INSURANCE

Insurance is very important in the automotive industry as accidents do occur and very often some of these accidents are very severe. These accidents may include damage to property, damage to customer vehicles and even accidents that can put employee’s lives at risk.Not all workshops have the funds necessary to keep the workshop operating after a big accident and that is where the insurance comes in. Having insurance for workshop owners will minimize the risk of losing their business should an accident occur.

An example of one of the more common types of insurance that a lot of workshops usually get is “business asset insurance”. The business asset insurance cover protects the business property, the internal contents such as stock and customer goods, repairs and cost of replacement for damages that are caused unintentionally.

Depending on the insurance company and the additional protection you want from your insurance package, you can protect even the onsite facilities, signs, gates and fencing, machinery, tools, equipment, and even furniture. You can even have your business insured for the full rebuilding of your business property should a huge accident occur which may result in you losing everything.

(Source: www.abaunited.com)

BANKING & FINANCIAL SUPPORT

One of the important aspects of having a business is the financials of the business. One of the financial aspects is banking. Banking is extremely important for any business as it provides a safe loaning option should you wish to expand or develop your business.

It is also a safe and easy way to keep track of all the money that the business needs and provides a method of receiving payments from customers as well such as eftpos payments. Having good relations with your bank can be very beneficial to your business as this enables you to apply for more loans to further the growth of your business.

Different banks will give you different offers. For instance ANZ is better than the ASB, in that ASB charges fees on every transaction, while ANZ is offers free transactions.
Selecting the right accounts to use is important for making sure that you make the most of the services and benefits that a bank has to offer.  Generally, a credit card is a better option than an Eftpos card, because you do not need to deposit money on a credit card. Also, with a credit card, you normally have 10,000 to 20,000 credit limit for businesses.

Applying for Financial Support
If you want financial support from banks or potential investors, you need to prepare an account book, and a complete track record of the workshop performance to date. The potential investors want to run a financial checking of your workshop.
They want to know if you have the ability to return the support and with interest.
If a workshop provide proof of profit for each year and each month, it is easier to receive approval for financial support.

What you must know:

• The amount you want to borrow
• The period or payment term
• The interest and finance rate

If you can get financial support you are better off extending the payment term, so you have sufficient time to pay the debt, whilst having the ability to pay off the loan earlier. If you cannot pay the debt on time, then you should at least pay the interest on time, otherwise the result will be a bad record on your credit history.

The finance rate is usually around 6% to 29.5% per year, and the finance company acquires the money from the market at around 10% interest, they will charge you 15% to 20% in finance rate per annum. For example, if you borrow $20,000 over a period of two years at an interest rate of 19.5%. The finance company will receive the interest fee by monthly debit and it is divided in to 24 instalments. For the first month, you will pay $833.33, with an interest fee of $325 dollars.  In the second month the payment will be $833.33, with an interest fee of $311.45. As you can see, as time progresses, while the instalments remain the same, the interest fee is reducing every month.

When seeking financial support it is vital to be aware of all the fine print as the interest sometimes increases more and more with time and businesses can collapse by the overload of interest. Also, bare in mind that when you borrow the money the finance company is very friendly, however when you cannot pay the debt and interest, they will become very impatient and at times rude, and so it pays to keep on top of your bills.

(Source: www.elca.ch.com)

LEGISLATIONS

Corporate structure options

Four main avenues are open to overseas entities wishing to set up a business in New Zealand.

They are to:

• Register a branch

• Form a subsidiary company

• Merge with or take over an existing New Zealand company, or

• Enter a limited partnership.

Taxation

New Zealand has a broad-based tax system consisting principally of:

• Income tax and fringe benefit tax

•Resident and non-resident withholding tax (RWT and NRWT)

• Goods and services tax (GST)

• Accident Compensation levies

• Import tariffs and miscellaneous excise duties, and

• Local authority rates on property.                                                                                         (Tripp, 2011)

Stamp duty, gift duty and death duties are not payable in New Zealand. Tax advice provided by lawyers enjoys legal privilege, that is, it does not have to be disclosed to the authorities in most circumstances.

