Hawkins v The Commissioner of Police
WC 29/07
Heard: 1 Oct 2007 -10 Oct 2007 (6 days) Wanganui, Wellington
Judgment Date: 30 Nov 2007
Court/Authority: Shaw J
Appearances: CP Brosnahan ; J Holden, A Martin
PROCEEDINGS REMOVED FROM EMPLOYMENT RELATIONS AUTHORITY - Personal grievance - Constructive dismissal - Plaintiff voluntarily disengaged from police and then raised personal grievance for constructive dismissal - Whether voluntary disengagement precluded claim for constructive dismissal - Plaintiff alleged he was bullied and intimidated by fellow police officers - Plaintiff was also facing possible assault charges - Informed evidence was strong and likely to be convicted - Advised retirement entitlements at risk if charged before he applied to disengage - HELD - Grievance raised out of time but defendant consented by actively engaging with plaintiff to attempt to resolve grievance - Voluntary disengagement does not prevent claim for constructive dismissal - Plaintiff was constructively and unjustifiably dismissed - Remedies reserved - Police officer
This was a matter removed from the Employment Relations Authority.
The plaintiff was a police officer. In 1999, the plaintiff told the Detective Inspector ("DIB") that the Detective Sergeant ("DSW") was a bully and difficult to work with. Despite an assurance of confidentiality, DIB revealed the plaintiff's complaints to DSW, whose behaviour worsened. The plaintiff also raised his concerns with other senior police members but matters did not improve. In 2001, a police welfare officer ("B") referred the plaintiff to trauma-related counselling. The plaintiff was feeling overworked and consumed by fear that DSW would get him.
In March 2001, it was alleged that the plaintiff had assaulted two youths who had been arrested. DSW was appointed to investigate. The plaintiff was concerned about how DSW would use the complaint against him. Meanwhile, the plaintiff's stomach ulcer became aggravated and he went on sick leave.
The plaintiff contacted B to inquire about voluntarily disengagement (colloquially known as "perfing"). The plaintiff understood that, due to the current political climate, it was important to get his application in before any criminal charges were laid otherwise he risked losing his entitlements.
While the plaintiff was still on sick leave, an Inspector ("IA") told another sergeant ("SC") that he was surprised the plaintiff was still in the country, that the community would not put up with the plaintiff returning, and that it would be foolish for the plaintiff to defend the charges. SC reported this conversation to the plaintiff.
The plaintiff felt he was being "fitted up". He applied to perf. The plaintiff was subsequently charged with the criminal offences but was discharged at trial due to clear conflicts in evidence.
The plaintiff sent a letter purporting to raise the grievance 87 days after his disengagement. Further details were to be provided. The following month, counsel for the plaintiff gave particulars of the grievance. The District Commander asked for further particularised details or clarification, which was provided after the plaintiff's discharge. The parties then attended mediation. The defendant first claimed that the grievance was raised out of time in his statement of reply in the Authority.
The plaintiff submitted that the criteria for medical disengagement were met by the plaintiff's ill-health which was brought on initially through the inaction and ineptitude of the police management. The actions of IA and B breached the defendant's duties to the plaintiff and left him with no other alternative but to apply to perf.
The defendant submitted that the plaintiff's grievance was raised out of time. Alternatively, that it was the prospect of criminal charges which led the plaintiff to apply to perf. The defendant denied he had breached any duties which led to that decision. The defendant further submitted that an officer who has voluntarily disengaged is precluded from bringing a claim for constructive dismissal.
Held
- The Court concluded that the grievance was not properly raised before the expiry of the statutory 90-day period but the defendant's lack of protest and his active engagement with the plaintiff in relation to the grievance after that date was sufficient evidence of implied consent. (para 20)
- The Police Act 1958 ("PA") contains statutory procedures by which officers cease to be members of the police meaning their employment comes to an end. These include compulsory disengagement where the Commissioner is satisfied that the member is incapable of performing police duties (s28C PA) or by way of application by a member for voluntary disengagement (s28D PA). There is no equivalent of s28C(4) PA in s28D PA and the bar to bringing a personal grievance for unjustified dismissal which effectively arises by reason of s28C(4) PA does not apply to s28D PA. (paras 23, 30)
- Section 28D PA is silent as to the possibility of a personal grievance being raised following a voluntary disengagement and it does not prevent the officer ceasing to be a member even though a personal grievance is taken. There is no statutory prohibition on such proceedings being brought and there is no reason why members of the police should be deprived of the right to make such a claim to which they are entitled under s87 Employment Relations Act 2000. The plaintiff's voluntary disengagement from the police did not bar him from bringing a claim for constructive dismissal. (paras 30, 33)
- The defendant's submission that it was the knowledge that he was to be charged with a criminal offence that led the plaintiff to his decision to perf did not take into account the dynamics which existed at the Taumarunui police station at the time which were relevant and important in establishing the cause of the plaintiff's resignation. The first relevant matter was the history of DSW's attitude to the plaintiff among others. The plaintiff felt intimidated and bullied by him. The fact that DSW was assigned to do the initial investigation into the complaint undermined the plaintiff's confidence that he would get fair treatment in the course of the investigation. (paras 100, 101)
- B's efforts on behalf of the plaintiff reinforced his decision to resign but were not the predominant reason for it. The prime responsibility for the plaintiff's resignation lay with IA. Although the plaintiff initially believed that the evidence against him in support of the criminal charges would not support a successful prosecution, that belief was completely undermined by the statements made by IA as reported to the plaintiff by SC. The actions of IA broadcasting his views on the likely outcome of the prosecution and the plaintiff's future were responsible for destroying what remained of any trust and confidence the plaintiff had in his employer. (paras 97, 98, 103, 105)
- The Court found that the defendant, through his agents at the Taumarunui police station and indeed at police national headquarters, should and would have foreseen the resignation and the reasons for it. (para 107)
- The plaintiff was constructively and unjustifiably dismissed from his employment as a police officer. (para 113)
Result
Plaintiff constructively and unjustifiably dismissed ; Remedies reserved ; Costs reserved
Statutes considered:
Accident Rehabilitation and Compensation Insurance Act 1992 s14
Crimes Act 1961 s347
ERA s103A
ERA s114
ERA s114(2)
ERA Part 9
Police Act 1958 s28
Police Act 1958 s28C
Police Act 1958 s28C(3)
Police Act 1958 s28C(4)
Police Act 1958 s28D
Cases referred to in judgment:
