Cases of interest: March 2022

A summary of interesting or topical employment cases.

Urban Décor Ltd v Yu [2022] NZEmpC 56

Employment Court – Personal grievance – Unjustified dismissal – Resignation 

At issue was whether two employees resigned or were unjustifiably dismissed. A sub issue was how much weight should be placed on the failure of an employer to provide a “cooling off” period after an employee resigns in the heat of the moment. 

The employees were curtain makers who usually worked together on the employer’s factory floor. Their relationship with the sole director of the employer was fractious. One day the director saw one of the employees using her mobile phone during work time. The employee said she accidentally opened an app when checking the time.  The two employees and the director argued for fifteen minutes before the employees said they quit, gathered their belongings, and left the premises. The employer sent the employees dismissal letters early the next morning.

The Employment Court (Court) reviewed case law discussing to what extent employers need to allow employees a “cooling off’ period before accepting their resignation. The Court said this involved an objective test (see para 64):

 … whether or not an employee has resigned is an objective test as to whether a reasonable employer, with knowledge of the surrounding circumstances, would have reasonably considered the employee to have resigned.  Clear words of resignation are likely to clear that bar unless a different understanding can be informed by the surrounding circumstances. 

The Court found that the employees resigned. The employees had stated that they quit. They did not make contact until after hours. When they did make contact, they did not indicate an intention to return (see para 70). The Court then considered whether the employees had been led to resign due to breaches of duty by the employer. It held that the evidence did not support a finding of constructive dismissal (see para 88). In doing so, the Court overturned the finding of the Employment Relations Authority (Authority) and the monetary awards it had ordered (see para 93). 

Urban Décor Ltd v Yu [2022] NZEmpC 56 [PDF, 290KB] (external link)  

Beauchamp v B & T Co (2011) Ltd [2022] NZHRRT 10

Human Rights Review Tribunal – Discrimination – Dismissal – Pregnancy

At issue was whether the employee was dismissed or subjected to detriments because of her pregnancy in breach of s 22(1)(c) (external link) of the Human Rights Act 1993. 

The employee was a waitress in a café. The café was operated by a married couple who were the directors of the employer company. The employee told a director she was pregnant. When she was less than halfway through the pregnancy, the directors gave her a letter. The letter congratulated her on her pregnancy and gave her two weeks’ notice of the termination of her employment. The employee believed she was dismissed. The directors told the Human Rights Review Tribunal (HRRT) they were confirming the date the employee had verbally told them she wanted to finish work. 

The HRRT found the employee had been dismissed by the employer because of her pregnancy.  It found:

  • Where the accounts of the parties differed, the HRRT preferred the evidence of the employee. Her evidence was logical, consistent over time and supported by documentation (see para 74).
  • The employee had sought legal advice after the dismissal and tried to get her job back (see para 33).
  • The director had told the employee’s lawyer at the time that she did not hire pregnant women; the role involved heavy lifting and moving between tables, and a pregnant tummy “wasn’t the right look” (see para 40).
  • There was a causative link between the pregnancy and the dismissal (see para 85). 

The employee also claimed she was subjected to detriments due to her pregnancy. Specifically, she claimed the director failed to give her the agreed number of working hours, was unfriendly and gave her tasks a pregnant person would struggle to complete. The HRRT found there was insufficient evidence to establish those detriments occurred (see paras 90, 96 and 108). 

The HRRT found the employee suffered serious and long-lasting emotional harm due to the unlawful dismissal. It awarded the employee damages of $25,000 and $1,713 in lost earnings. The HRRT also made a declaration of breach and ordered the directors to undertake training as to the obligations of employers under the Human Rights Act 1993 (see para 142).  

Beauchamp v B & T Co (2011) Ltd [2022] NZHRRT 10 [PDF, 250KB] (external link)  

A Labour Inspector v Rexjoy Enterprise Ltd (in liq) [2022] NZERA 74

Employment Relations Authority – Arrears – Breaches of minimum standards – Persons involved 

The employer operated a takeaway shop selling dumplings in a shopping mall. The directors of the employer company were a married couple, Mr and Mrs E. The Labour Inspector received complaints that the employer was failing to pay wages to its employees. After an investigation, the Labour Inspector found that the employer had also failed to pay employees their final holiday pay, keep proper wage and time records, and pay public holiday entitlements. The Inspectorate asked the Authority to order the employer to pay the arrears with interest as well as a penalty. It also asked the Authority to find that Mr and Mrs E were “persons involved” in the breaches under s 142W (external link) of the Employment Relations Act (Act). The directors would then be liable to pay the arrears if the company, which was by then in liquidation, could not. 

The Authority found that Mrs E was a person involved in the breaches as she (see paras 55, 58):

  • exercised control of the company
  • hired the employees and set their hours of work and tasks
  • was responsible for paying the employees
  • dealt with the Labour Inspector
  • knew the primary facts relevant to the breaches by the employer. 

Mr E was not found to have been knowingly involved in the breaches and was therefore not a person involved (see para 61). 

The Authority ordered the employer to pay the arrears of $7,632.76 and interest of $162.39 (see paras 35 and 41).  It also ordered Mrs E to pay the arrears and interest to the extent that the company could not (see para 63). The Authority ordered the company pay a penalty of $7,000 for non-compliance with the Labour Inspector’s improvement notice (see para 50). 

Labour Inspector v Rexjoy Enterprise Ltd (in liq) [2022] NZERA 74 [PDF, 50KB] (external link)  

CSN v Royal District Nursing Service New Zealand Ltd [2022] NZERA 102

Employment Relations Authority – Interim reinstatement – Vaccinations Order 

The employee was employed by a state agency funded employer to take care of her son in their home.  The Accident Compensation Corporation (ACC) paid her wages after her son was in a serious accident which left him with high care needs.  Workers in the health and disability sectors were required to be fully vaccinated under the COVID-19 Public Health Response (Vaccinations) Order 2021 (external link) (Vaccinations Order) from 1 December 2021. The employee chose not to receive the vaccination. Her employment was therefore terminated in late November 2021.  Pending a substantive hearing, the employee sought interim reinstatement to her role under s 127 (external link) of the Act. 

The Authority noted this matter was unusual because the employee continued to care for her son after the employment was terminated (see para 54). The employee’s brother, who had also been a caregiver for her son with the same employer prior to the events, subsequently took on a larger role in his care. The employee was the welfare guardian for her son and had otherwise refused the employer’s offer to provide additional carers.  

The Authority declined to order interim reinstatement on the grounds that:

  • The employee’s role was highly likely to be covered by the Vaccinations Order (see para 63).
  • It was not reasonable to impose a reinstatement order which would place both the employee and employer in the position of being in breach of the Vaccinations Order (see para 72).
  • Even reinstatement to the payroll only would put the employer at risk as the employee is continuing to perform the care work (see para 70). 

The employer indicated that if circumstances changed, such as if the employee was vaccinated or the Vaccinations Order altered, it would reinstate the employee to her caregiver role (see para 97). 

CSN v Royal District Nursing Service New Zealand Ltd [2022] NZERA 102 [PDF, 190KB] (external link)

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Page last revised: 13 April 2022

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