Cases of interest 2021

A summary of interesting or topical employment cases.

January 2021

Employment Court – Personal grievance – Constructive dismissal – Unjustified disadvantage 

At issue was whether the employee was constructively dismissed. 

The employee was a human resources site lead. The employer issued a directive about compensation settlement payments. The employee settled an employment mediation on behalf of the employer for an amount that was significantly more than was authorised by the directive. When questioned, the employee said she did not believe the directive applied to that situation. The employer undertook an investigation. During a subsequent disciplinary process, the employer issued its decision that it intended to dismiss the employee on notice for serious misconduct.  The employee took leave during which she gained alternative employment. The employee ultimately never resigned; nor was she dismissed.  

The employee raised a personal grievance for constructive dismissal on the basis that a breach of duty by the employer led her to resign. The Employment Court (Court) found that the employer breached its duty when it wrote to the employee stating that it had concluded the allegations were proven and serious misconduct had occurred (see para 60). The employer should have given the employee the opportunity to comment before the decision was made that serious misconduct had occurred. It failed to do so (see para 57). 

The Court found this breach did not amount to constructive dismissal (see para 86). The employee’s new position was what caused her to end her employment (see para 79). It broke the causation between the breach and the termination of the employment (see para 78). The Court was not satisfied the breach was serious enough to make her resignation reasonably foreseeable in any case (see para 85). The Court found the employee had been unjustifiably disadvantaged under s 122(external link)(external link) of the Employment Relations Act 2000 and awarded her $5,400 in compensation (see para 111). 

The employer claimed the employee breached her employment agreement and good faith when she failed to give notice or respond to communication from the employer asking if she had found another position. The Court agreed (see paras 114 and 121). The Court ordered the employee to pay a $1,500 penalty to the Crown (see para 133). 

Chief of New Zealand Defence Force v Darnley [2022] NZEmpC 4 [PDF, 400KB](external link)(external link) 

Employment Court – COVID-19 – Vaccinations Order – Interim reinstatement 

At issue was whether the Court would reinstate four unvaccinated aviation workers to their positions on an interim basis. 

The employees were Aviation Security Officers at an airport. Their roles were covered by the COVID-19 Public Health Response (Vaccinations) Order 2021(external link)(external link) (Vaccinations Order). The Vaccinations Order mandated that certain roles be performed by vaccinated individuals. The four employees chose not to be vaccinated. When alternative roles for the employees were not found, the employer terminated their employment. The employees raised personal grievances for unjustified dismissal. They asked the Court to reinstate them to their positions on an interim basis pending a substantive hearing. 

The Court recognised and respected the rights of the employees to come to their own conclusions about whether to be vaccinated (see para 265). However, the Court dismissed their application (see para 290). The Court found:

  • The employees’ contention that their role was not covered by the Vaccinations Order was only weakly arguable (see para 201).
  • The employer could not be expected to give the employees a special limited role which excluded activities that might require them to work airside (see paras 224–228).
  • It was arguable the employer could have taken a more proactive approach to finding alternative roles for the employees (see para 235).
  • Reinstating the employees to their roles would place them and the employer in breach of the Vaccinations Order, which could lead to penalties (see para 255). 

The Court noted that its findings were provisional (see para 139). 

VMR v Civil Aviation Authority [2022] NZEmpC 5 [PDF, 520KB](external link)(external link) 

Employment Relations Authority – Restraint of Trade 

At issue was whether a restraint of trade was enforceable. 

The employee was a political editor for a news programme on television. The employment agreement between the parties included restraint of trade provisions requiring non-competition for a period of three months and non-solicitation and non-dealing for six months (see para 8). The restraint stated the employee could not be involved in any business in competition with the employer. The geographical area for non-competition was nationwide. The employee resigned when she was offered a position as a host for a morning talk back show with another broadcaster. As per the employment agreement, the employee gave the employer three months’ notice of her resignation.  

The employee believed the restraints of trade would not be enforced by the employer because it did not have a radio station and was therefore not in direct competition with the future employer. The employee participated in a photo shoot and provided a quote to be used in promotion of the talk back show while she was still an employee of the television station. The employer advised the employee it intended to enforce the restraints of trade to protect its confidential information, business relationships and goodwill. 

The Employment Relations Authority (Authority) found the restraints of trade were reasonable and enforceable because the employee had agreed to the terms and held a key role (see para 56). It found there was a degree of competition between the broadcasters for viewers or listeners in the breakfast time slot (see para 66). However, the Authority reduced the period of the restraints. It backdated the three months of non-competition to begin at the start of the Christmas break, thereby modifying the duration to seven weeks (see paras 54–55).  The Authority also reduced the duration of the non-solicitation and non-dealing restraints from six to three months (see para 61). 