Attorney-General v B [2002] NZAR 809 (CA)
Auckland Electric Power Board v Auckland Provincial District Local Authorities
Officers IUOW Inc [1994] 1 ERNZ 168 (CA)
Charlton v Colonial Homes Ltd [2001] ERNZ 759
Commissioner of Police v Cartwright [2000] 2 ERNZ 106 (CA)
Goodall v Marigny (NZ) Ltd [2000] 2 ERNZ 60
Harman & Co Solicitor Nominee Company v Secureland Mortgage Investments
Nominees Ltd [1992] 2 NZLR 416 (CA)
New Zealand Fisheries Ltd v Napier City Council CA173/88 and CA199/88, 24
November 1989
Phillips v Net Tel Communications [2002] 2 ERNZ 340
W & H Newspapers Ltd v Oram [2000] 2 ERNZ 448 (CA)
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Balfour v The Chief Executive, Department of Corrections
WC 33/07
Heard: 23 Oct 2007, Wellington
Judgment Date: 14 Dec 2007
Court/Authority: Shaw J
Appearances: DN Balfour (in person) ; l Taylor, K Elkin
PRACTICE AND PROCEDURE - Application to strike out plaintiff's application for compensation and compliance order - Parties entered into settlement agreement - Defendant's Human Resources Manager summonsed to give evidence for prosecution of plaintiff by ACC - Plaintiff alleged evidence breached confidentiality provisions of agreement, breached obligations of good faith, and sought compensation and order for compliance with confidentiality provisions - Defendant submitted exception to confidentiality provisions applied and good faith not relevant as employment relationship had ended - HELD - Legal requirement to give evidence - Exception to confidentiality obligation - Statutory good faith obligations ended when employment ended - As a lay person, plaintiff could not be criticised for bringing proceedings - Application granted
This was a successful application by the defendant to strike out the plaintiff's application for a compliance order and compensation.
In 2003, the parties entered into a settlement agreement to resolve a personal grievance raised by the plaintiff. A human resources manager ("K") signed the agreement on behalf of the defendant. Clause 6 of the agreement provided that except as required by law the terms of the agreement were not to be disclosed.
In January 2004, a newspaper article was published concerning the settlement. K discussed the article with her husband. K's husband then sent a copy of the article to the Accident Compensation Corporation ("ACC") fraud unit with an annotation inquiring whether the settlement payment had been declared to ACC and whether its effect on the plaintiff's benefit had been assessed.
In March 2004, a group acting on behalf of ACC wrote to the defendant inquiring about the settlement amount paid to the plaintiff. A letter from ACC requesting any information from the defendant regarding the plaintiff and a form completed and signed by the plaintiff authorising the collection of information was enclosed. The defendant advised ACC of the amount of settlement payment.
Two years later, K was summonsed to appear in the District Court to give evidence for the prosecution by ACC against the plaintiff. In June 2006, the plaintiff wrote to the defendant complaining about that evidence. He subsequently brought the present proceedings seeking compensation for breaches of the settlement agreement and of good faith by the defendant. He also sought a compliance order against the defendant in respect of the confidentiality provisions of the settlement agreement.
The defendant sought to have the plaintiff's claim struck out. The defendant submitted that clause 6 was governed by the words "except as required by law" and K's disclosures were legally required by s 309 Injury Prevention, Rehabilitation, and Compensation Act 2001. Further, that there was no obligation of good faith between an employer and ex-employee.
Held
- The words of clause 6 of the settlement agreement were plain on their face, they gave protection to a party to the settlement agreement where they were required to respond to requests such as those made under s309 of the Injury Prevention, Rehabilitation, and Compensation Act 2001. That exception was a bar to any action against the defendant for breaching the confidentiality of the settlement agreement by providing information to ACC and the terms of a settlement agreement could not override the statutory powers granted to ACC under s309. (para 28)
- For good faith as defined in s4 Employment Relations Act 2000 to apply, the employment concerned must be current. The statutory obligations of good faith end when the employment ends. The settlement agreement contained express words that "the parties have mutually agreed to end their employment relationship". No relationship therefore existed beyond that point except for purposes of enforcement. In any event, on the facts of the present case, there was no evidence that, apart from the disclosure required by law to ACC pursuant to their request under s309 and the evidence required to be given pursuant to the summons in the District Court, that there was any other disclosure by the defendant or K of the terms of the settlement agreement. There was no tenable cause of action in relation to a breach of good faith as alleged in the statement of claim. (paras 30-33)
- K's disclosures made in the District Court and pursuant to the summons were protected by the witness immunity rule and the plaintiff's claim in this regard was untenable as it disclosed no reasonable cause of action. (paras 35, 37)
- While the defendant justifiably was frustrated by the plaintiff's attempts to bring it to account for alleged breaches of the settlement agreement, having heard from the plaintiff the Court did not accept that in the present case he was being frivolous or vexatious. As a lay person having been vindicated by being found not guilty of ACC fraud, charges laid as a direct result of the settlement agreement he entered into, the plaintiff had attempted to obtain redress for what he regarded as an injustice. While he did not have any valid cause of action against the defendant for any of its actions, he did have, in his own mind, a sense of grievance. If he had taken legal advice, he may well have been deterred from taking the present course of action but as a lay person he could not be criticised for attempting to bring a claim to the Court, however futile. (para 39)
Result:
Application granted (strike out) ; Orders accordingly ; Costs to lie where they fall
Statutes considered:
Injury Prevention, Rehabilitation, and Compensation Act 2001 s309
ERA s4
ERA s4(2)
ERA s4(4)(bb)
Cases referred to in judgment:
Attorney-General v Prince and Gardner [1998] 1 NZLR 262 (CA)
Dentice v Valuers Registration Board [1992] 1 NZLR 720 (HC)
Pages: 3
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Just Hotel Ltd v Jesudhass
CA 249/06
Heard: 28 Nov 2007, Wellington
Judgment Date: 14 Dec 2007
Court/Authority: Wilson J
Appearances: MAF Gilkinson ; BA Corkill QC, A Cressey
COURT OF APPEAL - Appeal against Employment Court Decision - Statutory interpretation - s 148(1) Employment Relations Act 2000 ("ERA") - Extent to which communications between parties in mediation may be relied on in determination of personal grievance - HELD - s 148(1) ERA applies to all documents prepared for use in or in connection with a mediation and to all statements or submissions made at a mediation unless created or made independently of the mediation - Whether any public policy exceptions not decided - Appeal allowed - Hotel manager
This was a successful appeal against a decision of the Employment Court which held that the confidentiality contemplated by s 148(1) Employment Relations Act 2000 was not absolute (See: [2006] 1 ERNZ 173).
