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Taylor and Anor v Von Tunzelman
AC 8A/08
Heard: 15 Jul 2008, Auckland
Judgment Date: 15 Jul 2008
Court/Authority: Travis J
Appearances: G Bogattio ; S Von Tunzelman (Respondent in person)
PRACTICE AND PROCEDURE - Oral judgment - Application to amend second amended statement of claim - First plaintiff applied for leave to amend second amended statement of claim to add defence that defendant was a contractor - Disclosure and inspection of documents - Documents annexed as exhibits had not been disclosed during discovery process - Defendant also complained about harassment of his partner - HELD - Court required to resolve issue of status of contracting parties - No prejudice to defendant in allowing amendment - Documentation may be vital evidence - Counsel for first plaintiff ordered to file and serve list of relevant documents - Defendant free to examine documents - Court had no jurisdiction over harassment complaint - Application granted - Orders accordingly
This oral judgment granted an application to amend a second amended statement of claim and ordered the disclosure and inspection of documents.
The first plaintiff applied for leave to amend his second amended statement of claim to include a defence that the defendant was a contract salesperson.
The defendant raised concerns about the disclosure and inspection of documents. The defendant drew attention to three documents that were annexed as exhibits to an affidavit of the first plaintiff but had not been disclosed in any list of documents.
The defendant also made a complaint about the harassment of his partner.
Held
(1) The issue of the status of the employment was before the Authority which
determined that issue in the defendant's favour. In that sense what was being sought in the amendment was not a new matter which was not previously before the Authority. The Court was bound to resolve the issue between the parties as to who were the contracting parties, whether it was the first plaintiff in person or whether it was the second plaintiff. In the course of doing that the Court would have to hear evidence which would, of necessity, also resolve the issue of whether the defendant's engagement was as an employee or as a contractor. For this reason it did not appear that there would be any prejudice to the defendant in granting the amendment sought and neither side wished to seek an adjournment of the hearing that had been set down to deal with the substantive issues. (paras 3-4)
(2) If an applicant for amendment can satisfy that the interests of justice require the amendment, that there will not be significant prejudice or significant delay then the amendment will be allowed to be made to enable all relevant issues to be disposed of by the Court. For these reasons the application to amend was granted. (paras 5-6)
(3) The documentation the parties created at the time may be vital in determining the contracting parties and the status of the defendant's engagement. As a consequence the Court directed counsel for the first plaintiff to file and serve a list of the relevant documents (as defined in Regulation 38 of the Employment Court Regulations 2000) in the first plaintiff's possession or power or which were previously in the first plaintiff's possession or power and which also listed those documents for which legal professional privilege was sought. The defendant was to be free to examine the documents in the presence of someone from the counsel for the
first plaintiff's office and to request and obtain copies of any documents he required at the defendant's expense. (paras 13-15)
(4) As to the defendant's complaint of the harassment of his partner, the Court had no jurisdiction to deal with this. The defendant's partner was not someone that the Court had any jurisdiction over. This Court can only deal with employment agreements and employment relationship problems. (para 19)
Result: Application granted (to amend statement of claim) ; Orders accordingly ; Costs reserved
Statutes considered: Employment Court Regulations 2000 r38
Cases referred to in judgment: Elders Pastoral Ltd v Maher (1987) 2 PRNZ 383 (CA)
Weston v Fraser WC 15/08, 4 July 2008
Other workers/site names: Worldwide Publishers Ltd
Pages: 4
[975170]
Butcher v OCS Ltd
CC 8/08
Heard: 11 Jun 2008, Christchurch
Judgment Date: 16 Jul 2008
Court/Authority: Travis J
Appearances: T Oldfield ; P McBride
NON-DE NOVO CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY - Dismissal - Justification - Plaintiff caught smoking on duty after verbal warning and written instruction not to - Employee handbook defined smoking on duty as misconduct - Failure to obey lawful and reasonable instruction defined as serious misconduct - Plaintiff summarily dismissed for serious misconduct for failing to obey lawful and reasonable instruction not to smoke on duty - Whether employer can summarily dismiss employee for serious misconduct when policy handbook categorised behaviour as misconduct requiring warnings before dismissal - Plaintiff submitted fair and reasonable employer would have issued further warning as handbook required, that handbook had contractual force, and that verbal warning had expired - Defendant submitted handbook only guide and rigid compliance not required - Defendant submitted expired warning could be considered as part of all the circumstances under s103A Employment Relations Act 2000 ("ERA") - HELD - Handbook not integrated into plaintiff's employment agreement - Policy did not have to be followed to the letter - Section 103A ERA enhanced flexibility in considering actions of employer that failed to follow own policies - Precise wording of policy not determinative - Expired warnings could be considered as part of all the circumstances under s103A ERA - Warning and instruction unequivocal and fair - Defendant's actions fair and reasonable in all the circumstances - Dismissal justified - Challenge dismissed - Airport trolley person
This was an unsuccessful non-de novo challenge to a determination of the Employment Relations Authority which held that the plaintiff's dismissal was justified.
The defendant provided services to the airport company at Christchurch International Airport. The defendant employed the plaintiff as a trolley person from 1995 until his dismissal on 15 November 2005.
The defendant's Code of Conduct handbook ("the handbook") set out its disciplinary procedures and defined misconduct and serious misconduct. Misconduct included smoking in any non-smoking area while on duty. Serious misconduct included the refusal or failure to obey the defendant's lawful written or verbal instructions. The penalty for misconduct was verbal or written warnings which could lead to dismissal after further misconduct. The penalty for serious misconduct was summary dismissal.
On 18 November 2004, one of the defendant's branch managers wrote to the plaintiff regarding a recent verbal warning for smoking in a non-smoking area on duty and in uniform. The letter was not a written warning but rather elaborated the defendant's position on smoking and instructed the plaintiff not to smoke cigarettes on duty and in uniform in any restricted area of the airport at any time outside of permitted areas and at any time other than official breaks. The letter advised the plaintiff that any breaches of these instructions would be considered serious misconduct which could result in dismissal.
On 6 October 2005, the plaintiff was seen smoking in a restricted area while on duty. The plaintiff admitted in the Authority that he had decided to smoke as he did not believe there to be anyone around to catch him. On 17 October 2005, the plaintiff received a written notification to attend a disciplinary meeting for serious misconduct for failing to follow a reasonable and lawful instruction. The plaintiff was advised that his serious misconduct could result in his dismissal.
At the conclusion of the meeting the defendant agreed to suspend its decision to dismiss to allow the plaintiff to present alternative options. The plaintiff was advised that he could potentially be re-employed elsewhere within the defendant's business. The plaintiff subsequently refused alternative employment and was consequently dismissed on 15 November 2005 for failing to follow a reasonable and lawful written instruction not to smoke in the workplace.
The Authority found that the investigation in October 2005 was full and fair and that the defendant's actions were what a fair and reasonable employer would have done in the circumstances.
First, the plaintiff submitted that the Authority erred in its conclusion that the defendant was entitled to regard the misconduct as serious due to the fact that the handbook specifically defined his behaviour as mere misconduct. Second, it was argued that a reasonable employer would have issued a further warning as provided for in the handbook. Third, the plaintiff submitted in reliance on Stimpson v Auckland Health Care Services Ltd (t/a Auckland Health Care) (cited below) that the handbook had contractual force. Fourth, the plaintiff argued that once published, the defendant was obliged to adhere to it. Finally, the plaintiff argued that the reliance on the November 2004 verbal warning was wrong because under the handbook verbal warnings were only in force for 6 months.
