EMPLOYMENT CASES SUMMARY March 2008 - NZ Department of Labour

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Callen v Marie Sanderson t/a Marie's Early Childhood Learning Centre

24 May 2007, K Raureti, AA 158/07, (8 pages)
UNJUSTIFIED DISMISSAL - Misconduct - Identity of employer - Applicant employed by company, not director personally - Director remiss in not correctly stating identity of employer in employment agreement, but no evidence applicant misled or deceived - Not just and equitable for director to be personally liable - Applicant being trained in total operation of business because planned to take up position as licensee - At end of first week's employment, decided to resign - Spoke with other staff about decision and handed in written resignations from all staff along with her own - Dispute arose over amount of administrative work applicant to do during notice period - Applicant insisted on keeping administrative hours despite respondents attempts to remove those duties from her - Respondent denied dismissing applicant after heated exchange, instead claimed suspended her to conduct investigation into several allegations - At disciplinary meeting, applicant presented prepared statement and sought more information about some allegations - Respondent did not accept applicant's explanations or requests for more information - Summarily dismissed applicant - No full and fair investigation - Dismissal unjustified - Remedies - Respondent's request applicant spend more time teaching than learning administrative tasks reasonable given resignation and terms of employment agreement - Applicant deliberately defied director's authority - Contributory conduct 20 percent - ARREARS OF WAGES - Applicant claimed paid at wrong salary rate - Higher rate specifically negotiated for extra responsibilities associated with licensee responsibilities had yet to take up - Applicant paid at correct rate - Entitled to be paid in full for days respondent sent her away as part of disciplinary process, but not for other absences - PRACTICE AND PROCEDURE - Counterclaim - Respondent sought large sum as damages - Claim not particularised and lacked sufficient detail to enable thorough investigation - Separate investigation set down but respondent sought adjournment - Counterclaim adjourned sine die - Team leader

Result: Application granted ; Reimbursement of lost wages (Two weeks reduced by 20%) ; Compensation for humiliation etc ($1,000 reduced to $800) ; Arrears of wages (Quantum to be determined) ; Counterclaim adjourned sine die ; Costs reserved

Denyer (Labour Inspector) v Vitality Juice Bar Ltd

2 Aug 2007, M Urlich, AA 231/07, (3 pages)
ARREARS OF WAGES AND HOLIDAY PAY - Applicant Labour Inspector sought to recover outstanding wages and holiday pay on behalf of two former employees - No appearance by respondent - In absence of records from respondent, applicant calculated claim on best information available, that provided by employees - Applicants calculations accepted - Arrears due and owing - PENALTY - Sought penalty for failure to provide wage, time and holiday records when requested - $2,000 penalty appropriate

Result: Application granted ; Arrears of wages ($635.50)(HP) ; ($686.75)(SJ) ; Arrears of holiday pay ($138)(HP) ; ($120)(SJ) ; Penalty ($2,000)(Payable to Crown) ; Disbursements in favour of applicant ($70)(Filing fee)

Doherty & Anor v 54 Cuba Street (2007) Ltd (formerly 54 Cuba Street Ltd) Ltd & Anor

18 May 2007, P R Stapp, WA 78/07, (5 pages)
COMPLIANCE ORDER - Identity of employer - Applicants asked Authority to make indicative findings about role of second respondent - Information produced by applicants did not rule out joint employment - Leave granted for applicants to pursue definitive rulings on role and liability of second respondent - Applicants sought payment of outstanding redundancy pay, bonuses and expenses - First respondent accepted liability for redundancy pay - Calculation of bonus owing to first applicant reserved as more detail required - Directors of first respondent requested to provide necessary information - First applicant's evidence as to vehicle allowance accepted - Second applicant owed outstanding expenses - First respondent claimed unable to pay and applicant’s preferential creditors - Compliance ordered, with date able to be varied on application - RECOVERY OF MONIES - Counterclaim - Respondents sought to recover cash alleged second applicant obtained from company credit card without authority - Second applicant submitted obtained cash to reduce exposure from not being paid expenses - Second applicant consented to offset sum from total claim - Authority reached no conclusion on his behaviour