The employer sought a penalty for breach of the employment agreement in respect of the promotional photo shoot and quote. The Authority ordered the employee to pay a penalty of $2,000 and issued a compliance order (see paras 92–93). 

O’Brien v Discovery NZ Ltd [2022] NZERA 15 [PDF, 430KB](external link)(external link)

February 2021

High Court – Judicial review – Order suspending expiry of collective employment agreements 

At issue was whether an order, that suspended the expiry of collective employment agreements while an Epidemic Notice was in place, was lawful. 

The employer was a disability service provider with nearly 4,000 employees. About 2,800 of them were members of a particular union (the union). The employer and the union had a collective employment agreement (the collective agreement) that was due to expire on 18 October 2020. In September 2020, before the expiry date, the union began bargaining for a new collective agreement. Under s 53(external link)(external link) of the Employment Relations Act 2000 (the Act), the commencement of bargaining extended the expiry of the existing collective agreement by 12 months to 18 October 2021. 

In March 2020, the Prime Minister issued an Epidemic Notice under s 5(external link)(external link) of the Epidemic Preparedness Act 2006 (the EP Act), namely the Epidemic Preparedness (COVID-19) Notice 2020(external link)(external link) (the Epidemic Notice). The issuing of the Epidemic Notice had the effect of giving the Governor-General, on the recommendation of a Minister, powers under s 15(external link)(external link) of the EP Act to “modify any requirement or restriction imposed by [an] enactment”, in order to enable compliance during an epidemic. 

In April 2020, the Governor-General, on the advice of the Minister for Workplace Relations and Safety, used s 15(external link)(external link) of the EP Act to make an order affecting collective bargaining while the Epidemic Notice was in place, namely the Epidemic Preparedness (Employment Relations Act(external link)(external link)

2000—Collective Bargaining) Immediate Modification Order 2020)(external link)(external link) (the Order). The Order included a provision that modified the expiry of collective agreements under s 53(external link)(external link) of the Act. The provision (cl 8(external link)(external link))  effectively paused the countdown of the 12-month extension period in s 53(external link)(external link), for as long as the Epidemic Notice was in place. 

The Epidemic Notice authorising the Order expired after three months if not renewed. Up until the time of the High Court hearing, the Notice had been continuously renewed, every three months. Each time the Notice was renewed, the Order modifying the expiry of collective agreements automatically renewed. The effect for the employer was that the collective agreement between the employer and union remained in place, when it would have otherwise expired under s 53(external link)(external link) of the Act. 

In October 2021, four days after the collective agreement between itself and the union would otherwise have expired, the employer applied for judicial review of the Order. The employer claimed the Order was unlawful and outlined five grounds for that claim (see para 51). One ground was that there was “an implied requirement to review immediate modification orders” made under s 15(external link)(external link), to determine whether they continued to be justified. The Order in this case had not been reviewed in more than 18 months (see paras 51, 134–137, 141). 

In November 2021, after learning of the judicial review proceedings, the Minister considered for the first time whether the continuation of the Order was justified. The Minister said he decided to recommend that the Order be revoked in February 2022 (see para 48). 

The High Court dismissed the employer’s first four grounds for judicial review (see paras 54–133). However, the High Court accepted the fifth ground, that the Order was unlawful because it should have been subject to review. The High Court held that Parliament could not have intended that the Order be continued without any review over an 18-month period (see para 141). The High Court held the lack of review was contrary to the rule of law and contrary to Parliament’s intention when enacting s 15(external link)(external link) of the EP Act (see paras 139–147). 

The High Court made a declaration and orders as follows (see para 157):

the first and second respondents’ failure to undertake a review of the Order against the requirements of s 15 of the Epidemic Preparedness Act prior to November 2021 was unlawful. I direct the first and second respondents to complete reconsideration of the Order against the requirements of s 15 within 14 days of the date of this judgment 

Idea Services Ltd v Attorney-General [2022] NZHC 308(external link)(external link)

High Court – Judicial review – Vaccination mandate – Police and Defence Forces 

At issue was whether a vaccination order affecting Police and Defence Force personnel was lawful. 

Under the COVID-19 Public Health Response (Specified Work Vaccinations) Order 2021(external link)(external link) (the Vaccination Order) the Minister for Workplace Relations and Safety (the Minister) determined that work carried out by certain Police and Defence Force personnel could only be done by vaccinated staff. Three Police and Defence Force workers who did not wish to be vaccinated brought judicial review proceedings against the Minister. The workers were facing termination if they did not get vaccinated by a certain date. 

The Vaccination Order was made under s 11AA(external link)(external link) of the COVID-19 Public Health Response Act 2020 (the Act). Section 11AA(external link)(external link) required the Minister to be satisfied that the Vaccination Order was in the public interest and was appropriate to achieve the purpose of the Act. Under s 11AA(2)(external link)(external link) “public interest” included “ensuring continuity of services that are essential for public safety, national defence, or crisis response”. The Minister said he recommended the Vaccination Order (see para 16):

based on the clear public interest in ensuring continuity of the services provided by the Police and the New Zealand Defence Force, both of whom are essential for public safety, national defence and crisis response. 