The defendant submitted first that employers' handbooks should be regarded as a guide and that overall fairness was more important than rigid adherence to the handbook. Second, that the plaintiff's failure to follow a lawful and reasonable instruction went to the heart of the employment relationship. Third, the defendant submitted that the plaintiff had already received a verbal warning and written instructions for similar conduct and an expired warning could be considered under all the circumstances under s103A. Finally, the defendant submitted that the flagrancy of the plaintiff's disobedience justified the misconduct being categorised as serious.
Held
(1) The Court accepted the force of the statement of Judge Finnigan in Stimpson v Auckland Health Care Services Ltd (t/a Auckland Health Care) (cited below) that the implied term of fair dealing, and today the statutory obligations of good faith, can lead an employee to expect that the employer will carry out the terms of a properly promulgated policy. That did not mean however that such a policy, unless it forms part of the employment agreement, cannot be unilaterally varied by the employer providing such variations are properly notified to the employee who might otherwise be relying on the old policy. In the absence of proof the Court made the same assumption as Judge Finnigan did in Stimpson, that the handbook was not incorporated into the plaintiff's employment agreement. (para 48)
(2) The authorities cited by counsel made it clear that the policy did not necessarily have to be followed to the letter. This flexibility in considering the actions of an employer which had failed to follow its own policy had been enhanced by the introduction of s103A. The section required a consideration of all the employer's actions and whether the way the employer acted was what a fair and reasonable employer would have done in all the circumstances. This made it clear that the issue was not whether or not an employer has properly followed every requirement of a promulgated policy document but whether, in all the circumstances at the time the dismissal occurred, the employer's actions were what a fair and reasonable employer would have done. (para 49)
(3) The contents of, and the adherence by an employer to, the policy and procedures contained in a handbook are highly relevant to the inquiry into the employer's conduct that must be conducted under s103A. As the authorities, even under the previous legislation, demonstrated, the precise wording in such handbooks is not necessarily determinative. (para 54)
(4) The Court did not accept the plaintiff's counsel's submission that the defendant had wrongly relied on an expired verbal warning to dismiss the plaintiff. The recent decision of the English Court of Appeal in Airbus UK Ltd v Webb (cited below) clarifies the position that if, but for the previous warning, the employer would not have had a reason for dismissing the employee, the expired warning cannot be relied on. An expired warning can be taken into account by an employer when deciding to dismiss an employee, and by a Tribunal in deciding whether the employer has acted reasonably or unreasonably. Previous misconduct referred to in the expired warning may be relevant in determining the reasonableness of the employer's response to the new misconduct. The Court therefore accepted the defendant's counsel's submission that a recently expired warning for the same conduct cannot be completely disregarded as it is part of all the circumstances which have to be considered under s103A. However, in the present case the defendant was not relying on an expired warning but on a direction contained in the same document which evidenced that warning that any repetition of the same conduct could result in dismissal. (para 55)
(5) The most important feature of the present case was the clear notification to the plaintiff in November 2004 that, in effect notwithstanding what may be said in the handbook, any future smoking was prohibited on the Christchurch Airport site and could be treated as serious misconduct justifying dismissal. In the face of such a warning, the smoking incident in October 2005 could properly have been brought under both the handbook categories of misconduct in smoking and also serious misconduct as a failure to obey a lawful and reasonable order in the November 2004 letter. Although general interpretation principles would indicate that the specific overrides the general, the warning given in the November 2004 letter made it clear to the plaintiff what the consequences of another breach could be. The Court held that this instruction was a fair and unequivocal warning, both of the instruction itself and the consequences that were possible for its breach. (paras 56-57)
(6) One of the features which the defendant took into account, as demonstrated by the letter of 15 November, was that neither the plaintiff nor his representative could give the defendant any reassurance that this would not happen again. This lack of reassurance was a material factor that a fair and reasonable employer could take into account in deciding whether or not to continue a warning process, in the hope that there might be a change of conduct. Here there were two obviously similar incidents within the space of 11 months, the second in the face of a specific warning, and a fair and reasonable employer was entitled to conclude that the plaintiff would not obey lawful instruction. (para 59)
(7) The defendant was also entitled to take into account that the final incident was actioned as the result of a complaint from its client, the airport company, which required the defendant to take appropriate action to ensure "that this behaviour ceases and desists immediately." The defendant was also entitled to take into account the plaintiff's refusal to consider a transfer to another less sensitive site where he would be free to smoke outside, as long as he was not smoking on duty. (para 60)
(8) The defendant had discharged the burden of showing that the defendant's actions were those which a fair and reasonable employer would have taken in all the circumstances. (para 61)
Result: Challenge dismissed ; Costs reserved
Statutes considered: ERA s103A
ERA s182(3)(b)
ERA s183
Cases referred to in judgment: Airbus UK Ltd v Webb [2008] EWCA Civ 49
Airline Stewards & Hostesses of NZ IUOW v Air New Zealand Ltd [1990] 3 NZLR 549
Alofa v Aotea Centre Board of Management AC 50/01, 30 July 2001
Carter Holt Harvey Panels Ltd v Nicholas CC 32/00, 21 December 2000
Corry v Clouston & Co Ltd (1904) GLR 213
Honda NZ Ltd v NZ Shipwrights Union (1990) ERNZ Sel Cas 855; [1990] 3 NZILR 23
Jerram v Franklin Veterinary Services (1977) Ltd [2001] ERNZ 157
Mitchell v Te Reo Irirangi o Ngati Raukawa Trust (t/a 90.6/95.7 Raukawa FM) AEC 73/96, 4 November 1996
Northern Distribution Union v BP Oil New Zealand Ltd [1992] 3 ERNZ 483
NZ Food Processing IUOW v Unilever New Zealand Ltd (1990) ERNZ Sel Cas 582;[1990] 1 NZILR 35
NZ Shipwrights Union v Honda NZ Ltd [1990] 3 NZILR 82
NZ Woollen Workers IUOW v Christchurch Carpet Yarns Ltd [1989] 2 NZILR 14
Reid v New Zealand Fire Service Commission [1999] 1 ERNZ 104
Samuels v Transportation Auckland Corp Ltd [1995] 1 ERNZ 462
Sky Network Television Ltd v Duncan [1998] 3 ERNZ 917
Sloggett v Taranaki Health Care Ltd [1995] 1 ERNZ 553
Stimpson v Auckland Health Care Services Ltd (t/a Auckland Health Care) [1993] 2 ERNZ 614
Timu v Waitemata District Health Board [2007] ERNZ 419
W & H Newspapers Ltd v Oram [2000] 2 ERNZ 448
Pages: 5
[975184]
Coffey v The Christchurch Press , a division of Fairfax New Zealand Ltd
CC 9/08
Heard: 12 Jun 2008, Christchurch
Judgment Date: 24 Jul 2008
Court/Authority: Travis J
Appearances: JA Wilton ; R Gibson
DE NOVO CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY - Dismissal - Justification - Dismissal on notice -- Plaintiff used abusive language in anger at manager after manager's editing introduced serious factual error into plaintiff's article - Error caught before going to print - Plaintiff had received warnings and final written warning for similar behaviour - Whether lower threshold of justification for dismissal on notice than for serious misconduct - Whether a fair and reasonable employer would have dismissed in all the
circumstances - Plaintiff submitted that payment in lieu of notice did not lower threshold under s103A Employment Relations Act 2000 - Plaintiff submitted fair and reasonable employer would not have dismissed - Defendant submitted that dismissal based on prior warnings not notice - Defendant submitted that foul language toward superior repudiatory - HELD - Giving of notice could occasionally be relevant when considering justification of employer's actions - Court had some concern over final written warning - Final written warning ultimately justified - Dismissal justified - Challenge dismissed - Journalist
This was an unsuccessful de novo challenge to a determination of the Employment Relations Authority which held that the plaintiff's dismissal was justified.
