New Zealand Public Service Association Te Pukenga Here Tikanga Mahi v Commissioner and Chief Executive Inland Revenue Department Te Tari Taake [2017] NZEmpC 164

Employment Court - Good faith in collective bargaining - Union representation during individual bargaining

The union claimed the employer breached the duty of good faith during collective bargaining and duties relating to the right of representation set out in s 236 of the Employment Relations Act 2000.

During restructuring, union members had authorised the union to represent them. Despite this, the employer sent letters offering redeployment directly to union members and indicated a willingness to deal directly with the members. These letters were sent prior to the initiation of collective bargaining.

The Employment Court held that it could not be said that the initiating of bargaining placed all the issues relating to the employment relationship on the bargaining table (see para 99). The beginning of bargaining did not automatically veto the employer’s management prerogative (see para 100). The offers of redeployment were covered by the provisions relating to individual bargaining and operated in parallel to the collective bargaining provisions (see para 110).

The Court held that, on the facts, the employees did not have a realistic option to respond via the union (see para 164). It concluded that s 236 had been breached when the employer dealt directly with union members regarding the redeployment offers (see para 174).

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Johnston v The Fletcher Construction Co Ltd [2017] NZEmpC 157

Employment Court - Special leave to remove to Employment Court - Sections 178 and 179 of Employment Relations Act 2000

The Employment Relations Authority had dismissed the employee’s application to remove the matter to the Employment Court. The employee sought special leave to remove proceedings to the Court under s 178(3). Alternatively, it sought leave to extend the time to challenge the Authority’s decision not to remove under s 179.

At issue was the inter-relationship between ss 178(3) and 179 and whether a party is entitled to pursue both options.  The Court applied the maxim generalia specialibus non derogant (the specific overrides the general). In this case, s 178(3) was the specific section overriding the more general s 179. It held in making a specific provision for an application for special leave when the Authority declines leave, Parliament clearly indicated that this was process that must be followed in such circumstances (see para 48).

The Court held that even where one or more grounds for removal are made out it still had residual discretion under s 178(3) to decide not to remove a matter (see para 33). In exercising this discretion the Court should have regard to the economic advantages of having the matter dealt with in one hearing rather than an investigation meeting and subsequent challenge (see para 36).

On the facts, the Court held that a number of questions of law did arise and special leave was granted. The Court noted that that the issues involved a mixed question of law but that this was not determinative in deciding whether there was an important question of law. The reality is that most cases involved issues of both law and fact and s 178(2)(a) is not restricted to cases which are devoid of factual dispute (see para 26).

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Coomer v JA McCallum and Son Ltd [2017] NZEmpC 156

Employment Court – Determining entitlement to costs award

At issue was who was to be determined the successful party and therefore entitled to an award of costs. The  Employment Relations Authority had found the employer to be the successful party as the majority of the investigation was taken up with the unsuccessful constructive dismissal claim (see para 20).

The Court considered that while the employee’s success was limited to a finding of unjustified disadvantage, this could not have been achieved without lodging a claim. Consequently, the Court considered the employee to be the successful party and entitled to an award of costs (see para 44).

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Performance Cleaners All Property Services Wellington Ltd v Chinan [2017] NZEmpC 152

Employment Court – Application to strikeout claim – Whether claim frivolous and vexatious, an abuse of the court process or outside the jurisdiction of the Employment Relations Authority and Employment Court

The Court was required to consider whether to grant an application to strikeout an appeal relating to claims an employee had received monies to which she was not entitled and had breached the fiduciary and good faith obligations owed to her employer.

The Court noted that, given the clear findings of the Authority, the employer’s claim might be an ambitious claim to establish. However, it was not possible to conclude from affidavit evidence that the claim was incapable of success (see para 54). Furthermore, whether the circumstances of proceedings are to be characterised as an abuse of process is a question of fact and degree (see para 59).

The Court was not satisfied that the evidence was sufficiently persuasive to establish that the proceedings were brought for the ulterior purpose of harassing the employee following the breakdown of the de facto relationship (see para 61). Consequently, the application for strikeout on the first two grounds was dismissed.

The Court granted the application for strikeout for want of jurisdiction (see para 105). The Court considered the substance of each claim to be that the employee knowingly engaged in wrongful conduct and took advantage of her position to the point of acting dishonestly (see para 88). Consequently, each action was to be properly regarded as a claim in equity or tort (see para 91).

Adopting the language of BDM Grange Ltd v Parker [2006] 1 NZLR 353 (HC), the Court held that the claims were not particular to the employment relationship which instead “merely provides the factual setting for the cause of action” (see para 90). As the essence of the claims was not employment-related, they were not within the Authority or Court’s jurisdiction (see para 92). The Court rejected the employer’s submission that, because the Authority had proceeded to investigate the claim, jurisdiction was bestowed by consent or by failure to raise an objection (see paras 93 and 94).

The Court refused to allow the employer an opportunity to amend their claims. The employer was given the opportunity to provide further and better particulars but did not indicate what amendments might be made. The Court concluded it was not appropriate for the Court to speculate (see para 103). The Court considered it unlikely that any amendments would overcome the jurisdictional issue (see para 103). Furthermore, where dishonesty is alleged, a plaintiff must be able to show a prima facie case at the time of filing and not simply hope something might turn up in discovery or cross-examination (see para 104).

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Page last revised: 16 March 2018