The stated purpose of the Vaccination Order was (see para 13):

to prevent, and limit the risk of, the outbreak or spread of COVID-19 by requiring specified work to be carried out only by affected workers who are vaccinated where it is in the public interest to do so.

The applicants sought judicial review of the Vaccination Order on the basis it was unlawful. 

The High Court accepted that the Vaccination Order was unlawful because it placed an unjustified limit on fundamental rights (see para 104). The High Court summarised its reasoning in para 105:

[105] In essence, the Order mandating vaccinations for Police and NZDF staff was imposed to ensure the continuity of the public services, and to promote public confidence in those services, rather than to stop the spread of COVID-19. Indeed health advice provided to the Government was that further mandates were not required to restrict the spread of COVID-19. I am not satisfied that continuity of these services is materially advanced by the Order. The actual number of affected staff — 164 Police staff and 115 NZDF staff is very small compared to the overall workforce of over 15,000 for each of the Police and NZDF. Moreover there is no evidence that this number is any different from the number that would have remained unvaccinated and employed had the matter simply been dealt with by the pre-existing internal vaccine policies applied by Police and NZDF. Neither is there any hard evidence that this number of personnel materially effects the continuity of NZDF and Police services.

The High Court set the Vaccination Order aside (see paras 104, 108). 

The High Court observed that its conclusion should not “be understood to question the effectiveness and importance of vaccination” (see para 107).

Yardley v Minister for Workplace Relations and Safety [2022] NZHC 291(external link)(external link)

Employment Court – Failure to comply with Employment Relations Authority compliance order – Remedies – Fine 

At issue was whether the employer should be fined for failing to comply with orders in an Employment Relations Authority (Authority) determination; and then failing to comply with a compliance order the Authority issued in relation to the same determination. 

The Authority issued a determination finding the employer unjustifiably dismissed the employee. The Authority ordered the employer to pay around $6,000 in lost wages; $25,000 compensation; a $4,000 penalty and $3,000 in costs. When the employer failed to comply with the orders, the Authority issued a compliance order, requiring the employer to pay the sums within 14 days. After the employer failed to comply with the compliance order, the employee sought a fine against the employer in the Employment Court (the Court) under s 140(6)(d)(external link)(external link) of the Employment Relations Act 2000. 

The Court imposed a fine of $10,000 against the employer. In coming to that sum, the Court took into account that:

  • The breach by the company was wilful, deliberate and ongoing (see para 31).
  • The breach had significant impacts on the employee (see para 31).
  • There was a need to deter the employer from such conduct in future (see para 31).
  • There was a need to deter employers generally “so that they realise the importance of satisfying Authority orders” (see para 31).
  • The fine was proportional considering the nature of the breach and the considerable amount of money owing to the employee (see para 32).

The Court also ordered the employer to pay costs of $3,000 (see para 39).

Cousens v Star Nelson Holdings Ltd [2022] NZEmpC 30 [PDF, 210KB](external link)(external link)

Employment Relations Authority – Minimum employment standards breaches – Penalties 

At issue was the quantum of penalties the Authority should order against the employer for minimum employment standards breaches. 

The employer operated a nail salon. The employer accepted it committed the following breaches in relation to six employees:

  • failing to keep full wage and time records, in breach of s 130(external link)(external link) of Employment Relations Act 2000.
  • breaches of the Holidays Act 2003(external link)(external link), including:
    • underpayment of leave entitlements
    • underpayment of wages for working on public holidays
    • failure to provide employees with alternative holidays
    • failure to pay employees for unworked public holidays
    • failure to keep full holiday and leave records.

Prior to the Authority considering penalties, the employer paid the employees all arrears that were owing.

The Authority considered what quantum of penalties should apply against:

  • the employer
  • its director
  • the person responsible for administering wages (who was also the husband of the director).

The Authority ordered the employer to pay a penalty of $40,000 and the director and her husband to pay penalties of $20,000 each as persons involved in the breaches. In coming to that decision, the Authority took into account the following:

  • Three of the workers were vulnerable due to being on temporary work visas (see paras 26, 39).
  • The breaches gave the employer “an unfair advantage in the marketplace” (see para 27).
  • The respondents had an attitude of remorse and a willingness to resolve matters after filing their statement of claim, but no reduction in penalty was warranted due to their repeated non-compliance previously (see para 38).
  • The recordkeeping breaches were longstanding and systemic (see para 39).
  • The respondents had previous interactions with the Labour Inspectorate, including previous Improvement Notices (see paras 40, 42).
  • The on-going and repeated occurrence of breaches meant penalties were necessary to reinforce the non-negotiable nature of minimum entitlements (see para 40).
  • There was a high degree of culpability (see para 42).
  • Consistency with other cases (see para 49). 

