the application used by assessors and estimators). We also viewed the online application process used by EQC.

3.4 A search of emails of the managers, whose relatives were successfully

appointed – or, in one case, not appointed - for Assessor or Estimator roles in 2012, was requested and carried out by the EQC IT department.

3.5 Interviews included all who were involved in the process, except in the

case of immediate supervisors where a small sample was interviewed. Additionally, in the case of the GM, Organisational Development, while she was not directly involved in the process, she did provide advice or comment on process.

3.6 We chose not to interview the four relatives of management quoted in the

media as in our view they were passive participants in the process.

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4. BACKGROUND TO THE 2012 RECRUITMENT PROCESS 4.1 Prior to the 4 September 2010 earthquake in Christchurch, EQC consisted

of 22 permanent staff. In addition to this, EQC had the ability to draw on a relatively small pool of retained Loss Adjusters in New Zealand and some personnel provider companies in Australia (which had provided loss adjustors in the past) to assist them in the event of national disasters. They also have relationships with a number of other providers (personnel providers, insurance companies, privately owned businesses specialising in loss adjustment) and can tap into these when a rapid escalation of resource is needed.

4.2 An example of this is EQC’s working relationship with Verifact in

Australia. They have in the past drawn heavily on Verifact’s ability to provide resource that is lacking (or exists in small numbers) in the New Zealand market. This relationship has been a critical one for the EQC as a business continuity measure and because of the shortage of appropriately experienced people in NZ. If EQC were to “ramp up” its numbers quickly while competing in the market with private insurers, hiring contractors through providers such as Verifact was an essential part of the EQC strategy. A benefit to EQC was that these experienced contractors – Australians in the main – would then be able to help train New Zealand contractors and thus grow a New Zealand-based resource. The recruitment driver from September 2010 to early 2011 was simply getting experienced and available people on the job quickly, hence a draw down of contractors from Verifact (and other companies) in Australia.

4.3 There was a need to rapidly deploy Loss Adjustors (later referred to as

‘Assessors’) and Estimators to carry out the work of full building assessment post the 4 September earthquake. The 22 February event, plus the setting of the 20 December deadline for full building assessment completion, required more field contract resource. Before 22 February EQC had thought it was working towards a ‘winding down’ of contract Assessors and Estimators, with a completion date of 31 March 2011. The major event of February 22 obviously called for a readjustment to those plans and meant another rapid recruitment response was required. The numbers required to undertake this work eventually rose to approximately 800.

4.4 EQC were working to tight deadlines and were focused on responding to

the needs of Christchurch people who had experienced two major events and continue to experience significant and numerous aftershocks. EQC identified the need for their field contractors to demonstrate a high level of interpersonal skills, empathy, a strong emphasis on the service delivery and customer service aspect of their role. They were also required to demonstrate ability to read and interpret policy and legislation as well as follow an agreed process. In addition Estimators had to be trade-qualified builders.

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4.5 The attributes required were identified as most likely to be found in occupations such as insurers, police, fire service workers, and military personnel. A reason for this was their experience in dealing with people who were stressed and/or traumatised. They had to be able to manage conflict, work through volatile situations, deal calmly with issues, and follow a process and interpret legislation. Indeed, Verifact employs ex-police because this is what they are trained to do. Private New Zealand insurance companies employ ex-police for the same reasons. Some individuals from other backgrounds, such as real estate agents, were also found to have relevant and appropriate knowledge and skills.

4.6 Within a period of 15 months, EQC had undertaken a rapid escalation in

numbers and deployment of Assessors and Estimators. They went from a having none in Christchurch at 1 September 2010, to a high of approximately 840 and then back to a workforce of approximately 200 by 17 December 2011– a highly unusual situation for any organisation. A working environment of this type is ideally suited to the use of contracts for, and not of, service, and that was the employment arrangement EQC preferred.

4.7 The timeframe to downsize the Christchurch field workers had to take

into account the tight deadlines EQC were working towards (full building assessment completions), the need to keep field contractors motivated and performing to a high level, and the expectations of the Christchurch home owners. Downsizing had to be done while continuing to meet targets – the field contractors had to stay motivated and perform to a high level.

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5. WORKFORCE

Employment status of 2011 field staff 5.1 The employment contracts for service, both for those employed directly

or through providers (such as Verifact, Adecco and others) explicitly state the terms of the contract as being that between EQC and a contractor who must be GST registered, responsible for invoicing EQC, and responsible for payment of their ACC levies and their own public liability insurance.

5.2 It is our view the 2011 Assessors and Estimators were all employed

(appropriately in the circumstances) on contracts for service. They were not employees of EQC.

Expectation of on-going employment 5.3 On 23 February the National Operations Manager addressed all field

contractors on site and advised them that the events of the previous day had necessitated a rethink of the aim of winding down by 31 March and they should plan to be working with the EQC in Christchurch for the rest of the year. He repeated his comments in a memo to all staff in May 2011 titled “How Long Will We Be Here” (Appendix D) confirming that his expectation was for work through to mid November. He said in that memo:

5.4 “…..I anticipate that we will have a need for Assessors and Estimators,

from both New Zealand and Australia, through to about mid-November this year. As you will understand though, not everything is predictable and you should not take this an (sic) absolute guarantee of being invited to return for every rotation. But so as long as your individual performance is at the level that the EQC finds acceptable, and assuming we continue to need at least our current number of staff, you can generally expect to be asked to continue for rotations until that time.”

5.5 The memorandum of 2 November 2011 to “All Field Staff” and titled

“Field Staff Engagement – 2012” (Appendix E) explicitly states in its introduction that there were to be fewer staff required for 2012.

5.6 We have seen no evidence to suggest that promises of work in 2012, or

indications that any particular contractor could expect to be re-engaged for 2012, were made. All the evidence, both documentary and oral, is to the contrary.

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Workforce for 2012 5.7 The National Operations Manager and the senior management team, with

input from the HR Analyst, determined the number of field staff for 2012. There was some fluctuation as events unfolded but the numbers were established through:

- Calculations based on re-inspection requests; - Productivity data provided by Fletchers; - Special requirements (e.g. TC3 concerning new foundations) – which

raised the potential for a further 8,000 re-inspections; - On-going land inspections; and - A ‘best guess’ on revisits and number of inspections per day (including

allowance for a reduction from 60 hours per week in 2010/11 to 40 hours per week in 2012).

5.8 The event of 23 December, occurring after the 2012 staff selection

process was completed. This generated some thousands of new claims and the need for some re-inspections. In addition, the EQC response to the Nelson district rainstorm event drew on the Christchurch workforce and expertise. However, neither of these factors influenced the 2012 selection process.

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6. ADVERTISING 6.1 All field contractors were notified in the 2 November memorandum “Field

Staff Engagement – 2012” of the reduction in staff numbers for 2012. They were invited to express interest in returning to work for EQC in 2012. The memo also described the nature of the work they would be involved in, outlined the terms and conditions of employment for 2012, and explained the Merit Selection process and the Application process.

6.2 At the same time (2 November 2011) a memo was also sent to the

Personnel Providers. It explained the coming changes and the advice EQC wanted Personnel Providers to relay to the contractors they managed who worked in the field for EQC. A copy of the memo sent to all field staff was attached for the Personnel Providers’ information.

6.3 The full details of the assessment criteria and the competencies in

question were provided only to the supervisory staff, i.e. Pod Leaders and Estimator Leaders.

6.4 The full position descriptions (Appendices F and G) were attached to the

fixed term employment agreements and the contracts for service provided to the successful applicants.

6.5 With a pool of 800 applicants, all with relevant experience and

qualifications, applying for 200 vacancies, together with the compressed timeframe (24 October to 4 December 2010) available in which to carry out the entire process, the obvious decision to restrict the exercise to internal candidates was taken by the Christchurch senior management team (which included the HR Manager, Christchurch). This timeframe necessitated taking a pragmatic approach to this recruitment exercise.

6.6 The rationale for not advertising externally was, in our opinion, soundly

based. EQC had at its disposal, over 800 field workers. They had the experience in the field undertaking Assessor and Estimator responsibilities, that the merit based selection criteria required. Any newly recruited individuals would have had to go through the EQC induction training and learn the work in which hundreds of existing field workers had already demonstrated their competence.

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7. SELECTION CRITERIA 7.1 The selection criteria were outlined to applicants in the memo of 2

November. While not a comprehensive list, it stated that the quality and quantity of work carried out, including technical and customer service aspects of the roles, would be taken into account and that personal attributes “such as working as part of a team, communication skills, flexibility, motivation and commitment” were being taken into consideration. Appropriate trade qualifications and registrations were additional criteria for Estimators.

7.2 The criteria specifically excluded “place of residence, gender, age, length

of experience, and an individual’s current contractual engagement basis”. Work experience prior to the EQC contract was also not a factor – merit related only to competence in the roles of Assessor or Estimator while working with the EQC in Christchurch.

7.3 The selection criteria were identified in detail in a memo sent to all Pod

Leaders in the week beginning 24 October. This memo, entitled “Assessment Process” (Appendix H), provided Pod Leaders with the following competencies against which to apply a 0 to 10 performance rating for their Assessors and Estimators:

- Interpersonal skills - Decision Making - Communication Skills - Customer Focus - Service Delivery - COMET / iPad proficiency

7.4 Descriptors of behaviours were included with each competency. Instructions on applying the rating scale were included.

7.5 Position descriptions for both the Assessor and Estimators roles were

prepared in October 2011, but, as far as we were able to determine, were provided only to the successful applicants as an attachment to their 2012 Fixed Term Employment Agreement or Contract for Service.

7.6 We received differing comments on whether or not the position

descriptions were accessible through EQC’s online Career Centre – as they would be in a “normal” recruitment process. It is possible they were, but the online link may not have been obvious to everyone who logged into the Career Centre (a software recruitment program holding vacancy listings, application forms and other relevant information such as position descriptions).

7.7 Whatever the circumstances, our estimation is that not all applicants

would have sighted the full position description for the role they were applying for. In any event, this is not a critical point (the roles were

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essentially no different to the roles being carried out in 2011) and did not invalidate the selection process, based as it was on the Pod Leader’s assessment of performance and moderated by the management team and HR. While it was generally agreed that POD Leaders and Estimator Leaders were in the best positions to make assessments of performance of their POD members, we did receive some comments that the Pod Leaders were not in a position to adequately assess the performance of their Pod members against the criteria.

7.8 We did however learn that Pod Leaders were required to do random

phone audits of their customers, to make random visits to observe the Assessors and Estimators completing a full building assessment. They were also required to review the assessment documentation produced by Pod members. We also sought from a number of EQC Christchurch staff (including the two Pod Leaders available for interview) their views on the length of time it would take for an Assessor and Estimator to be proficient in the role they had to carry out. The most common response was that if they were not fully competent at the end of two tours or rotations (3 weeks on, 1 week off is a tour or rotation) they should not be there. Many would have been competent by the time their first rotation ended.

7.9 Taking a (low) average of 3 full building assessments completed per day,

and working a 6 day week, the average number of building assessments per rotation would be 54. Pod Leaders took this into account when they claimed one rotation would be enough for the average Assessor and Estimator to be considered competent. Two rotations (6 working weeks) would definitely be enough to assess competence in the roles.

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8. SELECTION PROCESS

Planning 8.1 Discussions on planning for the staffing requirements for the

Christchurch office of EQC began in mid- September 2011. A major paper, dated 31 October 2011 and titled “Engagement Options for Field Staff and Contractors 2012” (Appendix I) was prepared by the GM, Organisational Development and the HR Manager, Christchurch, for the GM, Customer Services and the National Operations Manager. It addresses, inter alia, issues such as workforce requirements for 2012, remuneration options, 2012 employment contract options and the issues around making merit (“the best fit for the job”) the primary criteria for selection for 2012. The GM, Customer Services, approved the paper’s recommendations.

