Cases of interest: January 2024

C3 Ltd v O'Brien [2024] NZEmpC 6

Employment Court – Interim reinstatement – Concerns about health and safety if employee reinstated

At issue was whether the Employment Court (the Court) should grant interim reinstatement to an employee who was dismissed for allegedly providing a false drug test sample.

The employee worked as a stevedore in a hazardous port environment. The employee's role involved operating heavy machinery such as cranes, top lifters and forklifts.

The employer had a random drug and alcohol testing policy (the Drug Policy). The employee provided a urine sample in a random drug test. A technician was overseeing the test nearby, but without looking directly at the employee. The technician said when he collected the sample it did not feel warm as expected. The test did not trigger a reaction in the thermal strip on the sample cup; and did not have the required minimum level of creatine. The technician considered it was an invalid test. The Drug Policy provided that where the integrity of a sample was suspect, disciplinary action up to dismissal could follow.

The Australian New Zealand Standard 4760-2019 Procedure for specimen collection and the detection and quantification of drugs in oral fluid (the Standard) stated if there were issues with a specimen's integrity, a second specimen should be collected. The Drug Policy did not require the employer to conduct a second test after an invalid test and there was no further test. The employer carried out a disciplinary investigation and then dismissed the employee on the basis the sample he provided was not his own.

The Employment Relations Authority granted the employee interim reinstatement to his role, pending its investigation into his dismissal (see paragraph 1). The employer challenged the interim reinstatement in the Court on the grounds that allowing the employee to return to work would pose a health and safety risk. The employer said requiring the employee to take regular drug testing to establish that he was drug-free would be expensive and impracticable.

The Court accepted the employee had an arguable case he was unjustifiably dismissed. The Court found it was arguable a fair and reasonable employer would have (see paragraphs 11, 12):

• collected a second urine specimen, in accordance with the Standard
• fairly investigated the employee's defence that it was not feasible for him to have provided a false or adulterated sample
• considered other explanations for the urine being cool and the creatine level being low.

The Court accepted it was arguable the employee should be permanently reinstated, as he had the skills and experience to reintegrate into the stevedore roster (see paragraphs 18, 19).

Nevertheless, the Court found the balance of convenience and overall justice went against ordering full interim reinstatement. The Court took into account that:

• There was a lack of evidence that the employee could be returned to the workplace safely and practicably in the interim (see paragraph 31).
• The Court had to take seriously expert evidence that there was a risk of injury or death if the employee was reinstated (see paragraph 33).
• The employee could get remedies of reimbursement and compensation if he succeeded in the unjustified dismissal claim (see paragraph 28).
• The substantive hearing was scheduled to occur in a matter of weeks (see paragraph 28).

The Court ordered the employer to reinstate the employ to the payroll only (see paragraph 32).

C3 Limited v O'Brien [2024] NZEmpC 6(external link)

Athletes' Cooperative Inc v High Performance Sport New Zealand Ltd [2024] NZERA 43

Employment Relations Authority – Collective bargaining – Initiating bargaining under the Employment Relations Act 2000, section 40 – Need for employer to have employees within proposed coverage

Employment Relations Authority – Statutory interpretation – Employment Relations Act 2000, section 40 – Meaning of "employer" and "union"

At issue was:

• whether the Athletes’ Cooperative Inc (TAC), a body representing athletes, could initiate collective bargaining with High Performance Sport New Zealand Ltd (HPSNZ) under section 40 of the Employment Relations Act 2000 (the Act)(external link). HPSNZ did not have an employment relationship with the TAC members who were within the proposed coverage of the collective bargaining
• whether HPSNZ was obliged to bargain for a collective agreement with TAC in good faith under section 32 of the Act(external link) when it did not employ any employees within the intended coverage.

An inquiry into cycling and high performance sport found the existing funding model for athletes did not prioritise wellbeing. The resulting report recommended athletes set up a representative body and engage in consultation with HPSNZ on a "contractor v employee" model. TAC was established in response to that report.

There was no collective agreement between HPSNZ and TAC in place. TAC gave HPSNZ notice under section 42 of the Act(external link) that it was seeking to initiate collective bargaining under section 40(external link). The collective was intended to cover various categories of elite athletes.

HPSNZ declined to engage in collective bargaining. HPSNZ said it was not required to bargain as the relevant members of TAC were not its employees. TAC sought a compliance order to compel HPSNZ to engage in good faith bargaining.

In this proceeding the Employment Relations Authority (the Authority) determined first:

• whether TAC was able to initiate bargaining with HPSNZ
• whether HPSNZ was obliged to engage in bargaining.

