Penalty - Employment Relations Act 2000

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Andrews and Ors v Toll New Zealand Consolidated Ltd

4 Dec 2008, R Arthur, AA 412/08, (13 pages)

BREACH OF CONTRACT - Applicants recruited in South Africa - Applicants claimed representations made about pay and conditions would receive in New Zealand - Terms and conditions were contractual entitlements of wages and service recognition, relocation expenses, residency costs, healthcare and education - Authority found more likely than not that specific representations about nature of terms and conditions were not made or did not have meaning that applicants alleged - Found no contemporaneous documentary evidence supporting allegations as to what respondent's representatives told applicants - Found applicants acknowledged that real concern and primary motivator for emigration to New Zealand was safety and security of families, not close attention to details of terms and conditions of employment - Found applicants only raised concerns about difference between alleged representations and actual terms and conditions provided by respondent some months after arriving in New Zealand - Authority found if wrong as to whether representations made as alleged, case would fail anyway due to enforceability - Where recruitment interviews about conditions ambiguous, letters of offer clear - BREACH OF CONTRACTUAL REMEDIES ACT 1979 - BREACH OF FAIR TRADING ACT 1986 - Applicants sought damages under CRA to cover costs some incurred for healthcare, education and residency applications, and damages under FTA including damages for distress for alleged misleading statements about employment offered - Due to above findings, no need to consider applicants' submissions regarding FTA and CRA - Authority dismissed claims - PENALTY - Applicants sought penalties for not providing reasonable opportunity to seek advice on terms of employment - Authority found applicants did not inform respondent of difficulty getting advice - No requirement for respondent to arrange access to New Zealand legal advisors in South Africa without applicants requests - Applicants did not contact relevant union - Applicants had reasonable opportunity to seek advice - Authority declined to impose penalty - GOOD FAITH - Applicants sought declaration that respondent did not act in good faith in dealing with concerns - Authority found respondent investigated applicants' concerns through meetings, correspondence and mediation - However respondent breached duty of good faith where representative made comment discouraging applicant from discussing whether terms in offer letter being honoured with union representative - Comments breached duty of good faith in employment relationships towards applicants as union members and also relevant union - Breach intended to undermine employment relationship by discouraging applicant from exercising right to seek union assistance - If sought, Authority would have imposed penalty under s4A(b) ERA - Train drivers

Result: Applications dismissed (breach of contract)(penalty) ; Application granted (breach of good faith) ; Costs reserved

It Maniacs Ltd v Ford

12 Nov 2007, R A Monaghan, AA 351/07, (45 pages)

BREACH OF CONTRACT - Applicant claimed breach of contract and sought damages - Applicant claimed respondent attempted to set up competing business, enticed applicant's employee to work for him and breached confidential information and IT policies - Applicant also invited Authority to conclude respondent in contempt of Authority by failing to produce evidence - Respondent intended to set up business to sell specialist computer software - Applicant advised that plan acceptable if did not promote business to applicant's clients or work on business during applicant's time - Applicant offered respondent franchise opportunity which respondent rejected - Proposal included applicant's financial information and business plan - Information provided on confidential basis - Forensic examination revealed respondent copied several of applicant's client's CVs to laptop - Applicant claimed was evidence respondent using CVs for own business - Respondent argued CVs necessary to test software - Applicant's primary concern respondent setting up business in competition with applicant and breached obligations as employee - Authority identified supplementary breaches prior to hearing primary breach - Claimed breached Employment Agreement ("EA") by purchasing domain name, preparation of stationary, transferring large quantity of applicant's information to home server, registering recruitment website, testing applicant's software, and registration of new business - Authority found duty of fidelity did not prevent employees preparing for own business provided done without breaching duty of trust and confidence to current employer - Authority found no evidence respondent offered employment to co-worker - Authority not persuaded respondent diverted applicant's candidates to own business - Found allegations regarding misuse of confidential information and intellectual property was conduct capable of undermining trust and confidence, however, in these circumstances breaches not sufficient in themselves to amount to undermining conduct - Authority found respondent's credibility dented by deleting material from personal laptop which prevented applicant and Authority from identifying extent of activities - Authority considered applicant's evidence not as compelling as applicant believed - However, respondent's subsequent conduct seriously suggested guilty conscience - Authority concluded respondent's failure to inform applicant that working on new business after declining franchise offer favours finding respondent preparing to establish business in breach of duty of fidelity - Damages - Authority satisfied not enough evidence to warrant order that respondent repay salary - Found no loss suffered by applicant as result of breach of EA by respondent - Respondent ordered to reimburse applicant for costs incurred in forensic examinations ($14166) - Found respondent aggravated matters by deleting material after became aware of applicant's concerns - Authority found not enough evidence to support other damages claims - COUNTERCLAIM - UNJUSTIFIED DISADVANTAGE - Respondent claimed decision to suspend unfair as not given opportunity to be heard before suspension - Found no disadvantage as applicant's interests in protecting its proprietary information justified suspension without respondent being heard - UNJUSTIFIED DISMISSAL - Applicant argued decision to dismiss based on evidence in forensics report - Authority did not accept applicant's reasons for failing to reconvene disciplinary meeting - Respondent's breach of fidelity reflected extent to which could commence a competing business, however, when made decision to dismiss applicant read more into material available and therefore resulting conclusions flawed - Authority found use of respondent's "VPN connection" from home server a breached applicant's IT policy but risk to security not expressly relied on as reason for dismissal - Authority concluded reasons for dismissal not properly put to respondent - Dismissal unjustified - Remedies - Authority concluded respondent's efforts in response to applicant's investigation made respondent author of own misfortunes - No remedies awarded - ARREARS OF WAGES - Authority did not accept wages could be withheld on account of damages when neither quantum or liability established - Authority ordered applicant to pay $9328 being final pay and holiday pay unlawfully withheld from respondent - PENALTY - Authority found respondent's approach to applicant's information irresponsible but not breach of good faith - Authority concluded view of respondent's conduct reflected in remedy being declined for personal grievance - Penalty declined - National sales manager/senior recruitment consultant