The parties entered mediation over a personal grievance raised by the respondent in which he alleged he had been unjustifiably disadvantaged in his employment by the appellant. The respondent claimed that during the mediation the appellant indicated he would be dismissed immediately after the end of the mediation.
The issue was the meaning and effect of s 148 Employment Relations Act 2000 ("ERA") which concerns confidentiality of mediation, and specifically, the extent, if any, to which communications between the parties in mediation may subsequently be relied on in the determination of a personal grievance.
The Employment Court held that the confidentiality and inadmissibility contemplated by s 148 ERA was not absolute and that evidence of conduct at the mediation could be adduced if it did not relate to communications made in an attempt to resolve the employment relationship problem. Further, the Employment Court held that a dismissal of an employee would fall beyond the legislative protection of s 148 ERA.
The appellant submitted the words of s 148 ERA are clear and unambiguous and that the legislative intention was to remove any of the limited exceptions to the principle of confidentiality created by the case of Crummer v Benchmark Supplies Ltd (cited below). The appellant argued that evidence would be available from outside the mediation to prove that an employee had been dismissed.
The respondent submitted that the Employment Court decision was correct. To promote the purposes of the ERA and for reasons of public policy, s 148(1) ERA should be construed as protecting only communications made for the "proper" purposes of mediation. The respondent contended that evidence of dismissal may not always be available from sources extraneous to the mediation.
Held
- The Court did not see any ambiguity in the words of s 148(1) ERA. All communications "for the purposes of the mediation" attract the statutory confidentiality, except possibly where public policy dictates otherwise. In accordance with the ordinary meaning of the word "purpose", that of the intended object of an activity, a communication (written or oral) is protected unless it is created or made independently of the mediation. Documents which are prepared for use in or in connection with a mediation therefore come within the ambit of s 148(1) ERA. So do statements and submissions made orally at the mediation, or a record thereof. Only documents which come into existence independently of the mediation are excluded. (paras 31-33)
- Section 148(6)(a) ERA provides that nothing in s 148 ERA prevents the discovery or affects the admissibility of evidence which exists "independently of the mediation process". That wording strongly supported the interpretation of s 148(1) ERA which the Court adopted. The obvious implication of s 148(6)(a) ERA was that communications at a mediation which do not exist independently of it will not be discoverable or admissible. There is no reason why such evidence should not be discoverable or admissible unless it attracts the confidentiality conferred by subs(1). All evidence which does not exist independently of the mediation process is therefore evidence created or made "for the purposes of the mediation". (para 37)
- A retrospective examination, based on a mere allegation of illegitimate or improper purpose or of non-genuine use, would effectively defeat the protection that s 148(1) ERA seeks to provide. The resolution of disputed accounts of what occurred at a mediation would be particularly difficult because s 148(2) ERA would prevent the only independent witness, the mediator, from being called to give evidence. (paras 38-39)
- The Court did not discount the difficulty of establishing constructive dismissal by a statement made at a mediation. The Court thought, however, that in practice the skill and experience of mediators appointed to conduct mediations under the ERA should ensure that such a situation does not arise. (para 40)
- As the Employment Court stated, it may be that public policy considerations require s 148 ERA be interpreted so as to permit evidence of serious criminal conduct during a mediation to be called, including evidence from the mediator. It was not, however, necessary for the Court to decide on the present appeal whether there should be such an exception. (paras 41, 43)
Result:
Appeal allowed ; No order for costs
Statutes considered:
ECA
ERA s101
ERA s143
ERA s144
ERA s144(2)(d)
ERA s148
ERA s148(1)
ERA s148(2)
ERA s148(6)(a)
ERA Part 9
Family Proceedings Act 1980 s18
Words and phrases: for the purposes of the mediation ; purpose
Cases referred to in judgment:
Carter Holt Harvey Forests Ltd v Sunnex Logging Ltd [2001] 3 NZLR 343 (CA)
Crummer v Benchmark Building Supplies Ltd [2000] 2 ERNZ 22
Lowe v New Zealand Post Ltd [2003] 2 ERNZ 172
Milner v Police (1987) 4 NZFLR 424 (HC)
Parsons v Mathieson [1991] NZFLR 262
Shepherd v Glenview Electrical Services Ltd [2004] 2 ERNZ 118
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Toll New Zealand Consolidated Ltd v Rowe
AC 39A/07
Heard: 5, 6, 7, 8 Nov 2007, Auckland
Judgment Date: 19 Dec 2007
Court/Authority: Shaw J
Appearances: K Burson, L Jenkins ; G Davenport
DE NOVO CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY - Unjustified dismissal - Serious misconduct - Defendant went through a red signal and failed to report error - Defendant had recently returned to work from sick leave due to depression and adjustment disorder - Issues in contention were whether defendant had been offered representation when first confronted, whether defendant had initially denied incident, extent that defendant's health issues and option of medical retirement had been raised, and whether plaintiff had provided all relevant information to defendant - CROSS-CHALLENGE - Defendant alleged plaintiff had breached health and safety obligations and disputed level of contribution - HELD - Finding of serious misconduct justified but disciplinary process procedurally flawed - Dismissal unjustified - Challenge dismissed - Plaintiff breached health and safety obligations by failing to implement proper return to work programme for defendant - Defendant's contribution assessed at 10 percent - Crosschallenge accepted in part - Locomotive engineer
This was an unsuccessful de novo challenge and largely successful cross-challenge to a determination of the Employment Relations Authority which held that the defendant's dismissal was unjustified.
The defendant was employed by the plaintiff as a locomotive engineer. In May 2005, the defendant was diagnosed as suffering from borderline depression and was referred to a psychologist. The defendant was put on medication and declared unfit for work.