The plaintiff was a sports journalist and had been in the defendant's employ for 44 years until his dismissal on notice on 22 March 2007.
In November 2003 and August 2006 the plaintiff received written warnings for directing abusive language at his co-workers including the sports editor, Mr Lammers (L). After the latter incident, the plaintiff was offered confidential counselling. The plaintiff and L had weekly review meetings following the August 2006 incident. On 8 December 2006, the plaintiff initiated a meeting with the editor, Mr Thompson (T) and the defendant's H R Manager to discuss what he perceived as a lack of communication from L regarding his employment review process.
On 13 December 2006, the plaintiff was called to a disciplinary meeting in regard to the plaintiff's poor performance, attitude and an incident on 1 November 2006 in which T overheard the plaintiff using hostile language toward L. This resulted in a final written warning being issued on 23 December 2006. Again, the plaintiff was offered confidential counselling.
On 9 March 2007, L edited an article the plaintiff had written. L changed the plaintiff's introduction and in doing so created a factual error that altered the story's hook. L showed the story to the plaintiff, who noticed the mistake. There was a confrontation between L and the plaintiff during which the plaintiff used abusive language. The mistake was corrected before the story went to print.
L then advised T that the plaintiff had breached the final written warning by using abusive language towards him. T wrote to the plaintiff on 14 March 2007 seeking a meeting and a formal response to that allegation. A meeting ensued and the plaintiff was represented throughout. The following day the plaintiff was dismissed on notice for directing offensive and disrespectful language towards a colleague after having received warnings and a final written warning for similar offences.
The plaintiff raised a personal grievance. The Authority found that the decision to dismiss was one that a fair and reasonable employer would have made in all the circumstances.
The plaintiff raised a preliminary issue concerning an argument that the defendant submitted in the Authority, namely that where a dismissal is on notice, the standard of justification required is lower than serious misconduct. The plaintiff accepted that prior warnings could lower the threshold as part of the circumstances required to be considered under s103A Employment Relations Act 2000 but that payment in lieu of notice did not have the same effect. The plaintiff submitted that the issue was not yet settled.
The plaintiff submitted that the case was intensely factual and a fair and reasonable employer would not have dismissed the plaintiff in all the circumstances. In relation to the final written warning concerning the 1 November incident, the plaintiff submitted that T had overheard the plaintiff use offensive language toward L but had done nothing about it until 13 December despite participating in a meeting at the plaintiff's request on 8 December.
The defendant submitted that the giving of notice could reduce the degree of seriousness required to justify a dismissal but that in the present matter reliance was placed on the two previous warnings. Proof of serious misconduct was therefore not required. In any event, the plaintiff's actions could have been characterised as serious misconduct. The defendant relied on precedents which held that the use of foul language to a superior could be regarded as repudiatory. The defendant submitted that on each occasion the plaintiff's foul language was accompanied by aggressive behaviour .
Held
(1) The statutory test in s103A requires all the circumstances to be looked at. In Air New Zealand v Hudson (cited below), the Court concluded that the previous law in the Hepi case had been restored in the context of s103A. In Hepi, Judge Williamson expressed the view that the giving of notice could occasionally be relevant when considering the justification of the employer's actions. (para 43)
(2) The Court had some concerns about the way in which the final warning was issued. T overheard the words which were found to constitute misconduct and which founded the warning, and then shortly afterwards received a complaint from L. Notwithstanding this, two meetings were held with the plaintiff, one with L and one with T and at neither of those meetings was the issue of the plaintiff's conduct on 1 November raised. However, in view of the way the plaintiff had admittedly acted on 1 November towards L, it was perhaps not surprising that L did not raise that issue when he met with the plaintiff. (paras 55-56)
(3) It was somewhat more difficult to understand why T did not raise the matter with the plaintiff at the 8 December 2006 meeting that the plaintiff had requested, but again this may have been because T wanted to give the plaintiff adequate notice of the seriousness with which his conduct on 1 November was being viewed. The delay in dealing with L's complaint was also explainable by T's absences from the office at this time. In the end the complaint was dealt with thoroughly and the plaintiff was given a full opportunity to deal with T's concerns. (para 56)
(4) The language used and the manner in which the plaintiff admittedly addressed L on 1 November did show contempt for L's position as his supervisor. That was a serious matter which T was bound to investigate. On balance the Court concluded that a fair and reasonable employer was entitled to conclude that in light of the plaintiff's previous conduct, a final written warning was justified. (para 57)
(5) The Court was satisfied from T's evidence that he was reluctant to take the ultimate step of dismissal but that he was concerned that should a further incident occur which caused the plaintiff to again lose his temper, L or other staff could be subjected to the same disparaging and obscene language, which would be distressing to them. (para 60)
(6) The Court considered it was proper for T to look for other solutions. One, which could have been offered by the plaintiff in light of the suggestions made to him on at least two previous occasions, was that he might benefit from counselling or some form of anger management. That was not suggested by the plaintiff. In such circumstances T was entitled to conclude that he had no adequate reassurance that such conduct would not repeat itself. (para 61)
(7) The Court observed that the final incident took place within 77 days of the issue of the final written warning on 23 December 2006. It also appeared that the plaintiff was on leave for part of that period. (para 62)
(8) It was difficult to escape the conclusion that the plaintiff was entirely the author of his own misfortune in speaking to L in the way that he did over a mistake that the plaintiff was fully entitled to feel concerned about. The Court was fortified in the conclusion that it had reluctantly reached that the defendant had succeeded in discharging the burden of justifying the dismissal, by the reasoning and conclusion of the Authority with which the Court completely agreed. The Court also concluded that as a result of a fairly conducted investigation, the presence of previous written warnings including the final written warning, with no reassurance that it would not happen again, a fair and reasonable employer was entitled to conclude that the plaintiff's misconduct on 9 March 2007 was sufficiently serious to warrant his dismissal on notice. (paras 63-64)
Result: Challenge dismissed ; Costs reserved
Statutes considered: ERA s103A
Cases referred to in judgment: Air New Zealand Ltd v Hudson [2006] ERNZ 415
Alliance Freezing Company (Southland) Ltd v NZ Amalgamated Engineering IUOW (1989) ERNZ Sel Cas 575
Aotearoa International Ltd v Madsen [1996] 1 ERNZ 511
Dodd v D E & L M Spence Ltd (t/a Pak'n'Save) [2002] 2 ERNZ 572
Macadam v Port Nelson Ltd (No 1) [1993] 1 ERNZ 279
Northern Distribution Union v BP Oil New Zealand Ltd [1992] 3 ERNZ 483
Northern Distribution Union v Newmans Coach Lines Ltd [1989] 2 NZILR 677
Northern Hotel IUOW v Johannink (No 2) [1992] 2 ERNZ 917
NZ Baking Trades Employees IUOW v The French Bakery Ltd [1991] 1 ERNZ 409
Wellington Road Transport IUOW v Fletcher Construction Co Ltd (1983) ERNZ Sel Cas 59
Wellington Road Transport and Related Industries Motor and Horse Drivers IUOW v Shell Oil (NZ) Ltd [1980] ACJ 217
Pages: 20
[975212]
Air New Zealand Ltd v McAlister
CA 216/07
Heard: 14 Nov 2007 - 15 Nov 2007 (2 days) Wellington
Judgment Date: 30 Jul 2008
Court/Authority: Arnold, Panckhurst, Keane JJ
Appearances: AH Waalkens QC, KM Thompson ; RE Harrison QC
COURT OF APPEAL - Appeal against Employment Court decision - Unjustified disadvantage - Age discrimination - Correct comparator group - Genuine occupational qualification - International rule prohibited pilots over 60 years acting as pilot-in-command ("PIC") in many countries - Appellant's employment policy reflected rule - Appellant demoted respondent when he reached age of 60 years - Respondent alleged discrimination and unjustifiable disadvantage - Employment Court compared respondent with PICs under 60 years doing work of same description and held appellant had discriminated against respondent by reason of age -
Appellant submitted comparator group must be unable to fly through restricted counties because of some other disabling factor - Respondent submitted comparator group must be able to fly through restricted countries - HELD - To determine whether discriminatory, necessary to place comparator in same circumstances as aggrieved person, except for allegedly discriminatory factor - Flight restrictions (although not on account of age) must be reflected in comparator group - Employment Court erred in identification of relevant comparator group - Appeal allowed - Case remitted back to Employment Court for reconsideration - Pilot
This was a successful appeal against a decision of the Employment Court.