8.2 The costing in this memo was subsequently revised and amendments to

the field allowances and accommodation assistance were notified to all the applicants by email on 1 December 2011.

Process 8.3 Pod Leaders were advised by the memo previously referred to (Appendix

H), in the week beginning 24 October 2011, of the assessment process to be used and the competencies and behavioural descriptors involved. They were requested to rate their field contractors on a 0 – 10 scale against the six specified competencies using the rating sheets provided. They returned the results to their Field Office Supervisor (FOS) or Field Office Manager (FOM) by 9 November. The FOS or FOM reviewed the ratings in consultation with the Pod Leader by 11 November. The FOS then loaded the ratings onto Excel spreadsheets previously prepared by the HR Analyst.

8.4 The memos of 2 November previously referred to were sent to all field

contractors and field contractor suppliers on that date inviting those who wished to work with EQC to lodge their application by Sunday 13 November through the Career Centre. The application form filled out online required the applicant to declare if there were any family or similar relations with other staff members. Where this was done it was checked by the FOS, FOM or HR as appropriate for possible conflicts of interest. It appears the relevant question on the application form was not well stated. HR had to follow up where two people with known family associations did not declare them and a greater number of instances where applicants with no known family associations erroneously declared they had. Irrespective, they were followed up and clarified. None were in positions where conflicts of interest were likely.

8.5 From 3 November to 11 November five “Questions and Answers” sheets

(Appendix J) were emailed to all the field contractors and current

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personnel providers from the HR Manager, Christchurch. These anticipated questions that may be asked, clarified issues or points, and responded to specific questions asked by the contractors and personnel providers. The questions and answers covered a wide range, from the application process to the rationale behind the level of allowances to be paid in 2012. Individuals and providers received rapid and personal emailed responses to their queries, usually on the day they were asked. Although this was a good attempt to provide current and up to date information on the recruitment process for 2012 by the EQC Christchurch organisation, we still received comments that there was not sufficient communication or that it was not timely enough. We were not given specifics other than ‘they’ would have liked more communication earlier than it actually happened.

8.6 It is very difficult to achieve a level where there is communication

overload, particularly where the working environment is that of responding to a disaster such as that experienced in Christchurch. It is better to err on the side of delivering more information than you feel is required and allow people to ‘filter out’ what they consider they do not need.

8.7 Applicants were invited to apply for the ‘Active List (where, if not

selected, they would be placed on the ‘Reserve List’) or the ‘Back Up List’ of those who simply wanted to remain on EQC’s books for consideration for future short-term work should it become available.

8.8 On 17 November the names of people who had not applied were removed

from the spreadsheets. Two lists each for both Assessors and Estimators were created. The first was for the ratings as applied by the Pod Leader and agreed with their FOS. This listed all applicants from the highest score to the lowest. The second list had weightings for each of the six assessment criteria, which had been previously agreed between FOS, FOM and HR staff, added. The two lists were reviewed for any obvious anomalies. Initial shortlists (for Assessors and Estimators) were identified from combined, weighted, listings by taking from the top ranking names sufficient to fill the required staff numbers for each of the work groups.

8.9 From 22 to 24 November a moderation exercise was carried out. This

involved the FOS and FOM staff meeting with the HR Manager, Wellington (the HR Manager, Christchurch being on sick leave at this time) and the Assistant HR Manager, Christchurch.

8.10 After final checking against any relevant documentation (e.g. police

vetting, health records), the final lists (Assessor and Estimator) were confirmed on 30 November. The National Operations Manager approved these lists on 2 December 2011 and all applicants (successful and unsuccessful) were notified by email on 5 December.

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8.11 The final step was HR meeting with each successful applicant to explain the employment contracts being offered. Where any appointee withdrew at this stage the next individual on the merit list was offered the role.

Process strengths 8.12

- Appointments made on merit assessed against well stated competencies with behavioural descriptors

- The fact there was a rating assessment review with a moderation process with HR involvement in that process

- The integrity of those involved in the rating review process

8.13 We cannot comment on the Pod Leaders’ performance in rating the field contractors because, with our own time constraint and the fact that when we were in Christchurch (for the week of 9 January 2012), only two Pod Leaders were available. This was, in our opinion, not a large enough sample to make any meaningful assessment. What we can say, however, is that the two Pod Leaders we interviewed were very impressive and it was clear to us they had put a lot of thought and care into the assessment exercise.

Process weaknesses 8.14

- The lack of training of the Pod Leaders in rating the performance of their field staff

- The possibility that not all Pod Leaders had a high level of knowledge about the on-the-job performance of their Pod members

- The apparent lack of accessibility by applicants to the position descriptions when applying for the 2012 roles

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9. TIMEFRAME 9.1 The selection process commenced with a request for the Pod Leaders to

assess the performance of their Assessors and Estimators against the competencies that had been identified for their roles. This they began in the week of 24 October 2011. The selection process was completed when all applicants received notification of the results by email on the morning of 5 December 2011.

9.2 All successful applicants subsequently met for a 15 minute engagement

discussion with the HR Manager, Wellington, or the Assistant HR Manager, Christchurch, so that the nature of the fixed term employment agreement (or the contract for services, if they chose that option) could be explained. A low number declined any offer of engagement. Where that happened the person next on the merit list was contacted and offered the role.

9.3 The entire exercise was completed by the deadline for the full building

assessment programme of 17 December 2011. 9.4 The need for such a compressed timeframe for a major recruitment

exercise such as this was driven by the need to:

- Have sufficient and current, information on which to determine the required field staff strength in 2012;

- Ensure that there was a competent and available workforce engaged for 2012 before the end of 2011;

- Keep all contractors motivated to meet the output targets and deadline of 17 December 2011;

- Minimise the “leakage” of the best performers to alternative work, possibly with private insurers. (It should be remembered the EQC contractors are now a valuable resource for the insurance and loss adjusting industry and competition for their services was a factor from September 2010 onwards).

9.5 The decision to complete the entire recruitment exercise within a very

short timeframe and as close to the end of the year as possible was, in our view and as previously noted, a sound one. There was no need to search externally. By October 2011 there were more than enough experienced and well performing staff available “within the ranks”. That alone shortened the time needed for the process.

9.6 In addition, as already mentioned, management were concerned to keep

motivation high, with a focus on completing the productivity targets. Completing recruiting for 2012 in mid-November 2011, for example, was a risk to target achievement that could not be taken. This is not a criticism of the Assessors or Estimators. They have performed, in our opinion, an outstanding job in very difficult (to understate the case) circumstances. The lessening of commitment to the current employer is

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just something that routinely happens when individuals know their tenure in a role is coming to an end.

10. FAVOURITISM, BIAS AND NEPOTISM 10.1 The approach to this issue was to assume there was favouritism, bias or

nepotism and then try to find evidence of this. Failure to find any evidence would lead us to assume that in all probability there was no favouritism, bias or nepotism in the selection process.

Claims of favouritism and a bias towards police, military, real estate agents and or Australians 10.2 In response to the September 2010 and February events there was an

urgent and overwhelming need to get the “right people on the job quickly”. The decision was taken to use established arrangements and networks where a pool of people, experienced and capable of performing in an environment such as that facing EQC, were or could be available.

10.3 Australia had such a pool of experienced people who could be brought on

site immediately through EQC’s relationship with Verifact. A number of these people were ex-Australian Police. It is not unknown for ex–police personnel – either in Australia or New Zealand - to be employed in the insurance and loss adjusting industry. It made, in our opinion, very good sense to contact retired NZ police through their association, just as it made sense to contact those with military experience, and real estate agents.

10.4 The fact is contractors were recruited as Assessors from these work or

occupational groupings because they came on-board following the September and February events with the badly needed qualifications, skills and experience to perform in a tense and traumatic situation. EQC had no time to recruit and train; no time to go through a “normal” recruiting process. They were not facing a “normal” situation. It is useful to keep in mind that up until September 2010 and February 2011 “normal” had meant events such as Hurricane Bola, the Edgecombe and Murchison earthquakes. We have been advised that Christchurch is an earthquake event that is unique not just to New Zealand but also on a world scale. We have no reason to doubt that.

Claims of nepotism 10.5 We discussed this issue at length with staff involved in the selection

process from Pod Leaders to the National Operations Manager. We initiated a search of emails of the staff members related to both the successful and unsuccessful appointees in question. We are satisfied that

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we have sighted all existing documentation relating to the selection process from policy development to the rating lists against which appointments were made.

10.6 It should be noted that Section 21 of the Human Rights Act 1993 prohibits

discrimination on the grounds of family status. There are exclusions. These are:

- if there is a reporting relationship, or - there is a risk of collusion to the detriment of the employer.

10.7 The process that was followed complied with the Act. The exclusions did

not apply to these selection decisions and subsequent appointments. 10.8 We found no evidence of nepotism or any attempt to influence the merit

based selection process. We can therefore say it is probable there was none. The individuals appointed to the 2012 field staff strength were appointed on merit – that is, merit based on their performance in the role of Assessor or Estimator.

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11. CONCLUSIONS 11.1 The 2011 contracts for service made it quite clear that the contractors

were not employees and that they were on contract to the EQC to carry out a specific finite task.

11.2 We found no evidence of favouritism, bias or nepotism, and it is most

probable that there was none. 11.3 In response to the September 2010 and February 2011 events it was

logical, given the environment at the time, to recruit ex-police, former military personnel, and those with insurance and similar experience, to augment the relatively low number of appropriately experienced New Zealanders and Australians ‘on call’ with the EQC. On the basis of the 2010/11 experience these field staff gained, recruitment for 2012 could be carried out using demonstrated merit as the prime criteria for Assessors and Estimators.

11.4 The 2012 recruitment process, which excluded interviews as part of the

process, was, in our opinion the ‘best fit for purpose’ approach given that 800 plus applicants had to be reduced to 200 in a compressed timeframe and with all participants in the process more than fully involved in reaching immovable targets and deadlines. It was simply not practicable to do interviews.

11.5 It is also our view that regardless of the process used the top 25%

performers and the bottom 25% would find their own level. It is also usual in any recruitment process for good performers to fail to be appointed and for some appointments to be found (further down the line) to be mistakes. This does not invalidate the process used. It is important to keep in mind that 800 plus contractors were being reduced to approximately 200. With these numbers of applicants being fitted into that number of roles it was inevitable that some good performers were not going to make the cut.

11.6 One complainant offered the strong opinion that recruiting Cantabrians

should have taken precedence over selection on merit. To do that would contravene Section 22 (1) (a) of the Human Rights Act 1993, which states:

11.7 “(1) Where an applicant for employment or an employee is qualified

for work of any description, it shall be unlawful for an employer, or any person acting or purporting to act on behalf of an employer —

(a) to refuse or omit to employ the applicant on work of that description which is available;……”

11.8 As well as this legal obligation, the argument that it may be cheaper to

employ local candidates and that it may in some ways be ‘better’ for locals to be engaged could not, in our opinion, over-ride the clear and fair

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decision to appoint on the grounds of merit, relevant experience, personal attributes and demonstrated competence.

11.9 It is our view that there are no major causes for concern about the process

or procedures used for the 2012 recruiting exercise. 11.10 The two areas that could, in future situations such as this, be improved

upon, are:

1. the education or training of Pod Leaders or other contractors or staff involved in performance management and assessment, and

2. the use of a clear communications plan to ensure that the field (or other affected) staff are as well informed as possible.

