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Cases of interest: December 2020

A summary of interesting or topical employment cases.

Arachchige v Rasier New Zealand Ltd [2020] NZEmpC 230

Employment Court – Employee status – Uber driver

At issue was whether the plaintiff was an employee or contractor.

The plaintiff was a driver for the Uber ride-sharing business. The plaintiff’s access to the Uber Driver App was deactivated after Uber received a complaint about the plaintiff. The plaintiff sought a declaration that he was an employee of the first and/or second defendant, so that he could pursue a personal grievance for unjustified dismissal.

The Employment Court (the Court) found the plaintiff was not an employee. In coming to that decision the Court took into account that:

  • The plaintiff’s service agreement was not, in form, an employment agreement (see paras 41–46)
  • The relationship operated in practice in line with the Services Agreement (see paras 47–49)
  • While the plaintiff could not build a client base, he made other business decisions to potentially improve profitability (see paras 50–52)
  • While the work of drivers was integral to the defendants’ business, the defendants had little control over drivers (see paras 53–54)
  • There was no established industry practice across ride-sharing businesses that assisted in determining whether the plaintiff was an employee (see para 55).

Arachchige v Rasier New Zealand Ltd [2020] NZEmpC 230 [PDF 400KB] (external link)

Davis v Idea Services Ltd [2020] NZEmpC 225

Employment Court – Personal grievance – Unjustified disadvantage – Failure to provide a safe workplace – Failure to protect employee from assault by service user

The key issue was whether the employer took sufficient steps to protect the health and safety of an assisted-living support worker who was assaulted by a service user.

The employer provided support services to disabled service users. The employee worked as a support worker. The employee supported a service user who was living in a residence operated by the employer. The service user had a history of aggressive behaviour and behavioural incidents, including assaults. In the year 2016 there were 47 incident reports relating to the service user’s behaviour. In November 2016 a doctor prescribed the service user Clonazepam to treat his agitation. In December 2016, the service user assaulted another support worker. That assault resulted in the support worker filing a complaint with police.

In January 2017, an incident occurred where the service user chased the employee, tackled her to the ground and hit her around the head, shoulder and arm, causing her to lose consciousness (the January incident). After the January incident, the employee had a long period off work before returning to work part-time. In November 2019, the employee ceased working as the injuries she suffered in the January incident resulted in her being unable to continue doing the work. Subsequently the employee did not work and was on a benefit.

Following the January incident, the employer made a new safety plan for support workers to use when working with the service user. The employer also obtained sleep medication to give to the service user, to help with sleep issues that worsened his behaviour.

The employee claimed she was unjustifiably disadvantaged by the employer taking inadequate steps to provide a safe working environment. The Employment Relations Authority (the Authority) dismissed the employee’s claim – see: Davis v Idea Services Ltd [2019] NZERA 610, para 35 [PDF 230KB] (external link)

The Court reversed the finding of the Authority. The Court found the employer disadvantaged the employee by not taking necessary steps to protect her health and safety (see paras 174–178). In coming to that decision the Court found:

  • There was a clear picture from the incident reports of deteriorating behaviour arising from significant and ongoing sleep deprivation. By late November 2016, a fair and reasonable employer could be expected to have followed up on the issue of night-time medication (see paras 151–153).
  • There was a pattern of the service user becoming agitated, throwing things around, slamming doors and swearing (see paras 156–157). The decision by the employer in November 2016 that the service user should be administered Clonazepam could not have been expected to be a complete answer, or a substitute for night-time medication (see paras 158–159).
  • The assault by the service worker on another support worker in December 2016 was a red flag. A fair and reasonable employer could have been expected to review the service user’s care arrangement in response (see paras 160–163).

Davis v Idea Services Ltd [2020] NZEmpC 225 [PDF 370KB] (external link)

Gate Gourmet New Zealand Ltd v Sandhu [2020] NZEmpC 237

Employment Court – Minimum Wage Act 1983, s 6 – Whether s 6 applies to employees who do not perform work

At issue was whether the employer breached the Minimum Wage Act 1983 (the MWA), s 6 (external link) when it paid employees less than the minimum wage for periods when they did not perform work.