In June 2005, the defendant was diagnosed with an adjustment disorder with a depressed mood. In July 2005, the defendant returned to work. About a month later, the defendant erred by driving his locomotive through a red signal (known as a "signal passed at danger" or a "SPAD"). He did not report the incident. When the defendant was first asked about the SPAD, he explained that he had seen people moving an object across the tracks and made an emergency brake application. The defendant called his manager that evening and told him he had been making a cup of tea at the time of the incident and had been looking down. He repeated his earlier explanation. The defendant had been responsible for a previous SPAD in June 2004 and had been given a formal warning.
The plaintiff undertook an investigation into the SPAD and the defendant was subsequently dismissed. The reasons given for dismissal were serious misconduct in relation to the SPAD, failing to follow the correct reporting procedure, and denying the allegation when approached by his manager.
The defendant raised a personal grievance. The Authority found that the plaintiff had unjustifiably dismissed the defendant and awarded the defendant $15,000 compensation, and lost remuneration of 9 months' salary, noting the defendant's contribution to his dismissal.
The plaintiff challenged that determination. The defendant brought a cross-challenge alleging that the plaintiff had breached its health and safety obligations and disputing the level of contribution found by the Authority.
The issues in contention between the parties were: (i) whether the defendant had been offered the opportunity to have representation when he was first confronted by the plaintiff regarding the SPAD; (ii) whether the defendant had initially denied the SPAD; (iii) the extent to which the defendant's health issues and the option of medical retirement had been raised; and (iv) whether the plaintiff had provided all relevant information to the defendant.
Held
- Given the defendant's serious adjustment disorder in May and April 2005, which the plaintiff knew made him unfit to be a locomotive engineer at that time, the failure to implement a return to work programme in July 2005 amounted to a breach of the plaintiff's health and safety obligations towards the defendant. (para 81)
- The plaintiff was justified in taking disciplinary action against the defendant in 2005 because of the previous SPAD and his failure to report the SPAD in breach of the plaintiff's rules immediately after the event. On the facts and circumstances known to the plaintiff at the time of the dismissal, it was justified in concluding that on the face of it the defendant was guilty of serious misconduct apart from its incorrect finding that he had denied the SPAD on 1 August. However, there were procedural flaws in the way this was done which the Court found undermined the decision to dismiss. (paras 81, 83)
- It was more likely than not that representation was not raised. This was an important omission, particularly when the defendant had not been told what the meeting was about and the reliance later placed on it. With proper notice and representation, the defendant may have conducted himself quite differently. (paras 34-35, 85)
- The Court found that while the defendant was not as forthcoming as he might have been at this first meeting with his manager, neither was his manager who did not reveal anything of what he knew about the alleged incident. On his own admission his manager was testing the defendant to see if he would confess to the incident without prompting. When the defendant did not do this his manager framed this as a serious instance of dishonesty amounting to serious misconduct. The defendant was being cagey but did not deny the allegation. (paras 37, 51)
- The defendant's health issues were raised and discussed at the disciplinary meeting although not in the detail described by the defendant's union representative. The Court accepted the union representative's evidence that he spoke to the decision maker about the defendant's medication. As he was pushing for medical retirement and meeting some resistance, it was most probable that he would have pressed the issue and given details to back up the case for the medical retirement. The Court was also satisfied that the decision maker had previous and detailed knowledge of the defendant's psychological health issues. (paras 56, 59-60)
- The plaintiff accepted that only the summary of the investigation report was given to the defendant and his representatives as that was then company policy. The summary did not contain the analysis which included the report writer's conclusions on the defendant's work and meal patterns nor his findings that the defendant had admitted his reasons for not immediately reporting the incident together with the findings that the defendant had not admitted the SPAD to his manager until after the meeting. Whether or not the disclosure would have changed the course of the investigation could now only be a matter of conjecture but because the defendant's alleged conduct after the incident resulted in two of the allegations of serious misconduct the non-disclosure of opinions which contributed to the plaintiff's conclusion was a serious procedural error. (paras 61-63)
- The plaintiff was not justified in dismissing the defendant as a result of his misconduct. In failing to get back to him or his representatives about medical retirement and its consideration of matters not shown to the defendant in the time between the two meetings, the plaintiff did not act as a fair and reasonable employer would have done in the circumstances.
Comment
- In Simpsons Farms Ltd v Aberhart (cited below) Chief Judge Colgan expressed reservations about the upper limit for awards for non-economic loss in employment cases referred to in NCR (NZ) Corporation Ltd v Blowes (cited below). The Court respectfully agreed with his observations that as a matter of principle it was not for the courts to impose a cap in the absence of legislative direction and as a matter of precedent there were a number of employment cases where awards which were significantly higher than that referred to in Blowes have been affirmed or not interfered with by the Court of Appeal. To that the Court would add that the $27,000 figure settled on in Blowes is disproportionate with upper-end awards for noneconomic loss made in other jurisdictions. In the end, the level of compensation must be commensurate with the evidence of the degree of harm caused to a plaintiff. (paras 104-106)
- It is unwise for employers to reach any independent conclusions about the medical state of their employees particularly when they have a known history of illness without fully consulting the practitioners who are treating the employee. (para 84)
Result:
Challenge dismissed ; Reimbursement of lost wages ($75,000 reduced by 10% for contributory conduct) ; Compensation for humiliation etc ($25,000 reduced by 10% for contributory conduct) ; Costs reserved
Statutes considered:
ERA s103A
ERA s123(1)(b)
ERA s123(1)(c)(i)
ERA s124
HSE
New Zealand Bill of Rights Act 1990
Cases referred to in judgment:
Air New Zealand Ltd v Hudson [2006] ERNZ 415
Angel v Fonterra Co-operative Group [2006] ERNZ 1080
Barnett v Northern Region Trust Board of the Order of St John [2003] 2 ERNZ 730
BP Oil NZ Ltd v The Northern Industrial District Distribution Workers IUOW (1989)
ERNZ Sel Cas 512 ; (1990) 3 NZELC 97,486 ; [1989] 3 NZILR 276 (CA)
NCR (NZ) Corporation Ltd v Blowes [2005] ERNZ 932 (CA)
Northern Distribution Union v BP Oil New Zealand Ltd [1992] 3 ERNZ 483 (CA)
Simpsons Farms Ltd v Aberhart [2006] ERNZ 825
Taunoa v Attorney-General [2007] NZSC 70
Telecom New Zealand Ltd v Nutter [2004] 1 ERNZ 315 (CA)
W & H Newspapers Ltd v Oram [2000] 2 ERNZ 448 (CA)
White v Auckland District Health Board CA102/07, 8 June 2007
X v Auckland District Health Board [2007] ERNZ 66
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Yong t/a Yong and Co Chartered Accountants v Chin
AC 1/08
Heard: 25 Sep 2007, Auckland
Judgment Date: 15 Feb 2008
Court/Authority: Couch J
Appearances: E Orlov ; M Nutsford
PRACTICE AND PROCEDURE - Application for stay of proceedings and rehearing - Plaintiff unsuccessfully challenged Authority determination that found defendant was constructively dismissed - Plaintiff simultaneously filed application for leave to appeal decision to Court of Appeal and applications for stay of proceedings and rehearing of decision in Employment Court - Plaintiff submitted that Employment Court Judge made errors of law, breached natural justice, and acted with predetermination - HELD - Employment Relations Act 2000 specifically provides for appeal and judicial review and therefore general power to order rehearing not appropriate - Inappropriate for Employment Court to consider same material as presently before Court of Appeal - Application dismissed - Accountant
This was an unsuccessful application for a rehearing of a challenge to a determination of the Employment Relations Authority which held the defendant had been constructively dismissed and an unsuccessful application for a stay of proceedings.
