Cases of interest: September 2018

A summary of interesting or topical employment cases.

Richora Group Limited v Cheng [2018] NZEmpC 113

Employment Court – Effect of foreseeability of harm to employee with pre-existing mental health condition on remedies for hurt and humiliation – Effect of employer’s post termination conduct on personal grievance awards

The Employment Court upheld the Employment Relations Authority determination that the employee had been unjustifiably constructively dismissed.

An issue was raised as to the relevance of an employee’s pre-existing condition to the amount awarded as compensation for hurt and humiliation. The employee suffered a dramatic decline in her mental and physical health when the employment relationship broke down culminating in a suicide attempt and medical intervention (para [42]).The employer was aware that the employee suffered from depression and anxiety, had left her previous employment under unhappy circumstances and was apprehensive about re-joining the workforce.  The directors were described as having “made it plain that they would take her under their wing” (para [7]).

The Court accepted that, in cases involving a pre-existing condition, liability for harm must be assessed on a case by case basis. It is necessary to assess whether a sufficient causal connection exists between the loss suffered and the employer’s breach. However, such issues did not arise in the present case (para [43]).The severity of the harm suffered by employee was no doubt compounded by her pre-existing condition. However, her vulnerabilities were well known by the employer. It would have been readily apparent that the actions taken would have a serious negative impact on the employee (para [43]).

A further issue arose as to the relevance of an employer’s post termination conduct when assessing compensation to be awarded. The employee suffered further distress following her dismissal when the employer posted derogatory comments about her to the Rotorua Chinese Community of Commerce online chat group. The Court held that, although there was a clear link between the comments and the employment relationship, the harm caused by the posts was distinct from the harm caused by the dismissal (para [47]). Compensation for a personal grievance under s 123 of the Employment Relations Act 2000 is for loss sustained as a result of the grievance. Any loss caused by separate actions of the employer may give rise to a separate action for relief but should not affect the amount awarded under s 123(1)(c)(i) (para [51]). In the circumstances of this case, the point was irrelevant to the compensation awarded as the employee had only sought $20,000 compensation (para [50]).

Link to case [PDF 395KB] (external link)

X v Chief Executive of the Department of Corrections [2018] NZEmpC 106

Employment Court – Conduct outside of workplace leading to dismissal – Consequences of harassment following breakdown of private relationship with colleague

The employee was dismissed as a result of a series of incidents that arose from the break-down of his romantic relationships with two other employees. Such incidents included telephone calls, text messages, emails, “face-to-face contact”, the content of a Facebook post, being issued with a trespass notice, a harassment warning letter, a police safety order and being arrested for breaching that order. The Department concluded that its Code of Conduct for its employees had been breached. The employee challenged the validity of his dismissal.

A significant part of the employee’s case was that the conduct that resulted in his dismissal was a private matter. The Court accepted that there is a limit to the extent an employer can intrude on the private life of an employee. However, in this case the employer did not go beyond what was appropriate. Instead, the employer was drawn into the employee’s private life through his behaviour (para [69]). A neutral, objective, fair-minded and independent observer would conclude that the employee’s behaviour risked bringing the employer into disrepute.

The Court further held the employer was entitled to investigate and reach a conclusion about the employee’s behaviour because of its concerns about compliance with its social media policy. The policy warned of disciplinary action if an employee published any material that was harassing or could create a hostile work environment online. The Facebook post made personal comments about both of the female employees. The employee must have known that his Facebook friends included other employees and that the post was capable of being distributed more widely. The Facebook post was held to be inconsistent with the employer’s social media policy (para [76]).

Ultimately, the employer was entitled to investigate the complaint even though it related to events which occurred outside the workplace (para [76]). The fact that an employee is in a relationship with a colleague whom he harasses outside of work does not exempt that harasser from the consequences of his action in a workplace setting.

Link to case [PDF 683KB] (external link)

Labour Inspector v Prabh Ltd [2018] NZEmpC 110

Employment Court – Principles applying to calculation of penalties for a company breaching minimum employment standards – Relevance of an employee’s involvement in deceiving Immigration New Zealand

The employer admitted breaching minimum employment standards by breaching the Minimum Wage Act 1983 and Holidays Act 2003 in relation to three employees. However, the employer denied the alleged vulnerability of the employees.

At some point during the employment of each of the three employees their job description was changed from shop assistant to assistant store manager or store manager. This was done because all three came to New Zealand to study business management. For their visa applications to be successful they had to be in employment commensurate with their qualifications. Two of the employees admitted that they did not perform management duties. The employer submitted that the employees’ involvement in deceiving Immigration New Zealand was relevant to the calculation of penalties against the employer.

The Court held that the employees’ attempts to improve their immigration status were collateral to the main issue and did not absolve the employer from the “appalling way the employees were treated” (para [10]). To an extent, the breaches were aggravated by the employer taking advantage of the employees’ vulnerability over immigration status (para [10]).

Link to case [PDF 507KB] (external link)

Page last revised: 26 October 2018

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