Cases of interest: July 2024

Stellar Elements New Zealand Ltd v Amesbury [2024] NZEmpC 136

Employment Court – Unjustified dismissal – Redundancy – Interim reinstatement

At issue was whether the Employment Court (the Court) should grant the employee interim reinstatement, pending the Employment Relations Authority’s (Authority’s) investigation of his claim that he was unjustifiably dismissed for redundancy.

The employee worked for an international company as a Principal Consultant. The employer disestablished the employee’s role on the basis the employee had not been doing client billable work. At the time the employee was dismissed he was seconded to a non-billable role. The employee applied to be permanently appointed to his seconded role, but then withdrew the application after thinking the employer had another preferred candidate. When the preferred candidate did not accept the role, the employer did not tell the employee. The employer did not consider other redeployment opportunities for the employee.

The employee claimed the employer had an ulterior motive for dismissing him as he had been involved in a dispute with the employer as to whether he was entitled to a contractual bonus when he was not doing billable work.

The employee claimed he was unjustifiably dismissed and sought interim reinstatement in the Authority, pending the Authority’s investigation into his unjustified dismissal claim. The Authority granted interim reinstatement. The employer challenged the interim reinstatement in the Court.

The Court upheld the interim reinstatement. In doing so, the Court took into account that:

• The employee had a strongly arguable case that his dismissal was both procedurally and substantively unjustified (see paragraph 89). The Court found it was arguable:
  • The employee was given insufficient information for consultation purposes, contrary to the good faith obligations in section 4(1A)(b) and (c)(external link) of the Employment Relations Act 2000 (see paragraphs 86–88).
  • The employee should have been given more information about the availability of the position to which he was seconded (see paragraph 74).
  • The employer did not sufficiently consider other redeployment options, especially given that the employer was a large international business operation (see paragraphs 75, 76).
  • The dismissal was predetermined (see paragraphs 78–83).
  • The employer had an ulterior motive to dismiss the employee (see paragraphs 84, 85). 
• It was strongly arguable that permanent reinstatement would be practicable and reasonable (see paragraphs 101, 103). The Court found it was arguable:
  • There were options for redeployment within the “ANZ Region” (see paragraphs 95–98).
  • Challenges with redeployment could be managed (see paragraphs 99, 100).
  • Given the regional approach to operations it would be reasonable to reinstate the employee to the role he was employed in or to a similar role.
• The balance of convenience favoured the employee (see paragraph 124):
  • There was an issue as to whether it was reasonable for the employee to attempt to find alternate work while his employment relationship problem was under investigation (see paragraphs 108–110).
  • The Court was not persuaded damages would be a fair substitute for interim reinstatement (see paragraph 111).
  • The employer had made an undertaking as to damages if he were unsuccessful in his substantive claim (see paragraph 117).
• The overall justice favoured interim reinstatement, particularly as the employer had not given the employee full information during the restructure (see paragraph 127).

Stellar Elements New Zealand Ltd v Amesbury [2024] NZEmpC 136(external link)

Carrington Resort Jade LP v Grant [2024] NZEmpC 127

Employment Court – Employment status – Permanent or casual employment

A key issue was whether the employee was a permanent or casual employee.

The employee worked as a housekeeper for three periods of time for two related tourist accommodation entities; she worked for one entity for the first and third periods and the other entity for the second period. The employee had casual employment agreements for the first and second periods and no employment agreement for the third period.

The Employment Relations Authority (the Authority) found the employee was a permanent part-time employee for all three periods. The finding made the employer liable for holiday pay arrears and for unjustified dismissal.

The employer challenged the entire Authority determination in the Employment Court (the Court), including the determination that the employee was a permanent part-time employee throughout.