The defendant was employed by the plaintiff for two periods of time between 2002 and 2005. The defendant's claim for constructive dismissal was upheld by the Authority in October 2006. The plaintiff unsuccessfully challenged that determination before Judge Perkins (See: [2007] ERNZ 322).
The plaintiff then simultaneously filed applications for a stay of proceedings and a rehearing of that decision in the Court and an application for leave to appeal to the Court of Appeal against that decision. As Judge Perkins had ceased to be a member of the Court another Judge heard the application for a stay of proceedings and rehearing.
The plaintiff argued that Judge Perkins had made several errors of law, had breached natural justice, and had demonstrated predetermination. Clause 5 of the Third Schedule to the Employment Relations Act 2000 ("ERA") provides a general discretion to order a rehearing and associated stay of proceeding. Sections 179, 213, and 214 provide for a right of challenge to the Court from the Authority, as well as appeal and judicial review to the Court of Appeal from the Court in certain circumstances.
Held
- As is the case with all such general discretions clause 5 of the ERA must be exercised judicially and according to principle. The scope of the power must be determined in the context of the ERA as a whole and in light of the principles applicable to courts of record generally. (para 12)
- The scheme of the ERA is to provide two specific processes to address dissatisfaction with a judgment: appeal and judicial review. In addition the Act provides a general power to order a rehearing and the Court has an inherent power to recall. As a matter of principle, where a specific process is available, a party should not seek to invoke the exercise of a general power to achieve the same result. The general power should be reserved for those cases in which no other process is available. Thus, where a party is dissatisfied with a judgment of the Employment Court on grounds which may be the subject of an appeal under s 214 of the ERA or an application for judicial review under s 213 ERA, the Court should be very reluctant indeed to entertain an application for rehearing on those grounds. (paras 24-25)
- In the present case, the grounds relied on by the plaintiff under the heading "Points of Law" were all capable of being grounds of appeal under s 214 ERA. Equally, all the grounds under the heading "Breaches of natural justice and predetermination" were grounds on which an application for judicial review might be made under s 213 ERA. The plaintiff relied on no other grounds and advanced no reason why he could not pursue his dissatisfaction with the judgment through those specific processes. As a matter of principle, therefore, the Court found that it was inappropriate to consider an application for rehearing on those grounds. (para 29)
- The Court was strongly reinforced in that view by the fact that the plaintiff had filed an application for leave to appeal Judge Perkins' decision. By doing so, the plaintiff had placed before the Court of Appeal all of the issues the Court was asked to determine in the application for rehearing. It was entirely inappropriate that a judge of the Court should express an opinion on matters which were now before the Court of Appeal in the same proceedings. (para 30)
- This may well be a case in which the plaintiff ought to be entirely reimbursed for the costs she has incurred in responding to the applications for rehearing and stay of proceedings. (para 34)
Comment
- The provision by the Crown of courts of civil jurisdiction reflects the public interest in having an orderly means of resolving disputes between individuals. In discharging that role, the courts strike a balance between doing justice in individual cases, bringing disputes to an end and providing certainty of law. These interests are often in conflict and each must, at times, give way to the others. Thus, the public interest in justice requires the provision of rights of appeal in most cases even though this is contrary to the public interest in prompt resolution of disputes. Equally, the needed for finality in litigation requires that rights of appeal be limited. A key aspect of our legal system reflecting the need for finality of litigation is that the judgments of courts are final and binding on the parties in all but very few circumstances. This principle is reflected in the doctrines of res judicata and functus officio. (paras 13-14)
Result:
Application dismissed (rehearing and stay of proceedings) ; Costs reserved
Statutes considered:
ERA s179
ERA s213
ERA s214
ERA Third schedule cl 5
Holidays Act 1981
Judicature Amendment Act 1972 Part 1
Labour Relations Act 1987 s135
Cases referred to in judgment:
New Zealand Waterfront Workers Union v Ports of Auckland Limited [1994] 1 ERNZ 604
Yong t/a Yong & Co Chartered Accountants v Chin [2007] ERNZ 322
Pages: 3
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The New Zealand Air Line Pilots' Association Inc v Air New Zealand Ltd
AC 2/08
Heard: 8, 9, 20 Nov 2007, Auckland
Judgment Date: 19 Feb 2008
Court/Authority: Travis J
Appearances: R Harrison QC, R McCabe ; C Toogood QC, K Thompson
DE NOVO CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY - Interpretation of collective agreement ("CA") - Calculation of average incentive pay - Clause in CA excluded certain duties - Greater the number of excluded duties the higher the average incentive pay - Plaintiff submitted defendant miscalculated incentive pay by incorrectly including four particular categories - Whether oral agreement reached during collective bargaining that four categories would be included - Plaintiff submitted that oral agreement not admissible - Defendant submitted oral agreement relevant to factual matrix - Defendant submitted clause in CA simply a method to accommodate ad hoc duties in calculation of average incentive pay - HELD - Oral agreement not admissible - Policy reasons against admitting evidence of oral agreements reached in collective negotiations - Clause provided mechanism for excluding particular duties during the currency of the CA where agreed between parties and approved by defendant - Four disputed categories not agreed or approved - Challenge dismissed - Pilots
This was an unsuccessful de novo challenge to a determination of the Employment Relations Authority which held in favour of the defendant in its interpretation of a clause in a collective agreement regarding incentive pay.
