Cases of interest: March 2023

A summary of interesting or topical employment cases.

Pyne v Invacare New Zealand Ltd [2023] NZEmpC 33

Employment Court – Jurisdiction – Non-de novo challenge – New evidence and claim

At issue was whether on a non-de novo challenge the Employment Court (the Court) could hear evidence and claims which were not raised before the Employment Relations Authority (the Authority).

The employee was challenging the amount of remedies awarded by the Authority following a successful claim for unjustified dismissal. The employee chose a non-de novo hearing, meaning they were only challenging certain aspects of the Authority’s determination.

The employee wished to bring new evidence and make a new claim for breach of employment contract. The employer submitted that in a non-de novo hearing only evidence and claims already made before the authority could be made before the Court.

The Court held that the employee could bring new evidence in their non-de novo challenge. The Court said section 179(4) (external link) of the Employment Relations Act 2000 (the Act) requires the applicant to be very specific in identifying the errors of fact or law which they wish to challenge; however, it also confers broad powers on the Court to determine the extent of a hearing and does not say evidence is restricted to what was raised before the Authority (see para 13). Further, if Parliament intended a non-de novo challenge to be a strict appeal, they would have included requirements evidence presented before the Authority be recorded (see para 15). Instead, they have made it clear evidence does not need to be recorded.

The Court held that the employee could bring the new claim for breach of employment contract in the non-de novo challenge. It found that a broad definition of “matter” in s 179(1) (external link) should be taken regardless of whether the hearing is de novo (see paras 28, 29). It was only necessary for the breach of employment contract claim to broadly have been before the Authority, it did not need to have been specifically pleaded (see para 32). The Court felt this interpretation of the Act was most in line with statutory purpose, which is for Authority claims to not require legal stringency (see para 30). The Court said the Authority is designed to be accessible and informal; non legally qualified advocates routinely represent claimants in the Authority. It would not make sense for applicants to lose the ability to challenge a decision because their non-lawyer advocate misrepresented their claim.

The Court said it would hear the new evidence and claim and determine whether the Authority erred in the amount of relief it awarded the employee (see para 34).

Pyne v Invacare New Zealand Ltd [2023] NZEmpC 13 [PDF, 239KB] (external link)

Wilson-Grange Investments v Guerra (2023) NZEmpC 39

Employment Court ­­­– Personal grievance – Unjustified disadvantage – COVID-19 – Wage reduction – Procedural fairness

A key issue in the case was whether the employer unjustifiably disadvantaged the employee by reducing his wages by 20 per cent in response to reduced turnover caused by the outbreak of COVID-19.

The employee in this case worked Front of House at a restaurant owned by the employer. The employer challenged the Authority determination that it had unjustifiably disadvantaged the employee in several ways, most notably by reducing the employee’s pay by 20 per cent. The employer insisted that these wage reductions were necessary to avoid redundancies caused by COVID-19 and the subsequent lockdowns. It also said that employees agreed to these reductions during a staff meeting. However, the Court determined the evidence did not support this (see para 13).

The Court held that the wage reduction amounted to a personal grievance for unjustified dismissal. The Authority had found that while the employer had strong substantive justification for the wage reduction, its failure to consult the employee meant it did not meet the procedural requirements of s 103A (external link) of the Act (see para 36). In the Court, the employer challenged this point on the basis that the circumstances of COVID-19 should relax the procedural requirements of s 103A (external link) (see para 37). The Court agreed that context is important for determining the requirements of procedural fairness, and that the context of early COVID-19 was highly pressuring and challenging (see para 38). However, the Court said the impact on the employee was also relevant. The impact of substantially reducing the employee’s pay raised the standard required of a fair and reasonable employer (see para 42). Given this, the Court found that simply advising the employee by letter that their wage would be reduced fell short of the minimum procedural requirements. The employer should have consulted the employee on such a significant decision, regardless of the context of COVID-19.

The Court upheld the Authority’s finding (see para 46). The Court dismissed the employer’s challenge and awarded costs to the employee.

Wilson-Grange Investments v Guerra (2023) NZEmpC 39 [PDF, 226KB] (external link)

Rock v DJ Investments 2019 Ltd [2023] NZERA 98

Employment Relations Authority – Casual employment – Personal grievance – Unjustified dismissal

A key issue in the case was whether the employee was a casual or permanent employee. Her employment status was important to her personal grievance for unjustified dismissal.