The appellant airline employed the respondent as a pilot. He held the senior rank of captain of the Boeing 747-400 fleet as pilot-in-command ("PIC") and standards captain undertaking flight instructor duties.
The International Civil Aviation Organisation ("ICAO") adopted a rule that prohibited a commercial pilot over the age of 60 acting as a PIC on many international flights ("the rule"). New Zealand was a contracting state to the ICAO, but had not adopted the rule. Many countries that the appellant flew into or over had adopted the rule and approximately 89 per cent of the appellant's operations were affected. The Court used the United States of America as the proxy for those countries that had accepted the rule. In the United States, the Federal Aviation Administration ("FAA") reflected the rule in an operational specification.
The appellant's employment policy provided that no pilot who had attained the age of 60 could hold the position of PIC on 747 and 767 aircraft while the predominant operation of those aircraft was to or through counties that had adopted the rule.
When the respondent reached the age of 60, the appellant removed him from his PIC and flight instructor duties and assigned him to a first-officer position. The respondent filed a personal grievance alleging that: (i) he had been discriminated against by reason of his age, and (ii) the appellant had acted unjustifiably to his disadvantage.
Section 104(1) of the Employment Relations Act 2000 ("ERA") concerns discrimination in employment. Section 106 ERA provides a number of exceptions to s104(1) ERA, including s30 of the Human Rights Act 1993 ("HRA"), which creates an exception to the prohibition on discrimination in employment where age is a "genuine occupational qualification".
The Employment Court held that the appellant had discriminated against the respondent on the ground of age. The Employment Court held that the correct comparator group was flight instructors/PICs who were under the age of 60 years but were performing work of the same description that the respondent was performing before he reached the age of 60 years. See: [2006] ERNZ 979).
The appellant was granted leave to appeal on 5 questions of law. The principal question on appeal was: "Did the Employment Court err in concluding the demotion of the respondent from his 747-400 flight instructor position occurred by reasons directly or indirectly of a prohibited grounds of discrimination, namely his age, in terms of s104(1) of the Employment Relations Act 2000?" (See: [2007] ERNZ 224).
The parties agreed that the comparator group must comprise senior B747 pilots, holding flight instructor positions, who are less than 60 years of age and who are employed on individual employment agreements. The appellant submitted that the comparator pilots must be unable to fly into the USA or through its airspace, because although technically qualified, they face some disabling impediment other than age.
The respondent submitted that the comparator pilots must be technically qualified and able to fly into the USA or through its airspace.
Held
(1) To reach a true comparison of whether the appellant had discriminated against the respondent in terms of s 104(1)(b) ERA it was necessary to place the comparator in the same circumstances as the aggrieved person, except for the allegedly discriminatory factor. This permits a focus on the true role of that factor. In the present case there were two suggested reasons for the detriment suffered by the respondent - age (the prohibited ground of discrimination) and the flight restrictions that prevent pilots from acting as PICs in certain jurisdictions. The existence of flight restrictions (although not on account of age) must be reflected in the comparative analysis, through the identification of the comparator group. If this factor were to be omitted, the comparator group would consist of pilots who suffered from no operational restrictions, and they would be compared to a pilot who did suffer from an operational restriction. By ignoring a crucial operational difference, the comparison would not be a meaningful one. The Court considered that the Employment Court erred in its identification of the relevant comparator group. (paras 90, 95)
(2) In relation to causation, the Court considered that, in principle, a straightforward factual enquiry is involved at this stage. The structure of the statutory provisions requires such an approach. If a purposive approach were to be taken to causation, the Court would be unable to consider all the relevant factors in this context, particularly those relating to reasonable accommodation. An interpretation which produced that outcome did not, in the Court's view, accord with the objectives of these provisions. (paras 103-104)
(3) The application of s 30 HRA is not limited to situations where the formal qualifications for a position contain an age limit. Section 30 HRA refers to age being a genuine occupational qualification "whether for safety or for any other reason". In the present context, then, the Court considered that the language of s 30 HRA is broad enough to include situations where age, although not part of the formal qualifications for the activity at issue, is important to the employer's operations as a consequence of legal obligations which the employer has no alternative but to accept. Such a justification could fall within the words "for any other reason". Just how important age is in the context of the employer's operations will determine whether it can properly be regarded as a "genuine occupational qualification". (paras 109-111)
(4) If, in order to maintain his position, the respondent had to fulfil PIC duties on B747 aircraft and as a practical matter he could not do that as a result of ICAO/FAA age restrictions, the Court considered that being beneath the relevant age would be a "genuine occupational qualification". The Court considered that it would be artificial to refuse to recognise the constraints that the ICAO/FAA age restriction placed on the appellant in its international operations, particularly as New Zealand is in a minority in not imposing a mandatory retirement age on commercial pilots. In this context the real issue would be whether the appellant could reasonably have accommodated the respondent, given that the restriction did not apply to all areas of the appellant's international operations. However, this was not the basis on which the Court determined the present case. (paras 114-115)
Result: Appeal allowed ; Case remitted to Employment Court for reconsideration ; Costs in
favour of appellant ($8,000 plus disbursements)
Statutes considered: ECA s27
ECA s28
ECA s28(1)
ERA s103(1)(b)
ERA s103(1)(c)
ERA s104
ERA s104(1)
ERA s104(1)(a)
ERA s104(1)(b)
ERA s104(1)(c)
ERA s104(2)
ERA s104(3)
ERA s105(1)(i)
ERA s106
ERA 106(1)(g)
ERA s106(1)(l)
ERA s106(2)
ERA s106(2)(b)(i)
Human Rights Act 1993 s21(1)(i)
Human Rights Act 1993 s22(1)(a)
Human Rights Act 1993 s22(1)(b)
Human Rights Act 1993 s22(1)(c)
Human Rights Act 1993 s22(1)(d)
Human Rights Act 1993 s30
Human Rights Act 1993 s30(1)
Human Rights Act 1993 s35
Human Rights Commission Act 1977 s15(1)
Human Rights Commission Act 1977 s16A
Human Rights Commission Amendment Act 1992 s2
Human Rights Commission Amendment Act 1992 s3(2)
Human Rights Commission Amendment Act 1992 s6
Human Rights Commission Amendment Act 1992 s22
International Covenant on Civil and Political Rights 1966 art 26