12. RECOMMENDATIONS 12.1 When EQC are faced with similar situations or are in similar

circumstances (i.e. having contractors or staff in positions where they are required to assess the on-the-job performance of others) we recommend EQC:

A. Provide contractors in such a role with thorough training in

performance management, performance assessment and the use of rating scales.

B. Ensure Field Office management (e.g. Field Office Managers and Field

Office Supervisors) have their Pod Leaders carry out their performance management roles appropriately.

C. Adopt as standard practice the use of a communications plan when

managing change events D. Ensure communication to the field staff is timely and appropriate.

Sue Jones Kevin Jones Director, KSJ Associates Ltd Director, KSJ Associates Ltd

Appendix A

TERMS OF REFERENCE

FOR AN INDEPENDENT REVIEW OF THE PROCESSES USED TO SELECT

INDIVIDUALS FOR EQC FIELD STAFF ROLES IN 2012

INTRODUCTION

From September 2010 to December 2011 the Earthquake Commission (EQC) engaged as contractors,

on a rotating basis, approximately 800 individuals as Assessors and Estimators (“field staff”) to help

it meet its statutory obligations following serious earthquakes in Canterbury.

In anticipation of some further requirements for field staff in 2012 (and possibly 2013) a process was

undertaken to select approximately 200 staff from the existing field staff workforce. EQC also used

this as an opportunity to transition the workforce from a high volume of short term contracts, where

rates reflected uncertainty of tenure to longer term fixed term employment agreements.

Concerns were expressed by some field staff (and media commentators) that the selection process

was not entirely fair and allegations of favouritism, bias and nepotism were made.

INDEPENDENT REVIEW

Because of the nature of the criticisms and allegations the Chief Executive, on behalf of the EQC

Board has authorised an independent review of the processes for making the selection of field staff

for 2012.

The review is to be carried out by KSJ Associates Ltd, a Human Resources consultancy company

based in Wellington.

TERMS OF REFERENCE

1. The Reviewer will investigate the Earthquake Commission’s management and application of

the selection process for 2012 field staff, to determine the fairness of the policies and

processes that were used.

2. The Reviewer will, in particular, consider and report on the following issues:

a. The Workforce

What was the status of the 2011 field staff? i.e. were they contractors or

employees?

Was there any basis for any of the 2011 field staff to have an expectation or

right to any further work with the EQC in 2012?

How many estimators and how many assessors are required for 2012 (and

beyond) and how does this relate to the 2011 workforce strength?

b. Advertising

When and how were 2011 field staff advised of the possibility of a limited

number of positions available in 2012 and beyond?

What are the roles and functions of the field staff for 2012 and how were they

advertised?

Were the available positions advertised externally, and if not, what was the

rationale for not making the positions publicly available?

Was the rationale reasonable and appropriate in the circumstances?

c. Selection Criteria

Was the criteria for selection outlined or described and was it explained in such

a way that it could be clearly understood by potential applicants?

What were the stated experience, qualifications and personal attributes

required for the 2012 positions of Assessor and Estimator?

d. Selection Process

What was the selection process used?

Who was involved in developing, approving, managing and implementing the

selection process?

Was the selection process made known to field staff before the process began

and was the field staff kept informed?

What were the mechanisms used to make comparisons between applicants?

What were the strengths and weaknesses of the processes and mechanisms

used?

Would it have been practicable to conduct selection interviews for all

applicants?

Would selection interviews have made any significant difference to the results?

e. Timeframe

Over what period was the selection process implemented?

What practical considerations influenced the timing and process?

f. Favouritism, Bias and Nepotism

Where there was the possibility of conflicts of interest or bias, was this

possibility acknowledged and dealt with appropriately? (Before or during the

selection process).

Is there any evidence of family members of applicants having in any way

influenced the selection process?

Are procedures in place to guard against inappropriate family member

influence?

Where there was a reliance on the views of supervisors, were appropriate

procedures in place to mitigate any bias or prejudice in the selection process?

What roles did supervisory and management staff from the Operational team

play in the selection process for 2012 and were these appropriate?

What roles did EQC Human Resources staff play in the selection of the field staff

for 2012 and were these appropriate?

What role did senior management staff in Christchurch play in the selection of

2012 staff and was this appropriate?

3. The Reviewer will provide advice to the EQC Board, in particular:

a. Reaching a conclusion in respect of the overall fairness, or otherwise, of the

processes and procedures used;

b. Advising the EQC Board whether or not the Reviewer considers there to be any

major causes for concern about the processes used, and if so, what they are;

c. Informing the EQC Board of any evidence found that would suggest that undue and

inappropriate influence was brought to bear, negatively or positively, in respect of

the selection or non-selection of any individual applicant or group of applicants.

REPORTING

4. The Reviewer will provide, by 27 January 2012, a report to the EQC Board (which will provide

a copy of the Reviewer’s report to State Services Commissioner).

13 December 2011

Appendix B

EQC DOCUMENT REQUEST LIST

Recruitment policies (including appeal process)

Employment contracts and appointment letters for 2011 field staff (examples only – but include the “family” appointees)

Notes from interviews by managers with field-staff who have complained about recruitment process contracts, employment status, or job qualifications

Job descriptions, competencies etc. for field staff (2011 and 21012 versions)

Advert policy, process

Adverts for 2012 field staff; any emails, memos (including handwritten notes on this topic)

Instructions to recruitment agencies (including handwritten notes, emails, notes from meetings)

Application forms, with a sample of applications (include family members) for 2011 & 2012

Information sent to applicants or potential applicants (i.e. existing field-staff) in relation to 2012 staffing levels, change management policy and or recruitment policy or process

Appointment panel write-ups, discussion notes, ratings etc. on a sample of 2011 & 2012 appointments but including “family” members

Emails, notes etc. where the “family” applicants are mentioned with any comments on appointability, passing from managers to the appointment panel or vice versa

Fieldstaff workforce calculations for 2011 and 2012

Data on number of applications received for 2011 and 2012; correspondence etc. leading to decisions on process to be followed

Appendix C List of people interviewed by designation

All individually were interviewed face-to-dace, unless otherwise stated.

GM, Organisational Development, Wellington

HR Manager, Wellington

HR Manager, Christchurch

HR Assistant Manager, Christchurch

HR Analyst, Christchurch

HR Assistant, Christchurch

GM Customer Services, Christchurch

National Operations Manager, Christchurch

Canterbury Field Operations Manager, Christchurch

Field Office Manager, Christchurch

Hub Manager, Christchurch

Quality & Compliance Manager, Christchurch

Field Office Supervisor (phone interview), Christchurch

2 Pod Leaders (one phone interview) Christchurch

2 complainants Christchurch

Appendix D

To: All EQC Field Staff, Canterbury

From: Reid Stiven

Date: 24 May 2011

HOW LONG WILL WE BE HERE?

On 23 February I stood on the back of a ute behind our damaged offices in Deans Avenue and told

the assembled field staff that the previous day’s earthquake will have generated a lot of work for us

and that rather than expecting to run our numbers down to the end of March, we should plan to be

here for the rest of the year.

Although that was very much an off-the-top-of-the-head statement, it appears increasingly clear

that that my assessment at that time was probably about right. I am pleased to say that most

people there accepted this statement as the indication of the prospect of work that it was, and

reviewed their other commitments. As a consequence, we now have a largely experienced field

workforce that is committed to helping EQC help the people of Christchurch and surrounding

districts.

But I know that as time has gone on, the questions about how long we will be here are increasing.

This reflects the need we all feel to plan our lives and consult with our families about the extent of

our personal availability. Many also have other business to attend to, and some need to know

whether to seek other work.

About family commitments and needs I want to be particularly clear. We strongly believe that family

commitments must come first, and we understand the importance of needing to return home, for

short or long periods. But for those who want to stay, and who are able to, the important thing to

know is how long the work is going to continue.

The best advice I can give you on this is that I anticipate that we will have a need for assessors and

estimators, from both New Zealand and Australia, through to about mid-November this year. As you

will understand though, not everything is predictable and you should not take this an absolute

guarantee of being invited to return for every rotation. But so as long as your individual performance

is at the level that the EQC finds acceptable, and assuming we continue to need at least our current

number of staff, you can generally expect to be asked to continue to return for rotations until that

time.

Thank you for your work to date. It is greatly appreciated.

Regards,

Appendix E To: All Field Staff

From: Reid Stiven

Date: 2 November 2011

Prepared by: David Curry

Subject FIELD STAFF ENGAGEMENT – 2012

This information is for Assessors and Estimators who wish to express their interest in returning to

work for EQC in 2012.

The field work to be carried out over the next couple of years will predominantly be re-inspections

and land settlement claims, in Canterbury and, to a lesser extent, in the rest of the South Island.

Some work in other parts of the country may also become available.

As you know EQC will require fewer people in the field than we have now and we anticipate this to

be about 120 people. Many of these roles will be based in Hubs. All field staff, including those

currently deployed in field offices and Hubs, may apply or express interest.

TERMS & CONDITIONS

The terms and conditions of engagement for 2012 have changed. These changes were approved on

1 November 2011 and are outlined below.

CONTRACTS

EQC will be offering Fixed Term Agreements (FTA’s) or Agreement for Services (Contracts). They both

have benefits. In some instances an amendment to a current contract will be offered.

1. Fixed Term Agreements will include a one month notice period for either party, 4 weeks

annual leave, sick leave and Kiwisaver contributions. Engagement will be as an employee of

the Commission. You will also have more certainty of how long you will have work for.

2. Agreements for Services will use a contract format similar to the current Agreements for

Services. The hourly rate is slightly higher than the rate offered for Fixed Term Agreements

but does not include any leave provisions. The notice period is shorter, 14 days, and you

don’t have the same rights as an Employee.

There will be no guarantee of any minimum amount of work for contractors. The amount of work,

and work periods, will be determined on the basis of need and discussed with each contractor to

test interest and availability prior to commitment.

Eligibility criteria for engagement on Agreements for Services remain the same, being the

requirement that the contractor is engaged through a Sole Trader, a Limited Liability Company or

another specifically approved entity. Contractors may be engaged through Personnel Providers if the

providers have a current contract with the Commission.

TERM

Assessors and Estimators who are selected and re-engaged by the Commission will be offered either

Fixed Term Agreements, initially for one year, OR engagement on contracts (Agreements for

Services) on an hourly basis but for periods of up to one year.

WEEKLY HOURS AND RATES OF PAY

Working hours are expected to be 44 hours per week (usually Monday to Saturday morning), 52

weeks a year (less statutory holidays and leave). The remuneration shown below is based on the 44

hour working week, as follows:

Employee (FTA)

Contractor

Assessor

$115,500 p.a.

$55 per hour

Estimator

$115,500 p.a.

$55 per hour

Senior Estimator

$137,500 p.a.

$65 per hour

(For a 40 hour week these annual rates equate to $105,000 p.a. (Estimator / Assessor) and $125,000

p.a. (Senior Estimator)).

The rates for Assessors and Estimators will be identical in 2012 and there will be no difference

between the amounts paid to New Zealand and Australian residents. All payments will be in New

Zealand dollars.

In the event that additional field staff are required from time to time, for short periods, they will be

engaged on the same rates as above.

ALLOWANCES

The following will be payable for those who are not resident in Christchurch:

i. A daily allowance (to cover meals and incidentals) of $50 per day (plus GST if on a

contract) if staying in accommodation arranged and paid for by the Commission

ii. A daily allowance (to cover self-arranged accommodation, meals and incidentals) of

$100 per day (plus GST if on a contract)

iii. A Fixed Travel Amount (at rates determined in late 2011) based on the travel time and

costs from each individual’s normal place of residence to work in Christchurch and

return, for up to one return journey every two weeks.

For those who are resident in Christchurch EQC will no longer pay a daily allowance or mileage.