Result: Compliance ordered ; Orders accordingly ; Costs in favour of applicants ($3,000)

Hodgson v Parentline Charitable Trust

4 Feb 2008, J Scott, AA 28/08, (148 pages)
UNJUSTIFIED DISMISSAL – Constructive dismissal – Good faith – Applicant ran Parentline for 25 years before it became charitable trust and respondent formed – Applicant member of oversight group (“TRTK”) that had ability to remove Board members – Respondent decided to measure Parentline’s effectiveness – Psychologist (“ND”) contracted to design study – Shortly after engaging ND, applicant cancelled project and sought to terminate her contract – When respondent sought advice on legality of ending contract, applicant alleged poor performance – Allegations against ND unfair and unfounded – Applicant misled respondent as to true position – Applicant objected strongly when respondent confirmed ND’s contract and continued with project – Resigned in dramatic fashion and expected Board to attempt to convince her to stay - Resignation did not relate to alleged breaches of duty by respondent, also, applicant had affirmed breaches – No constructive dismissal – After respondent accepted resignation, applicant got TRTK to lobby it to reconsider - In normal circumstances, employer does not accept or reject resignation but merely acknowledges it – However, resignation made it clear applicant felt unfairly treated and had not simply decided to retire – No employer, acting in good faith, could ignore such missives – Required to engage applicant and inquire as to meaning of resignation, satisfy itself it was genuine and attempt to resolve issues – Simply accepting resignation amounted to serious breach of good faith and amounted to “sending away” dismissal - In circumstances, dismissal unjustified – Board compounded breach by not reconsidering resignation when it became clear applicant had changed mind, and by manner it took over management of Parentline - However, applicant did not communicate with Board or advise it she had reconsidered, as did not want to appear to be backing down - Not consistent with good faith obligations – Applicant acted as if had not resigned – Conspired with TRTK to remove board members and have herself reinstated as CEO – Demonstrated ulterior motives and multiple, serious and sustained breaches of good faith – Breaches founded on refusal to accept Board and its legitimate governance role – Adopted dismissive and confrontational approach in relations with Board - Breaches so blameworthy applicant disentitled to remedies, otherwise Authority would have awarded her $25,000 compensation and one year’s lost wages – Contributory conduct 100 percent - Authority took into account serious misconduct Board not aware of at time, but now subject of counterclaim – COUNTERCLAIM – Recovery of monies – Respondent sought to recover unauthorised salary increase and bonus paid to applicant – Board had not approved either payment – Applicant directed to repay monies – CEO

Result: Application granted ; Counterclaim granted ; Recovery of monies (Quantum to be determined) ; Costs reserved

Li v Astral Management Ltd

15 May 2007, J Crichton, CA 54/07, (12 pages)
ARREARS OF WAGES - Applicant supplied two purported employment agreements - Second document operative agreement - Applicant to be paid salary, not wages as claimed - Alleged worked 1,516 unpaid hours - No wage and time records - Authority accepted records not required for salaried workers - More likely applicant did work some extra hours - No entitlement to additional remuneration pursuant to employment agreement and at no stage was applicant paid less than minimum wage - No basis for arrears claim or recovery of other sums applicant claimed entitled to - UNJUSTIFIED DISADVANTAGE - UNJUSTIFIED DISMISSAL - Evidence did not support any wrong doing by respondent to found disadvantage or constructive dismissal claim - Applicant absent for various periods at end of employment with only sporadic contact - Respondent's attempts to establish applicant's intentions resulted in it being warned off by applicant's friend - Applicant later returned key and removed belongings - Employment ended without resignation or indication applicant might return to work, however friend of applicant indicated she had new job - In circumstances, respondent could not be blamed for end of employment relationship - No personal grievance - Applicant's witnesses included two "secret" witnesses who gave evidence on footing identity not disclosed to respondent - COSTS - Normally costs would be reserved - However, applicant's financial means precluded her form making realistic contribution to costs - Costs to lie where they fall - Restaurant worker