Labour Relations Act 1987 s210(1)(c)
Labour Relations Act 1987 s211(1)
New Zealand Bill of Rights Act 1990 s19
Race Relations Act 1971 s5
Cases referred to in judgment: Accident Compensation Corporation v Ambros [2008] 1 NZLR 340
Air New Zealand Ltd v McAlister [2007] ERNZ 224 (CA)
Air New Zealand Ltd v Rush [2003] 2 ERNZ 344
Love v Australia Comm No 983/2001, 25 March 2003
McAlister v Air New Zealand Ltd [2006] ERNZ 979
McKinney v University of Guelph [1990] 3 SCR 229
Purvis v New South Wales (2003) 217 CLR 92
Qantas Airways Limited v Christie (1998) 193 CLR 280
Quilter v Attorney-General [1998] 1 NZLR 523
Re Stevenson and Canadian Human Rights Commission (1983) 150 DLR (3d) 385
Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] 2 All ER 26 (HL)
Smith v Air New Zealand [2000] 2 ERNZ 376
Tranz Rail Limited v Rail & Maritime Transport Union (Inc) [1999] 1 ERNZ 460
Trilford v Car Haulaways Ltd [1996] 2 ERNZ 351
Pages: 38
[975214]
Orakei Group (2007) Ltd (formerly PRP Auckland Ltd) v Doherty
WC 12A/08
Heard: 7 Jul 2008, Wellington
Judgment Date: 15 Aug 2008
Court/Authority: Shaw J
Appearances: C Patterson ; MF Quigg, T Sissons
POINT OF LAW CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY - Identity of employer - Whether plaintiff joint employer of defendant - associated company ("54 Cuba St (2007) Ltd") accepted it employed defendant and was liable for redundancy and other payments owed to defendant - 54 Cuba St (2007) Ltd in liquidation and unable to pay - Defendant alleged he was jointly employed by plaintiff company and plaintiff therefore liable for amounts owed - Plaintiff submitted no employment relationship between it and defendant and defendant was employed only by 54 Cuba St (2007) Ltd - HELD - Person may have more than one employer - More than two unrelated employers required - Sufficient degree of relationship and element of common control necessary - 54 Cuba St (2007) Ltd and plaintiff acting in concert in employment of defendant - Plaintiff was joint employer of defendant - Plaintiff liable for amounts owed by 54 Cuba St (2007) Ltd - Challenge dismissed - Valuer
This was a point of law challenge to a determination of the Employment Relations Authority which held that the plaintiff was the joint employer of the defendant.
The defendant raised an employment relationship problem against the plaintiff and an associated company ("54 Cuba Street (2007) Ltd") claiming that the two companies owed him redundancy money and other allowances. Before the investigation meeting, 54 Cuba Street (2007) Ltd accepted that it had employed the defendant and was liable for redundancy and other payments.
In a determination dated 18 May 2007 the Authority ordered 54 Cuba Street (2007) Ltd to pay the defendant redundancy money plus other payments. On 1 June 2007, 54 Cuba Street (2007) Ltd went into liquidation. In a determination dated 21 December 2007, the Authority found that there was sufficient evidence that the plaintiff also employed the defendant and ordered the plaintiff to pay the outstanding amounts for which 54 Cuba Street (2007) Ltd had accepted liability ("the second determination").
The plaintiff challenged the second determination.
The plaintiff submitted that in the absence of a written employment agreement there was no evidence of a meeting of the minds to justify a finding of an employment relationship between the parties. The plaintiff contended that the facts demonstrated that the defendant was intended to be and was employed by only 54 Cuba Street (2007) Ltd.
The defendant submitted that on the facts, the employment relationship was between the defendant and both the plaintiff and 54 Cuba Street (2007) Ltd as joint employers.
Held
(1) The Court found that it is within the contemplation of the Employment Relations Act 2000 that a person may have more than one employer. (para 53)
(2) There are a number of authorities from other jurisdictions which have adopted the concept of joint employer. These cases establish that joint employment is possible but what is required is more than two unrelated employers. There must be a sufficient degree of a relationship between the legal entities. In judging that relationship the Court will look for the element of common control. (para 56)
(3) Applying the principles relating to joint employment to the evidence, the Court was satisfied that the plaintiff company and 54 Cuba Street (2007) Ltd were acting in concert in their employment of the defendant. At the outset of his employment he was told and had no reason to doubt that he was being employed by the plaintiff company, that was reinforced by the offering of an employment agreement from the same company, and throughout his employment there was a merging of both managerial and operational control over his activities. Over the course of his employment the establishment of the separate companies saw each assuming responsibility for whatever part of his employment that suited the circumstances of either company at the time. Throughout, the same director was the source of common control over each company at least insofar as it affected the defendant's employment. (para 58)
(4) The plaintiff company was the joint employer along with 54 Cuba Street (2007) Limited and that joint employment persisted throughout the defendant's employment. The plaintiff was therefore liable for the payment of the amounts owed to the defendant by 54 Cuba Street (2007) Limited as identified by the Authority. (para 59)
Result: Challenge dismissed ; Orders accordingly ; Costs reserved
Statutes considered: Acts Interpretation Act 1924 s4
ECA s2
ERA s5
ERA s6
Interpretation Act 1999 s33
Cases referred to in judgment: Conference of the Methodist Church of New Zealand v Gray [1996] 2 NZLR 554 (CA)
Costello v Allstaff Industrial Personnel (SA) Pty Ltd and Bridgestone TG Australia Pty Ltd [2004] SAIR Comm 13
Downtown Eatery (1993) Ltd v Ontario (2001), 200 D.L.R (4th) 289
Hawley v Luminar Leisure Ltd & Ors [2006] EWCA Civ 18
Inspector of Awards & Agreements v Pacific Helmets (NZ) Ltd (In Receivership) and Wholesale Cycles (South Pacific) Ltd [1988] NZILR 411
Muollo v Rotaru [1995] 2 ERNZ 414
Roberts' Fish Farm v Spencer 153 So.2d 718
Sinclair v Dover Engineering Services Ltd (1987), 11 B.C.L.R (2d) 176
Pages: 14
[975286]
Ryan Security & Consulting (Otago) Ltd v Bolton & Anor
CC 11/08
Heard: 8 Jul 2008, Christchurch
Judgment Date: 18 Aug 2008
Court/Authority: Full Court
Appearances: P Anderson ; no appearance
PROCEEEDINGS REMOVED FROM EMPLOYMENT RELATIONS AUTHORITY - Civil contempt - Jurisdiction and powers of Authority - Alleged breach of injunction - orders made by Authority - Whether Authority had power to punish for contempt - Plaintiff submitted Authority had power to punish for contempt under s162 Employment Relations Act 2000 ("ERA") - Plaintiff submitted Authority had implied power to punish for contempt of its orders because power necessary to make its jurisdiction effective - HELD - Authority does not have power to punish for civil contempt - Punishment of contempt not an order relating to contracts - Not necessary to imply power as other enforcement processes provided in ERA - Plaintiff able to apply for compliance order or seek enforcement through District Court - Questions
answered
This was a matter removed from the Employment Relations Authority. The Court held that the Authority does not have the power to punish for civil contempt.