EQC will continue to provide facilities, equipment, accommodation and vehicles on a basis similar to

the 2011 arrangements. (Cars are expected to be shared fairly. If a car is shared between a

Christchurch resident and a non-Christchurch resident the non-Christchurch resident will be

expected to be responsible for the vehicle after working hours). These arrangements will apply

equally to EQC Fixed Term Agreement employees and any contractors employed on Agreements for

Services.

RELOCATION

For those families who wish to relocate to Christchurch to preserve family unity, EQC will contribute

to relocation costs. This contribution will be determined after the provision of three quotations, and

will be capped at a maximum of $13,680. Naturally if you relocate we will want you to stay for the

duration of your employment. So if for any reason your employment ends before your first three

months we will seek a refund on a pro-rata basis.

MERIT SELECTION PROCESS

Selection of assessors and estimators (including selection to Senior Estimator roles) will be made by

the Commission on the basis of their availability, and their demonstrated competence and personal

attributes, including:

a. the quality and quantity of the work they have carried out, including the technical and

customer service aspects of their roles

b. individuals’ personal attributes such as working as part of a team, communication skills,

flexibility, motivation and commitment.

Appropriate trade registration qualifications are required for Estimators.

Place of residence, gender, age, length of experience, and an individual’s current contractual

engagement basis are not factors in determining merit.

The selection process will be carried out by operational management staff and include consultation

with Field Office Managers, Field Office Supervisors, and Pod Leaders. The relative merits of all

Assessors and Estimators will be assessed and then reviewed to ensure objectivity.

The process will be overseen by the Human Resources Manager.

Residential location of assessors or estimators will not be a factor in determining merit for selection

to the 2012 team. Australian field staff or contractors may be engaged as long as they do not cost

more in terms of remuneration, allowances and expenses than equivalent New Zealand residents.

APPLICATION PROCESS

EQC is asking all Assessors and Estimators who wish to work for us next year to register their interest

through our Careers Centre. We will be asking you to either;

1. apply to be part of the Active List of field staff if you are available and will be able to

commit to further EQC field work from early 2012; or

2. express interest in being on the EQC’s Back-Up List of field staff if you MAY be available to

return to undertake further EQC field work in 2012, and possibly later. EQC will use this list

of people if the need arises.

Those who apply to be on the Active List but who are not selected for it will be placed on a Reserve

List of individuals who may be approached if additional or replacement people with experience are

required.

The Reserve List differs from the Back-Up List in that the individuals on the Reserve List will have

expressed their availability and desire to commit for work in 2012 on the Active List. People on the

Reserve List may be called upon in 2012 (or later) should there be a need to add to the numbers on

the Active List or as replacements. Individuals on the Back-Up List may be contacted for shorter

terms or unexpected work such as another Event.

Please either:

Apply to be on the Active List if you would like engagement with the Commission through

2012 (and possibly longer).

Express Interest in being on the Back-Up List if you do NOT want to be considered for work

through 2012 (and possibly longer) but would like to be on a list of people who could be

invited for further EQC work if there is an unexpected need (such as another Event).

If you are unsuccessful in your application to be on the Active List and are placed on the Reserve List,

you will NOT need to also add your name to the Back-Up List.

Selection of individuals for Senior Estimator roles will be undertaken at the same time as selection

of Estimators and Assessors.

All applications and Expressions of Interest will be acknowledged by email.

CLOSING DATE FOR APPLICATIONS

The closing date for applications and expressions of interest is Sunday 13 November 2011.

PERSONAL PROVIDERS

Individuals who are engaged through a personnel provider are advised to discuss their response with

their personnel provider. Personnel Providers are being advised of these changes separately.

HOW DO I APPLY / EXPRESS INTEREST IN A ROLE?

If you wish to make an application to be considered for the Active List or Express Interest in being

listed on the Back-up List please use the EQC’s new career centre: www.careers.eqc.govt.nz where

you will be able to submit your details.

This website will be AVAILABLE from Monday 7 November for applications and will CLOSE ON

Sunday 13 November 2011. Applications and Expressions of Interest will be acknowledged

automatically.

Decisions will be made as quickly as possible and advised by email. Information on when you will be

able to expect a decision will be advised once all the applications and expressions of interests have

been received.

If you find you have difficulties accessing the career centre please contact Rebecca Lilliebridge on

03 741 9312 or rlilliebridge@eqc.govt.nz.

Reid Stiven

Event Manager

QUERIES

Please refer any initial queries to your POD Leaders or Field Office Supervisors, otherwise queries

may be addressed to:

Sue Harrison, Assistant Human Resources Manager, 7419311, 027 554 2611,

sharrison@eqc.govt.nz, or

David Curry, Human Resources Manager, 03 7419310, 021 511 846, dcurry@eqc.govt.nz

Appendix F

POSITION DESCRIPTION

Position: Assessor

Location: Christchurch

Reporting to: Field Office Manager

Issue Date: October 2011

EQC’s purpose The Earthquake Commission (EQC) is a Crown entity whose key responsibilities are to:

1. Provide insurance of residential property against loss or damage caused by earthquake, volcanic eruption, hydrothermal and geothermal activity, tsunamis and natural landslips, to properties insured against fire in accordance with the Earthquake Commission Act 1993. Land is also insured against the above hazards as well as storm or flood.

2. Administer the Natural Disaster Fund (the NDF), including its investment and reinsurance.

3. Facilitate research and education about matters relevant to natural disaster damage and its mitigation.

4. Following the Canterbury earthquakes of 4 September 2010 and 22 February 2011 EQC, at the Government’s direction, has two additional responsibilities:

5. Project manage, through a contract with Fletcher Construction, the residential rebuild of Christchurch and affected areas of Canterbury

6. Arrange for and monitor, on behalf of the Crown, additional land remediation activities to certain parts of Christchurch and Waimakariri districts. This reflected a Cabinet decision that some land badly damaged by the September 2010 Canterbury earthquake should be remediated to a greater degree than EQC must do to settle claims under the EQC Act.

Context EQC will be changing rapidly and continuously over the next two to three years. The organisation will “flex” as it as it moves from a response phase to a recovery and repair phase. This is likely to involve:

Phase 1: Initial response and expansion (completed)

Phase 2: Optimise claims management (next 8 weeks to 9 months)

Phase 3: Repair management (next 2 months to 3 years primarily through external PMO)

Phase 4: Review of performance (e.g. preparation for select committees, formal inquiries) and reversion to steady state, (12 to 24 months on)

Other key activities will be taking place throughout each of these phases –coordination with CERA and other

lead agencies for Canterbury land repairs, fund management (liquidation of $1.5bn global equities and rebalancing back to benchmark), interface with global reinsurance markets, public communication and education.

Purpose of the Position: The purpose of this position is to provide assessing services to the Earthquake Commission. The work entails assessing at EQC field offices as and when required and providing information to the general public of New Zealand about the Earthquake Commission.

Working Relationships

Internal:

Event Manager

Operations Manager

Field Office Manager

Field Office Supervisors

Pod Leaders

EQC Corporate staff External:

General Public

Customers

Key Accountabilities:

Key Result Area

Key Accountabilities

Assessing

Site visit and field assessment, delivering best assessing practice on all claims to ensure quality, accurate, and cost effective outcomes are provided to all claimants, internal and external, within agreed timeframes

Manage claimant expectations, ensure minimised claims cost leakage, and provide enhanced service levels

Deliver factual, concise, and professional reporting to claims, via EQC’s ClaimCenter program, in a timely manner, that clearly identifies and explains all relevant information to reflect or facilitate informed decisions being made

Provide sound advice/reports on imminent risk, as defined under the EQC Act 1993.

Availability

Manage time, resources and workloads, while working to meet agreed objectives and productivity KPIs as well as ensuring the cost effective delivery of property assessing services

Attend at EQC field offices on agreed rotations. Where necessary arrange or carry out site visits, to attend to and alleviate immediate customer needs

Support EQC’s response to catastrophe and weather events, by working the

agreed hours, and/or travelling to any part of the country as delegated.

Health and Safety

Support all Health and Safety guidelines and requirements

Comply with all legislative and regulatory requirements, and report any breaches as soon as they become know

Personal Specifications Technical/Professional Knowledge and Experience

Preference will be given to assessors that have previously worked in an EQC field office.

Familiar and comfortable with the use of technology such as IPads

Well-developed organisational skills and time management skills with a willingness to be flexible in accepting changed priorities

Well-developed understanding of the Earthquake Commission Act

Strong decision making skills and the ability to clearly explain the rationale used to reach an outcome

Excellent oral communication skills, including superb listening skills

Ability to compile reports and with minimal supervision

Ability to remain calm when faced with adversity Key Competencies: The role specific competencies highlight the behavioural and technical skills important for “success” in this position.

Competencies Description of behaviours

Interpersonal Savvy Relates well to all kinds of people – up, down, and sideways, inside and outside the organisation

Builds appropriate rapport

Builds constructive an defective relationships

Uses diplomacy and tact

Can diffuse even high-tension situations comfortably

Decision Quality Makes good decisions based upon a mixture of analysis, wisdom, experience and judgement

Sought out by others for advice and solutions

Quickly establishes which issues/opportunities can be managed and which need to be escalated

Written Communications

Is able to write clearly and succinctly in a variety of communication settings and styles

Can get messages across that have the desired effect

Integrity and Trust Is widely trusted

Is seen as a direct and truthful individual

Can present the unvarnished truth in an appropriate and helpful manner

Keeps confidences

Admits mistakes

Doesn’t misrepresent him/herself for personal gain.

Customer Focus Is dedicated to meeting the expectations and requirements of internal and external customers

Gets first-hand customer information and uses it for improvements in products and services

Acts with customers in mind

Establishes and maintains effective relationships with customers and gains their trust and respect

Appendix G

POSITION DESCRIPTION

Position: Estimator

Location: Christchurch

Reporting to: Field Office Manager

Issue Date: October 2011

EQC’s purpose The Earthquake Commission (EQC) is a Crown entity whose key responsibilities are to:

7. Provide insurance of residential property against loss or damage caused by earthquake, volcanic eruption, hydrothermal and geothermal activity, tsunamis and natural landslips, to properties insured against fire in accordance with the Earthquake Commission Act 1993. Land is also insured against the above hazards as well as storm or flood.

8. Administer the Natural Disaster Fund (the NDF), including its investment and reinsurance.

9. Facilitate research and education about matters relevant to natural disaster damage and its mitigation.

10. Following the Canterbury earthquakes of 4 September 2010 and 22 February 2011 EQC, at the Government’s direction, has two additional responsibilities:

11. Project manage, through a contract with Fletcher Construction, the residential rebuild of Christchurch and affected areas of Canterbury

12. Arrange for and monitor, on behalf of the Crown, additional land remediation activities to certain parts of Christchurch and Waimakariri districts. This reflected a Cabinet decision that some land badly damaged by the September 2010 Canterbury earthquake should be remediated to a greater degree than EQC must do to settle claims under the EQC Act.

Context EQC will be changing rapidly and continuously over the next two to three years. The organisation will “flex” as it as it moves from a response phase to a recovery and repair phase. This is likely to involve:

Phase 1: Initial response and expansion (completed) Phase 2: Optimise claims management (next 8 weeks to 9 months) Phase 3: Repair management (next 2 months to 3 years primarily through external PMO) Phase 4: Review of performance (e.g. preparation for select committees, formal inquiries) and

reversion to steady state, (12 to 24 months on) Other key activities will be taking place throughout each of these phases –coordination with CERA and other lead agencies for Canterbury land repairs, fund management (liquidation of $1.5bn global equities

and rebalancing back to benchmark), interface with global reinsurance markets, public communication and education.