Income Tax (Residency and rates of tax)

For individuals and companies defined as “resident” in New Zealand, income tax is imposed on worldwide income. Non-resident individuals and companies, on the other hand, are taxed only on income derived from New Zealand, and their tax liability may be reduced by the provisions of an applicable double tax agreement. Individuals are regarded as resident in New Zealand for income tax purposes if they have a permanent place of abode in New Zealand or are present in New Zealand for more than 183 days within a 12-month period.

A company is regarded as resident in New Zealand if:

• It is incorporated in New Zealand

• It has its head office in New Zealand

• It has its centre of management in New Zealand or control in New Zealand.

Companies (both resident and non-resident) are taxed at 28%. Individuals (both resident and non-resident) are taxed incrementally at between 10.5% and 33%. As noted above, non-residents are taxed only on their New Zealand-sourced income.

For individuals, assessable income includes (among other items) salary and wages, bonuses, other employment benefits or remuneration, partnership income and investment income. For salary and wage earners, tax is deducted at source through the Pay As You Earn (PAYE) system. Non-cash benefits provided to employees are subject to fringe benefit tax which is payable by the employer.

(Tripp, 2011)

Goods and Services Tax (GST)

GST is a consumption tax charged at 15% on the supply of most goods and services in New Zealand. GST-registered taxpayers must charge GST on the goods and services they supply and can obtain a credit for any GST they pay in the course of their business. In this way, the burden of GST is passed along a chain of registered suppliers until it reaches the final consumer.

(Tripp, 2011)

Those making supplies in New Zealand are required to register for GST if they carry on a taxable activity (which is similar in concept to a business, but wider in scope) through which they will make taxable supplies of more than NZ$60,000 per year. 

A person carrying on a taxable activity (whether in New Zealand or outside New Zealand) can voluntarily register for GST even if they are under this threshold. Certain supplies of goods and services can be either exempt from GST or zero-rated (e.g. the supply of financial services, services performed as an employee, some services supplied to non-residents and residential rental accommodation).

(Tripp, 2011)

Accident Compensation Levies

New Zealand operates a no-fault accident compensation scheme whereby persons suffering from accidental injuries need not prove fault before receiving compensation. The scheme provides for some financial assistance for medical expenses, loss of earnings, and compensation for dependants in the case of death. All compensation is paid by the Accident Compensation Corporation (ACC), which is funded by:

• Levies paid by all employers, self-employed persons and private domestic workers for work-related accidents. The levy for the self-employed and private domestic workers is set by regulation, whereas the levy for employers is determined by the industry risk class applying to the employer, and may be adjusted up or down depending on the individual employer’s safety management practices

• Levies paid by self-employed persons, private domestic workers and employees for non-work related accidents

• A residual claims levy paid by employers, private domestic workers and the self-employed to cover claims outstanding prior to the introduction of the Accident Insurance Act 1998, and

• Funds set aside by Parliament to fund compensation for injuries to non-earners.

(Tripp, 2011)

Another option is the ACC’s accredited employer programme under which employers can elect to pay no levy, or a reduced levy, in return for funding all or a share of any compensation entitlements incurred at their workplace. To be accepted for the programme, the employer must satisfy a number of criteria, including a minimum level of safety expertise and financial solvency.

Consumer protection

The principal pieces of consumer protection legislation are the Fair Trading Act 1986 and the Consumer Guarantees Act 1993.

The Fair Trading Act

The Fair Trading Act applies to anyone involved in trade. It prohibits (generally whether the activity is intentional or not):

• Engaging in conduct which is likely to mislead or deceive

• Engaging in conduct that is liable to mislead as to the nature, manufacturing process, characteristics, suitability for purpose, or quantity of goods

• Engaging in conduct that is liable to mislead as to the nature, characteristics, suitability for purpose, or quantity of services

• Engaging in misleading conduct in relation to employment that is or may be offered to a person

• Making false or misleading representations in respect of goods or services.