In December 2007, the plaintiff applied to the Authority for an interlocutory injunction to restrain the first defendant from breaching the employment agreement between the parties. The plaintiff alleged that the first defendant was competing with it in breach of an express contractual restraint and/or was likely to disclose confidential information in breach of an express agreement not to do so. The Authority issued an interim injunction that restrained the first defendant from providing security services of the type that the plaintiff provided. The injunction applied to any person for whom the plaintiff had provided such services within a period of 12 months prior to 4 November 2007 and required the defendant to abide by a contractual clause relating to confidential information.
The plaintiff alleged that the first defendant had breached those injunctions. The plaintiff sought a declaration from the Authority that the first defendant was in contempt, an order for costs, and a fine.
The Authority removed the plaintiff's application to the Court under s178 Employment Relations Act 2000 ("ERA"). The plaintiff submitted that the Authority had a limited power to punish for contempt. First, the plaintiff submitted s162 ERA conferred on the Authority a power to punish for contempt because punishment for contempt of court order is an order that the High Court or District Court may make under an enactment or rule of law relating to contracts. The plaintiff contended that punishment for contempt of orders based on contractual obligations involved making orders "relating to contracts". Second, the plaintiff submitted that the Authority had implied power to punish for contempt of its orders because that power was necessary to make its jurisdiction effective. The plaintiff argued that it was desirable that the judicial body considering and granting injunctive relief should have control over any subsequent breach of its orders.
Held
(1) Punishment for contempt is imposed to reinforce the authority of the courts. While it may be imposed at the instigation of a party to litigation, it is not a litigation tool to be used inter partes. Any benefit derived by a party from punishment of another party for contempt is incidental to the purpose of the power to impose such punishment. In terms of s162 of the Act, therefore, punishment for contempt is an order that can be made by the High Court or a District Court under an enactment or rule of law, but it does not meet the second limb of the test that this must be an enactment or rule of law relating to contracts. The enactments or rules of law empowering those Courts to punish for contempt relate to the administration of justice and the rule of law. It followed that the Court did not accept the plaintiff's first argument that s162 provides an express power to the Employment Relations Authority to punish for contempt of its orders. (paras 17-18)
(2) Processes for enforcement of orders made by the Authority are contained in the ERA. In light of these express powers of enforcement, it is not necessary to imply any powers of enforcement of injunctions by the Authority into the ERA. Implication of powers to punish is a step which ought not to be taken lightly and the Court was not persuaded that the inconvenience of the process expressly provided necessitated the implication of a parallel process not contemplated by the legislature. (paras 40, 43, 44)
(3) The Court found that the Authority has no power to punish for contempt. In the context of the present case, the Authority had no jurisdiction to make the orders sought by the plaintiff consequent upon the contended breach by the first defendant of the interim injunctions issued by the Authority. It was open to the plaintiff to seek compliance with the injunctions made by the Authority through the process provided for in ss137 and 140 of the Act. It was also open to the plaintiff to seek orders for punishment for contempt in the District Court pursuant to s141. (paras 48-49)
Comment
(1) In his separate judgment in the final Credit Consultants case (Credit Consultants Debt Services NZ Ltd v Wilson (No 4) (cited below)), the Chief Judge urged parliamentary reconsideration of the position that had been reached in that case. The result of the Credit Consultants litigation was that the full Court felt obliged by the scheme and wording of the Act to conclude that the Authority had exclusive primary jurisdiction to grant injunctions in employment matters (except strikes and lockouts), notwithstanding that this may not have been the actual intention of Parliament. But for the conclusion to which the Court was reluctantly driven in that case, the present case would not have arisen. The fact that it did arise and the conclusion the Court reached served only to emphasise the awkward division of jurisdiction which currently exists between the Authority, the Employment Court and the courts of general jurisdiction and the need for legislative reconsideration. (paras 50-51)
Result: Questions answered ; Costs reserved
Statutes considered: ERA s137
ERA s138(6)
ERA s140(6)
ERA s141
ERA s162
ERA s178
ERA s196
Industrial Relations Amendment Act 1977
Judicature Act 1908 s88A
Labour Relations Act s207
Labour Relations Act 208
Labour Relations Act s307
New Zealand Bill of Rights Act 1990 s6
New Zealand Bill of Rights Act 1990 s21
New Zealand Bill of Rights Act 1990 s22
Words and phrases: Civil contempt ; Criminal contempt
Cases referred to in judgment: Attorney-General v Reid [2000] 2 ERNZ 258
Claydon v Attorney-General [2002] 1 ERNZ 281
Credit Consultants Debt Services NZ Ltd v Wilson (No 2) [2007] ERNZ 205
Credit Consultants Debt Services NZ Ltd v Wilson (No 4) [2007] ERNZ 446
NZ Railways Corporation v NZ Seamen's IUOW and Evans [1989] 2 NZILR 613; (1989) ERNZ Sel Cas 321
Quality Pizzas Ltd v Canterbury Hotel Employees Industrial Union [1983] NZLR 612
Taylor v Attorney-General [1975] 2 NZLR 675
Other workers/site names: Up Front Security Ltd
Pages: 13
[975288]
Mana Coach Services Ltd v New Zealand Tramways and Public Passenger Transport Union Inc.
WC 13B/08
Heard: 30 Jun 2008 - 30 Jul 2008 (5 days) Wellington
Judgment Date: 26 Sep 2008
Court/Authority: Colgan CJ
Appearances: H Fulton, K Ashcroft ; P McBride
POINT OF LAW CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY - Collective bargaining - Strike action - Defendant union gave plaintiff notice of intended strike action - Plaintiff made alternative arrangements including using other persons to drive buses - Communications between defendant and members that strike action may not proceed - Defendant cancelled intended strike minutes before notified commencement time - Plaintiff continued with alternative arrangements - Defendant's members not provided any work - Plaintiff sent letters outlining bargaining options directly to union members without defendant's consent - Whether employees should be paid as originally rostered after strike was cancelled - Whether replacement labour was lawfully engaged to perform work of striking employees - Whether direct employer communications to employees breached obligations of good faith during collective bargaining - HELD - Late cancellation of strike a deliberate tactic to maximise loss and inconvenience for plaintiff - Strike action must be deployed in good faith - Notice of strike action must not mislead or deceive - Defendant misled and deceived plaintiff and failed to be communicative - Defendant's conduct meant union members not entitled to remuneration - Most of replacement labour lawfully engaged - Direct employer communications breached good faith obligations - Challenge granted in part - Bus drivers
This was a point of law challenge to a determination of the Employment Relations Authority which held that the late cancellation of notified strike action breached good faith obligations and disentitled union members from receiving remuneration, that most replacement labour was lawfully engaged, and that direct employer communications to union members breached good faith obligations.
The parties were involved in collective bargaining. On 31 July 2007 the defendant union gave the plaintiff notice of intended strike action on 1 August 2007 from 2:30pm until 6:30pm. In response, the plaintiff took steps to alleviate the effect of the notified strike action, including making roster and timetable changes, arranging for others to operate affected bus services, and advertising changes to bus users.
On the evening of 31 July 2007, the defendant's secretary suggested to one of its delegates that the strike would be cancelled and union members were encouraged to be present at their depots at the scheduled strike commencement time. No such indication was given to the plaintiff.
At 2:22pm on 1 August 2007 the defendant's secretary emailed the plaintiff advising that the intended strike action was cancelled. A facsimile was sent to the plaintiff at about the same time. By this time a number of the alternative arrangements were already in place and had begun operating. The plaintiff decided to continue with the alternative arrangements and union members were not provided with their usual, or any, work. The plaintiff used drivers from other depots, casual workers, mechanics and the plaintiff's former general manager ("W") to drive buses during the affected period.