Purpose of the Position: The purpose of this position is to provide estimating services to the Earthquake Commission. The work entails estimating at EQC field offices as and when required and providing information to the general public of New Zealand about the Earthquake Commission.

Working Relationships

Internal: Event Manager Operations Manager Field Office Manager Field Office Supervisors Pod Leaders EQC Corporate staff

External: General Public Customers

Key Accountabilities:

Key Result Area

Key Accountabilities

Estimating

Site visit and field assessment, delivering best assessing practice on all claims to ensure quality, accurate, and cost effective outcomes are provided to all claimants, internal and external, within agreed timeframes

Manage claimant expectations, ensure minimised claims cost leakage, and provide enhanced service levels

Deliver factual, concise, and professional reporting to claims, via EQC’s ClaimCenter program, in a timely manner, that clearly identifies and explains all relevant information to reflect or facilitate informed decisions being made

Provide sound advice/reports on imminent risk, as defined under the EQC Act 1993.

Availability

Manage time, resources and workloads, while working to meet agreed

objectives and productivity KPIs as well as ensuring the cost effective delivery of property assessing services

Attend at EQC field offices on agreed rotations. Where necessary arrange or carry out site visits, to attend to and alleviate immediate customer needs

Support EQC’s response to catastrophe and weather events, by working the agreed hours, and/or travelling to any part of the country as delegated.

Health and Safety

Support all Health and Safety guidelines and requirements Comply with all legislative and regulatory requirements, and report any

breaches as soon as they become know

Personal Specifications Technical/Professional Knowledge and Experience

Hold a current building/carpentry qualification Preference will be given to assessors that have previously worked in an EQC field office. Familiar and comfortable with the use of technology such as IPads Well-developed organisational skills and time management skills with a willingness to

be flexible in accepting changed priorities Well-developed understanding of the Earthquake Commission Act Strong decision making skills and the ability to clearly explain the rationale used to

reach an outcome Excellent oral communication skills, including superb listening skills Ability to compile reports and with minimal supervision Ability to remain calm when faced with adversity

Key Competencies: The role specific competencies highlight the behavioural and technical skills important for “success” in this position. Competencies Description of behaviours Interpersonal Savvy Relates well to all kinds of people – up, down, and sideways, inside and

outside the organisation Builds appropriate rapport Builds constructive an defective relationships Uses diplomacy and tact Can diffuse even high-tension situations comfortably

Decision Quality Makes good decisions based upon a mixture of analysis, wisdom, experience and judgement

Sought out by others for advice and solutions

Quickly establishes which issues/opportunities can be managed and which need to be escalated

Written Communications

Is able to write clearly and succinctly in a variety of communication settings and styles

Can get messages across that have the desired effect Integrity and Trust Is widely trusted

Is seen as a direct and truthful individual Can present the unvarnished truth in an appropriate and helpful

manner Keeps confidences Admits mistakes Doesn’t misrepresent him/herself for personal gain.

Customer Focus Is dedicated to meeting the expectations and requirements of internal and external customers

Gets first-hand customer information and uses it for improvements in products and services

Acts with customers in mind Establishes and maintains effective relationships with customers and

gains their trust and respect

Appendix H

THE ASSESSMENT PROCESS

BACKGROUND.

A need has been identified to have the ability to assess all field staff moving forwards,

particularly as a result of a proposed workforce reduction in the New Year.

As a result we have developed an assessment process, and the aim of these assessments

is to enable all field staff to be assessed across common criteria.

This criteria falls in line with the position description taking into account key accountabilities,

experience and key competencies to ideally provide a complete view.

This assessment process is only the first part of the procedure which may be used to assess

the suitability of staff for continued and future involvement in events with the E.Q.C.

Other factors that will be taken into account include statistics drawn from Comet, Plat and

records and advice from H.R. and other sources.

Although statistics will be taken into account, we do not want an assessment process based

solely on statistics, and thus the need for this assessment documentation and proposed

procedure.

This assessment process is being put in place for all field staff irrespective of where they are

currently attached and will take into account, pods, specialist teams and hub personnel.

INSTRUCTIONS

The process is to be undertaken confidentially by supervisors without the input of field staff

involved, and should be regarded as confidential.

Once issued these assessments are to be completed as soon as possible.

A TIME FRAME FOR THAT DELIVERY IS ATTACHED WITH THE OTHER DOCUMENTS.

FOS will be responsible for assessing their pod leaders and estimator leaders using

the former field office structure in order to obtain the most accurate information. As

such, they will be responsible for the assessment of their former pod management

personnel. (i.e. Showplace, Barrington, Northwood etc)

Pod Leaders and Senior Estimators will be responsible for assessing their current

pod staff.

Team leaders in other sections will be notified and will be responsible for assessing

their staff.

If supervisors have new staff members and they feel that they are unable to fairly assess the

staff member, the matter should be NOTED ON THE ASSESSMENT SHEET and raised on

return of the assessment sheets so the pod member can be assessed by their former

supervisor.

The assessment criteria are to be marked out of a possible score of 10 points, with 10

being the highest score and 1 being the lowest score.

The process will entail the issue of electronic spread sheet files to each FOS or responsible

supervisor.

Upon receipt they are to print a copy of each pod / section assessment sheet and issue a

hard copy only to pod leaders / supervisor.

They will then use the criteria as supplied to assess staff member under the categories

accordingly.

Once the process is completed by pod leaders / supervisors, they will review the results with

the Field Office Supervisor / Manager to ensure, as far as possible, the assessments are

justified and fair.

The Field Office Supervisor or Manager will then enter the data electronically onto the

spread sheets and return it to me at alanrholloway@gmail.com

The completed assessments will then be compiled, weighted as necessary and the other

data sources added.

It is anticipated that the complete data sets will then be available for use in on-going field

staff selection.

It is extremely important that this process be undertaken in a timely manner and be

completed in line with expectations.

ASSESSOR ASSESSMENT CRITERIA

COMPETENCY DESCRIPTORS

INTERPERSONAL SKILLS

Relates well to others, including customers, supervisors and fellow team members.

Develops appropriate rapport and participates as part of the team dynamic.

Builds constructive and effective relationships.

Uses diplomacy and tact

Can diffuse high tension situations and maintain composure in adverse situations.

DECISION MAKING Makes good decisions based on a combination of analysis, knowledge, experience and judgement.

Is sought out by others for advice / solutions and contributes to problem solving.

Quickly establishes which issues / opportunities can be managed and which need to be escalated.

COMMUNICATION SKILLS

Is able to write clearly and succinctly in a variety of communication settings and styles.

Ability to verbally communicate clearly and concisely with customers and staff alike and achieve desired outcomes.

Demonstrates good listening skills

Demonstrates the ability to clearly communicate and explain decisions made.

CUSTOMER FOCUS Demonstrates the ability to manage both internal and external customer’s expectations efficiently and effectively.

Acts with the customers in mind.

Establishes and maintains effective relationships with customers and gains their trust and respect.

SERVICE DELIVERY Demonstrates a clear knowledge and understanding of the Act and ability to apply its principles to the assessment process.

Demonstrates an understanding of building practices.

Ability to adapt to and embrace new ideas and processes in an evolving and changing environment.

Performs to a consistently high level.

Multi-skilled in all areas of service delivery (i.e. land / multis / special and sensitive files)

Demonstrate good time and workload management and planning skills.

Demonstrates flexibility in service delivery.

COMET / IPAD PROFICIENCY

Demonstrated ability to use IPAD technology to meet productivity objectives and standards required.

Demonstrated ability to use IPAD technology and meet Q A standards required in completed assessments.

Demonstrated consistency in use of applications. (ie none to minimal revisits / returns of files.)

**SCORES ARE OUT OF A POSSIBLE 10 POINTS WITH ‘10’ BEING THE HIGHEST AND ‘0’

BEING THE LOWEST

ESTIMATOR ASSESSMENT CRITERIA

COMPETENCY DESCRIPTORS

INTERPERSONAL SKILLS

Relates well to others, including customers, supervisors and fellow team members.

Develops appropriate rapport and participates as part of the team dynamic.

Builds constructive and effective relationships.

Uses diplomacy and tact

Can diffuse high tension situations and maintain composure in adverse situations.

DECISION MAKING Makes good decisions based on a combination of analysis, knowledge, experience and judgement.

Is sought out by others for advice / solutions and contributes to problem solving.

Quickly establishes which issues / opportunities can be managed and which need to be escalated.

COMMUNICATION SKILLS

Is able to write clearly and succinctly in a variety of communication settings and styles.

Ability to verbally communicate clearly and concisely with customers and staff alike and achieve desired outcomes.

Demonstrates good listening skills

Demonstrates the ability to clearly communicate and explain decisions made.

CUSTOMER FOCUS Demonstrated ability to contribute to the management of both internal and external customer’s expectations as required.

Acts with the customers in mind.

Establishes and maintains effective relationships with customers and gains their trust and respect.

SERVICE DELIVERY Demonstrates an understanding of the principals of the Act.

Demonstrates a clear knowledge of building repair strategies and practices with the ability to apply those in the assessment process.

Ability to adapt to and embrace new ideas and processes in an evolving and changing environment.

Performs to a consistently high level.

Multi-skilled in all areas of service delivery (i.e. land / multis / special and sensitive files)

Demonstrate good time, workload management and planning skills.

Demonstrates flexibility in service delivery.

COMET / IPAD PROFICIENCY

Demonstrated ability to use IPAD technology to meet productivity objectives and standards required.

Demonstrated ability to use IPAD technology and meet Q A standards required in completed assessments.

Demonstrated consistency in use of applications. (ie none to minimal revisits / returns of files.)

**SCORES ARE OUT OF A POSSIBLE 10 POINTS WITH ‘10’ BEING THE HIGHEST AND ‘0’

BEING THE LOWES

Appendix I

To : Reid Stiven

Bruce Emson

From : Heather Stewart

David Curry

Date : 31 October 2012

Subject : ENGAGEMENT OPTIONS FOR FIELD STAFF AND CONTRACTORS 2012

1. WORKFORCE REQUIREMENTS FOR 2012

From January 2012 it is estimated that we will need between 120 and 170 field staff and contractors

to support the Canterbury residential rebuild. The initial requirement is for 60 teams of Assessors

and Estimators (2 people per team) to work in pairs to undertake re-inspections.

There is also a requirement for Senior Estimators as well as Contracted Loss Adjustors to work from

the Fletcher hubs undertaking supervision of the re-inspections. It is expected that this workforce

will work 44 hours per week, Monday – Friday, the expected hours to be worked by the Fletchers

staff in the hubs at present.

2. CURRENT EMPLOYMENT ARRANGEMENTS

The employment arrangements for the 2012 workforce are currently under review as it isn’t

appropriate or sustainable to continue with our current contracting arrangements. At present

Assessors are paid $75 per hour and Estimators are paid $60 per hour. In addition, people from out

of town receive a daily allowance of $70 ($130 if they make their own accommodation

arrangements) and people who live in Christchurch receive a daily allowance of $15. These current

arrangements were made on the basis of the work being for a short term event; however the

resulting aftershocks mean that the work has continued for considerably longer than anticipated.

It is clear that contract terms and conditions should be adjusted to reflect that fact that work from

2012 will continue for at least 12 months, possibly longer. This gives us an opportunity to “right size”

the engagement framework.

