Cases of interest: June 2023

Fire and Emergency New Zealand v New Zealand Professional Firefighters Union [2023] NZEmpC 90

Employment Court – Holidays Act 2003 – Public holidays – Relevant daily pay – Overtime

At issue was whether the pay rate for overtime worked on a public holiday met the time and a half requirement in section 50(external link) of the Holidays Act 2003.

The employer and union agreed in their collective agreements to introduce overtime rates with staggered increases over the following five years. At the end of those five years, the employees would receive 1.5 times the standard hourly rate for all overtime worked. The intention of the increases was to reduce absenteeism and increase the uptake of relieving positions.

The increases took place. A dispute then arose between the parties regarding the correct pay rate on public holidays. The employer argued that because the employees were paid 1.5 times the standard hourly rate when they worked overtime on public holidays, the rate met the statutory requirement. The union argued that in those circumstances the employees should be paid time and a half on top of the 1.5 overtime. It submitted that a mistake had been made in the collective agreements.

The Employment Court (Court) found that the parties had originally agreed the employees would be paid at the same overtime rate on public holidays, but the collective agreements were “in error” (see paragraphs 47–49). Therefore, the employees were not receiving their minimum entitlements under the Holidays Act 2003.

The Court held that the employer should first ascertain the relevant daily pay under section 9(external link), including the applicable overtime rate, and then multiply that amount by 1.5 under section 50(external link) (see paragraph 51).

Fire and Emergency New Zealand v New Zealand Professional Firefighters Union [2023] NZEmpC 90(external link)

GF v Comptroller of the New Zealand Customs Service [2023] NZEmpC 101

Employment Court – COVID-19 – Mandatory vaccination – Unjustified dismissal – Unjustified disadvantage

Employment Court – Public service employers – Heightened obligations – Tikanga – Good faith

At issue was whether the employer, the New Zealand Customs Service (Customs):

• unjustifiably dismissed the employee for failing to get vaccinated against COVID-19
• unjustifiably disadvantaged the employee by the process it followed before dismissing her.

The employee was employed by Customs in October 2020, as an Assistant Customs Officer Maritime Border (ACOM). In February 2021 Customs decided the ACOM role came within the roles that would be part of a COVID-19 vaccination rollout to border workers. The employee did not wish to be vaccinated. Initially Customs presented vaccination as voluntary.

By early March, Customs reached the view that all staff who were subject to COVID-19 "Mandatory Testing Orders" would need to be vaccinated to continue their work (see paragraphs 73, 77).  The Mandatory Testing Order in operation at the time required border workers to test and undergo medical examinations if they:

• spent more than 15 minutes enclosed in an affected ship; or
• interacted with people required to be in isolation or quarantine under a COVID-19 order.

The employee was never required to undergo testing or a medical examination under any Mandatory Testing Order while she was an ACOM. The employee thought she was not covered by the Mandatory Testing Orders (see paragraphs 53, 54, 66).

In late March the employee found out through a newspaper article that her job was at risk if she did not get vaccinated. The employee engaged an advocate. The advocate wrote to Customs twice seeking information and consultation, and informing Customs of the stress the employee was under (see paragraphs 87–89, 92). Customs responded, three weeks after the advocate's first contact, with a generic letter proposing to terminate the employee's employment (see paragraphs 90, 93, 100, 103). At the end of April, Customs dismissed the employee on the basis she was not able to do the work unvaccinated and there were no redeployment options (see paragraphs 49, 115, 116).

The employee pursued a claim for unjustified dismissal and disadvantage in the Authority. The Authority dismissed the claim (see GF v New Zealand Customs Service [2021] NZERA 382(external link)). The employee challenged the determination in the Court.

The Court accepted the employee's submissions (see paragraph 7) that:

• Customs, as a public service employer, had "heightened good employer obligations" under the Public Service Act 2020, (see paragraph 11, also paragraphs 19–22, 27, 34, 35, 124).
• Customs had obligations to deal with staff, including non-Maori staff, in accordance with tikanga/tikanga values, because it incorporated tikanga/tikanga values into documents such as (see paragraphs 11, 16–18, 124, 129):
  • Customs' strategy and statement of intent document
  • Customs' induction material
  • its Code of Conduct
  • the employee's individual employment agreement.

The Court said that where an employer "purports to incorporate tikanga/tikanga values", the extent to which the employer meets such commitments is relevant to assessing:

• the fairness and reasonableness of an employer's actions
• the employer's compliance with the good faith obligations under section 4 of the Employment Relations Act 2000(external link)
• the employer's compliance with "good employer obligations" under section 73 of the Public Service Act 2020(external link).

(See paragraph 35, also paragraphs 11, 16–19, 29–32).