Result: Application granted (Breach of contract) ; Application dismissed (Penalty) ; Damages ($14,166.54) ; Counterclaim granted (Dismissal) ; Counterclaim dismissed (Disadvantage) ; Counterclaim granted (Arrears of wages and holiday pay) ($9,382.57) ; Costs reserved

Koehler v New Zealand Forst Research Institute t/a Scion

9 Jan 2009, D King, AA 5/09, (11 pages)

UNJUSTIFIED DISADVANTAGE - Applicant claimed respondent failed to pay redundancy compensation - Applicant claimed accepted secondment in Australia on basis would return to same role in New Zealand on conclusion of secondment - Joint venture ("E") formed between respondent and Australian Commonwealth Scientific and Industrial Research Organisation ("CSIRO") - E an unincorporated joint venture therefore employees employed by either respondent or CSIRO - Applicant's Client Services Manager role converted to E's Operation Manager role - At conclusion of secondment transitional Operations Manager role established permanently in New Zealand - Applicant later appointed to acting E Finance Manager role but continued duties in Operation Manager's role - Applicant sought relocation for personal reasons to Australia as Operations Manager's role involved extensive travel between Australia and New Zealand - E's CEO arranged for relocation of Operations Manager's role to Australia - E's CEO notified respondent that applicant to be transferred to CSIRO payroll under terms of CSIRO enterprise agreement - No agreement between respondent and CSIRO that applicant seconded to CSIRO - Applicant's employment with CSIRO not E - Respondent's human resources manager ("H") explained to applicant only way to transfer to Australia would be to take two years leave without pay ("LWOP") from respondent - LWOP granted, however, H stated no guarantee of ongoing employment at terms end - H reiterated if no ongoing employment with respondent then not entitled to redundancy compensation - Applicant contacted H again and sought confirmation that seconded and lack of redundancy compensation clause be withdrawn - H contacted applicant and reiterated no secondment, on unpaid leave, and not entitled to redundancy compensation - Applicant sought further clarification of employment status from CEO - Applicant received reply which gave inconsistent interpretation of LWOP policy - Decision by E board to terminate joint venture arrangement made applicant's employment with CSIRO redundant - Applicant sought return from LWOP to work for respondent - Respondent offered applicant alternative position and told not entitled to redundancy compensation if offer rejected - Applicant rejected offer on basis did not have technical competencies for role - Unjustified disadvantage claimed when LWOP and employment with respondent ended - Authority found applicant on LWOP from respondent and not seconded to either E or CSIRO - Found reference to secondment in E and CSIRO's policies simply for basis on which relocation costs would be paid - Found employment with respondent not terminated because made redundant and at time of redundancy CSIRO employee - Authority found when decided not to accept respondent's offer at end of LWOP then not entitled to redundancy compensation - Also found no entitlement to redundancy compensation under LWOP policy - Authority accepted respondent's submission that question of suitable vacancy only arose in relation to question of whether employee could return to work for respondent after LWOP - Respondent argued reason why applicant advised to take LWOP because if joint venture partners decided to recognise service of each others employees then being on LWOP would mean any service related entitlement with respondent would not adversely impact on terms of employment with CSIRO - Authority found interpretation of LWOP by CEO incorrect - Found applicant not entitled to redundancy compensation under LWOP policy because not redundant within definition of EA and policy - Authority agreed with respondent that even if applicant redundant within redundancy definition not entitled to redundancy compensation due to rejection of reasonable alternative offer of employment with respondent - Authority found applicant offered reasonable option of employment which he chose not to accept - No disadvantage - PENALTY - Penalty claims for failure to pay redundancy compensation, failure to respond in timely manner, and breach of mediation confidentiality denied - Costs reserved

