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September 2016

Interesting or topical employment cases.

A Ltd v H [2016] NZCA 419

Court of Appeal - Procedural fairness - Appeal granted

The employee, a pilot, was dismissed following allegations that he sexually harassed a flight attendant. The Employment Court held that the employer’s investigation was procedurally flawed because the employer had scrutinised the employee’s account of the incident more vigorously than that of the flight attendant and other witnesses.

The Court of Appeal held that the Employment Court had erred in its application of the law. The employer did not need to question each witness in the same way and to the same level of detail. This approach would be inconsistent with the s 103A(2) (external link) test which asks what a fair and reasonable employer could have done in the circumstances (see para 37). Instead, the degree of scrutiny which should be levelled at each witness depended on the circumstances of the case.

In this case there were clear doubts about the employee’s explanation of events and so the employer was entitled to structure its investigation around these doubts (see para 38). On the other hand, there was no reason to doubt the reliability of the flight attendant’s and other witnesses’ account of the events and so a different approach was warranted (see para 48 and 51).

The appeal was allowed.

A Ltd v H [2016] NZCA 419 (external link)


Radius Residential Care Ltd v The NZ Nurses Organisation Inc [2016] NZEmpC 112

Employment Court - Meaning of ‘union meeting’ - Standard of proof in respect of penalty claims made alongside damages claim

The union notified the employer that its members would be attending union meetings. The union members then gathered at the appointed time and picketed and protested outside the employer’s head office and places of work.

The parties disputed whether this action amounted to an unlawful strike. The Employment Court set out a definition of ‘union meeting’ for the purpose of s 26 (external link) of the Employment Relations Act 2000 and found that the union members’ activity did not fit this definition (see para 54-56). Instead, the union members’ activity was held to be an unlawful strike (see para 57-59).

The employer sought both penalties for the unlawful strike and damages for the wages it paid employees during the strike. The Court considered what standard of proof should apply in respect of penalty claims when made alongside a damages claim. The Court held that a heightened civil standard of proof should apply to penalties in this situation. In practice, this required “convincing evidence of the probability of a defendant’s breach” (see para 98). As an ordinary balance of probabilities standard applied to the claim for damages, the Court acknowledged that different standards of proof might apply to the same conduct where both damages and penalties are sought for the same breach (see para 99).

Radius Residential Care Ltd v The NZ Nurses Organisation Inc [2016] NZEmpC 112 (external link)


New Zealand Meat Workers & Related Trades Union Inc v AFFCO New Zealand Limited [2016] NZEmpC 117

Employment Court - Whether remuneration lost during lockout period claim for unlawful deduction or claim for damages

The employer had previously been found to have illegally locked out a number of union members. This case addressed preliminary issues including whether a claim for lost remuneration during the lockout periods should be framed as a claim for ‘wages’ under the Wages Protection Act 1983 or as a claim for damages. The lockout period occurred during the off-season and continued into the on-season when the union members had a right to be re-engaged.

The Employment Court held that the loss suffered was not a ‘failure to re-engage’ nor could it be classified as a loss of opportunity (see para 24-25). The Court held that the union members would have been paid for the performance of work but for the illegal lockout (see para 28). Consequently, the failure to pay these wages was an unlawful deduction recoverable under the Wages Protection Act (see para 28).

New Zealand Meat Workers & Related Trades Union Inc v AFFCO New Zealand Limited [2016] NZEmpC 117 (external link)


The Pulp & Paper Industry Council v Oji Fibre Solutions Ltd [2016] NZEmpC 113

Employment Court - Application of s 40 of Holidays Act 2003

The employees were previously employed by the second defendant. The second defendant sold the business to the first defendant. The employees’ employment ended and they were subsequently employed by the first defendant under the same terms.

An issue arose over whether s 40 (external link) of the Holidays Act 2003 applied in this context. It provides that an employee is entitled to payment for any public holiday which would have occurred during any annual leave owing at the end of employment.

The Employment Court held that the purpose of s 40 is to ensure the integrity of an employee’s annual leave entitlement without compromising any other leave entitlements (see para 51). Consequently, if the elements of s 40 (external link) were made out, the employees were entitled to payment for any public holiday even though the new employer was also required to pay the employees for the same public holiday (see para 51).
It was held that s 40 applied in this context.

The Pulp & Paper Industry Council v Oji Fibre Solutions Ltd [2016] NZEmpC 113 (external link)


Sands v Serco New Zealand Ltd [2016] NZERA Auckland 303

Employment Relations Authority – Removal to Employment Court

The employer was contracted by the Department of Corrections to manage a prison. The employee worked as the prison director. His employment was terminated following the intervention of the Department into the employer’s management of the prison. The employee argued that the respondent failed to disclose relevant information prior to removing him from his positon.

The Employment Relations Authority removed the matter to the Employment Court. There was an important question of law regarding the scope of s 4(1B)(c) (external link) which provides exceptions to when an employer needs to disclose information to an employee (see para 34). Further, an important question of law arose around whether this was a public/private partnership and, if so, what the impact of the Department’s actions were (see para 39). Finally, an important question could arise as to the relationship between s 199(2) (external link) of the Corrections Act 2004 and s 238 (external link) of the Employment Relations Act 2000 (see para 42).

The Pulp & Paper Industry Council v Oji Fibre Solutions Ltd [2016] NZEmpC 113 (external link)


Below v The Salvation Army New Zealand Trust [2016] NZERA Wellington 111

Employment Relations Authority – Removal to Employment Court

The applicants claimed to be employees of the Salvation Army while undertaking training in order to become Officers of the Army. The Salvation Army claimed that no contractual relationship existed between the parties.

The Employment Relations Authority removed the matter to the Employment Court. There was an important question of law regarding whether or not the parties were in an employment relationship during the training (see para 16).

Below v The Salvation Army New Zealand Trust [2016] NZERA Wellington 111 (external link)


8i Corporation v Marino [2016] NZERA Auckland 312

Employment Relations Authority – Removal to Employment Court

The applicant alleged that the respondent, an ex-employee, breached a s 149(3) (external link) settlement agreement by using the applicant’s confidential information in his new business venture. The settlement agreement provided that in the event of a material breach the respondent would have to transfer his remaining stock to the applicant for one dollar.

The Employment Relations Authority removed the matter to the Employment Court. There was an important question of law regarding whether s 149(3) (external link) of the Employment Relations Act 2000 prevented the respondent from claiming that the clause in the mediated settlement was a penalty clause and therefore unenforceable (see para 34).

8i Corporation v Marino [2016] NZERA Auckland 312 (external link)

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