The employer operated an airline catering business. In response to the SARS-CoV-2 pandemic, the Government required all but essential service providers to cease operating for a period of time. The employer was allowed to continue operating as an essential service provider. Due to decreased demand, the employer did not need all its employees to perform work. Employees for whom there was no work stayed at home. Under their collective employment agreements (CEAs), the employees had agreed to work 40 hours per week.

The employer paid employees who did not perform work only 80 per cent of their pay. 80 per cent of their pay was less than what the employees would have got if they had been paid the minimum wage for their agreed hours.

The Authority found that if the employees were ready, willing and able to carry out their work, the employer was required to pay them at least the minimum wage, regardless of any agreement the employer may have made to the contrary – see: Sandhu v Gate Gourmet New Zealand Ltd [2020] NZERA 259, paras 36–41 [PDF 300KB] (external link)

The employer challenged the Authority determination in the Court. The challenge was limited to the finding that entitlements under the MWA applied to the employees, despite the employees, at the relevant times, performing no work for the employer.

In a split Court decision, the majority found there was no breach of the MWA. The Court held (see paras 39–45):

Chief Judge Inglis, in the minority dissenting judgment, said she would have found there was a breach of the MWA. The Chief Judge maintained that as long as the employees’ failure to perform was not due to their default, illness or accident, the employer was obliged to pay the employees at least the minimum wage (see paras 69–71).

Gate Gourmet New Zealand Ltd v Sandhu [2020] NZEmpC 237 [PDF 320KB] (external link)

Lye v ISO Ltd [2020] NZEmpC 231

Employment Court – Individual employment agreements – Availability provisions – Breach of the Employment Relations Act 2000, ss 67D and 67E – Exercise of discretion to issue compliance order – Whether Employment Court should issue compliance order while collective bargaining taking place

At issue was whether the Employment Court (the Court) should issue a compliance order to compel the employer to make an employee’s individual employment agreement (IEA) comply with the availability provisions in ss 67D (external link) and 67E (external link) of the Employment Relations Act 2000 (the Act), while the employer at the same time was engaged in bargaining with the relevant union for a collective agreement.

The employee’s IEA required him to work varying hours and/or day and night shifts. The IEA included a statement that the employee had “no set entitlement to particular days, shifts, or hours of work unless otherwise agreed in writing with the Employer”. The employee was guaranteed a retainer of 60 hours per fortnight; if the employee worked fewer than 60 hours he was payed for 60 hours; if he worked more than 60 hours, he was paid the extra hours.

The Authority determined that the employee’s IEA breached ss 67D (external link) and 67E (external link) of the Act (the availability provisions). However the Authority declined to issue a compliance order to remedy the breach. The employee challenged the decision not to issue a compliance order. In the period between the Authority determination and the Court hearing, the employer changed its practice to better comply with the availability provisions, but it did not change the employee’s IEA.

The Court agreed with the Authority that the IEA breached the availability provisions. It found that a change in practice by the employer was not sufficient to remedy the breaches (see paras 15, 27–31).

The Court declined to issue a compliance order. The Court accepted that without a compliance order there was a risk the employer would continue to breach the availability provisions (see para 42). However, the Court found that, to issue a compliance order while the employer and the relevant union were undergoing bargaining for a collective agreement, would compel the employer to bargain with the union to secure a compliant collective agreement (under s 32(1)(d)(ii) (external link) of the Employment Relations Act 2000). The Court found this would place the employer and union under pressure that would not normally apply in collective bargaining (see paras 43–47).

The Court held it would be preferable to encourage the employer and union to reach a comprehensive collective agreement before making a compliance order (see para 48). The Court adjourned the proceeding for four months to give the employer and the relevant union time to conclude a collective agreement (see para 49).

Lye v ISO Ltd [2020] NZEmpC 231 [PDF 250KB] (external link)

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Page last revised: 15 January 2021

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