Cases of interest: November 2019

A summary of interesting or topical employment cases.

Savage v Wai Shing Ltd [2019] NZEmpC 153

Employment Court – Application for sanctions – Employment Relations Act 2000

The employee was offered the position of Farm Operations Manager with the employer. He accepted and relocated from the United Kingdom to commence the role. Within six months, the employer terminated the employment on the grounds of redundancy. The employee sought, and was granted, interim reinstatement while awaiting a hearing in the Employment Relations Authority (Authority). 

When the employee returned to the workplace, he was given menial tasks to do rather than his managerial role.  The employee sought a compliance order from the Authority, and the employer was ordered to reinstate the employee to his former role without limitation.

The employee was then given additional duties, but was still not returned to his senior role. The Court found that the interim reinstatement order was only partially satisfied (see para 66). It found that one of the directors of the employer company, Mr Shing, was reluctant to accept the employee back into the workplace and relinquish the managerial responsibilities he had taken over (see para 83).

The Court found the employer had deliberately failed to comply with the compliance order (see paras 107–108). The employee asked the Court to impose sanctions on the employer under s 140(6) of the Employment Relations Act 2000 (Act) (external link) . The sanctions sought were:

  • a fine of $40,000;
  • penalties;
  • a term of imprisonment against Mr Shing.

The Court declined jurisdiction to impose a term of imprisonment. The employer, as a company, could not be imprisoned. Mr Shing had not been named on the compliance order and therefore could not be sanctioned personally (see para 118). The Court noted it would not have imposed imprisonment in any case as the breach was not sufficiently serious to justify it (see para 119).

The Court found that a fine of $2,500 was appropriate in the circumstances. It added that should the employer continue to be non-compliant, it may face a more serious sanction (see para 117). The Court declined to impose penalties as that would amount to a double jeopardy (see para 124).

Savage v Wai Shing Ltd [2019] NZEmpC 153 — Employment Court of New Zealand (external link)

Allied Investments Ltd t/a Allied Security v Cradock [2019] NZEmpC 159

Employment Court – Validity of 90-day trial – Notice Period – Employment Relations Act 2000

The parties entered into an employment agreement containing a 90-day trial period clause including the following wording:

"If, during the trial period, we decide to terminate your employment, we will give you notice of termination before the end of the trial period. If we decide to terminate based on the 90-day trial any notice period will not apply and termination may be immediate. "

At the relevant time, s 67B(1) of the Act (external link) stipulated:

"This section applies if an employer terminates an employment agreement containing a trial provision under section 67A by giving the employee notice of the termination before the end of the trial period, whether the termination takes effect before, at, or after the end of the trial period."

Before the trial period ended, the employer terminated the employment with immediate effect. The issue was whether immediate notice can be given under a 90-day trial period; or whether the lack of a notice period invalidated the 90-day trial and meant the employee could raise a personal grievance for unjustified dismissal.

The Court noted that legislation will be strictly interpreted when it restricts the rights of employees to access the courts (see para 35). This is particularly important due to the “inherent inequality of power in employment relationships” (see para 40). The Court proceeded on the basis that Parliament would have been aware of the general law that a reasonable notice period is implied (see paras 42-44) and also that immediate dismissal is only permissible on the grounds of serious misconduct (see para 45). In this context, the Court found that if Parliament had intended to allow immediate dismissal during a trial period it would have said so (see para 62).

The Court held that “notice of the termination” in s 67B(1) means the giving of advance notice, or a notice period (see para 57).  The trial period provision in the agreement did not therefore meet the requirements of s 67B of the Act (see para 64). The Court found that the employee was unjustifiably dismissed.

The Court declined to specify an implied term of minimum notice (see para 55).

Allied Investments Ltd t/a Allied Security v Cradock [2019] NZEmpC 159 — Employment Court of New Zealand (external link)

Allied Investments Ltd v Flowers [2019] NZEmpC 173

Employment Court – Holidays Act 2003 – Transferring part of public holiday

At issue in this case was whether a provision in an employment agreement complied with s 44A of the Holidays Act 2003 (Holidays Act) (external link) . Section 44A allows employers and employees, under certain circumstances, to agree to move the start time and finish time of a public holiday, to fit around shift work that starts one day and finishes the next.

For example, if employees work shifts from 10 pm to 6 am, under s 44A the employee and employer could agree to change the ANZAC Day public holiday so that it starts at 10 pm on the 24th of April and finishes at 10 pm on the 25th of April; that way, any 10 pm to 6 am shifts will not be partly on a public holiday and partly not.

In this matter, the employee was employed as a security officer. His roster included night shifts that began at 6 o’clock in the evening and ended at 6 o’clock in the morning.

The employment agreement between the parties included the following term:

Transfer of a Public Holiday Clause

The Employer and Employee agree to transfer the public holiday to accommodate the Employers operational hours.  The transfer of a public holiday will occur either when the shift starts on the public holiday and transfers into the non-public holiday or when the shift starts on a non-public holiday and moves into a public holiday.

Example

Public Holiday on a Monday: Work shift Monday 7am to 7pm and Monday 7pm to Tuesday 7am may be treated as the 24hrs of Public Holiday period.  Further information on this can be found at: www.legislation.govt.nz/act/public/2008.

The employers’ public holiday transfer policy included the following paragraph:

Public Holiday Transfer

As per the Holidays Amendment Act 2008 and the transfer clause in your employment contract Public holidays will be treated as applying from the start of your shift on a public holiday until the end of a shift whether during or after a public holiday.

The issue before the Court was whether the above transfer agreement was effective for the purposes of s 44A.

The Court held that to comply with the Holidays Act, the transfer agreement must specify the relevant part of the public holiday being transferred. In this case, it was not clear whether the clause related to transferring a whole public holiday, or part (see para 35). The clause also did not address what would happen when public holidays were on consecutive days (see para 36).

The Court found that the wording of the clause was ineffective and had not resulted in a transfer of part of the public holidays worked by the employee to another day (see para 46).

Allied Investments Ltd v Flowers [2019] NZEmpC 173 — Employment Court of New Zealand (external link)

Still haven't found what you're looking for?