The Court accepted Customs did not act as a fair and reasonable employer when:

• It did not "adequately or appropriately communicate with [the employee], including in a respectful, considered, individualised manner that respected their mana" (see paragraph 75, also paragraphs 63, 86–93, 103, 104, 144, 145).
• It did not target communications to those who had decided not to be vaccinated, instead focusing on people who were vaccine hesitant (see paragraphs 65, 74).
• It engaged with the employee in a way that did not comply with Customs' own commitment to tikanga and tikanga values (see paragraphs 11, 130, 138–141, 147).
• It did not carry out an individualised risk assessment for the employee's work; it relied instead on a generic assessment (see paragraphs 67, 69, 77–81, 84–86, 94, 100, 107–109, 112, 115, 143).
• It predetermined the employee's dismissal (see paragraphs 101, 117–122, 143).
• It was unnecessarily hasty in bringing matters to a conclusion (see paragraphs 125–127, 142, 154).

The Court took into account that Customs was "a large organisation with significant resources at its disposal, including in terms of human resources and access to legal advice and support" (see paragraph 124).

The Court found the employee was unjustifiably dismissed and unjustifiably disadvantage (see paragraphs 11, 142, 143, 146, 147). The Court awarded the employee $25,000 in compensation and three months lost wages (see paragraphs 161–164, 173).

The Court also made recommendations that Customs should (see paragraph 187):

• "take steps to engage pūkenga to ensure that it has in place capacity and capability to meet its obligations" as to tikanga/tikanga values
• "take steps to receive appropriate advice and training on the nature and scope of" its obligations under section 73 of the Public Service Act 2020(external link)
• "take steps to review its communications strategy to enable it to adequately and appropriately engage with the full range of employees in circumstances such as arose in this case."

GF v Comptroller of the New Zealand Customs Service [2023] NZEmpC 101(external link)

Martin v Maharishi Foundation Inc [2023] NZERA 302

Employment Relations Authority – Employee status

At issue was whether the applicant and the respondent Foundation (the Foundation) had an employment relationship.

The applicant, a teacher of transcendental meditation (TM), ran a TM centre based in Palmerston North. He was a member of the Foundation and sat on the Foundation’s Board of Directors for about five months. The applicant left the Foundation after some disputes. The applicant raised a personal grievance claim of unjustified dismissal. The Foundation claimed that the applicant was not an employee.

Authority for the applicant to teach TM came from an “Associated Agreement” he entered with the predecessor organisation of the Maharishi Vedic University Courses and Consultations B. V. (MVU) after completing the TM training in 1996. He taught TM at various levels of frequency for the next 24 years. The applicant received his TM teaching income in “scheduler payments” (after tax deductions and allowances for expenses) from the Foundation.

The applicant also led a local TM Teachers’ Organisation (the Organisation). The TM international movement did not recognise the legitimacy of the Organisation and required the members of the Foundation to undertake a recertification course to continue to teach TM. MVU then granted the Foundation the ability to “promote and apply” TM through a license agreement without the applicant (or any other TM teachers) being a party. The applicant did not undertake the recertification course. A further dispute arose between the applicant and the Foundation after the applicant took on new students. The applicant claimed the Foundation dismissed him during their email interaction.

The Authority was not satisfied that the real nature of the relationship between the applicant and the Foundation was an employment relationship (see paragraph 61). This finding was based on the following reasons:

• TM movement’s members, including the applicant, were “motivated by idealistic goals for their teaching”. There was a “lack of clear and unambiguous intent” to enter an employment relationship with the Foundation or MVU (see paragraphs 21, 62).
• The “Associated Agreement” did not clearly state that teachers would be employed or engaged by a national organisation representing the predecessor organisation (which later became MVU). The Authority was advised the Foundation was not such a national organisation for MVU. Thus, there was a “lack of written evidence” to show an employment relationship existed (see paragraphs 24, 25, 62).
• The applicant had control over his own teaching business. This included “who he taught TM to” and “when he taught TM” (see paragraphs 44, 45, 47, 62). Other aspects such as making “schedular payments” to the applicant and advertising were services provided by the Foundation, not control akin to an employment relationship (see paragraphs 38, 56).
• There were “indicators” that the applicant was working on his own account. These included the choices to searching and funding the TM premise without the Foundation’s financial reimbursement, the number of students to take on, and the insufficient income level generated that he had to fit other work around the teaching (see paragraphs 40, 60, 62).

The Authority stated these factors were not outweighed by the applicant’s lack of control or independence over the setting of fees and commission/royalty arrangements (see paragraph 62).

Since the Authority concluded that the applicant was not an employee, it could not consider the applicant’s personal grievance claim and other related issues (see paragraphs 63, 71).

