Cases of interest: August 2022

A summary of interesting or topical employment cases.

Board of Trustees of Melville High School v Cronin-Lampe [2022] NZCA 407 

Court of Appeal – Jurisdiction of the Employment Court – Accident Compensation Act 2001 – Mental Injury 

At issue was whether the Employment Court had jurisdiction to hear a proceeding in which a claimant made claims under the Accident Compensation Act 2001 (AC Act) but review and appeal rights under that Act were not exhausted. 

The employees worked as guidance counsellors at a school. The employees suffered post-traumatic stress disorder during their 16-year employment. The employees lodged claims with the Accident Compensation Corporation (ACC) for work-related mental injuries. The ACC declined the claims. The employees sought to review the decision. Before the review and appeal process was exhausted, the employees agreed with ACC that they were not entitled to cover because their mental state was not linked to a single event as required under s 21B (external link) of AC Act (see para 9). They discontinued their ACC claim. 

The employees then initiated proceedings in the Employment Court (Court) alleging the employer breached its health and safety obligation. The employer argued that the Court had no jurisdiction as per s 133(5) (external link) because the employees had not exhausted their review and appeal rights (see para 2). 

The Court decided s 133(5) (external link) had no application in the present circumstances. The Court “could not see why ‘needless litigation within the ACC regime’ could have been intended” (see para 11). 

The Court of Appeal held that the Court had jurisdiction to hear the proceedings based on the circumstances of this case. The Court of Appeal held: 

  • The dispute resolution process ran its course when the employees agreed with ACC that they had no cover under the Act (see para 23). 
  • It could not have been Parliament’s intention that a claimant who accepted the Corporation’s decision would be required to “challenge” that decision, by way or review or appeal, before being able to pursue remedies elsewhere. It would likely be regarded as frivolous, an abuse of process and contrary to Parliament’s intention that disputes about cover should be resolved speedily and efficiently (see para 24). 

The appeal was dismissed. 

The Board of Trustees of Melville High School v Cronin-Lampe [2022] NZCA 407 [PDF, 200KB] (external link)  

E Tū Inc v Carter Holt Harvey LVL Ltd [2022] NZEmpC 141

Employment Court – Dispute – Holidays Act 2003 – Annual leave 

The main issue was whether the employer could require the employees to use the annual leave entitlements under the Holidays Act 2003 (HA 2003) during the third and fourth week of a nationwide lockdown. 

The employer was preparing to shut down its plants across the country in response to a nationwide Alert Level 4 lockdown. Two days before the lockdown, the employer sent out an email. It announced that the employees would be kept on full pay for the first two weeks of the lockdown. They were required to take annual leave for the remainder of the lockdown to keep their full pay. This required the employees to use eight days of their annual leave entitlements. 

An employee forwarded this email to the union. The union emailed the employer the next day. It stated its opposition on the employer’s requirements and asked the employer to apply for a wage subsidy to cover the employees’ pay. The employer did not respond to this email. Six days later, the union sent a follow-up email and still received no response from the employer. 

A week later, the New Zealand Government granted a wage subsidy to the employer. The union again emailed the employer. The employer later responded and reiterated its original policy. Meanwhile, the employer asked the employees to complete health and safety training modules. 80 per cent of its workforce completed the modules. A month after the lockdown ended, the employer made about 70 per cent of its workforce redundant. 

The Court considered the relevant facts and concluded: 

  • The employer made no attempt to engage with its employees prior to making the decision about annual holidays (see para 67). 
  • The employer did not respond to the union’s email in a timely manner when the union engaged with the employer constructively. It was not responsive and communicative; it failed its good faith obligation (see para 68, 69). 
  • It was not inevitable that an agreement would not have been able to be reached if the employer had engaged with the union (see para 72). 

The Court held that the employer could not require the employees to use their annual leave entitlements during the third and fourth week of the lockdown (see para 92). 

E Tū Inc v Carter Holt Harvey LvL Ltd [2022] NZEmpC 141 [PDF, 360KB] (external link)  

Kang v Saena Company Ltd [2022] NZEmpC 151 

Employment Court – Personal grievance – Unjustified dismissal – Remedies

Employment Court – Personal grievance – Disadvantage 

At issues were: 

  • whether the employer unjustifiably dismissed the employee.
  • whether the employer unjustifiably disadvantaged the employee by failing to provide a written individual employment agreement (IEA). 