(Tripp, 2011)

The Fair Trading Act also deals with consumer information, falsely applying trademarks, using coercion in connection with supply, offering prizes without providing them as offered, bait advertising, pyramid selling schemes, consumer information standards, product and service safety standards, product recall and the sale of unsafe goods. The Act is enforced by the Commerce Commission and gives consumers direct rights of action. Anyone providing goods or services needs to be aware of the Act.

The Consumer Guarantees Act

• Provides consumers with certain basic warranties in relation to goods and services

• Sets out certain guarantees that relate to the quality, suitability and other aspects of goods and services

• Gives consumers remedies against suppliers where goods or services fail to comply with one or more of those guarantees.

The Act does not apply to dealings with business customers and commercial contracts usually contain a specific acknowledgment of this effect. It applies only to persons buying goods or services for the purposes of household or domestic use.

(Tripp, 2011)

Resource Management Act 

The Resource Management Act 1991 (RMA) is New Zealand’s principal statute relating to the use of land, water, minerals, the coast, air and physical resources. The Act aims to promote “sustainable management of physical and natural resources”. The Act also seeks to maintain and enhance New Zealand’s “clean, green” image. The RMA has major implications for industrial projects and property developments. A new development may require a number of consents under the Act before it can go ahead.

Controls on development are administered by locally elected Government authorities and are expressed through a range of publicly notified plans. These include regional plans, regional coastal plans and district plans. Plans set out rules for activities in various locations or “zones”. Parties seeking consent to proceed with a development must follow the procedures set out in the relevant plan, and this may involve public participation through the public notification of the consent application.

Privately owned land may be designated in the district plan as being required by the Government for a public work, which may result in the land being acquired by the Government (compulsorily if necessary). The current market value of the land would be paid as compensation.

(Tripp, 2011)

Building Works

The Building Act 2004 is designed to regulate and control building work and the use of buildings. Every new building and most substantial alterations or additions to existing buildings will require a building consent. Multiple-use approvals are available for group home builders who build homes throughout New Zealand using the same or similar plans.

On completion of works, a code compliance certificate will be issued, provided compliance with the building consent has been satisfied. Allied to the Building Act is the Building Code. This sets criteria to ensure buildings are safe, sanitary, have adequate means of escape and, in the case of public buildings, have access and facilities for disabled persons. Existing buildings, which are being altered, may require upgrading in the course of the alterations in order to comply with these criteria as nearly as is reasonably practicable. Buildings considered earthquake prone may also be required to be upgraded.

The Act imposes restrictions upon occupation of a building where public areas of that building are subject to building works for which a code compliance certificate has not yet been issued.

(Tripp, 2011)

Labour and employment (Employment Relations Act 2000)

The Employment Relations Act is the principal statute governing employment in New Zealand. It aims to promote good faith in the employment relationship and the right of workers to bargain collectively.

Agreements must be in writing, and may be individual (between an individual employee and the employer) or collective (between one or more unions and one or more employer). As of 1 July 2011, employers must hold a signed copy of employment agreements.

Union membership is not compulsory but all collective agreements must be negotiated and concluded by a union.

(Tripp, 2011)

Good faith

The parties to an employment relationship must not do anything, either directly or indirectly, to mislead or deceive each other. They must be “active and constructive,” as well as “responsive and communicative” in their dealings.

The Act also requires parties to bargain in good faith. Employers and employees/unions must, at a minimum, come to the bargaining table, listen and respond to what the other party puts forward.  Parties bargaining for a collective agreement must conclude the collective contracts unless there are “genuine reasons” not to.

Further, employers proposing to take an action that may have an “adverse effect” on their employees must (subject to genuine although strict confidentiality exceptions) provide information about the decision and consult with their employees in good faith before the decision is made.