On 6 August 2007 the plaintiff sent three communications directly to union employees. The first communication advised that if the employees participated in further notified strike action, they would be suspended. The second communication was a letter from the plaintiff's CEO to the defendant's secretary outlining a number of points about the collective agreement negotiations. The letter was sent to union members at about the same time as it was sent to the secretary. The third communication was a letter from the plaintiff's CEO to individual union members informing union members that their representative had been given a deadline to accept two bargaining options. It then set out two further options which would be on offer if either of the first two options were not accepted.
The issues were: (1) whether employees should be paid as originally rostered after a strike was cancelled; (2) whether replacement labour was lawfully engaged to perform the work of striking employees; and (3) whether direct employer communications to employees breached obligations of good faith during collective bargaining.
The Authority found that union members should be paid as originally rostered, that the use of casual workers and drivers from other depots was unlawful, and that the direct employer communications breached obligations of good faith.
The defendant submitted that union employees were ready, willing and able to work and therefore, should receive wages accordingly. In support, the defendant relied on cases, including two Court of Appeal judgments, which held the Court's predecessors were not entitled to use the Court's equity and good conscience jurisdiction to disentitle employees to remuneration that they might otherwise have been entitled.
The defendant further argued that the persons the plaintiff used to drive buses were unlawful strike breakers.
Held
(1) A combination of circumstances together meant that the very late advice of cancellation of the strike notice amounted to a deliberate tactic to maximise loss and inconvenience for the plaintiff. These circumstances included:
the absence of an apparent bona fide reason relating to the bargaining prompting a change of tactics by the defendant;
the defendant's secretary's refusal or failure to notify the plaintiff earlier than he did of the cancellation of the strike;
the nature of advice to delegates and members conveyed as early as the evening before the day of strike action; and
the encouragement of union members to present themselves at the depot for work or at least to be able to claim pay if work was not provided to them. (para 37)
(2) Although economic and other harm is a legitimate reason for, and consequence of, strike action, the statute now provides that the long-established weapons of strike and lockout that might be seen at one level to be the antithesis of good faith behaviour, must nevertheless be deployed in good faith. So, to use the words of s4, notice of strike action and dealings during the period of notice must neither mislead nor deceive the party subject to the strike action. Neither is it permissible for the relevant conduct of the intended strikers or their representative to be likely to mislead or deceive the other party. (para 38)
(3) The defendant's conduct at relevant times misled or deceived the plaintiff or was at least likely to have done so. It misled or deceived the plaintiff's management into thinking that the strike would begin at 1430 hours on 1 August. Instead, it had been the intention of the defendant's secretary, who was for these purposes the union to whom members had delegated all their rights and powers in this regard, that the strike would not proceed. By early morning on 1 August the defendant, if it was to have conducted itself in good faith, should have told the employer of at least the possibility of the withdrawal of the strike. To use the words of s4, it was obliged to have been "communicative" about a matter related to bargaining and employment relations generally, but was not. (paras 39-40)
(4) In the circumstances it was reasonable for the plaintiff to have decided, as it did, that it should continue with the emergency arrangements and that work would not be offered to union members in the circumstances. There was a point at which the plaintiff was entitled to decide that it could and should not make further changes that might have damaged its business more than had already occurred. That point had been reached well and truly by the time of the defendant's belated advice of the cancellation of the strike. (paras 42, 47)
(5) The Court concluded that both judgments of the Court of Appeal were distinguishable and that the breach of statutory good faith obligations may now sound in remuneration deprivation under the equity and good conscience jurisdictions of both the Employment Relations Authority and the Employment Court in appropriate cases. The Court also decided that the present case was one such case where the misleading conduct of the defendant, acting on behalf of its members, towards the employer meant that related remuneration should not have to be paid by the company. In these circumstances, affected union members should not benefit in the sense of being paid for work not performed, as a result of their union's bad faith conduct towards the plaintiff. (para 65)
(6) As a matter of principle, there may be nothing objectionable in law in an employment relationship in the conventional sense of employment of indefinite duration, although performed as and when the parties agree to performance on an ad hoc basis. Such a situation may be described as one of "permanent casual" employment. Any more than that general observation must turn on the particular arrangements of the particular enterprise. Unless both planets of work availability, and employee preparedness to perform it, are in alignment, the contract will not operate in practice but will nevertheless continue to define the ongoing employment relationship. (para 76)
(7) Because of the requirements of s93 necessitating notice to the employer of the strike, the plaintiff was able to engage staff from its pool of casuals before the notified strike commencement time. So even if the defendant was correct that those casuals were not employed until engaged for a particular duty or duties, by the time of the
commencement of the strikes, such contractual relationships between the plaintiff and the casuals had been formed. The casuals were not employed principally for performing the work of striking employees. They were engaged to perform their own work, that was driving buses. (paras 82-83)
(8) Full-time or part-time drivers deployed to depots other than those from which they usually operated did not fall into the category of unlawful strike breakers. They were already employed by the plaintiff at the times the strikes commenced. They were not employed principally for the purpose of performing the work of striking employees (as that has been defined) and the evidence is that they agreed to perform the work. Their secondment to strikers' duties was not unlawful. (para 88)
(9) W was not already employed by the plaintiff at the time the strikes commenced. Being a consultant to the company under new ownership, to assist in the transition from family owned enterprise to the division of a large corporate, did not qualify as being "employed by the employer". W was at the plaintiff, not for driving buses, but for the benefit of her prior ownership and management expertise. Even although W agreed to drive buses during the periods of strike action, that was unlawful strike breaking in breach of s97. That said, the Court did not consider that it would be just in all the circumstances to impose a penalty on the plaintiff for its unlawful use of W as a strike breaker. The defendant was therefore entitled to a declaration of breach by the plaintiff of s97 but no other remedy. (paras 93-96)
(10) Mechanics that operated services during the strikes were likewise already employed by the plaintiff at the times the strikes commenced. They too were not employed principally for the purpose of performing the work of striking employees, and agreed to perform the work. There was no breach of s97 by use of mechanics to do the work that, absent the strikes, union members would have performed. (para 99)
(11) The plaintiff's 6 August written communications with staff, who were union members, together amounted to bad faith behaviour in breach of s32(1)(d) of the Act. Specifically, the sending of these letters and their contents evidenced a refusal by the plaintiff to recognise the role and authority of the defendant's members' representatives or advocates. It amounted to an attempt at indirect bargaining about matters relating to terms and conditions of employment with persons for whom the defendant was acting but without its agreement. It was conduct likely to undermine the bargaining or the authority of the defendant in the bargaining. The Employment Relations Authority imposed what the Court categorised as a relatively modest penalty on the company for this breach, of $2,500. There was no challenge to the amount of this penalty. (paras 101, 104)
Result: Challenge granted in part ; Penalty imposed on plaintiff for breach of good faith
($2,500) ; Costs reserved
Statutes considered: ERA s4
ERA s32(1)
ERA s32(1)(d)
ERA s97
ERA s97(3)(a)
ERA s97(3)(b)
ERA s97(3)(c)
ERA s97(4)
ERA s157(3)
ERA s189
Cases referred to in judgment: Bell (Inspector of Awards & Agreements) v Broadley Downs Ltd [1987] NZILR 959
CMI Screws and Fasteners Ltd v NZ Amalgamated Engineering etc IUOW [1990] 2 NZILR 433
Finau v Southward Engineering Co Ltd [2007] ERNZ 522
NZ Amalgamated Engineering, Printing & Manufacturing Union Inc v Air Nelson Ltd
(No 2) [2007] ERNZ 725
Pages: 5
[975429]
Arthur D Riley and Co Ltd v Wood
WC 18/08
Heard: 23 Jul 2008 - 24 Jul 2008 (2 days) Wellington
Judgment Date: 8 Oct 2008
Court/Authority: Shaw J
Appearances: TP Cleary, B Scotland ; DD Vincent, A Bhasin
DE NOVO CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY - Dismissal - Misuse of email - Defendant received two verbal warnings for breach of house rules regarding email and internet use - Defendant warned about inappropriate content of some forwarded emails - Defendant forwarded email with images of nude and semi-nude people and persons of odd appearance in unusual poses - Defendant dismissed for breaching rule prohibiting transmission of offensive and inappropriate material - Defendant alleged dismissal was unjustified because plaintiff had not strictly followed or properly enforced house rules - Further, that plaintiff had not made an objective assessment of what was objectionable and it was necessary to consider views of impartial and neutral observer - HELD - Rule regarding inappropriate content had not been relaxed - Test of justification not that of an impartial observer - Employers bring to their decisions values, culture and expectations of specific work place - Workplace conservative - Plaintiff justified in considering some images objectionable - Defendant had received express warnings of expected standards - Dismissal justified - Challenge granted - Administrative Assistant
This was a de novo challenge to a determination of the Employment Relations Authority which held that the defendant's dismissal was justified.