The plaintiff and the defendant were parties to an expired collective agreement ("CA"). A dispute arose over the calculation by the defendant of the pilots' average incentive pay. This was calculated by taking the total incentive hours (the numerator) and dividing it by the total number of available pilot hours (the denominator). The CA made several exclusions from the denominator thus reducing the number of available pilot hours. In particular, clause 13.3.4(a)(vii) ("clause vii") excluded "any pilots performing agreed company-approved duties unrelated to flying duties...".
The plaintiff argued that the defendant had miscalculated the incentive pay by incorrectly including four particular categories ("the four disputed categories") in the denominator that should have been excluded under clause vii. Further exclusions would increase the payable incentive pay benefiting the members of the plaintiff. The plaintiff sought orders that the defendant pay all unpaid incentive pay, plus interest, and a penalty of $10,000 for each and every breach.
The Authority found that the four disputed categories were not excluded and were therefore within the denominator. The plaintiff challenged that determination.
The defendant contended the designer of the software that calculated incentive pay ("M") had explicitly told representatives of the plaintiff during negotiations that the four disputed categories were to be included. The defendant therefore alleged that an agreement had been reached between the parties as to the formula for calculating the average incentive pay during the currency of the CA. The plaintiff submitted that evidence as to what was said during negotiations was not admissible. The defendant submitted that the Court could take into account the way in which the parties approached the drafting of the disputed provision by way of the mutually accepted factual matrix of the present case. Argument on this point turned on the recent Supreme Court decision of Wholesale Distributors Ltd v Gibbons Holdings Ltd (cited below).
As to the interpretation of clause vii, the plaintiff submitted that the correct interpretation was that the four disputed categories should have been excluded. The defendant submitted that the four disputed categories were correctly included.
Held
- The Court found that M expressly told the plaintiff representatives at the Karaka meeting that simulator duties, admin days, fleet refresher and emergency procedure duties were already included but that he may not have referred to non typerating courses which had also been included in the denominator over the past ten years. The Court also found as a fact that the negotiators agreed that the method of calculation of average incentive hours that was currently being used by the company for other purposes, would be the same calculation that would be used for all the pilots covered by the CA. No changes were made to the computer programme throughout the currency of the CA. If any changes had been agreed during the currency of the CA, it would have required a direction to be given to the computer programmers to incorporate the agreed changes as exclusions from the denominator. This was never done. (paras 29-31)
- The Court accepted that evidence of negotiations for a collective agreement which must be ratified, as a matter of policy based on the Employment Relations Act 2000, falls outside of the possible categories where reliable proof of an oral agreement in negotiations can be relied on. The Act provides policy reasons of the sort described by Tipping J in Wholesale Distributors against admitting such material. The Court was not persuaded that the law has yet reached a point where an oral agreement, which has not been included in the collective agreement, can be used to provide the meaning of a disputed term in the collective. To do so in the present case would allow parol evidence of an oral agreement to vary the words in 13.3.4(a) to expressly include the four disputed categories and thus exclude them from the denominator. (paras 48, 50)
- However, the evidence of how the incentive pay was calculated prior to the CA and how it was calculated by the company during its currency, had provided some understanding of the context or factual matrix in which to interpret what was a complex and technical clause. Therefore, although the Court's factual findings reached the point of concluding that there was an agreement to include at least three of the four disputed categories of duties in the denominator, as that agreement did not find its way expressly into the CA, which was then subjected to ratification, that oral agreement was unenforceable. (paras 51-52)
- The Court preferred and accepted the plaintiff's submissions as to the interpretation of clause vii. The Authority found, on the plain meaning of clause vii, that it required an agreement that the particular type of duties were to be excluded from the denominator. The Court agreed. To adopt the defendant's submissions would mean the word "agreed" would have no meaning. In the sense that the roster set out duties which may be required under the CA, they were all company approved and that did not support the plaintiff's argument. The interpretation the plaintiff advanced would also render clauses (i) to (vi) redundant because only flying duties strictly so called, plus the hour at each end, would be included and everything that did not involve the actual flying would be excluded. If that had been intended the clause could simply have read that the denominator would "not include any pilots performing company-approved duties unrelated to flying". (paras 66-67)
- The Court found instead, in the absence of such an agreement, that the particular type of company approved duties in the four disputed categories, whether or not they were unrelated to flying duties, were to be included in the denominator. The clause operated as a mechanism for excluding particular types of duties from the denominator where the parties had agreed and the company had approved. As the company had not agreed or approved the exclusion of the four disputed categories, on this interpretation, that was the end of the matter. (para 68)
Result:
Challenge dismissed ; Costs reserved
Statutes considered:
ERA s51
ERA s51(1)
ERA s54(1)
ERA s163
ERA s192
Cases referred to in judgment:
A-G v Dreux Holdings Ltd (1996) 7 TCLR 617 (CA)
Air New Zealand v Nippon Credit Bank Ltd [1997] 1 NZLR 218
ASTE v Chief Executive of Bay of Plenty Polytechnic [2002] 1 ERNZ 491
Brownsons Holdings (1999) Ltd v The Plaza Pakuranga Ltd (HC, Auckland, CIV-
2004-404-2133, 30 May 2006)
Hansells NZ Ltd v Ma AC 53/07, 14 September 2007
Lowe Walker Paeroa Ltd v Bennett [1998] 2 ERNZ 558
Wholesale Distributors Ltd v Gibbons Holdings Ltd [2007] NZSC 37, (2007) 5
NZConvC 194.493
Yoshimoto v Canterbury Golf International Ltd [2001] 1 NZLR 523
Yoshimoto v Canterbury Golf International Ltd [2004] 1 NZLR 1.