(Tripp, 2011)

Reference:

Chapman Tripp. (2011).DOING BUSINESS IN NZ: Regulations affecting business. Retrieved from: http://www.chapmantripp.com/publications/Pages/DOING-BUSINESS-IN-NZ-Regulations-affecting-business.aspx

EXTERNAL FACTORS ASSESSMENT BEGINS

In our first assignment we investigated a workshop and observed their day to day activities, followed their operations and compared some of the New Zealand regulations and legislations with the workshop. This assignment however will talk about the external side of the business that we normally won’t observe but is also an important part of any workshop as it involves business aspects that are needed in order for the workshop to function and operate efficiently.

Source: www.leoisaac.com

REPORT DUE

We were at last able to rid ourselves of this burden that we have been carrying, as today we submitted the assessment. I am silently confident that we have produced a decent report seeing as we were extra careful in its preparation leading up to today.

For now, our sights are firmly set on our discussion in a few days time.
This morning our group congregated  and had discussion regarding  this. We have worked out who will cover what in the discussion and now we are in the process of preparing slides.
I would hate for things to go downhill from here as we have done well up until now.

I hope things should go according seeing as we just need pick those important points from the report to showcase our research. Bring on the discussion!!

SUMMARISING FINDINGS

Conclusion

After observing the East Auckland Honda workshop, we have come to the realization that the company is compliant with New Zealand regulations. Based on the past experiences with working at other workshops, there are many workshops out there that struggle to comply with regulations as they lack the proper business knowledge and capacity. These types of workshops usually become more prone to having accidents or incur silly errors made by technicians on vehicles, costing the business large amounts of money, which on many occasions can be avoided.

Honda have countered these issues by setting up the employees to follow strict policies when working on vehicles, and following workshop manuals so that when working on a vehicle errors can be eliminated.

Throughout the course of the observations we have learnt the importance of rules and regulations in the automotive industry, and believe that we are lucky that in New Zealand we have a governing body that regulates and enforces those rules. Without such rules and regulations, health and safety for employees within a company would seize to exist and accident levels and death tolls would be high.

Overall, in every business whether it be a dealership or a parts company; it is imperative that they follow the New Zealand regulation’s so that they can produce a safe and sustainable environment for people to work in. When setting up a business of any kind, it is important that we come to terms with and also understand each and every operating context so that we can distinguish what is right and wrong in order to meet all the expected obligations that the New Zealand government has implemented. In the end, it is for the greater good of us all.

5TH OBSERVATIONS

Honda Waste Management System

Honda has a very reliable waste management system. They have bins that are easily accessible inside and outside the workshop. Rags which are used for cleaning are properly disposed of in allocated bins once they have been used. 

The waste management company sends in trucks to remove the general waste bins on a weekly basis, as the bins have the capacity to store a large amount; with the option of early removal just a phone call away if needed.

Recycling truck picking up cardboard                               Truck picking up rubbish

There are also storage containers to dispose of any fluids. These bins are specially designed to contain fluids so that they do not become exposed to people and the environment. These bins are kept along rear end wall of the building. Once the tanks are full, a waste disposal truck arrives to collect the waste by pumping it into a storage tank on the truck. The waste product is then taken away to be disposed recycled or disposed of. 

In New Zealand, the used oil collection system is divided into public collection points, industrial and commercial sites, collection agents and disposal services. 

                                                        TRANSPACIFIC Recyclers

Summary

It is evident that Honda has followed all the legal requirements for waste management, and has played a huge role in keeping employees, the wider community, and the environment safe by promoting sustainable practices, and disposing of waste in a safer manner. This is why Honda is a great company to work with, and it show through the employees and the satisfied customers.

4TH OBSERVATIONS

Health and Safety

It is mandatory for all staff and visitors entering into the workshop to dress according to the Occupational Health and Safety (OSH) standards. This means that staff and visitors are required to wear tight, fire proof clothing or clean overalls to protect the skin from contacting any harmful substance, safety boots with steel toe caps to protect feet from falling objects, safety glasses for eye protection, and breathing respirators to protect from harmful substances in the air.

Customers and visitors are not permitted to enter the works shop at all times, unless accompanied by a senior staff member, and are required to wait in the waiting area in the office. The customers waiting area (office) is separated from the mechanical and panel shops by sound proof walls to prevent harmful gases and noise from entering into the room. This is to ensure occupant safety in the office.