Labour Inspector v Olive & Jenn Co Ltd [2022] NZERA 54 [PDF, 52KB](external link)(external link)

Employment Relations Authority – Breach of settlement agreement – Penalties 

At issue was whether the employer breached s 149(3)(external link)(external link) of the Act, when its Chief Executive Officer (the CEO) talked about the employee with the Human Resources advisor (the HR advisor) of her new employer. 

The employee and her employer reached a mediated settlement under s 149(external link)(external link) of the Act. The settlement agreement (the agreement) required the parties not to disclose anything arising from mediation. The agreement also controlled what the employer could say if anyone made enquiries about the employee. 

The employee commenced working for a new employee. Seven months later, the original employer’s CEO heard, from another unrelated CEO (the other CEO), that the employee’s new employer was having trouble with her. The other CEO suggested the CEO should talk to the new employer about the employee. Subsequently the CEO spoke to the HR advisor at the employee’s new workplace. According to the Authority, the CEO held a “wide ranging conversation” about the employee and gave his “unfettered opinion” of the employee’s “management style and character traits conveyed in a way that can be described as prejudicial” (see para 23). The CEO also disclosed the settlement figure contained in the agreement (see para 43). 

The Authority accepted the CEO disclosed to the new employer “much more than what was permitted” under the agreement (see paras 34 and 43). The Authority ordered the original employer to pay a penalty of $12,000, $4,000 of which was to go to the employee. In coming to that figure the Authority took into account:

  • There were continuing consequences for the employee, as the disclosures raised questions about the employee’s honesty and integrity (see para 47).
  • Information that was disclosed could not be taken back and had serious consequences for the employee (see para 49).
  • The breaches took place seven months after the employee commenced new employment (see para 49).
  • The breaches were not inadvertent and were close to being deliberate (see para 49).
  • The employer did not take any steps to mitigate any adverse consequences of the breaches (see para 48).
  • The breaches undermined the integrity of s 149(external link)(external link) agreements (see para 49). 

DCB v RTS [2022] NZERA 48 [PDF, 180KB](external link)(external link)

March 2021

Employment Court – Personal grievance – Unjustified dismissal – Resignation 

At issue was whether two employees resigned or were unjustifiably dismissed. A sub issue was how much weight should be placed on the failure of an employer to provide a “cooling off” period after an employee resigns in the heat of the moment. 

The employees were curtain makers who usually worked together on the employer’s factory floor. Their relationship with the sole director of the employer was fractious. One day the director saw one of the employees using her mobile phone during work time. The employee said she accidentally opened an app when checking the time.  The two employees and the director argued for fifteen minutes before the employees said they quit, gathered their belongings, and left the premises. The employer sent the employees dismissal letters early the next morning.

The Employment Court (Court) reviewed case law discussing to what extent employers need to allow employees a “cooling off’ period before accepting their resignation. The Court said this involved an objective test (see para 64):

 … whether or not an employee has resigned is an objective test as to whether a reasonable employer, with knowledge of the surrounding circumstances, would have reasonably considered the employee to have resigned.  Clear words of resignation are likely to clear that bar unless a different understanding can be informed by the surrounding circumstances. 

The Court found that the employees resigned. The employees had stated that they quit. They did not make contact until after hours. When they did make contact, they did not indicate an intention to return (see para 70). The Court then considered whether the employees had been led to resign due to breaches of duty by the employer. It held that the evidence did not support a finding of constructive dismissal (see para 88). In doing so, the Court overturned the finding of the Employment Relations Authority (Authority) and the monetary awards it had ordered (see para 93). 

Urban Décor Ltd v Yu [2022] NZEmpC 56 [PDF, 290KB](external link)(external link) 

Human Rights Review Tribunal – Discrimination – Dismissal – Pregnancy

At issue was whether the employee was dismissed or subjected to detriments because of her pregnancy in breach of s 22(1)(c)(external link)(external link) of the Human Rights Act 1993. 

The employee was a waitress in a café. The café was operated by a married couple who were the directors of the employer company. The employee told a director she was pregnant. When she was less than halfway through the pregnancy, the directors gave her a letter. The letter congratulated her on her pregnancy and gave her two weeks’ notice of the termination of her employment. The employee believed she was dismissed. The directors told the Human Rights Review Tribunal (HRRT) they were confirming the date the employee had verbally told them she wanted to finish work. 