Martin v Maharishi Foundation Inc [2023] NZERA 302(external link)

Mulqueen v The Merino Story (NZ) Ltd [2023] NZERA 329

Employment Relations Authority – Personal grievance – Unjustified dismissal – Serious misconduct – Remedies

At issue was whether the employee was unjustifiably dismissed based on a finding of serious misconduct.

The employee had worked in one the employer’s stores for seven and half years. The employee was dedicated to her role and the employer previously provided a positive written reference for her. However, the employer also had concerns about the employee’s tendency to impose her personal beliefs on customers due to informal customer complaints. As the employer never told the employee about these complaints, the employee thought she had a good employment record.

The employer sent an email to require staff to refrain from discussing controversial topics such as COVID and COVID vaccinations during work hours. About two months later, a customer emailed the employer to complain about the employee pressing uninvited anti-vaccination information on her when she visited the store. The employer wrote to the employee with the allegations of “potential serious misconduct” raised by the complaint and likely dismissal and required the employee to respond. The employee apologised to the employer, and explained she was feeling distressed over a family situation. She said this influenced the comments she made. The employee also asked for leave to help her family. The employer replied two days later with a proposal of dismissal, giving the employee one day to respond. The employer eventually proceeded to summarily dismiss the employee, despite the employee offering to apologise to the customer.

The employee raised a personal grievance claim of unjustified dismissal.

The Authority found that the employer did not follow a fair and reasonable process and its decision to dismiss the employee was not fair and reasonable in all the circumstances (see paragraphs 34, 50). The reasons were as follows:

• The employer's investigation into the customer complaint was “insufficient”. The employer should have spoken to the customer to verify the employee’s account (see paragraphs 36, 37).
• The employer did not follow the summary dismissal procedure set out in the employee’s employment agreement, because it failed to meet with the employee (see paragraphs 38, 39).
• The employer failed to disclose historical customer concerns to the employee, which resulted in the employee being unable to consider and comment on them (see paragraph 40).
• The employer failed to “genuinely” consider all the circumstances and the employee’s explanations (see paragraphs 41, 42, 43, 44).
• The employee did not have an adverse employment record. She did not “obviously” breach the house rules that set out serious misconduct warranting summary dismissal (see paragraph 47).

The Authority concluded the employee had a personal grievance for unjustified dismissal (see paragraph 50). However, it also found the employee had contributed to her dismissal, which warranted a small reduction of the compensation (see paragraph 61).

The employee was awarded three-month remuneration, and $10,800 in compensation after a 10 per cent reduction for contribution (see paragraphs 57, 61, 62).

Mulqueen v The Merino Story (NZ) Ltd [2023] NZERA 329(external link)

Atkins v Alpine 182 Degrees Ltd [2023] NZERA 334

Employment Relations Authority – Personal grievance – Unjustified dismissal – Serious misconduct – Remedies

Employment Relations Authority – Personal grievance – Unjustified disadvantage – Breach of safe workplace obligation

Employment Relations Authority – Arrears – Unpaid wages – Annual leave entitlement

At issue was whether:

• the employee was unjustifiably disadvantaged and dismissed by the employer.
• the employer owed arrears in wages and holiday pay to the employee.

The employer operated a hotel. The employee started working for the employer in an apprenticeship and progressed to a trainee cook. The sole director of the employer (director) regularly shouted, used swear words and belittled the employee. The director’s outbursts intensified in the last six months, leaving the employee feeling physically sick and fearful to be around him. The employee started travelling to work with a colleague so they could support each other. The director was the employee’s mentor, but he seldom delivered the training as promised. The employee often worked alone without assistance. There were times that the employee asked for the director’s support, but he refused to help her. The director later accused the employee of spreading rumours about him and suspended the employee from work for three days. When the employee returned to work, the director called her into a meeting and made more allegations. The director then summarily dismissed the employee for gross misconduct.

The employee raised personal grievance claims of unjustified dismissal and disadvantage. She also claimed unpaid wages and holiday pay.

The Authority concluded:

• The summary dismissal of the employee was unjustified because the employer did not act as a fair and reasonable employer. The employer failed to raise specific concerns, give the employee an opportunity to respond and genuinely consider the employee’s explanations during the process of dismissal (see paragraphs 32, 33).
• The employer’s conduct was a breach of the implied obligation to provide a safe workplace and caused the employee to be disadvantaged in her employment (see paragraph 36).
• The employer owed the employee arrears of $2,817 in wages and $1,120 in holiday pay based on the remaining seven days of annual leave entitlement (see paragraphs 43, 48).

The Authority ordered the employer to pay outstanding wage and holiday pay arrears. It also awarded eight days of lost remuneration, and $25,000 in compensation for humiliation, loss of dignity and injury to feelings (see paragraphs 53, 55, 59).

Atkins v Alpine 182 Degrees Ltd [2023] NZERA 334(external link)