Result: Application dismissed ; Costs to lie where they fall

Mathieson v Kaituna Pastoral Farms Ltd

23 Apr 2007, R A Monaghan, AA 116/07, (18 pages)
UNJUSTIFIED DISADVANTAGE - Respondent had number of concerns about applicant's performance - Applicant not promoted to manager as promised - However, failure justified to extent it took into account his unwillingness to carry out full range of managerial duties - Respondent did not seek response from applicant before issued performance warning, although applicant should not have been so dismissive of respondent's earlier informal approach - Seriously flawed procedure - Entitled to $3,000 compensation - Not persuaded promotion would have gone ahead but for warning and associated concerns - No further award appropriate - No basis for allegation applicant "harassed" to sign new employment agreement - Applicant also claimed disadvantaged when leave request granted and later withdrawn - Authority not persuaded amounted to disadvantage grievance - UNJUSTIFIED DISMISSAL - Constructive dismissal - Parties and representatives met to discuss employment problems - Suggestion applicant draft job description reasonable starting point for addressing issues - Applicant took view because unsuccessful in negotiating exit package during meeting matters at stalemate and employment over - Applicant became disruptive and uncooperative - Failed to respond to respondent's queries over several weeks or provide job description discussed at meeting - Further meeting resulted in applicant being demoted and required to report daily to manager - Applicant considered demotion a repudiation of employment agreement and resigned - Demotion repudiatory conduct - Circumstances amounted to dismissal - However, respondent had gone as far as it could in attempting to resolve issues between parties - Reasonable grounds to conclude applicant could not continue in role - Dismissal justified - ARREARS OF WAGES AND HOLIDAY PAY - Parties agreed applicant owed wages and holiday pay - Interest 7.9 percent - RECOVERY OF MONIES - Authority not persuaded parties agreed on costs associated with dogs or phone rental - Unclear how purchase of farm bike would be recognised - Applicant received higher salary than agreed and likely increase recognised purchase - No entitlement to additional payment - Applicant attempted to claim bonus on behalf of other staff - Not authorised to do this and no order made - Farm manager

Result: Application granted (Disadvantage, arrears) ; Compensation of humiliation etc ($3,000) ; Arrears of wages and holiday pay (Quantum to be determined) ; Interest (7.9%) ; Application dismissed (Dismissal, recovery of monies) ; Costs reserved

Nataniel v Golf Management and Consultancy Ltd

8 May 2007, M Urlich, AA 141/07, (5 pages)
ARREARS OF WAGES AND HOLIDAY PAY - Applicant not paid at agreed rate in employment agreement - Respondent alleged parties agreed to reduce number of days applicant worked each week and salary reduced proportionately - No convincing argument agreement changed - Respondent to pay applicant at rate agreed in employment agreement - Authority not satisfied respondent appreciated consequences of not commenting on applicant's calculation of amount owing - Given 14 days to file own calculation if desired - Respondent accepted Labour Inspector's calculation of holiday pay correct - However, claimed entitled to deduct 70 hours from final pay for unauthorised leave taken during employment - Alleged applicant took five days sick leave without providing medical certificate - Sick days taken individually so applicant not required to produce medical certificate - No basis to recover payments for sick days lawfully taken and paid - Other than notations on attendance record no documentary evidence of other leave alleged applicant took - Record fell short of statutory requirements for holiday and leave record - Insufficient evidence to support respondent's claim applicant took annual leave as claimed - No lawful basis for deductions from holiday pay - Arrears due and owing

Result: Application granted ; Arrears of wages and holiday pay (Quantum to be determined) ; Disbursements in favour of applicant ($70)(Filing fee)