The Authority set out its process for considering the matter as follows:

[23] To determine whether the notice issued was valid, and consequentially whether HPSNZ is required to engage into good faith collective bargaining, it must be determined whether HPSNZ is an “employer” for the purposes of s 40 of the Act. That in turn requires consideration of the term “employee”. That also requires consideration of whether term “union” as appears at s 40 of the Act requires that the union seeking to initiate bargaining be representing an employee or employees of the relevant employer.

The Authority found:

• HPSNZ was an "employer" for the purposes of section 40 of the Act(external link); section 40 required only that the employer was the employer of "any" employee (see paragraphs 60 to 62).
• TAC was a "union" for the purposes of section 40; section 40 required only that the union was registered as a union under part 4 of the Act(external link) (see paragraph 63).
• The meaning of "employee" in section 6 of the Act(external link) did not need to be restricted to exclude from the meaning of “employer” employees undertaking work that was not covered by the proposed coverage clause in an initiation notice (see paragraph 64).
• An approach that permitted the initiation of bargaining in the present circumstances was consistent with the objects and purpose of the Act (see paragraphs 66, 67).

The Authority concluded that TAC gave HPSNZ a valid notice initiating bargaining under section 42 of the Act(external link) and HPSNZ was obligated to comply with section 32 of the Act(external link) (see paragraph 68).

The Authority reserved the determination of whether the Authority should issue a compliance order (see paragraph 32).

Athletes' Cooperative Inc v High Performance Sport New Zealand Ltd [2024] NZERA 43(external link)

Knight v CommArc Consulting Ltd [2024] NZERA 50

Employment Relations Authority – COVID-19 – Vaccination policy – Unjustified dismissal – Requirements of Employment Relations Act 2000, schedule 3A

At issue was whether the employee was unjustifiably dismissed when he was made redundant because he refused to comply with a COVID-19 vaccination policy.

The employee’s role included a requirement that once per fortnight he attend on site at a client's premises. The client implemented a COVID-19 policy requiring anyone who attended their site to be fully vaccinated. Although the employer did not have its own vaccination policy, it felt the employee attending the client's premises was fundamental to his role. The employee refused to get vaccinated, meaning they could not visit the client's premises. The employer, after a consultation period, terminated the employee’s employment by way of redundancy.

The Authority began by noting that the employer used a restructuring process to dismiss the employee rather than a standard dismissal. The Authority said it initially thought this was an obvious flaw in the process, however, it concluded the use of a restructuring process was in fact of no consequence. The issue remained whether the dismissal was substantively and procedurally justified (see paragraph 29).

The Authority found the dismissal was procedurally flawed because the employer failed to genuinely consider the employee’s feedback on the restructuring proposal (see paragraph 32). The employee had suggested another employee could cover the client site visits until vaccination requirements changed. He submitted the time he spent at the client site was minimal and could easily be covered; further, he argued there was indication the vaccination requirement may be dropped, and it did not make sense to terminate his employment over something that may soon not be a requirement (see paragraph 33). The Authority found there was no evidence the employer had considered this suggestion. The employer did not consider the possible timeframe of the vaccination requirement, did not analyse the employee’s tasks at the client site, did not discuss with the other employee the prospect of covering the client visits, and did not consider how the other employee could cover the work at the client site (see paragraph 35).

The Authority found another issue was that the dismissal did not follow the procedure set out in Schedule 3A(external link) of the Employment Relations Act 2000 (the Act) (see paragraph 37). Schedule 3A informs aspects of the process and substantive justification for a dismissal based on COVID-19 vaccination status (see paragraph 27). The employer argued Schedule 3A did not apply because it was not the employer who determined the employee must be vaccinated to carry out the work; it submitted that the client made this decision (see paragraph 39). The Authority dismissed this argument. That the decision arose because of client’s policy was irrelevant – the simple point was the employer determined the employee needed to be vaccinated (see paragraph 40).

Having found Schedule 3A applied, the Authority identified 2 parts of the Schedule the employer failed to comply with (see paragraph 41):

• It did not provide the employee with a specific date by which he needed to be vaccinated in order to carry out his work.
• It, as already outlined, failed to consider reasonable alternatives that would not lead to termination.

The Authority found the outlined failings were sufficiently serious that it could not say the decision to dismiss was substantively justified (see paragraph 43). The Authority awarded the employee $23,000 in compensation under s 123(1)(c)(i)(external link) (see paragraph 52).

Knight v CommArc Consulting Ltd [2024] NZERA 50(external link)