The HRRT found the employee had been dismissed by the employer because of her pregnancy.  It found:

  • Where the accounts of the parties differed, the HRRT preferred the evidence of the employee. Her evidence was logical, consistent over time and supported by documentation (see para 74).
  • The employee had sought legal advice after the dismissal and tried to get her job back (see para 33).
  • The director had told the employee’s lawyer at the time that she did not hire pregnant women; the role involved heavy lifting and moving between tables, and a pregnant tummy “wasn’t the right look” (see para 40).
  • There was a causative link between the pregnancy and the dismissal (see para 85). 

The employee also claimed she was subjected to detriments due to her pregnancy. Specifically, she claimed the director failed to give her the agreed number of working hours, was unfriendly and gave her tasks a pregnant person would struggle to complete. The HRRT found there was insufficient evidence to establish those detriments occurred (see paras 90, 96 and 108). 

The HRRT found the employee suffered serious and long-lasting emotional harm due to the unlawful dismissal. It awarded the employee damages of $25,000 and $1,713 in lost earnings. The HRRT also made a declaration of breach and ordered the directors to undertake training as to the obligations of employers under the Human Rights Act 1993 (see para 142).  

Beauchamp v B & T Co (2011) Ltd [2022] NZHRRT 10 [PDF, 250KB](external link)(external link) 

Employment Relations Authority – Arrears – Breaches of minimum standards – Persons involved 

The employer operated a takeaway shop selling dumplings in a shopping mall. The directors of the employer company were a married couple, Mr and Mrs E. The Labour Inspector received complaints that the employer was failing to pay wages to its employees. After an investigation, the Labour Inspector found that the employer had also failed to pay employees their final holiday pay, keep proper wage and time records, and pay public holiday entitlements. The Inspectorate asked the Authority to order the employer to pay the arrears with interest as well as a penalty. It also asked the Authority to find that Mr and Mrs E were “persons involved” in the breaches under s 142W(external link)(external link) of the Employment Relations Act (Act). The directors would then be liable to pay the arrears if the company, which was by then in liquidation, could not. 

The Authority found that Mrs E was a person involved in the breaches as she (see paras 55, 58):

  • exercised control of the company
  • hired the employees and set their hours of work and tasks
  • was responsible for paying the employees
  • dealt with the Labour Inspector
  • knew the primary facts relevant to the breaches by the employer. 

Mr E was not found to have been knowingly involved in the breaches and was therefore not a person involved (see para 61). 

The Authority ordered the employer to pay the arrears of $7,632.76 and interest of $162.39 (see paras 35 and 41).  It also ordered Mrs E to pay the arrears and interest to the extent that the company could not (see para 63). The Authority ordered the company pay a penalty of $7,000 for non-compliance with the Labour Inspector’s improvement notice (see para 50). 

Labour Inspector v Rexjoy Enterprise Ltd (in liq) [2022] NZERA 74 [PDF, 50KB](external link)(external link) 

Employment Relations Authority – Interim reinstatement – Vaccinations Order 

The employee was employed by a state agency funded employer to take care of her son in their home.  The Accident Compensation Corporation (ACC) paid her wages after her son was in a serious accident which left him with high care needs.  Workers in the health and disability sectors were required to be fully vaccinated under the COVID-19 Public Health Response (Vaccinations) Order 2021(external link)(external link) (Vaccinations Order) from 1 December 2021. The employee chose not to receive the vaccination. Her employment was therefore terminated in late November 2021.  Pending a substantive hearing, the employee sought interim reinstatement to her role under s 127(external link)(external link) of the Act. 

The Authority noted this matter was unusual because the employee continued to care for her son after the employment was terminated (see para 54). The employee’s brother, who had also been a caregiver for her son with the same employer prior to the events, subsequently took on a larger role in his care. The employee was the welfare guardian for her son and had otherwise refused the employer’s offer to provide additional carers.  

The Authority declined to order interim reinstatement on the grounds that:

  • The employee’s role was highly likely to be covered by the Vaccinations Order (see para 63).
  • It was not reasonable to impose a reinstatement order which would place both the employee and employer in the position of being in breach of the Vaccinations Order (see para 72).
  • Even reinstatement to the payroll only would put the employer at risk as the employee is continuing to perform the care work (see para 70). 

The employer indicated that if circumstances changed, such as if the employee was vaccinated or the Vaccinations Order altered, it would reinstate the employee to her caregiver role (see para 97). 

CSN v Royal District Nursing Service New Zealand Ltd [2022] NZERA 102 [PDF, 190KB](external link)(external link)

April 2021

Employment Relations Authority – Jurisdiction – Jurisdiction to investigate employee status  – Employee status of intern in government ministry

Employment Relations Authority – Statement of problem – Whether applicants bound by the wording of their statement of problem – Whether Authority could reframe the problem 

At issue was whether the Employment Relations Authority (the Authority) had jurisdiction to investigate the employment status of someone who was an intern at the Ministry of Education (the MoE) under an “internship scholarship programme”. 