O'Neill v Kamo Labour Ltd

15 Oct 2007, L Robinson, AA 321/07, (4 pages)
ARREARS OF WAGES AND HOLIDAY PAY - Applicant sought one week's salary and holiday pay - Respondent did not dispute owed applicant some money - However, sought direction as to whether Authority would permit deductions from sums owing - Respondent alleged applicant did not give requisite notice of termination - No evidence respondent objected at the time or intended to require applicant to forfeit salary - Arrears due and owing

Result: Application granted ; Arrears of wages and holiday pay ($2,393.93) ; Disbursements ($70)(Filing fee)

Philpott v Phoenix Risk Management Ltd

31 Jan 2008, J Crichton, CA 9/08, (2 pages)
ARREARS OF WAGES AND HOLIDAY PAY - Applicant sought unpaid salary and associated expenses - Respondent admitted money owed but unable to pay due to cash flow issues - Arrears due and owing

Result: Application granted ; Arrears of wages and holiday pay ($17,386.92) ; Expenses ($331.19) (Telecom costs) ($698.08) (Credit card reimbursement) ; Disbursements ($70) (Filing Fee); Costs to lie where they fall

Tregoweth v Albert Number Six Ltd

14 Sep 2007, V Campbell, AA 286/07, (4 pages)
ARREARS OF WAGES AND HOLIDAY PAY - Dispute about number of hours applicant worked in manager's absence - Applicant initially paid for hours she claimed - Manager subsequently decided applicant overstated hours and deducted 17 hours from final pay - Respondent also deducted two days pay for failure to give notice - Applicant had not consented to deductions - Deductions unlawful - Arrears due and owing - RECOVERY OF MONIES - Counterclaim - Respondent also deducted PAYE that it claimed related to "management fee" previously paid to applicant - On balance of probabilities more likely than not management fee a gross amount - Liability for payment of tax responsibility of tax-payer - As matter of convenience PAYE deducted at end of employment - Money remitted to IRD on applicant's behalf and respondent entitled to be recompensed for it - Sums owing to applicant to be off-set by amount of PAYE attributable to management fee - Cleaner

Result: Application granted ; Arrears of wages ($397.50) ; Arrears of holiday pay ($792.96) ; Counterclaim granted ; Recovery of monies (Quantum to be determined) ; Disbursements in favour of applicant ($70)(Filing fee)

von Tunzelman v Taylor & Anor

9 Jul 2007, L Robinson, AA 206/07, (7 pages)
PRACTICE AND PROCEDURE – Identity of employer – First respondent director of second respondent – Claimed only second respondent had legal relationship with applicant – Applicant previously employed by first respondent – Had no knowledge of second respondent, but accepted worked for publication – Applicant entered into and concluded negotiations with first applicant – First respondent never disclosed acting as agent – No written agreement – Doctrine of undisclosed principal – Applicant entitled to proceed against first respondent – JURISDICTION – Whether employee or independent contractor – Applicant claimed paid weekly retainer and commission – Respondent contended applicant not paid retainer but “advance” commission – Applicant’s evidence preferred – Applicant subject to significant control and integral part of operation – Applicant an employee – UNJUSTIFIED DISMISSAL – Applicant drinking with first respondent after work – Alleged told would need to find a new job and would not be paid commission – Applicant's attempts to contact respondent to clarify situation unsuccessful – Applicant’s evidence accepted – Dismissal unjustified – Applicant did not seek remedies - ARREARS – Applicant claimed owed outstanding commission – Respondent submitted not owed anything as did not earn any – Also said not paid because did not submit invoices – Statements inconsistent and Authority rejected contention applicant required to submit invoices – Applicant entitled to commission of greater of 10 percent of total sales, or $40,000 – Authority unable to determine arrears without sales figures – Respondents ordered to supply information

Result: Application granted ; Arrears of wages (Quantum to be determined) ; Orders accordingly ; No order for costs