Result: Application dismissed ; Costs reserved

Labour Inspector (Henning) v Broadbat Ltd

20 Dec 2007, H Doyle, CA 154/07, (18 pages)

ARREARS OF HOLIDAY PAY - Identity of respondent - Employees employed by third party which sold business to respondent - Respondent now employer - Applicant Labour Inspector sought compliance with respondent's statutory obligations on behalf of five former and two current employees - No appearance by respondent - Arrears due and owing to employees - Interest 9 percent - PENALTY - Applicant sought penalty for respondent's failure to calculate and pay holiday pay and to provide records as requested - Separate penalties awarded for number of breaches - $200 for failure to calculate and pay holiday pay - Failure to provide records for former employees resulted in three $500 and one $600 penalty - Failure to supply records when requested by two current employees considered aggravating factor, $1,000 penalty for each breach - COMPLIANCE ORDER - Respondent ordered to comply with request to provide records

Result: Application granted ; Arrears of holiday pay ($2,320.95)(GM) ; ($1,979.95)(GP) ; Compliance ordered ; Penalty ($200)(s75 Holidays Act) ; ($4,100)(Total for failure to supply records to six employees) ; Disbursements in favour of applicant ($70)(Filing fee)

McLachlan v Hayward Coachlines Ltd

22 Dec 2008, R Arthur, AA 433/08, (9 pages)

UNJUSTIFIED DISADVANTAGE - Respondent employed applicant as bus driver - Applicant driving bus when involved in accident where driver of other vehicle killed - Applicant claimed treated unfairly following accident and dismissed - Applicant also sought pay owing - No health and safety plans and procedures in place to manage physical and emotional needs of drivers involved in accidents - Authority found only minimal steps taken to care for applicant following accident - Respondent checked to ensure applicant not driving beyond permitted hours and offered applicant food - Applicant not checked by ambulance staff - Authority found respondent should have arranged check-up - Found respondent gave no consideration to shock suffered by applicant after accident - Respondent reasonably expected to identify risk of traffic accidents as part of hazard identification process under Health and Safety in Employment Act 1992 - Disadvantage established - UNJUSTIFIED DISMISSAL - Redundancy - Respondent argued no bus available for applicant following accident - Respondent had told applicant that was rearranging coaches and drivers - Authority accepted evidence of applicant's friend who alleged told by respondent that applicant no longer an employee - Respondent argued spoke to applicant about lack of work but did not dismiss applicant - Authority satisfied applicant made redundant - Authority accepted genuine reasons for redundancy - Applicant's skills surplus to needs of respondent due to accident and damage to bus - However, respondent failed to consult with applicant about redundancy and alternatives - Dismissal procedurally unjustified - Remedies - Accident legislation barred any compensation as result of accident - $5000 compensation appropriate for loss of dignity and injury to feelings - PENALTY - $500 penalty awarded for failure to pay holiday pay and supply wage and time records - COSTS - Respondent to pay applicant $2070 as contribution to costs - Bus driver

Result: Application granted (Disadvantage)(Dismissal) ; Arrears of holiday pay ($1034.35) ; Compensation for humiliation etc ($5000) ; Penalty ($500)(Payable to applicant) ; Costs in favour of applicant ($2070)

McMillan v Joy Bong Ltd & Anor

11 Dec 2007, R A Monaghan, AA 390/07, (13 pages)

UNJUSTIFIED DISMISSAL - Constructive dismissal - Identity of employer - During employment with first respondent, applicant discussed setting up second respondent with directors of first respondent - Meeting notes indicated would be employed by new company - No written employment agreement - Given second respondent set up to provide "clean slate" surprising if applicant genuinely wished to remain associated with first respondent - First respondent ceased to operate or pay wages - Employed by second respondent - Problems arose in relationship when applicant promoted - Letter drafted by director purporting to demote applicant on basis of performance review conducted in his absence came to applicant's attention, although not sent - Director subsequently filed statement of problem in Authority - Applicant told to accept reduced salary and demotion and employment would end if matter went to mediation - Applicant left premises and employment ended - Director's conduct and threats during meetings sufficient to amount to breach of obligations to accord fair and reasonable treatment to applicant - Attempt to bully applicant into reducing pay would also support breach of duty - Although Authority accepted applicant did not have skills to do promoted job, director's approach did not meet standard expected of fair and reasonable employer - Constructive dismissal - Remedies - Arrears due and owing - PENALTY - Applicant sought penalty for failure to provide employment agreement - Ex-director responsible for failure - In circumstances, nothing to be gained by imposing penalty on respondent - General manager