3. ISSUES FOR CONSIDERATION

In determining an appropriate framework we need to fully understand issues and risks from EQC’s

perspective. A discussion was held last week and a number of key issues were highlighted:

a. Assessors and Estimators were employed on the assumption of different skill bases, but our

expectations of this group has changed over the year and the differential in rates may no

longer be appropriate.

b. EQC has employed outside the New Zealand insurance market to avoid reliance on those

already working in NZ. This means that our remuneration levels have been benchmarked

against the external insurance market (i.e. contracting loss adjustors) instead of against

employees of insurance companies across New Zealand and Australia. The options for

consideration should involve comparisons between internal and external markets.

c. It has been agreed that there is justification in terms of significant cost savings (through

claims settlement) if we hire the best people for the jobs, and there is also agreement that

there should be no preferential treatment to current (or future) Christchurch workers.

d. Choosing the ‘best for the job’ in order to provide the best outcome for our customers and

overall cost-savings to the country are clear priorities, but it is recognised that there will

inevitably be extra costs associated with the travel and accommodation of field staff and

contractors. The extent of those costs depends on what is determined to be sufficiently

attractive, as well as fair to both the taxpayer and the individuals.

e. We need to consider whether we expect our field workers to live in Christchurch, or to travel

to and from Christchurch on a regular basis. We know there is a great deal of fatigue in the

field and requiring them to work rosters in the same way as 2011 may not be sustainable

over a further 12-36 month period.

f. Appointing on merit (i.e. the best for the job) should not exclude candidates on the basis of

where they live, but if the chosen candidates live in Australia and there are suitable

candidates in New Zealand, it is agreed that the costs of using Australian-based workers

should be no more than using New Zealand-resident workers (including salary/wages and

expenses).

4. OPTIONS FOR CONSIDERATION

The following table summarises the advantages and risks for each of three options:

Option 1 Status Quo (contracts through personnel providers and with individuals)

Option 2 All workers on Fixed Term Agreements

Option 3 Mixture of contracts and Fixed Term Agreements.

Advantage

Risks/Implications

Potential Solution

Option 1

(Contracts - Status Quo)

Best workers retained

Flexibility in working arrangements (as they are contractors)

Low risk of personal grievances or other employment relations issues

Short notice period means can release when not required

EQC pays more than market rate

Perception of not being good value for money

Less attractive to many field staff and contractors because of lack of significant tenure

Potential of high risk of tax liability with sole traders

Offer new contracts at rates that will be acceptable to both the worker and EQC

Offer contracts with tenures of 6 months or more

Option 2

(All workers on FTAs)

Potentially reduces costs

Provides surety of tenure (security and therefore attractiveness)

Able to delegate authorities as they will be employees

Workers will receive same benefits as other employees, e.g. annual leave, sick leave KiwiSaver contributions.

Decrease in sole trader tax liability

Loss of experienced workers, especially those who are self -employed and who do not want to be employees

Increase in employment relations issues that take time and effort to resolve

Increase in risk of mediation / employment authority presence

Any potential change would have to be managed carefully under the Employment Relations Act

Potential delays in employment caused by Restraint of Trade provisions in current contracts with providers

Offer new Agreements that will be acceptable to both the workers and EQC

Offer relocation options

Allow for ‘phasing in’ of workers who need to serve out contractual obligations to current providers

Option 3

(Mixture of contracts and employment)

EQC would be able to attract the best people for the jobs

The workers would be able to decide how they want to be engaged, so more of the best could be attracted

Enables retention of preferred workers currently with third party providers without having to allow for ‘phasing in’ to allow for restraint of trade provisions

Complexity in arrangements and determining different offers to each type of worker

Equity issues – will be important to be fair and transparent

Potential tax issue for sole traders

Offer both engagement types that will be acceptable to all.

Manage equity issues by having firm and transparent basis for differing arrangements

Comment

Option 3 offers both EQC and its workers the most flexibility. The workers would choose the option

which is best for them. This would best enable the EQC to meet its objective of having the most

productive and experienced workforce to provide the best possible and most efficacious service to

the customers.

There would be less exposure to the risks of employment relations challenges, and it would also

mean that, when appropriate, we can begin to release people without being in breach of contracts,

e.g. potentially release independent contractors first.

5. MARKET COMPARISONS

Over the last few months the HR team has been gathering benchmarking data for similar roles in the

internal and external insurance markets. The data collected is current (2011).

As it is important to benchmark the same data description, the roles have been defined using the

following accountabilities and attributes.

Loss Adjustor

Adjusts claims for property loss or damage

Quantifies loss and initiates repairs

Completes repair specifications and arranges and manages agreed repairs

May project manage tender process

Monitors payments against agreed replacement values

Refers files back to claims for settlement

May liaise with customers to negotiate settlement for referred claims

Keeps all parties informed and updated on progress

May liaise with Councils and lobbies for change in regulations

May hold either tertiary, insurance industry and/or Chartered Loss Adjusting qualifications.

At least 3+years of experience in general insurance

Reports to Loss Adjusting manager

Senior Loss Adjustor

Team Leader

Day to day supervision

Adjusts claims for property loss or damage

Quantifies loss and initiates repairs

Completes repair specifications and arranges and manages agreed repairs

May project manage tender process

Monitors payments against agreed replacement values

Refers files back to claims for settlement

May liaise with customers to negotiate settlement for referred claims

Keeps all parties informed and updated on progress

May liaise with Councils and lobbies for change in regulations

May hold either tertiary, insurance industry and/or Chartered Loss Adjusting qualifications.

5-7 years of experience in Loss Adjusting or Building Trade Experience

Reports to Loss Adjusting manager

Remuneration levels below are rounded. They are based on a 52 week year.

All in NZD

Range

(40 hours per week)

Range

(44 hours per week)

Hourly Rate

Loss Adjustor

$63,000 - $71,000

$69,281 – 78,100

$30.28 – 34.13

Senior Loss

Adjustor

$77,000 - $90,000

$84,656 - 99,000

$37.00 - $43.27

We have also received data from Hay Recruitment on loss adjusting roles across NZ and Australia, as

follows:

Range

(40 hours per week)

Hourly rate

Loss Adjustor Sydney

$58,000 - $75,000

$27.88 – $36.05

Loss Adjustor Chch/Wgtn/Auck

$55,000 - $80,000

$26.44 – $38.46

Senior LA Sydney

$70,000 - $90,000

$33.65 - $43.26

Senior Loss Adjustor Chch/Wgtn/Auck

$70,000 - $100,000

$33.65 - $48.07

Technical Specialist LA Chch/Wgtn/Auck

$80,000 - $120,000

$38.46 - $57.69

Assessing Manager Chch/Wgtn/Auck

$80,000 - $120,000

$38.46 - $57.69

Comment

In analysing the remuneration data shown above, it is clear that the internal market (Insurance

companies) pay less than the external market (contractors). It is important to note that these are

base salaries only and most insurance companies provide other benefits such as KiwiSaver,

superannuation, life insurance, income protection, and incentive schemes. Valuing those additional

benefits isn’t simple as they vary considerably across organisations.

Our research shows the NZ insurance market has been dominated by events in Christchurch and has

led to a shortage of domestic loss adjustors and claims specialists. EQC’s need has reduced the pool

of experienced candidates for major insurers and apparently companies are seconding international

Loss Adjustors and claims specialists to assist in the processing of large volumes of new claims.

This means that we need to position our offer at a level that will be attractive to our current field

workers. We will also need to ensure there will be equity between people on fixed term agreements

and those on independent contracts.

We have also established that the hourly rate paid by a large employer with similar needs for

qualified builders in Christchurch as the Commission’s is $55 per hour and it is this rate that we must

compete with in order to retain qualified staff and contractors. This is the rate we will be

recommending and basing costs on.

6. OTHER TERMS & CONDITIONS

Other than base remuneration rates we need to consider our operating model for the field work

from 2012. One of these considerations is whether or not to pay any form of assistance to staff and

contractors to relocate their families/households to Christchurch.

a. Relocation of Households Our assumptions are that because of the long term

arrangements being proposed some individuals may wish to relocate themselves (and

families) to Christchurch rather than to live and work apart for long periods.

The simplest approach would be to at least partially fund the removal of the chosen field staff and

contractors (and their families) to Christchurch. The extent of the subsidy would need a proper

financial analysis but given the extent of travel costs associated with individuals travelling to and

from Christchurch, and the accommodation costs while they are in the city, it appears likely that a

package could be prepared that would appeal to some individuals and their families.

However, we recognise that because of the earthquake risks in Canterbury, some families will not

chose to relocate here, and for this reason as well as others, there will be a need to allow for a

variety of arrangements.

b. Engagement Proposals

Given the various scenarios, and bearing in mind the need to reduce identified factors causing stress

and fatigue, we propose that the terms and conditions for field staff and contractors in 2012 be as

follows:

The EQC will engage field staff and contractors on merit, irrespective of their place of

residence, choosing from the candidates who have indicated their interest in returning

to Christchurch on the “Active List” (continuing engagement)

Appointment to the Active List can be either:

on a Fixed Term Agreement (FTA) basis (initially for a period 12 months) with all of

the associated non-salary benefits, or

on an hourly (or daily) contract without the surety of tenure (say monthly) and

without the FTA non-salary benefits, but being paid at a level somewhat higher than

the FTA rate in recognition of these factors

Engagement of individuals on the Back-Up List (the list of individuals who have indicated

their willingness to be invited to assist when required, in Canterbury or for other events)

– only if necessary and for limited durations – on the same hourly or daily basis as those

engaged on the Active List.

The payment of:

Fixed Travel Amounts (as calculated and operated in 2011) to all out of town field

staff and contractors engaged from 1 January 2012, on the basis of each individual

travelling home at EQC expense fortnightly (or less frequently).

A Relocation Allowance, at a rate to be determined, for field staff and contractors

engaged for periods of six months or more, if they decide to relocate their families

to Christchurch subject to:

i. the amount of the allowance being less than a combination of the Fixed

Travel Amount that would be paid if the individual were to travel home

fortnightly (for a period of three months) at EQC expense and the

accommodation allowance that would be payable were s/he to be housed in

Christchurch at EQC expense (up to a maximum of $13,680); and

ii. a contractual requirement that the relocation allowance be refunded on a

pro-rata basis if the individual does not complete a minimum period (say

three months) of satisfactory service

An Accommodation (and other expenses) Allowance of $100 plus GST per day, or

the provision of EQC-arranged accommodation and an allowance for other expenses

at the rate of $50 plus GST per day; (reduced from current rates of $130 and $70

respectively per day to reflect the changed environment).

The provision (loan) of:

A rental or leased vehicle for work purposes for each team of assessor and

estimator, and for the shared private use (for local running) of the assessors and

estimators who are not local Christchurch residents. (We understand that FBT will

not apply for any private use of the cars if they are not built into the individual

contracts of employees. It is also to the advantage of the Commission that the cars

are taken ‘home’ in the evening to prevent vandalism and theft).

A cell phone for work purposes, and for private calls to family of up to 15 minutes

per day for field staff and contractors who are not local Christchurch residents

An iPad computer and other standard equipment, for work purposes.

7. COSTINGS

Cars Any additional charges associated with the rental and leased cars

resulting from the private running by the out-of-town field staff and contractors has

not yet been quantified but will apply no matter how the field staff and contractors

are engaged (unless they are local).

Phones Similarly, costs associated with daily cell phone calls home by field

staff and contractors will be a charge no matter how the field staff and contractors

are engaged and this has not been specifically costed.

Remuneration The proposal is that the overall engagement packages (salary or

wages) for field staff and contractors should amount to similar overall costs

irrespective of the approach. The following tables indicate the estimated costs of

remuneration (alone), calculated for 44 hour weeks.

For the purposes of the costings below it has been assumed that some Senior Estimators will be

included in the ‘mix’ at each Hub or office, and that there will be about 50 such Hubs. (It is also

assumed that Contracted Loss Adjustors will play a leading role in the Hubs but as they are engaged

on a separate contractual basis, no specific provision for them is made in these calculations).