Pages: 3
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Employment Relations Authority v Rawlings
CA 228/07
Heard: 13 Feb 2008, Wellington
Judgment Date: 21 Feb 2008
Court/Authority: William Young P, Chambers and Arnold JJ
Appearances: CC Inglis, LM Fong ; FJ Wall, M Quigg
COURT OF APPEAL - Appeal against an Employment Court decision - Authority issued direction that respondent's proceedings to be withdrawn unless amended statement of problem was lodged - Whether direction challengeable under s179 Employment Relations Act 2000 ("ERA") - Whether judicial review precluded by ss184(1A) and 194(3) ERA - Employment Court dismissed application to strike out application for review holding it was open to respondent to challenge direction under s179 ERA and review proceedings not precluded by ss184(1A) and 194(3) ERA - HELD - If right of challenge exists, review proceedings excluded unless or until right of challenge has been exercised - Right of challenge under s179(1) ERA - Review proceedings inconsistent with s184(1A) ERA and must be struck out - Appeal allowed
This was a successful appeal against an Employment Court decision which dismissed the appellant's application to strike out the respondent's application for review (See: [2006] ERNZ 729).
The respondent, through his advocate ("W"), lodged a statement of problem in the Employment Relations Authority alleging unjustified dismissal and seeking interim reinstatement. The statement of problem also contained W's views about employment law and made abusive comments about the Authority. The Authority directed the respondent to file an amended statement of problem without W's views about the law and the Authority and stated that the proceedings would otherwise be treated as withdrawn. No amended statement of problem was lodged. The Authority then deemed the proceedings to be withdrawn.
The respondent attempted to file a challenge against that direction in the Employment Court under s179 Employment Relations Act 2000 ("ERA"). However, the Registrar advised the respondent that he was not able to challenge, by way of s179 ERA, an action by a staff member of the Authority or an Authority Member. The respondent then filed proceedings under s194 ERA seeking review of the Authority's decision.
The appellant sought to have the review proceedings struck out.
The Employment Court dismissed the application to strike out. The Employment Court held that it was open to the respondent to challenge the Authority's direction that the proceedings were to be treated as withdrawn. Further, that the review proceedings were not precluded by ss194(3) or 184(1A) ERA.
The amicus curiae submitted that the procedural overlay to the Authority's actions was not inconsistent with review under s184(1A) ERA but was enough to engage s179(5) ERA, which meant that there was no right of challenge under s179(1) ERA.
Held
- The direction of the Authority was akin to the sort of "unless order" which the High Court in practice employs only as a last resort and where there has been a history of failure to comply with other orders, see Hytec Information Systems Ltd v Coventry City Council (cited below). Such orders are available in the Employment Court under r 6 of the Employment Court Regulations 2000 but are, no doubt, sparingly used. As of 9 May 2005, there had been no history of failure on the part of the respondent to comply with other orders or directions. Presumably the Authority took the view that the actions of W in other cases provided a broader justificatory context. The issue of whether possibly inappropriate conduct by W in cases in which the respondent was not involved justified the abruptness of the unless direction in the respondent's case might be thought to give rise to a legitimate argument, at least in the context of a challenge under s 179 ERA. (paras 15-16)
- Although the deemed withdrawal was probably of limited intended effect, it was doubtful whether it was within the powers of the Authority. The ERA does not confer on the Authority an explicit power to make unless directions or to deem proceedings abandoned for non-compliance. It was thus arguable that it was the duty of the Authority to resolve the problem, not to refuse to hear the dispute. All in all there was scope for much argument about the appropriateness of the unless direction. Given that the unless direction provided the basis upon which the claim was deemed to have been withdrawn, that deemed withdrawal may well also be challengeable. (paras 17, 19, 21-22)
- Sections 179(5) and 184(1A) ERA are intended to prevent challenge or review processes disrupting unfinished Authority investigations. But once the investigation is over and a determination has been made, there is no reason for limiting the challenge and review jurisdictions of the Employment Court. Consistently with that approach the Court were of the view that the actions of the Authority in the present case were, for the purposes of s 179(5) ERA, not just a determination about procedure. Accordingly that subsection would not bar a challenge to the course taken by the Authority. The Court were likewise satisfied that s 184(1A)(a) did not preclude review proceedings. Both conclusions rested on the premise that, in substance, the Authority had determined the proceedings which were initiated by the statement of problem lodged on behalf of the respondent. (paras 26-27)
- To make sense of s184(1A) ERA, it was necessary to recognise that the phrase "any matter before the Authority" in s 184(1A) ERA has, in substance, the same meaning as the rather different words which appear in s 184(1) ERA, "determination, order, or proceedings of the Authority". This meant that the phrase "any matter before the Authority" does not mean "any matter which is currently before the Authority" as the Employment Court held, but rather "any matter which is or has been before the Authority". In s 184(1A)(b) ERA, the words "if applicable" mean that the requirement to challenge the determination applies only if there is a right to issue challenge proceedings. When construed in the above way, the purpose of the subsection is clear. It is to prevent review proceedings being filed until the Authority is quit of the case and any rights of challenge have been exercised. (paras 34-36)
- Reading ss 194(3) and 184(1A) ERA together makes it clear that the right of challenge provided for under s 179(1) ERA is the preferred method of challenging decisions of the Authority. In other words, if there is a right of challenge, review proceedings are excluded unless or until the right of challenge has been exercised. (para 38)
- There was a right of challenge under s 179(1) ERA with the consequence that the review proceedings were inconsistent with s 184(1A) ERA and must be struck out. (para 43)
Result:
Appeal allowed ; Orders accordingly ; No order for costs
Statutes considered:
ERA s103(1)(a)
ERA s113
ERA s114
ERA s114(6)
ERA s127
ERA s143
ERA s157
ERA s160
ERA s160(1)(f)
ERA s173
ERA s173(1)(b)
ERA s177(4)
ERA s178(6)
ERA s179
ERA s179(1)
ERA s179(5)
ERA s184
ERA s184(1A)
ERA s184(1A)(a)
ERA s184(1A)(b)
ERA s184(1A)(c)
ERA s184(2)
ERA s184(2)(c)
ERA s188(4)
ERA s194
ERA s194(3)
ERA Second Schedule
ERA Second Schedule cl 4
ERA Second Schedule cl 13
ERA Second Schedule cl 14
ECR r6
Words and phrases: any matter before the Authority ; if applicable
Cases referred to in judgment:
Hytec Information Systems Ltd v Coventry City Council [1997] 1 WLR 1666 (CA)
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Chief Executive of the Department of Corrections v Tawhiwhirangi
WC 4/08
Wellington
Judgment Date: 7 Mar 2008
Court/Authority: Shaw J
UNJUSTIFIED DISMISSAL - Remedies - Defendant reinstated following mediation - Level of compensation - Effect of reinstatement on compensation - Whether remedies should be reduced for contributory behaviour - Defendant submitted effects of prolonged suspension and dismissal process severe and justified higher than usual award of compensation - HELD - Reinstatement considered whether or not other remedies awarded - Only statutory provision for reducing remedies is for employee's contribution - Defendant's contribution so limited that reduction for contribution not warranted - $10,000 compensation awarded - Principal Corrections Officer
This decision determined the issue of remedies following an unsuccessful de novo challenge and unsuccessful cross-challenge to a determination of the Employment Relations Authority.