The MoE offered “internship scholarships” to postgraduate students of educational psychology. The second applicant was awarded such a scholarship. Under the scholarship, the second applicant (the intern) was based at the MoE for eight months. During the eight-month period the intern received two lump sum payments totalling $25,000. 

The relevant multi-union collective agreement (MECA) in effect at the time outlined terms and conditions of employment applying to “intern psychologists”. The applicants (the intern and one of the MECA unions) asked the Authority to consider whether what the intern did during the internship meant she was really an employee; and so was entitled to the terms and conditions applying under the MECA. 

The MoE denied the internship arrangement amounted to employment. The MoE also denied that the Authority had jurisdiction to investigate employee status in this case. The MoE claimed that as the applicants had sought a “declaration” of employee status in their statement of problem, under s 6(5)(external link)(external link) of the Employment Relations Act 2000 (the Act), only the Employment Court (the Court) could resolve the matter. 

The Authority considered it was not bound by the fact the parties had sought a declaration in their statement of problem. The Authority noted the finding of the Supreme Court in FMV v TZB [2021] NZSC 102, [2021] 1 NZLR 466, para 58, that if the Authority “considers the parties have not understood the real nature of their problem, it can reframe the problem and resolve that” (see para 20). 

The Authority determined that it did have jurisdiction to determine the employee status of the intern (see para 40). The Authority found that getting a declaration of employee status from the Court under s 6(5)(external link)(external link) was an option available to parties, rather than a requirement (see para 30). The Authority considered that “[s] 6(2) clearly provides for the Authority to address and determine such a question if it arises in the course of considering an application to it” (see para 26). 

In coming to its determination, the Authority relied on the interpretation of s 6(external link)(external link) in the superior court decisions Labour Inspector v Gill Pizza Ltd [2021] NZCA 192, [2021] ERNZ 237 and Gill Pizza Ltd v Labour Inspector [2021] NZSC 184 (Gill Pizza) (see paras 26–31). The Authority determined the facts in this case were not so different from those in Gill Pizza that Gill Pizza did not apply (see paras 32–39).

Association of Professionals and Executive Employees Incorporated v Ministry of Education [2022] NZERA 121 [PDF, 160KB](external link)(external link)

Court of Appeal – Jurisdiction of Employment Court – Jurisdiction to hear challenge to directions of the Authority – Directions to parties to attend mediation 

At issue were directions of the Authority ordering parties to attend mediation and whether it was arguable these could be challenged in the Employment Court. 

The applicant and her former employer signed a record of settlement. The applicant later sought to challenge the record of settlement in the Employment Relations Authority (Authority). The Authority directed the parties to first attempt to resolve their differences in mediation. The Authority suspended its investigation pending the outcome of the mediation. The applicant challenged the direction to mediation in the Court. 

The Court held that it had no jurisdiction to hear the challenge. The Court found that for the purposes of the Employment Relations Act 2000, s 179(5)(external link)(external link), the Authority’s direction to mediation was procedural and so not able to be challenged. The applicant sought leave to appeal the Court decision in the Court of Appeal. 

The Court of Appeal declined to grant leave. The Court of Appeal found there was no arguable case (see para 19):

a direction to attend mediation cannot be anything other than procedural in nature. Such a direction does not affect substantive rights nor impact on the determination of the claim. If the mediation does not resolve the dispute, the claim simply proceeds. All substantive rights are preserved.

ABC v DEF [2022] NZCA 148 [PDF, 230KB](external link)(external link) 

High Court – Judicial review – Vaccination mandates – Orders affecting health practitioners and educators – Whether mandatory vaccinations were a justifiable limit on rights under the New Zealand Bill of Rights Act 1990 

At issue was whether orders imposing mandatory vaccinations against COVID-19 on certain health and education workers were a reasonable and demonstrably justified limit on their rights under the New Zealand Bill of Rights Act 1990(external link)(external link) (the Bill of Rights). 

The COVID-19 Public Health Response (Vaccinations) Order 2021(external link)(external link) (the Order) required certain workers in the health and disability and education sectors to undergo vaccination against COVID-19, in order to continue in their roles. The applicants claimed mandatory vaccinations were an unjustifiable limit on their right to refuse medical treatment under s 11(external link)(external link) of the Bill of Rights. The applicants claimed the right to refuse medical treatment was “absolute” and not capable of justified limitation (see para 40). The applicants sought to have the orders set aside as unlawful. The applicants also claimed that the criteria for qualifying for a vaccine exemption were “unreasonable, irrational or being applied overly rigidly” (see para 35). 

The High Court dismissed the claim that the right to refuse medical treatment under s 11(external link)(external link) was absolute. The High Court noted the claim went directly against the decision New Health New Zealand Inc v South Taranaki District Council [2018] NZSC 59, [2018] 1 NZLR 948 (New Health). In New Health the Supreme Court found water fluoridation involved a justified limit of the right to refuse medical treatment (see para 51).