Wash Bays

Located inside the workshop are wash bays with cleans rags, which may be used for wiping up oil spills or cleaning hands. All rags or paper towels used for cleaning must be placed in steel bins as they can spontaneously ignite and start a fire.

Safety Information

Accidents or near misses such as oil spills, gas leaks, etc are a common occurrence in in the workplace and may cause harm if the correct precautions are not taken to rectify the issue. For this reason, Honda has set safety policies in a manual form and Material Safety Datasheets (located in the office), and safety equipment to protect workers.

Located around the entire workshop are safety signs that act as a reminder to wear the proper protective equipment. A safety sign is displayed by the front entrance as you enter the workshop through the roller door. Everyone who enters the workshop must comply with these safety signs, irrespective of who you are. 

                                 Safety equipment Sign                Product Safety Card

Product cards containing a brief description about a product for quick identification and reference purposes are located near dangerous goods. shows instruction procedures on how to safely operate a painting booth. Each instruction is explained in detail, and is displayed beside the painting booth control panel inside the Honda workshop.

A Material Safety Data sheet folder containing in-depth information about all the types of substances used in the workshop is kept in the office, which may be useful when attempting to determine the content of a substance during a spillage.

                                                      Material Safety Data Sheet folder

Work Setup

Work is divided into areas and are labelled clearly. Each vehicle is parked in its own area, while parts being kept separately in a different area to avoid crowding and promote safety in working environment.

Vehicles parked to one side                                       Parts placed seperately

Cleanliness           

Sweeping and steam cleaning the floor  helps keep the floor free from dirt and dust, reducing the possibility of slipping or inhaling dust, which are common safety hazards in a workshop.

Employee sweeping floor                                               Steam cleaning

Ventilation

The workshop integrates a ventilation system which helps remove hazardous gases from the air inside the workshop area, by sucking inside air the through duct ports, cycling the air through a filtration system, before expelling the resultant clean air to the outside atmosphere. At the same time, clean air is been cycled into the workshop from the outside. This allows for clean air in the work space employees to breath. The company also uses many sealed doors at each passage way to prevent dust and gusts of wind from entering the work area, which may hinder the painting process.

Air vents draw in clean air from outside                  Air tight doors locks out dust

Lifting of Heavy Objects
All employees who carry out work in the workshop are required to follow strict guidelines with reference to health and safety. This means that under any raised vehicle either on a trolley jack or hoist must make an effort to secure the weight by locking in the hoist or by lowering a raised jack down onto axle stands rated to suit the vehicle load.

The workshop supplies all the required safety equipment and operation guidelines in order for the employees to safely complete the work, though it is ultimately the employee’s responsibility to follow these guidelines and make use of the equipment being supplied. All specialized equipment is inspected by a licensed professional on a regular basis.

Hoist is locked into position                                     Service label

First Aid Kits

Honda has also has many first aid kits for all sorts of injuries that can occur in the workshop. Honda uses the same first aid table which is shown in the above information but with different quantities and few extra items.

Fire Safety
The workshop area contains a lot of flammable goods such as oil, fuel and other items which can potentially start a fire and cause the area to burn very quickly. From our observations, all employees strictly abide by the no smoking rule. No employees can be seen smoking anywhere within the premises due to the risk of a fire. The employees however are allowed to smoke only during break times and are advised to smoke at least ten meters offsite, away from where the risk of a fire starting is very unlikely.

In terms of preventative equipment, there are several fire sprinklers, hoses and extinguishers that have been strategically located around the workshop in the event of a fire breaking out. Fire alarms are also present to allow staff to quickly notify the fire service when required.

Summary
Judging from the observations above, Honda follows the legal requirements and requires that every employee has to go through an induction training process in the workshop, and be familiarized with the company’s health and safety policies before commencing work.

In relation to the theoretical requirements previously described, Honda management can be seen actively looking after the well-being of their employees, trainees and visitors. As Honda holds health and safety to high regard, this makes them a prime example of when it comes to health and safety.