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Cases of interest: February 2020

A summary of interesting or topical employment cases.

Morris v Sharda Transport Ltd [2020] NZERA 63

Employment Relations Authority – Unjustified Dismissal – Discrimination on the basis of age

The employee was a truck driver for the employer for a short time. He was referred to the transport company by Work and Income New Zealand. An interview was arranged, but later cancelled by the employer, who asked the employee to commence work the next day. The employee was required to undertake a drug test, which he passed, and attend a dangerous goods course. He was advised of the hourly rate and understood there would be at least 40 hours work per week.

Less than a fortnight after the employment commenced, the employer sent a text message to the employee indicating he was in hospital following a truck accident. The employer said he would telephone the employee, but failed to do so. A week later he texted the employee a message saying “9am work”. However, shortly thereafter he texted the following (see para 20):

Sorry wrong message due to work and personal matters with truck being off road and will be looking for a fit young person all the best.

The employer claimed the employee had been undertaking “training work” (see para 31). The Employment Relations Authority (Authority) found there had been an employment relationship and that the employer had dismissed the employee. It held the employer had not acted as a fair and reasonable employer would have done (see para 32). The employee had done nothing to justify a dismissal (see para 33). The Authority found the dismissal was unjustified.

The Human Rights Act 1993 (external link) makes it unlawful for an employer to discriminate in employment against a person on the basis of age. Terminating an employee’s employment in circumstances in which other employees would not be terminated constitutes such discrimination (see para 36). The Authority found the employee was discriminated against in his employment on the grounds of his age (see para 38). The employee was awarded $5,000 compensation and two weeks’ wages for the notice period he did not receive when he was dismissed. He was not awarded lost wages as he had been employed elsewhere in the industry since the time of his dismissal.

Morris v Sharda Transport Ltd [2020] NZERA 63 [PDF 91KB]

Davis Trading Company Ltd v Uelese [2020] NZERA 61

Employment Relations Authority – Interim Injunction – Restraint of trade

The employee worked for the employer in the food distribution industry for over 17 years. The original company had been acquired by another, who was later acquired by the employer. His most recent employment agreement contained a ‘restraint of trade’ clause. The employee had agreed not to:

… establish, purchase or obtain an interest in, including as an employee, either directly or indirectly any business in relation in any way to the employer within a radius of 100 kilometres, without the express written consent of the employer …

The employee resigned to work for one of the employer’s competitors at a higher rate of pay. The employer considered the employee had breached the non-compete restraint and was likely to share its confidential information. It applied to the Authority for an interim injunction preventing the employee from working for his new employer.

The Authority set out the steps in an interim injunction matter (at paras 21–22):

(1) Is there an arguable case that the employer will succeed in the substantive hearing in showing that the employee is breaching the terms of his employment agreement, and that the clauses are reasonable and enforceable against him?

(2) Where does the balance of convenience lie between the parties? Is there an adequate alternative remedy available to the employer?

(3) Does the overall justice of the case require that an interim injunction be granted?

The Authority found that the employer has an arguable case the employee entered into the employment agreement with knowledge of the restrictive terms. However, it found that when the employer bought the company and offered its existing employees the employment agreements with those terms, it did not provide the employees adequate consideration in exchange (see paras 34–36). The Authority also found that the restraint of trade claim was prohibitively wide and too large in geographical area. The effect was that the employee would be prevented from working in any business in the area and therefore was not reasonable or enforceable as being against public policy (see paras 41–43).

The employer claimed the employee may hold a more senior position in the company at a later date and his knowledge of their confidential information may damage their business (see para 50). The Authority found there was a greater risk of the employee suffering financially and being unable to find work in the area (see paras 52–56). The Authority declined to issue an interim injunction (see para 58).

Davis Trading Company Ltd v Uelese [2020] NZERA 61 [PDF 273KB]

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Page last revised: 22 July 2021

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