Cases of Interest: March 2020

A summary of interesting or topical employment cases.

Arachchige v Rasier New Zealand Ltd [2020] NZEmpC 35

Employment Court - application to adjourn hearing – COVID-19 travel restrictions prevent defendants from attending hearing – interests of justice require adjournment – adjournment granted

The plaintiff applied for a declaration pursuant to s 6 (external link) of the Employment Relations Act 2000 (external link) as to whether he was an employee of the defendants. The defendants represent the Uber ridesharing service.

The defendants applied for an adjournment of a three day hearing set down for the week of 25 March 2020 (see para 3). Uber’s sole witness and its representative providing instructions to counsel are both based in Australia. Travel restrictions arising out of COVID-19 prevented both from being present for the hearing (see para 4).

The Court held that even though Audio-Visual Link could have been used to contact the Australian representative and witness, the fact that Uber has effectively no managerial presence in New Zealand meant that the hearing would have no appropriate representative for Uber present in Court (see para 14). The interests of justice therefore required an adjournment to a date as soon after 19 May 2020 as practicable (see para 18).

Arachchige v Rasier New Zealand Ltd [2020] NZEmpC 35 [PDF 142] (external link)

Rappongi Excursions Ltd v Fernandez [2020] NZCA 37

Court of Appeal – application for leave to appeal – franchise arrangement – unjustifiable dismissal

The applicant owns the Denny’s restaurant business in New Zealand (Denny’s). The respondent had worked for Denny’s, and had been exploring with Denny’s ways to set up his own restaurant and leave his employment. United States representatives of Denny’s sent the employee a dismissal letter. The employee brought a personal grievance for unjustifiable dismissal. The Employment Court found in favour of the employee and rejected Denny’s counterclaim. The Court of Appeal declined leave to appeal (see para 20).

Importantly, this leave judgment of the Court of Appeal confirms the following points:

  • The first three questions of law related to reimbursing the employee for costs incurred in defending criminal charges related to the employment relationship problem. The Court found that:
    • The need for an accounting exercise to trace events before the personal grievance does not mean that these benefits would be precluded by s 123(1)(c)(ii) (external link) . If benefits lost are not continuations of existing benefits such as remuneration, they fall within the scope of the section (at para 16).
    • Awarding reimbursement of legal costs where they were not pleaded by the employee is not an issue because the issue was included in the employer’s counterclaim (at para 17).
  • The other two points of appeal were factual points and not points of law (at paras 18 and 19).

Rappongi Excursions Ltd v Fernandez [2020] NZCA 37 [PDF 142KB] (external link)

Sexton v Lowe [2020] NZEmpC 25

Employment Court – jurisdiction – contractor or employee – abuse of process – claim in Disputes Tribunal already determined

The plaintiff was a contractor on a building site at Auckland Airport. The defendants were contractors on the site as well. The plaintiff invoiced his hours worked through a company E. Clean NZ Ltd, whose sole director and shareholder was the plaintiff. The first defendant paid the invoices prior to 1 April 2017, and then the second defendant paid the invoices thereafter.

The employment relationship problem arose when $18,783.76 (including GST) worth of invoices were unpaid. By 21 September 2017, $7,475 was outstanding. The plaintiff at this point claimed he was an employee of the defendants. Being unsuccessful in the Employment Relations Authority, the plaintiff made a claim in the Disputes Tribunal as E. Clean Ltd against the second defendant (PASMR (NZ) PTY Ltd). The Disputes Tribunal found in favour of E. Clean NZ Ltd (see para 15).

The Court held that it would be an abuse of process to allow the plaintiff to pursue his claim against the second defendant, due to the doctrine of res judicata, preventing a party already subject to a final judgment from bringing subsequent proceedings about matters already determined (see para 18). The Court also emphasised that the doctrine applied to the plaintiff, because he has such a connection to E. Clean NZ Ltd (the party in the Disputes Tribunal) that the previous judgment should also bind him: the plaintiff has clear mutuality of interest and is the sole director and shareholder of E. Clean NZ Ltd (see para 19).

The Court however held that the claim against the first defendant was not barred and found against the plaintiff on the facts (see paras 37 and 38).

Sexton v Lowe [2020] NZEmpC 25 [PDF 300KB] (external link)

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