The High Court also dismissed the claim that the vaccination orders themselves were unjustifiable under the Bill of Rights. The High Court did not accept evidence from the applicants that there were safety issues with the vaccine that meant the mandates were not justified. The High Court found that while there was no long-term safety data, there was nothing in the materials provided to the Court to suggest “that any uncertainties in the long-term are likely to give rise to the identification of unforeseen adverse effects”. The High Court was not satisfied there were unaddressed risks from the vaccine beyond those assessed when the vaccine was approved. The High Court took into account evidence the Pfizer vaccine had been approved in 130 countries and more than 10 billion doses had been administrated (see paras 114120). 

The High Court held that at the time the orders were implemented in October 2021, justification for the mandates existed. In coming to that decision the High Court relied on the following:

  • At that time, the delta variant was dominant and there was evidence vaccination limited its transmission (see paras 132, 134, 165).
  • Adverse effects on individuals affected by the mandates had to be weighed against the impact of COVID-19 spreading in the affected communities (see paras 124126). 

The High Court found in relation to health professionals (see para 157):

the close interaction between health professionals and patients, the patients potential vulnerability, the limitation on the ability of patients to make informed choices, and the need to keep public confidence in health services provided justification for the mandate. 

In relation to the education sector, the High Court found (see para 158):

It was important for students to be able to learn in a school environment, and that environment created a potential transmission risk. In effect the community was requiring significant numbers of children to congregate with others, and with adults. There was a risk of COVID infection for the children, but more particularly a risk to the community that the children interacted with. That potentially justified a risk minimisation approach, albeit the justification is less clear cut than in the health sector.

The High Court held overall that the adverse effects of the mandates on affected people were “not out of proportion to the benefit to…communities in reducing the potential harm caused by COVID-19 itself” (see para 162). The High Court observed that with the arrival of the omicron variant, the mandates may not continue to be justified. By the time the judgment was handed down, the mandate for those in the education sector had already been lifted (see paras 164, 165). 

The High Court did not accept that criteria for qualifying for a vaccine exemption were “unreasonable, irrational or being applied overly rigidly”. The High Court was not satisfied that exemption criteria were too narrow; or that the exemption process should have been decentralised. The High Court held it “was understandable the Ministry of Health decided to centralise the exemption process, and to do so only through clinically prescribed criteria”; otherwise, the process would have been open to abuse from health professionals who were opposed to vaccination (see paras 150, 153, 166). 

NZDSOS Inc v Minister for Covid-19 Response [2022] NZHC 716 [PDF, 190KB](external link)(external link) 

Private Security Personnel Licensing Authority – Investigation of employment matters by private investigator – Whether investigator required to be registered under the Private Security Personnel and Private Investigators Act 2010 

At issue was whether a private investigator, hired by the employer to investigate a workplace bullying complaint, needed to be licensed under the Private Security Personnel and Private Investigators Act 2010(external link)(external link)

The applicant made a complaint of bullying against members of her team at work. The employer hired a private investigator to investigate the complaint. The applicant had concerns about the private investigator’s competency and whether she was qualified to carry out an employment investigation. 

The Private Security Personnel Licensing Authority (the PSPLA) found the private investigator did need to be licensed as a private investigator to carry out an employment investigation. The PSPLA did not recommend prosecuting the private investigator for operating without a license, as the breach was inadvertent and the individual concerned had given assurances she would not act as a private employment investigator without a license in the future (see paras 7, 10, 11). 

PS v LS & LAS Ltd [2022] NZPSPLA 11 [PDF, 180KB](external link)(external link) 

Employment Relations Authority – Employee status – Food delivery driver – Online app delivery service 

At issue was whether a takeaway food delivery driver was an employee or a contractor. 

The respondent provided a food delivery service via an online app. The app allowed customers to order Chinese food items from local restaurants and grocers and to get them delivered through drivers who were also connected to the app. Customers were able to make orders in Mandarin and the service mainly provided for the local Chinese community. 

The applicant was a Chinese immigrant. The applicant had a master’s degree in science from the United Kingdom, but said he sometimes struggled in spoken English. The applicant worked as a takeaway delivery driver for the respondent for almost two months. 

The respondent disconnected the applicant from the app after a restaurant owner complained about his attitude. The applicant raised a personal grievance with the respondent seeking remedies and reinstatement. The respondent claimed the applicant was an independent contractor. In this application the Authority considered only whether the applicant was an employee or an independent contractor. 

The Authority determined that, taking into account the totality of the relationship, how it operated and the objects of the Act, the real nature of the relationship was one of employment (see paras 6668). 