Result: Application granted ; Reimbursement of lost wages ($7,288.48) ; Compensation for humiliation etc ($5,000) ; Arrears of wages and holiday pay ($4,274.68) ; Costs reserved

New Zealand Tramways and Public Passenger Transport Authorities Employees IUOW (Wellington) Branch v Mana Coach Services Ltd

20 Dec 2007, P Cheyne, WA 176/07, (18 pages)

BARGAINING - GOOD FAITH - PENALTY - Parties bargaining for new collective employment agreement - Union issued strike notices - Respondent responded with letters advising striking employees would be suspended for duration of strikes - At time of suspension only a threatened strike, not active strike as required - No valid suspension - However, invalidity did not make actions breach of good faith - No dishonesty or ulterior purpose in circulating invalid suspension notices -Third strike arranged but called off before it began - Nothing to prevent unilateral withdrawal of strike notice - Respondent not informed of cancellation until last minute - Had already altered rosters to remove employees threatening to strike - Applicant sought arrears of wages for affected employees - No legal basis for roster changes - Respondent argued equity and good conscience meant should not have to pay arrears - Strikes lawful and contractual right could not be defeated by reference to equity and good conscience - Employees entitled to be paid in accordance with original roster -Respondent also issued direct communications to employees detailing bargaining - Applicant complained breach of bargaining process agreement and s32(1) Employment Relations Act 2000 ("ERA") - Communications calculated attempt to bypass union, undermine its authority and undermine bargaining - Breach of good faith - Breach not sustained and respondent ultimately resiled from intentions expressed in letter - $2,500 penalty appropriate - Applicant also sought penalty for use of substitute labour to perform work of striking employees - Drivers from other depots used to run services - Could not be said drivers normally based at another depot were performing own work as did not regularly or routinely work out of different depot - However, no evidence to indicate lack of consent - Number of casual employees also used to cover striking workers - Nature of casual employment meant not "already employed" by respondent at time of strike - Breach of s97 ERA - $4,000 penalty appropriate

Result: Orders accordingly ; Arrears of wages (Quantum to be determined) ; Penalty(payable to Crown) ($2,500)(Breach of good faith) ; ($4,000)(Breach ERA s97) ; Costs reserved

Smith v Engineering & Technical Recruitment Ltd & Anor

7 Jan 2008, R A Monaghan, AA 1/08, (23 pages)

UNJUSTIFIED DISMISSAL - Poor performance - Applicant given final warning for performance and failure to take responsibility for actions - Performance issues continued and two weeks later dismissed for failure to effect remedial action - Warning required satisfactory client performance within a month but other timeframes not clear - Statement further similar behaviour would be seen a gross misconduct went too far and confused misconduct procedures with performance - Circumstances not sufficient to demonstrate failure to improve sufficient to justify dismissal - Dismissal unjustified - Remedies - Applicant's attitude contributory conduct - Respondent's later complaint about applicant to recruitment industry body not taken into account when assessing remedies - RESTRAINT OF TRADE - PENALTY - Counterclaim After dismissal applicant set up business in direct competition with respondent which breached restraint - Business dealings with respondent's clients fell within scope of restraint - Breached non-solicitation clause by advertising services to respondent's clients and seeking to get former co-worker to join new company - Remedies - Normally breach of restraint would warrant significant penalty, but Authority took into account unjustified dismissal and resulting lack of income which led applicant to grasp opportunity to set up own business - No penalty awarded for setting up company or sending emails advertising new business - However, applicant took inappropriate advantage of approach made to him by one of respondent's client in capacity as respondent's employee - Penalty of $750 - Approach to former co-worker also warranted penalty of $1,000 - Respondent also sought penalty against applicant's company for aiding and abetting breaches - Applicant prime mover behind his company and actions already given rise to penalties, no penalty awarded against company - Recruitment consultant

Result: Application granted ; Reimbursement of lost wages ($2,500) ; Compensation for humiliation etc ($3,500) ; Counterclaim granted ; Penalty ($1,750)(Payable by applicant to Crown) ; Costs reserved

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