The employee worked in a small retail clothing shop owned by the employer. The employee brought a personal grievance against the employer for unjustified dismissal. The employer’s initial justification for the dismissal was that the employee was on a 90-day trial period. However, the employer later claimed that the dismissal was justified because the employee was on a casual employment agreement. The employer argued that because the employee was on a casual contract, they could have no ongoing expectation of receiving work, and therefore no grounds to claim unjustified dismissal.

The Authority determined that the employee was on a permanent rather than casual contract. In the absence of a statutory definition for casual employment, the Authority defined it as “working on an as and when required daily basis” (see para 23). It then looked at whether an as and when required daily basis would make sense for the type of work. The Authority determined that for a small retail shop with consistent opening hours, such as the one in this case, a casual arrangement would not make sense because the employer would need to have a level of certainty that someone is always present and serving (see para 25). The Authority suggested a catering company working irregular events was a business which may genuinely require casual employees (see para 25).

The Authority went on to provide further reasons for the employee being permanent rather than casual:

  • Rosters were put up on a wall calendar a month in advance, but then were varied closer to the day (see para 24).
  • The employee worked for 12 consecutive weeks for over 20 hours per week with only two weeks as an exception. This had the regularity of permanent part time work (see para 26).
  • The employee held a set of keys. This would be unlikely for an employee who had no guarantee of ongoing work (see para 27).
  • Although holiday pay being paid as you go suggested casual employment, it was not determinative. This form of holiday pay is used for other forms of employment agreement that are not casual (see para 30).

The Authority found the employee would still have a claim for unjustified dismissal even if they were considered casual. Casual employment does not remove the procedural fairness requirements in s 103A (external link) of the Act. The Authority determined a fair and reasonable employer would have given notice for the dismissal and would have considered restructuring before dismissing the employee (see paras 23, 31).

The Authority ordered the employer to pay $18,112.50 in lost wages, and $18,000 in compensation in addition to costs (see para 57).

Rock v DJ Investments 2019 Ltd [2023] NZERA 98 [PDF, 46KB] (external link)

Nesami v Chief Executive of the Ministry of Business, Innovation and Employment [2023] NZERA 152

Employment Relations Authority – Paid parental leave – Combining employment with self-employment to reach entitlement threshold

At issue was whether the employee could combine hours worked in self-employment with hours worked as an employee to reach the threshold to receive parental leave payments.

The employee was an artistic researcher who spent some time working as an employee, and some time self-employed as a contractor. After going on parental leave, the employee realised she had not been getting parental leave payments. The Department of Inland Revenue (the Department), under delegated authority from the Ministry of Business, Innovation and Employment (the Ministry) informed the employee she did not meet the requirements for leave payments because she did not work a minimum weekly average of 10 hours for at least 26 of the 52 weeks prior to her expected due date. If the employee’s employed and self-employed hours were combined, she would have easily met this threshold, but when the employed and self-employed hours were separated, she did not.

The employee challenged the Department’s decision not to combine her employed and self-employed hours. The Ministry claimed that the Parental Leave and Employment Protection Act 1987 (the Act) did not allow an applicant to combine a period of employment with a period of self-employment to meet the weekly average of ten hours.

The Authority determined the employee could not combine her hours to meet the threshold. This was because combining hours was explicitly prohibited by s 2AD (external link) of the Act (see para 15). The Authority recognised strong policy reasons to allow parents to combine hours; combining hours would protect parents who precariously move between employed and self-employed, which is increasingly common in modern working environments (see para 19). However, the wording in s 2AD (external link) of the Act was too clear for the Authority to exercise its wide discretion and combine the forms of employment (see para 21).

The Authority concluded its determination by noting two previous cases where it had overruled s 2AD (external link) of the Act and reversed the Department’s decisions not to allow the combining of hours (see para 23). Each of these cases were distinguished because the parent had relied on incorrect advice from the Department (see paras 24, 25). The parents had asked the Department if they could combine hours and had been assured that they could. The employee in this case had not relied on incorrect advice from the Department (see para 26).

The Authority confirmed the Department’s decision (see para 28).

Nesami v Chief Executive of the Ministry of Business, Innovation and Employment [2023] NZERA 152 [PDF, 34KB] (external link)

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Page last revised: 20 April 2023

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