Assessors and Estimators

Base rate

(44 hr/wk)

70 staff and contractors

120 staff and contractors

170 staff and contractors

Additional employee Benefits?

At $55 per

hour*

8,984,976

15,402,816

21,820,656

No

At $115,500

p.a.

($105,000 equivalent for a 40 hour week)

8,494,101

14,561,316

20,628,531

Yes

*This is also the proposed rate for contractors engaged on an ‘as needed’ basis for the Back-Up list.

Senior Estimators on the Active List

Base rate

(44 hr/wk)

25 staff and contractors

50 staff and contractors

Additional employee Benefits?

At $137,500 p.a.

($125,000 equivalent for a 40 hour week)

3,611,438

7,222,875

Yes

At $65 per hour

3,792,360

7,584,720

No

Allowances For costing purposes it has been assumed that a total of 170

field staff and contractors will be engaged, of whom 120 do not live in Christchurch

and return home fortnightly.

The costings below indicate payment of accommodation assistance and daily allowances.

For costing purposes 60 of the out-of-town staff and contractors are assumed to live in EQC-

arranged accommodation and to receive the lower daily allowance.

The cost of 50 Christchurch field staff and contractors being paid the current $15 daily

allowance is $216,750 per annum. In addition to this allowance, some Christchurch staff and

contractors who have to travel more than 50 kilometres each way to work are currently paid a

mileage allowance.

It is not normal practice for employers to pay for staff or contractors to travel to and from their base

workplace, nor for their lunch, so the argument for the continued payment of these allowances is

debatable. They are not recommended for 2012 and beyond.

INDICATIVE COSTINGS OF ALLOWANCES

Travel

Staff/contractor numbers

Average Fixed Travel

Allowance

Subtotal Trips per year (excludes 4 wks leave)

Total

120

1,000

120,000

24

2,880,000

Daily Allowances

Staff/contractor numbers

Proposed Daily

Allowances

Subtotal Days per year (6 days per week

less leave)

Total

60

100

(If finds ‘own’ accom)

6,000

289

1,734,000

60

50

(If in ‘EQC’ hotel)

3,000

289

867,000

Accommodation (paid directly)

Staff/contractors in EQC accom.

Average Hotel Tariff

Subtotal Nights per year (6 days per

week less leave)

Total

60

140

8,400

289

2,427,600

8. SUMMARY

Comparisons with external employers, both those paying remuneration packages (i.e. salary plus

benefits) and contractors indicates that the rates of remuneration now recommended in this paper

are appropriate for the current competitive environment, and that they should be sufficiently

attractive to enable the engagement of both salaried field staff (FTA) and contractors. .

It is argued that the quality and experience of the best of the field staff and contractors engaged by

the Commission during 2010 and 2011 is such that there is the potential to save considerably more

than they will cost through the quality of their inspections and assessments.

In order to obtain the best it will be important to engage individuals on a combination of salary and

wage packages that reflect their interests in tenure and flexibility. It will also be important to make

living in Christchurch sufficiently attractive to draw them from their usual places of residence and

their families – or to relocate their households to Christchurch.

The proposed lengths of engagement will, in our view, go some way towards compensating for what

for many will be lower rates of pay than they have received previously, but we believe that it would

be unwise to also significantly reduce allowances which cover expenses for the out of town staff and

contractors. However, some reductions in daily allowances are proposed for non-Christchurch

resident staff and contractors, and the case for paying local field staff and contractors meal and

mileage allowances can no longer be justified.

In order to get the job done we will need to be able to engage and retain the best staff and

contractors in flexible and equitable ways that do not impact more on the public purse than is

necessary. The following recommendations are based on these requirements.

9. RECOMMENDATIONS

We recommend that you:

1. Confirm that the selection of field staff and contractors for 2012 and beyond should be

entirely on the basis of merit.

2. Confirm that the place of residence of any applicant will not be a factor in determining

suitability for engagement and that Australian candidates may be engaged as long as they do

not cost more in terms of remuneration, allowances and expenses than equivalent New

Zealand residents.

3. Approve that the remuneration of Assessors and Estimators on the Active List will, from

1/1/2012, be on both of the following two bases:

a. Fixed Term Agreements, initially for a period of one year

b. Contracts for the provision of services on an hourly or daily basis, typically for

periods of up to 12 months

4. Approve that the engagement of Assessors and Estimators selected from the Back-up List on

an ‘as needed’ basis for short term requirements will, from 1/1/2012, typically be for periods

of less than three months duration.

5. Note that reviews of market rates have provided a basis for confidence in the

competitiveness of recommended rates of remuneration as well as confidence that the

recommended rates are consistent with responsible management of public funds.

6. Confirm that from 1/1/2012 the standard hours for field staff and contractors engaged in

Canterbury will be 44 hours per week (and note that this is reflected in the salary rates in 7

below).

7. Approve the rate of remuneration to be paid to field staff and contractors from 1/1/2012,

based on a 44 hour week, as follows:

a. Assessors and Estimators - salary – $115,500 p.a.

- wage – $55 per hour

b. Senior Estimators - salary - $137,500

- wage - $65 per hour

8. Approve the following allowances and rates of allowance:

a. For all staff and contractors who are not resident in Christchurch:

i. A daily allowance (to cover meals and incidentals) of $50 per day (plus GST if

a waged contractor) if staying in accommodation arranged and paid for by

the Commission

ii. A daily allowance (to cover self-arranged accommodation, meals and

incidentals) of $100 per day (plus GST if a waged contractor)

iii. A Fixed Travel Amount (at rates determined in late 2011) based on the travel

time and costs from each individual’s normal place of residence to work in

Christchurch and return.

9. Approve a relocation subsidy, at a rate to be determined and separately approved by you,

for field staff and contractors, if they relocate their families to Christchurch, subject to:

i. the amount of the subsidy being less than a combination of the Fixed Travel

Amount that would be paid if the individual were to travel home fortnightly

(for a period of three months) at EQC expense, and the accommodation

allowance that would be payable were s/he to be housed in Christchurch at

EQC expense (a maximum of $13,680), and

ii. a contractual requirement that the relocation subsidy be refunded on a pro-

rata basis if the individual does not complete a minimum period (say three

months) of satisfactory service

10. Approve the abolition (with effect from 1/1/2012) of the allowances paid to Christchurch

staff and contractors for :

a. meals ($15 per day (plus GST)) and

b. mileage ($0.85 per kilometre incl GST) for staff and contractors travelling more than

50 kilometres to work each day

11. Approve the (loan) allocation to field staff and contractors, in 2012, of rental or leased

vehicles to assessors and estimators for work purposes, and for the shared private use of the

assessors and estimators who are not local Christchurch residents.

12. Approve the (loan) allocation of cell phones to assessors and estimators for work purposes,

and for private calls of up to 15 minutes per day to family who are not Christchurch

residents

13. Approve the (loan) allocation of an iPad computer and other standard equipment such as

ladders, levels, and protective equipment, to field staff and contractors for work purposes.

Heather Stewart David Curry

General Manager (OD) Human Resources Manager (Christchurch)

Supported:

Reid Stiven

Event Manager

Approved:

Bruce Emson

General Manager, Customer Services

Appendix J

FIELD STAFF ENGAGEMENT 2012 – QUESTIONS AND ANSWERS #1

These Questions & Answers are intended to be read in conjunction with the Memo of 2

November signed by Reid Stiven and sent to all field staff. Further Q&As will be provided as

required.

Question

Answer

1 Are Senior Estimator roles going to be advertised on the Career Centre in the same way that Estimator and Assessor roles will be?

No. Senior Estimators are deployed to those roles rather than appointed to them, and deployment can be for short or long periods. As at the present time, Senior Estimators will be chosen on the basis of their experience and demonstrated skills and competence.

2 Why do you need a Reserve List and a Back-up List?

The Reserve List is a list of people who would like to work full time with the Commission in 2012 (and maybe longer). They will be called on as vacant spots arise. The Back-up List is a list of people who may be available to work with the Commission for short periods when and if the need arises. Both lists will be used to staff the Commission’s needs when another event occurs.

3 How were the 2012 pay rates determined?

The Commission undertook market research in the main centres of New Zealand (and some Australian cities). The rates determined for 2012 are very competitive.

4 What is the basis for lowering the daily allowance rates?

The daily allowances paid during 2010 and 2011 reflected the need to encourage individuals to travel to Christchurch to help with the major Events The Commission has a responsibility to spend public money responsibly and with care. After consulting with many individuals who have been in receipt of the allowances it is clear that the 2012 rates are quite reasonable.

5 Why has the Commission decided not to continue to pay a daily allowance or mileage allowances for people who live in Christchurch?

It is not normal practise for employers to pay for their staff to travel to work. Nor do employers normally pay for their staff members’ lunches. The Commission does not believe that it is appropriate to pay these allowances from 2012.

6 If individuals choose to stay in Christchurch rather than travel home when they are entitled to, will the accommodation (and daily allowance) be paid for the weekend?

Yes. Accommodation and daily allowances would be paid as long as the cost does not exceed the costs associated with travelling home.

7 Will there be any flexibility around working hours? For instance, will it be possible for individuals to work a little extra time during the week so that they can be free for family commitments etc on Saturday morning (such as children’s sport)?

This will depend on the arrangements within each workplace. The need to work on Saturday mornings is driven by the expectation that the Hubs will be open then. There may be room for some flexibility around manning on Saturday mornings (such as alternating Saturdays ‘on duty’), but it will not be possible to be definite about this until next year.

8 Can you clarify the situation regarding the need to make a refund of contributions to relocation costs?

If the Commission makes a contribution towards family relocation costs and the individual leaves the Commission within three months of receiving the payment, s/he will be required to refund the Commission’s contribution, on a pro rata basis. For example, if only one month of the 3 months had been served with the Commission since receipt of the payment, two thirds of the contribution will need to be repaid to the Commission.

9 Do I need to apply or express an interest if I am a POD Leader, FOS, or in any other supervisory or specialist role?

Yes. In 2012 the roles of POD Leader and Field Office Supervisor will cease to exist. Although a management structure may well develop in the new year, it will come from the assessors and estimators who have indicated their availability and interest. Similarly, any individual in roles such as those in the Claims Review Team or Opt Out Team also need to apply or express interest. If they do not, they will not be part of the engagement process. If in doubt, put your name in the hat.

10 If I am currently engaged by the EQC through a personnel provider do I have to apply or express an interest in 2012 roles through that provider?

No. It is important that you communicate with your personnel provider about what you want and intend to do, but you should also personally apply or express an interest in the available roles using the EQC’s Career Centre. We will be asking personnel providers to provide us with a list of their employees or contractors and what they expect them to be doing (i.e. applying or expressing an interest etc) and we will check these lists against the Career Centre registrations. If you want a chance of coming back next year you need to make sure you are on one of the Career Centre lists.

11 What will be the situation if I am engaged through a personnel provider and I am selected to come back next year, but I want to come back ‘independently’ – i.e. not through my provider?

You must meet your contractual obligations to your provider. So if you have a contract with your provider that includes a restraint of trade provision requiring you to not work with the EQC for a period after giving formal notice to the provider, you will need to respect that. The Commission may be prepared to delay your start date in 2012 to accommodate this. You may wish to flag this in your application / expression of interest.

David Curry

Human Resources Manager, Christchurch 3 November 2011

FIELD STAFF ENGAGEMENT 2012 – QUESTIONS AND ANSWERS #2

These Questions & Answers are intended to be read in conjunction with the Memo of 2

November signed by Reid Stiven and sent to all field staff. Further Q&As will be provided as

required.

Question

Answer

1 If I am offered a Fixed Term Agreement do I have to sign it as an individual or can I sign it as a Limited Liability Company?

