Cases of interest: November 2017

A summary of interesting or topical employment cases.

Waikato District Health Board v Archibald [2017] NZEmpC 132

Employment Court - Redeployment to same or similar position - Travel requirements

The employee’s role was disestablished during restructuring. The employee was dismissed after she declined to take up an alternative role which would have required her to travel for two hours and 45 minutes (202 km) each day for a period of up to nine months.

At issue was whether the employee was entitled to a severance payment under the applicable collective agreement. To qualify for a severance payment, the collective agreement stipulated that the redeployment offer must be for a position on terms that are the same or no less favourable than the employee’s current positon.

The Employment Court held that the fact other employees were prepared to undertake the new role did not assist the employer’s position. The assessment was fact-specific to the employee (see para 41). The Court cautioned against arguments involving assumptions about the employee’s ability to travel based on the employees age (see para 46).

The Court concluded that the employee had put the employer on notice around her health concerns relating to the extent of travel and the employer should have made further inquiries before reaching a conclusion (see para 47). The extensive travel was not ameliorated by its limited duration (up to nine months) or that travel would be undertaken during work hours. The enhanced travel component made the role one which was plainly on less favourable terms (see para 50).

The employee was entitled to severance pay. 

Link to case [PDF 457KB] (external link)

Prasad v LSG Sky Chefs Ltd [2017] NZEmpC 150

Employment Court - Triangular employment relationship

LSG Sky Chefs Ltd (‘LSG’) engaged the plaintiffs to work for it through Solutions Personnel Ltd, a labour hire company. At issue was whether the plaintiffs were employed by LSG.

The Court held that it was appropriate to apply the traditional s 6 ERA 2000 tests in order to ascertain the employment status of workers involved in labour hire arrangements (see para 31). The underlying policy objective of s 6, to prevent employers from avoiding responsibilities for employee rights, had particular relevance in labour hire agreements (see para 35).

The Court noted complex employment models, like labour hire agreements, make it uncertain who bears responsibility for working conditions. It held that section 6 is sufficiently flexible to deal with these difficulties (see para 91).

The Court set out a spectrum. Where the rights and obligations of each party are well documented and understood at the outset, it is less likely that the host organisation will be found to be in an employment relationship with the labour hire worker. Conversely, it will become increasingly likely that an employment relationship will be found to exist where the documentation is unclear, the work is of indefinite duration and the host exercises a significant degree of control (see para 92).

A labour-hire agreement does not represent an impenetrable shield to a claim that the “host” is engaging the working under contract of service. Employment status depends on the facts and an analysis of the real nature of the relationship (see para 98).

On the facts, the Court held that the plaintiffs did not have any real idea about the precise nature and scope of their legal relationship with LSG or Solution Personnel Ltd (see para 94). Application of the section 6 tests suggested that the plaintiffs were employed by LSG (see para 96-98).

Link to case [PDF 493KB] (external link)

Wendco (NZ) Ltd v Labour Inspector of the Ministry of Business, Innovation and Employment [2017] NZERA Christchurch 199

Employment Relationship Authority - Determining otherwise working day - Three week rule

The Labour Inspector challenged the employer’s method of determining whether employees were entitled to an alternative holiday after working on a public holiday. The employees worked variable rosters. At issue was how to determine whether a public holiday would otherwise have been a working day for the employees. 

The employer used the ‘three week rule’ to determine employee’s otherwise working days. This looked at an employee’s pattern of work over the three weeks prior to the public holiday worked. If the employee had worked at any time on the same day in the preceding three weeks, the employer considered the public holiday to be an otherwise working day.

The Employment Relations Authority found that in some cases the three week rule will restrict an employees’ entitlement to an alternative day after working on a public holiday (see para 59). Further, the three week rule will exclude other factors required in the assessment under section 12 of the Holidays Act 2003 (see para 72-73).

Consequently, section 6 of the Holidays Act 2003 prohibits the three week rule to the extent it restricts employee rights (see para 63-64). For the purposes of examining the employee’s working patterns under section 12 of the Holidays Act 2003, a period of at least three months should be used (see para 67).

The Authority concluded that the employer could not apply a blanket three week rule approach to employees on variable rosters (see para 71). A more individualised approach which takes into consideration all the factors under section 12 was required (see para 76-77).

Link to case [PDF 330KB] (external link)

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