The Court found the employment was permanent despite the two employment agreements asserting casual employment (see paragraph 112). The Court held that, standing back, it was “clear that the realities of the employment relationship were those of a permanent part-time employment arrangement, and not a casual employment arrangement, at all times”. The Court took into account that:

• It was apparent that the employee “worked for each and every week during each period of employment”; with the only exceptions being one time she was described as being on “sick leave” and one time when she was described as being “on holiday”; and during COVID-19 lockdowns (see paragraphs 100, 107).
• While the employee’s daily hours varied, there was a consistent expectation on the part of each employer that she would be available; and a consistent expectation on the part of the employee that she would work weekly (see paragraph 101).
• The employee was paid the wage subsidy during COVID-19 lockdowns, indicating that she would have otherwise been expected to work (see paragraph 102).
• The written employment agreements for the first two periods described a casual work arrangement but also contained provisions confirming “mutual obligations sufficient to create an ongoing employment arrangement” (see paragraph 106).
• The employee gave two weeks’ notice at the end of the second period indicating she did not consider she could terminate immediately (see paragraph 107).
• After the termination the employer requested the return of uniforms and keys, indicating she held these items as someone with regular work (see paragraph 111).

Carrington Resort Jade LP v Grant [2024] NZEmpC 127(external link)

Gumbeze v Chief Executive of Oranga Tamariki – Ministry for Children [2024] NZEmpC 133

Employment Court – Unjustified dismissal – Serious misconduct – Care and protection social worker – Evidence required to establish serious misconduct

At issue was whether the Employment Relations Authority (the Authority) was correct to find the employee’s dismissal for serious misconduct was justified.

The employee social worker was dismissed for serious misconduct following an investigation into complaints from his supervisor and other supervisors in relation to three cases where the employee was the assigned social worker. The alleged misconduct included the manner in which the employee engaged with his supervisor. The employee claimed the dismissal was unjustified and sought reinstatement.

The Employment Court (Court) overturned the Authority’s finding that the employee was justifiably dismissed. The Court found the dismissal was substantively unjustified. It held that a finding that serious misconduct had occurred was not open to a fair and reasonable employer (see paragraph 172). The Court took into account that:

• The employer could not adequately explain how it arrived at a decision that serious misconduct had occurred in relation to the employee’s engagement with his supervisor; the best that could be said was that the employee’s engagement with the supervisor was less than the supervisor wanted (see paragraphs 144, 146).
• The employer had not interviewed the employee’s previous supervisor who had supervised him for four years; and could not shed light on the quality of interactions with that supervisor (see paragraph 144).
• It was difficult to see how a decision the employee had failed to observe a lawful and reasonable instruction could be safely reached, as the employee participated in the employer’s solution to the supervision issues (see paragraphs 148, 149).
• The lack of specific examples of when the employee was aggressive to his supervisor meant a fair and reasonable employer could not have concluded that serious misconduct was established in that regard (see paragraphs 150–53).
• Generally, complaints about the employee had the ring of performance-related issues rather than amounting to serious misconduct and at most could have been misconduct (see paragraph 155).
• In relation to complaints about the employee’s handling of particular cases, the employee had inherited one case from another employee who was not spoken to; the complaint could not fairly be placed at the employee’s feet (see paragraphs 157 to 161). Other complaints showed potentially that the employee’s work fell below expectations and needed remediation but did not amount to serious misconduct (see paragraph 166).
• The preliminary decision letter used such strong language that the decision appeared predetermined (see paragraph 171).

The Court declined reinstatement. The Court said reinstatement was unlikely to be workable given (see paragraphs 189, 190):

• the employee’s deep distrust in the employer’s management
• his strong views as to whether the employer was discharging its statutory functions
• the fact he had been out of the workplace for six years
• the tension to the point of dysfunctionality that emerged between the employee and senior managers who were still at the organisation.

The Court awarded the employee:

• one year’s gross salary of $79,015 as lost wages, under ss 123(1)(b)(external link) and 128(external link) of the Employment Relations Act 2000 (the Act; see paragraphs 181, 182, 195).
• $35,000 compensation under s 123(1)(c)(i) of the Act (see paragraphs 185, 186, 195).

The Court did not consider the employee contributed to the unjustified dismissal (see paragraph 193).

Gumbeze v Chief Executive of Oranga Tamariki – Ministry for Children [2024] NZEmpC 133(external link)

Wiles v Vice-Chancellor of the University of Auckland [2024] NZEmpC 123

Employment Court – Unjustified disadvantage – Breach of employment agreement – Failure to protect employee from harm – Applicable remedies – Contractual damages – Compensation

The employee made a claim for both contractual damages and compensation for unjustified disadvantage in relation to the same alleged breach. An issue was whether, after establishing the breach, the Employment Court (the Court) should grant:

• contractual damages; or
• compensation for unjustified disadvantage; or
• both.