The employee started working for the employer at a sushi restaurant after he obtained a work visa. His wife also started working for the employer three weeks later. However, a conflict developed between the employee’s wife and the wife of the employer director, the head chef. The tension escalated into an argument between them, with the employee’s wife walking out her job after two weeks in the role. The employee then left the restaurant following his wife’s exit. 

After the incident, the employee sent a text message to the director to seek clarification about what happened next. The director’s wife replied to his text and suggested the parties to “go their separate ways”. The employee also noticed the employer posted job advertising for his wife’s role. The employee later applied for mediation. Further discussions continued between the parties over the employee’s returning to work. It was at this point that the employee requested the employer to provide an IEA. The employer provided a draft IEA to the employee two days later. There were further disagreements between the parties over the proposed terms and conditions which could not be resolved by the mediation. 

The employee subsequently lodged a personal grievance claim on the grounds of unjustified dismissal and unjustifiable disadvantage for the employer’s failure to provide an IEA. 

The Court found: 

  • The employee and his wife reasonably understood they were dismissed based on the subsequent text exchange and the job advertisements (see paras 123, 125 and 140). 
  • The directors’ wife held the apparent authority of the employer in sending the texts that reinforced the employee’s impression of dismissal (see para 131). 
  • The employer did not unjustifiably disadvantage the employee by failing to provide an IEA, as the employee was able to source advice from a Citizens’ Advice Bureau, contacted Ministry of Business Innovation and Employment to arrange a mediation and continued negotiation with the employer. These actions were consistent with what might have happened if there had been an IEA (see para 163). 

The Court held: 

  1. the dismissal grievance was established (see para 158).
  2. the disadvantage grievance was not established (see para 165). 

The Court ordered the employer to pay lost wages and $20,000 compensation to the employee (see para 185). 

Kang v Saena Company Ltd [2022] NZEmpC 151 [PDF, 380KB] (external link)  

Kennedy v Field Nelson Holdings Ltd [2022] NZERA 421 

Employment Relations Authority – Employee status – Conditional offer of employment 

At issues were: 

  • whether the job applicant (applicant) was an employee under s 6 (external link) of the Employment Relations Act 2000 (the Act) after accepting a conditional offer of employment from the employer. 
  • whether the Authority had jurisdiction to determine the applicant’s personal grievance claim. 

The applicant was conditionally offered a role at the employer’s store. He received the offer of employment in the form of an employment agreement (the IEA).  The front page stated the offer of the employment was subject to reference and pre-employment checks to the employer’s sole satisfaction. Subsequently, both parties signed the IEA and agreed the starting date. The applicant authorised the pre-employment checks. The employer sent tax forms, policies, and roster options to the employee; and provided updates on the progress of the pre-employment checks. 

The employer received an adverse reference and decided to withdraw the job offer. The employer phoned the applicant, withdrew the job offer and told the applicant that it had appointed someone else for the role. 

The applicant later raised a personal grievance claim for unjustified dismissal, despite never commencing work with the employer. 

To determine whether the applicant was an employee, the Authority considered whether the applicant was a “person intending to work” under the Act. The Authority concluded that the applicant was not a person intending to work because: 

  • The employer made a conditional offer of employment. It clearly communicated about the fulfilment of the conditions. The employer maintained this position throughout and did not waive any of the conditions. The applicant accepted the conditional offer. The applicant did not fulfil all the conditions, resulting in the employer withdrawing the offer of employment before he could start work (see para 21). 
  • The offer of the employment was conditional not the contract. As the applicant did not fulfil all the conditions attached to the offer, there was never a completed offer and acceptance. The applicant “had not accepted an offer of employment as it was incapable of being accepted before the conditions attached to it were fulfilled” (see para 24). 
  • It was clear that the employer did not want either party to perform obligations under the IEA until the conditions were met. That was evidenced by correspondence about the proposed start date and the reference checks needing to be completed (see para 25). 
  • Expressing the offer as being conditional was in contrast to when a contract is expressed as conditional (see para 25). 

The Authority concluded that the applicant was not an employee under s 6 (external link)  of the Act and the Authority had no jurisdiction to determine his personal grievance claim (see para 26). 

Kennedy v Field Nelson Holdings Ltd [2022] NZERA 421 [PDF, 45KB] (external link)

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Page last revised: 27 September 2022

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