The defendant was suspended and eventually dismissed following an allegation that he had assaulted a prisoner. The investigation took 11 months to complete. The Court found that the defendant had been unjustifiably dismissed. The issue of remedies was deferred (See: WC 14A/07, 13 September 2007). The Court was later advised that the defendant had been reinstated following mediation.
The defendant submitted that the effect of the prolonged suspension and dismissal process was severe and met the threshold for a higher than usual award for compensation. The defendant gave evidence that he suffered financial detriment when he ceased to receive his salary following his dismissal and was put under pressure to pay his mortgage and other expenses, including his son's college fees.
The defendant sought an award of compensation of $23,500 without reduction for contribution.
The plaintiff submitted that the only evidence of the effect of the dismissal on the defendant concerned the effects of the period of suspension which had been found to be lawful. Further, that the defendant and his representative had contributed to the delays.
Held
- The failure of the plaintiff to move swiftly to complete the investigation was material in assessing compensation. The ongoing stress the defendant suffered during that period was made worse when he was eventually dismissed. His humiliation because of his inability to meet his family's needs following dismissal was relevant to an award of compensation. Beyond that, however, there was little evidence to support the defendant's claim for $23,500. In these circumstances, an award at the starting point of $10,000 for hurt and humiliation was appropriate. (paras 13-14)
- Reinstatement may be seen as the ultimate vindication for an employee who has suffered an unjustified dismissal and in some circumstances may mitigate the hurt and humiliation caused by the dismissal. However, reinstatement is to be considered whether or not other remedies are awarded and the only statutory provision for remedies to be reduced is for contributory behaviour by the employee. In the present case, the fact of reinstatement was hard-won. $10,000 is a comparatively modest level of compensation and in the circumstances of the present case it would not be just to reduce it because the defendant was eventually reinstated. (paras 15-16)
- In the substantive judgment the Court concluded that the defendant may have breached the plaintiff's code of conduct by the manner in which he dealt with the prisoner but this was not enough to warrant a finding of serious misconduct. The Court found that, although the defendant did contribute to the situation in which he found himself because of these breaches, it was to such a limited extent that a reduction for contribution was not warranted. (paras 17-18)
Result:
Reimbursement of lost wages (quantum to be determined by parties) ; Compensation for humiliation etc ($10,000) ; Costs reserved
Statutes considered:
ERA s123(1)(c)(i)
ERA s124
Cases referred to in judgment:
Chief Executive of the Department of Corrections v Tawhiwhirangi WC 14A/07, 13
September 2007
Pages: 2
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Sealord Shellfish Ltd v Sefo
CA 600/07
Heard: 18 Feb 2008, Wellington
Judgment Date: 13 Mar 2008
Court/Authority: Chambers, O'Regan and Arnold JJ
Appearances: AE Scott-Howman ; P Cranney
COURT OF APPEAL - Practice and procedure - Application for leave to appeal against an Employment Court decision - Scope of non-de novo hearing - Employment Court directed matter to be heard as full rehearing but limited issues to be decided - Applicant submitted direction effectively changed nature of challenge - HELD - Direction essentially a matter of case management in specific circumstances - Judge aware issues were limited - Parties not forced into de novo challenge - Application dismissed
This was an unsuccessful application for leave to appeal an Employment Court decision.
The respondent filed a non-de novo challenge to a determination of the Employment Relations Authority. The respondent elected to challenge the Authority's findings on suspension, contribution, and reinstatement. An issue arose between the parties as to how the challenge should be conducted, and, in particular, how the evidence should be led. The Employment Court made a direction as to the nature and extent of the hearing under s182(3)(b) Employment Relations Act 2000 ("ERA").
The Employment Court held that there would be a full rehearing of the matter that was before the Authority but the issues to be decided were to be limited to suspension, contribution, and reinstatement.
The applicant submitted that the Employment Court was not entitled to make orders as to the conduct of the hearing which effectively changed the nature of the challenge. The effect of the order was to expand the grounds of the challenge beyond the specific errors alleged. The applicant contended that in considering the matter on the basis of a full rehearing the Employment Court would necessarily consider matters that were not the subject of challenge and therefore not relevant to the Court's task. Finally, the applicant submitted that the issue was one of public importance because the question of appropriate procedure on a non-de novo challenge had regularly been the subject of confusion and debate.
Held
- The Court did not consider that leave to appeal should be granted. (para 13)
- What the Judge did in the present case was essentially a matter of case management prior to hearing. Case management decisions of this type are likely to be case specific, as the present decision clearly is. They will not often lend themselves to discussion at the level of general principle, which is the concern of the Court under s 214 ERA. Accordingly, the Court was not persuaded that the proposed appeal raised any issue of general or public importance. (paras 14-15)
- The Judge was clearly aware that the issues before her were limited. It was not correct to say that the Judge had effectively forced the parties into a de novo challenge. (para 16)
- The Court considered that the Judge's decision was, in the circumstances, sensible, even inevitable. In part, this was because the sequence of events giving rise to the grievance was relatively short and limited. It would be impossible, or at least very difficult, to consider parts of the sequence in isolation. And in part it was because there was no contemporaneous record to which reference could be made to resolve the dispute about what happened before the Authority. (para 17)
Comment
- The Court had some sympathy for the parties as the result of the difficulty they faced because of the absence of a verbatim record of what occurred before the Authority. In some instances that may make it difficult for a party to exercise its right to challenge by way of non-de novo hearing. (para 12)
Result:
Application dismissed (leave to appeal) ; Costs in favour of respondent ($1,500 plus disbursements)
Statutes considered:
ERA s179(3)
ERA s179(4)
ERA s182(3)(b)
ERA s214
Cases referred to in judgment:
Sefo v Sealord Shellfish Ltd CC 19/07, 25 October 2007
Pages: 2
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