The employee was a scientist, working for a university. During the early stages of the COVID-19 pandemic the employee acted as a science communicator in relation to the pandemic, across a variety of media. The employee’s science communication work attracted online and other abuse, directed at her personally. The employee claimed the employer did not sufficiently protect her from harm from the abuse. She sought remedies for both unjustified disadvantage and breach of contract.

The Court accepted that the employer breached its contractual health and safety and good faith obligations to the employee and in so doing unjustifiably disadvantaged her (see paragraphs 163, 164, 174, 180–182). It found she was due both “compensation for the unjustifiable disadvantage she suffered and general damages for breach of contract”.

The Court said it was (see paragraph 134):

…open to Associate Professor Wiles to claim remedies both for breach of contract at common law and under the Act. However, those remedies are not to be cumulative; rather, where damages and compensation are recoverable for the same matter, the higher of the two awards is appropriate.
(Footnotes omitted.)

The Court found limited evidence that the employee was distressed by the unjustified disadvantage, reflecting her own stoicism and resilience; this limited the compensation for unjustified disadvantage that was available (see paragraph 184). The Court awarded general damages of $20,000, which it said encompassed compensation under section 123(1)(c)(i) of the Employment Relations Act 2000(external link) (see paragraph 186).

Wiles v Vice-Chancellor of the University of Auckland [2024] NZEmpC 123(external link)

Public Service Association – Te Pūkenga Here Tikanga Mahi Incorporated v Secretary for Education [2024] NZERA 432

Employment Relations Authority – Contractual interpretation – Collective employment agreement – Consultation requirements – Requirement to consult before commencing change management process

A key issue was whether the employer had complied with consultation requirements under the change management provisions in the Collective Employment Agreement (the CEA), prior to commencing a change management process. 

The employer, a government Ministry, commenced a change management process that was to potentially result in 755 job losses. The relevant union (the PSA) claimed that the Ministry had commenced the change process without following the consultation requirements in clause 11.7 of the CEA. Clause 11.7 governed restructure processes. At dispute between the parties was the meaning of the final sentence in clause 11.7:

The aim of this mechanism will be to reach agreement and make recommendations to management, who will endeavour to take the views into account as far as possible before making final decisions.

The PSA sought a determination as to (see paragraph 16):

• Whether clause 11.7 required the Ministry to participate in a process with the PSA with the aim of reaching agreement as to joint recommendations to be made to management.
• Whether clause 11.7 required that the Ministry’s management take the joint recommendations into account as far as possible before making final decision.
• Whether the Ministry has complied with clause 11.7.

The Employment Relations Authority found the effect of clause 11.7, based on its ordinary natural meaning (see paragraph 34) and considering context (see paragraph 42) was that (see paragraph 51):

…clause 11.7 obligates both parties to engage collaboratively with the aim of reaching agreement and making recommendations to management although the recommendations may not necessarily be joint or agreed.

The Authority determined that obligations under clause 11.7 were significant (see paragraph 52):

Collaborative engagement must be between members of the Ministry and PSA at an appropriate level and the contractual right of the PSA to be an active participant in the change management process must be secured.

The Authority determined the Ministry did not comply with clause 11.7 (see paragraphs 74, 80). The Ministry gave evidence of only one meeting between the Hautū (Deputy Secretaries) and leadership team members with the PSA and the Authority said it was unclear what the purpose of that meeting was. The Authority said (see paragraphs 74, 75):

The PSA was involved in the change management process, but as a recipient of information from the Ministry and disseminator of information to its members. The evidence falls short of demonstrating the PSA was an active participant in the change management process and the Ministry engaged collaboratively with the PSA with the shared aim of reaching agreement and making recommendations to management.

…  there was no evidence before the Authority of meetings or discussions for the shared purpose of formulating recommendations to Hautū. Each Hautū worked with their own leadership team and sometimes other Hautū to understand the programmes of work, and where savings could be made. The Ministry did not work with the PSA to make recommendations to the Hautū.

Public Service Association - Te Pūkenga Here Tikanga Mahi Incorporated v Secretary for Education [2024] NZERA 432(external link)