The plaintiff employed the defendant as an administrative assistant in July 2005. On 26 September 2005, the plaintiff's human resources manager advised the defendant that an email she had sent was inappropriate. The plaintiff provided the defendant with a copy of the updated house rules in October 2005, which included the plaintiff's policy on email, intranet and internet. Rule 15.6 provided that "Employees are not authorised to access, download, upload, save, request, transmit, store or purposely view sexual, pornographic, obscene, racist, profane or other offensive or inappropriate material." Although the policy stated email, intranet and internet were to be used for business purposes only, the plaintiff did allow some personal use. The defendant signed an acknowledgement that she had had the opportunity to read, understand and have clarified the contents of the policy.
On 9 December 2005, the defendant was issued with a verbal warning for breach of the internet and email policy concerning her high number of forwards and joke emails, including the questionable content contained in emails. The defendant received another verbal warning on 4 August 2006 for breach of the company internet and email policy regarding forwarding jokes and internet surfing. The defendant signed acknowledgements that she had received both warnings.
On 28 August 2006 the defendant received an email and attachments entitled "Eleven Most hot People!!!!!!!" ("the email"). The defendant forwarded the email internally and externally with the comment "ewww". The attachments contained images of nude or semi-nude people and persons of odd appearance in unusual poses. The general manager wrote to the defendant inviting her to a disciplinary meeting concerning an allegation that she had been misusing the company's email system.
The defendant's mother accompanied her to the meeting as a support person. The parties discussed the email as well as the content and frequency of other emails the defendant had sent since receiving the second verbal warning. The defendant apologised and said she thought the emails were jokes. The meeting was adjourned.
At a second meeting, the defendant was advised that the company was considering dismissing her. The defendant acknowledged the forwarding of the emails was serious and apologised. The general manager then advised the defendant that she was dismissed. The plaintiff considered that the defendant had breached rule 15.6 and this amounted to serious misconduct.
The defendant submitted that the plaintiff could not rely on the strict wording of the house rules because they were not strictly followed or properly enforced. Further, that the plaintiff took a flawed approach to determining serious misconduct because it failed to make an objective assessment of what was objectionable and took into account irrelevant considerations such as breach of human rights and previous warnings. The defendant contended that it is necessary to consider what an impartial and neutral observer would consider objectionable.
Held
(1) In the present case the Court found that while the house rules about internet and e-mail use had not been strictly applied by the company this did not disentitle it from referring to those rules when conducting the disciplinary investigation. While the company tolerated some personal use of the internet and e-mail system the rule in section 15(6) was relied on by the company and that had not been relaxed. In the series of meetings with the defendant where she received warnings the Court found that this particular part of the policy was referred to and enforced. In September 2005 she was told that e-mails should not depict nudity and in December 2005 the defendant was warned about "questionable content" in e-mails. (para 45)
(2) The Court concluded that in so far as the internet/e-mail policy and house rules set standards of content of e-mails it was a relevant circumstance for the purpose of assessing whether the dismissal was justified. (para 46)
(3) The test is not that the dismissal is judged according to the standards of an impartial observer. Section 103A recognises that the circumstances of an employment environment are a factor to be considered. This means that the standards of what is fair and reasonable may be variable according to the circumstances and a fair and reasonable employer may not necessarily be totally impartial or neutral. Of necessity employers bring to their decisions the values, culture and expectations of their specific work place. They must weigh the impact of the behaviour of an employee under investigation on other employees and the work environment generally. This does not give employers unbridled license to impose their personal prejudices or values on employees. The concept of fairness implies an open-minded approach and reasonableness implies rationality. (paras 54-55)
(4) In judging the finding that the defendant had seriously misconducted herself it was necessary to assess the decision in all the relevant circumstances. Those circumstances include the workplace culture, the house rules, the state of the defendant's awareness of the company's expectations and the consequences of the defendant's conduct. (para 56)
(5) The conduct of the workplace was reasonably conservative. The internet/email policy was quite clear about the lack of tolerance of offensive material being circulated. The Court was satisfied that the defendant and her colleagues knew of the standards that prevailed. The defendant in particular had been expressly warned about breaching those standards. According to the standards of the company, the general manager was justified in considering that some of the images forwarded by the defendant were objectionable. The defendant herself recognised that by acknowledging that she would not have been permitted to post the images on the staff notice-board. Her comment on the e-mail that forwarded the attachments also suggested that she was aware that these were not just funny but were, to say the least, questionable. The Court also found that the general manager was justified in concluding that the defendant's error of judgement was in the forwarding rather than the receipt of the e-mail. It was reasonable for him to be apprehensive about his company's reputation when such an e-mail was sent to employees in Government agencies. In all these circumstances the Court found that the general manager on behalf of the company acted as a fair and reasonable employer in concluding that the defendant had seriously misconducted herself. (paras 57-61)
(6) While the company did not rely on the previous warnings to justify the dismissal, the fact that those warnings had been given over a period of time and were all related to internet/e-mail use was a relevant factor. This was not the first time the defendant had been called to task on this issue. Further, when the general manager told her he was considering dismissal and asked her for an explanation, the defendant apologised, accepted she had done wrong and offered no other explanation that could reasonably have altered the general manager's preliminary decision to dismiss her. For these reasons the Court found that the company was justified in dismissing the defendant. (paras 65-67)
Result: Challenge granted ; Costs reserved
Statutes considered: ERA s103A
Cases referred to in judgment: Airbus UK Ltd v Webb [2008] EWCA Civ 49
Air New Zealand Ltd v Hudson [2006] ERNZ 415
Butcher v OCS Ltd CC 8/08, 16 July 2008
Sky Network Television Ltd v Duncan [1998] 3 ERNZ 917 (CA)
X v Auckland District Health Board [2007] ERNZ 66
X v Auckland District Health Board AC 52A/05, 31 October 2005
Pages: 3
[975453]
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