You would be able to engage on a FTA as either an individual or through your LLC. The choice would be yours.

2 Will the standard 8 hours a day include a lunch break?

You will be entitled to a lunch break of between 30 minutes (minimum) and an hour, sometime between 12 and 2. If you take a 30 minute lunch break you could finish earlier, though this depends on the needs of the organisation.

3 Will statutory holidays be automatic days off or will staff be required to work on these days?

Statutory days off will be yours as of right. Fixed term employees will be paid for those days (but contractors will not).

4 Will tax and ACC levies be deducted by the EQC?

Tax will be deducted on a PAYE basis for employees (i.e. those people on FTAs). EQC will pay the ACC levies.

5 Will there be a requirement for an employee to hold their own public liability or public indemnity insurance?

EQC employees will not need to hold their own public liability insurance. Public Indemnity insurance is not required now and will not be required in 2012. Contractors will need to hold and pay for their own public liability insurance, as at the present time.

6 Will contractors be paid for absences due to sickness?

No, contractors do not have any sick leave entitlement.

7 What is the Commission’s position on the length of stand-down periods required under restraint of trade clauses in individual’s contracts with personnel providers?

The Commission expects individual’s to meet any reasonable restraint of trade requirements prior to any direct engagement with the Commission. We recommend that you discuss this matter with your personnel provider. The Commission’s position on this issue was set out in a Notice to personnel providers and field staff on 20 April 2011. The Commission’s stated policy is as follows: “ 1. If the individual has previously worked for the

Commission having been supplied to it through a third party, and if the individual has a written contract with the supplier, the Commission will only engage the individual after such time as the individual has completed any reasonable and valid ‘stand-down’ period required by that written contract.

2. In the event that the individual’s written contract with a

supplier has an excessively long or open-ended clause which effectively precludes the individual from directly contracting with the Commission, the Commission will be prepared to consider contracting directly with the individual after a period of three months from the individual’s last day of work with the Commission under the third party arrangement (or sooner by agreement with the third party).

3. If the individual does not have a written contract with

the supplier which precludes the individual from contracting directly with the Commission, the Commission will be prepared to consider directly contracting with the individual, as soon as they have completed their current work rotation with the Commission, or if they are not currently working on rotation, with immediate effect.”

‘Thank you’ to the individuals who asked these questions, they are likely to be of interest to other

individuals.

David Curry

Human Resources Manager, Christchurch 4 November 2011

FIELD STAFF ENGAGEMENT 2012 – QUESTIONS AND ANSWERS #3

These Questions & Answers are intended to be read in conjunction with the Memo of 2

November signed by Reid Stiven and sent to all field staff. Further Q&As will be provided as

required.

Question

Answer

1. What is the correct internet address for me to use when applying for a 2012 role on the Active List or Back-Up List?

The correct address is careers.eqc.govt.nz. (We learnt only today that the address has been setup without “www”).

2. Some of the questions on the careers website seem inappropriate or not relevant to the application I want to make. Do I have to answer all of the questions?

The EQC careers website is designed for a variety of roles and may include some questions that are not really relevant (such as the preferred pay rate question). Once the application period is up we will ask the system to give us the responses from only the relevant questions. If in doubt, please answer all questions.

3. If the EQC choose one or more of our team (we are a personnel provider) for 2012 and their personal circumstances change and they cease to be available during the year, can we substitute another of our team for the person who is no longer available?

The short answer is ‘no’. If vacancies arise or extras are needed for the Active List, the EQC will fill the gap with the person who is next in terms of merit and confirms that they are available. The issue of whether they come through any provider or ‘directly’ has no bearing on the selection.

4. Will accommodation allowances be paid for those who are in self-arranged accommodation for the weekends when they have gone home (up to fortnightly).

No. The EQC doesn’t pay the accommodation allowances for the week that contractors are off rotation now, and the same will apply next year. That is, for the two days that individuals are away at home (up to fortnightly) next year, they will need to find the funds to pay for those two days themselves.

5. In the 2 November memo from Reid Stiven, the rates of $55 per hour are quoted for contractors (in the table on page 2), but does this include or exclude GST?

The rates are GST exclusive (i.e. $55 plus GST).

6. In the 2 November memo from Reid Stiven, the word ‘employment’ is used in the paragraph on page 3 that refers to Relocation costs. Does this mean that only those on Fixed Term Agreements (the ‘employees’) and not the contractors are entitled to the assistance with the relocation expenses?

No. We should have used the term ‘engagement’ rather than employment. The relocation assistance will be available to both employees and contractors.

7. In Question 4 of the Q&A #2 issued on Friday 4th November, the statement is made that “EQC will pay the ACC levies’. Does that apply to contractors?

No. That only applies to Employees (on Fixed term Agreements).

8. Will interviews be held as part of the selection process for next year?

No, interviews will not be held for these roles. The selection process will be based to a large extent on the assessments currently being carried out by supervisory and management staff. Those assessments will also be subject to peer and HR review to ensure, as far as possible, that selection is objective and based on merit.

9. How much sick leave is an employee entitled to if engaged on a fixed term agreement?

10 days per annum (proportionately less if less than 1 year is worked).

10. How much is the Kiwisaver contribution worth to employees (people on FTAs)?

2% of earnings.

Thanks once more to all of the individuals, and personnel providers, who provided these helpful

questions.

David Curry

Human Resources Manager, Christchurch 7 November 2011

FIELD STAFF ENGAGEMENT 2012 – QUESTIONS AND ANSWERS #4

These Questions & Answers are intended to be read in conjunction with the Memo of 2 November signed by Reid Stiven and sent to all field staff. Further Q & As will be provided as required.

Question

Answer

11. If we use EQC arranged accommodation, (hotels or motels), would we be staying in the same location (& room) all year or would we be moved around between different hotels, as we have been this year?

This year some people have been able to stay in the same place for three months or so. Some people like that and some prefer to move around. There is still quite a lot of detail to sort out around these matters, including accommodation arrangements, and there will be an opportunity to discuss individual preferences at a later date.

12. What is the flexibility around working additional hours to the 44 on offer under the contracts?

It may be possible to negotiate additional hours for individuals who wish to work them (prior approval would be required), but at this stage we cannot guarantee that extra hours will be available. It will depend on workloads, and fitting in with others. The bottom line will always be that any extra hours available would be when and if the EQC wants them worked, (and subject to prior approval).

13. For those choosing the “contractor” option, will there still be a ‘tolerance’ for travel of 2 hours arrival to Christchurch and 2hours on departure?

No.

14. What are the fixed travel rates for travel? Is there an updated schedule?

The fixed travel amounts depend on where individuals live. If you have specific queries about how much the rate would be for yourself, please speak to Jo Baird, Accounts Manager, 03 37419329

15. Can we please clarify what constitutes a “local resident” ?

A local resident, for the purposes of the 2012 terms and conditions, is anyone whose family home is South of the Hurunui River, North of Hinds, and east of Springfield.

16. If I relocate my family to Christchurch do I become a “local resident”?

Yes. And when that occurs, any allowances that are payable to employees or contractors who are not local residents will cease.

17. Is there flexibility to travel home each weekend and can the accommodation cost be offset against this cost?

Until the basic needs of the organisation are met (including sufficient coverage for Saturday mornings), it is not possible to negotiate releasing individuals for the whole weekend every weekend. If individuals are not at work they will not be entitled to payment of accommodation costs, so there is no way that they could be offset against travelling home.

18. Does the EQC appreciate the difficulties of being able to travel home only every second weekend?

The Commission is very conscious of the importance of enabling field staff to be able to be able to spend time with their families in the weekends. Where it is possible to meet our obligations to cover Saturday mornings and still permit individuals to travel home (ideally on Friday nights) we will do our best to facilitate it. We are looking further at how this may be achieved as we appreciate that it is a very important issue to many people.

19. If the personnel returning to work for EQC are not all posted to a Hub, is there a difference in remuneration for each separate role performed?

Some individuals will be deployed to hubs from the 2012 field office. Exactly what will be required of individuals allocated to hubs (or any other role) will be reviewed and specified later. The relative strengths of all available individuals will be considered when making the deployment decisions.

20. Is it necessary to attach a CV to the application for employment, given the fact that we should be well known by now.

It is not essential for the application process, but it would be helpful, even if we already have a previous copy in the office. One of the reasons is that the EQC is building its database of people who can be called upon and it doesn’t yet have electronic copies of CVs for everyone.

Thanks once again to all of the individuals, and personnel providers, who provided these helpful questions. David Curry Human Resources Manager, Christchurch 9 November 2011

FIELD STAFF ENGAGEMENT 2012 – QUESTIONS AND ANSWERS #5

These Questions & Answers are intended to be read in conjunction with the Memo of 2

November signed by Reid Stiven and sent to all field staff. Further Q & As will be provided

as required.

The deadline for submitting an application/expression of

interest on the careers.eqc.govt.nz website is on 11.30 PM

Sunday 13 November 2011.

Questions

Answers

21. If I have “Registered” on the EQC website is that all I have to do?

IMPORTANT

NO. To be considered for the following roles you must actually APPLY to the vacancy listed on the website.

Assessor (Active List)

Estimator (Active List)

Assessor (Back up list)

Estimator (Back up list) How to apply:

1- Return to the site careers.eqc.govt.nz. 2- On the welcome page you will see a list of the roles under

‘Top Jobs’. 3- Click on the role you wish to be considered for. 4- Click the Apply now! Button. 5- You will be asked to login with your email address and the

password you created when you registered 6- Follow the instructions to complete the application

process.

Unless you actually go through the application process fully on the website, your name will not appear on the list of applicants. If you have any questions or would like help, please contact Rebecca Lilliebridge on 03 741 9312, or rlilliebridge@eqc.govt.nz

22. If I am not selected, will it be possible to get some sort of Certificate of Service as a record of my time here and to show future potential employers?

Yes. On request we can provide a signed Statement of Service. This is a simple statement on the EQC letterhead which shows the role you played (Assessor or Estimator), the date you started and the date you finish. If you would like such a statement you are welcome to call or email Rebecca Lilliebridge on 03 741 9312, or rlilliebridge@eqc.govt.nz

23. If employed or engaged as an individual contractor (not LLC) will the EQC be deducting withholding tax (20%) as normally required by IRD when engaging contractors?

Estimator/assessor work does not fall within the Schedule 4 of the Income Tax Act 2007, so withholding tax is not necessarily deductible. However, if individuals are invited to contract with the Commission and wish to do so as sole traders, we will need to get their tax treatment confirmed with the IRD to establish whether or not PAYE or a withholding tax is required to be deducted.

24. I have applied for the "Active" list. Hopefully I will be offered a position. However, If I am not successful there, must I also submit an application for the back-up list , "just-in-case?"

If you apply for an Active List role and are unsuccessful you will be automatically placed on the appropriate Reserve List (assessor or estimator). Individuals on that list will be approached for vacancies or additional positions as they arise. Individuals will be drawn from the Back-up List (and from the Reserve List) for short term or periodic work as it arises. If you have applied for the Active List there is no need to also apply for the Back-Up List.

25. For staff on employment contracts in 2012, is annual leave able to be taken as it is earned or only after one year of employment?

Annual leave can normally be taken once it has been earned, on a pro rata basis. That is, you don’t have to wait until you have completed a year to enjoy a 4 week break. You could, for example, take two weeks after six months, or 1 week after 3 months. This of course is all subject to application and approval at the time.

Thanks once again to all of the individuals, and personnel providers, who provided these helpful

questions.

Remember, the deadline for submitting an application/expression of

interest on the careers.eqc.govt.nz website is on 11.30 PM Sunday

13 November 2011.

David Curry

Human Resources Manager, Christchurch 11 November 2011