Some factors the Authority took into account were:

  • While the written agreement between the applicant and the respondent stated the applicant was an independent contractor, the agreement was in English; the respondent did not provide a copy of the agreement to the applicant; the respondent did not explain the terms of the agreement; the applicant was not able to get advice on the agreement before signing it (see paras 4648).
  • The applicant had to indicate his availability for rosters in advance; he could not just log in and “grab” orders (see paras 51, 52).
  • While the applicant had a significant degree of choice over when and where he chose to work, the model of business gave the respondent significant control over him when he was working (see paras 4956).
  • While the applicant used his own vehicle, which had no signage, delivery drivers were essential and integral to the respondent’s business model as the only tangible “public face” of the business (see para 57).
  • While the agreement provided that drivers could contract substitute drivers if they were unavailable, this was “a somewhat illusory benefit as the applicant had no guaranteed work to undertake” (see para 57).
  • The applicant had no ability to expand the customer base to his advantage; there was no evidence he was in business on his own account (see paras 49, 59, 60).
  • Take-away food delivery drivers had a greater level of vulnerability when compared to taxi or courier operations which had been considered in other cases (see paras 64, 66). 

Wang v HungryPanda (NZ) Ltd [2022] NZERA 154 [PDF, 240KB](external link)(external link)

May 2021

Employment Court – Rest and meal breaks – Work period – Split shifts 

At issue was whether, when employees worked on split shifts, time continued to run between shifts for the purposes of calculating rest and meal breaks. 

The employer operated public transport buses. The employees were bus drivers. Around a third of their work shifts were split shifts, where the employees worked in the morning, stopped working for between two and four hours, and then returned to work later that day. Section 69ZD(external link)(external link) of the Employment Relations Act 2000 (Act) stipulates the minimum rest and meal breaks an employer must provide its employees with, according to the length of the work period. The term “work period” is defined in s 69ZC(external link)(external link) as the period beginning and ending with the times at which an employee starts and finishes work in accordance with the terms and conditions of their employment. The employer and union disagreed as to whether the work period for the employees on a split shift included the period in the middle of the day when they were not working. 

The Employment Court (Court) found that the period in the middle of the day between shifts was not part of the employees’ work period for the purposes of calculating their rest and meal breaks (see para 65). The Court noted that when providing for breaks, Parliament had intended to provide employees with the opportunity for rest and refreshment during working hours (see para 51). It found that the provisions of 69ZD referred to periods of time within a working period, rather than including time between working periods (see para 40). The Court concluded that a proper interpretation of a work period meant that breaks should be calculated “with reference to hours when an employee has work responsibilities” (see para 45). 

Tranzurban Hutt Valley Ltd v New Zealand Tramways & Public Passenger Transport Employees Union Wellington Inc [2022] NZEmpC 75 [PDF, 315KB](external link)

Employment Court – Interim reinstatement – Fixed term employment agreement 

At issue was whether the employee should be reinstated to his position under s 127(external link)(external link) of the Act pending a substantive hearing into his personal grievance. 

The employee was employed on a fixed term employment agreement. The letter of offer stipulated that the employment would end on 24 December 2021, as that was when the particular project he was employed to work on was due for completion. The employee had strained working relationships with other employees. The project did not end when expected. The employee asked for an assurance his employment would be extended and he was given such assurance by his manager. Two weeks later the employee was to give a presentation at a virtual workshop.  He became agitated and abusive when technical difficulties meant the workshop ran late. He took sick leave and did not make the presentation, leaving a colleague to do so. Another colleague made a complaint about his behaviour, which the employer decided to investigate. The employer learned the employee suffered from mental illness. In the meantime, the employer did not extend his fixed term contract. 

The employee claimed the fixed term agreement was either invalid or extended by the employer when it agreed by email to an extension (see para 48). However, the employer refuted that claim, saying the legitimacy of the original fixed term was not affected by events that followed (see para 47). The employee sought interim reinstatement to his former role while his personal grievance was resolved. 

The Court declined to order interim reinstatement (see para 108). The Court found that:

  • The employment agreement did not require more detail for the reasons the role was fixed term, as had been argued by the employee (see para 61).
  • While there were still formalities to be completed, the email extending the employment past the original fixed term was unequivocal (see para 71). This meant there was a serious question to be tried in relation to the claim of unjustified dismissal, although it was weakly arguable (see paras 68 and 73).
  • The employee was critical of the employer and did not have any insight into the problems he caused in the workplace (see para 79).
  • The balance of convenience favoured the employer. The employee had been difficult to manage (see para 100).
  • Although reinstatement is the primary remedy (under s 125(external link)(external link) of the Act), it would be “very difficult to re-establish a working relationship” (see para 102).
  • The project was due to finish on 30 June 2022 so the employment would not continue until the substantive hearing in any case (see para 103). 

New Zealand Qualifications Authority v Hickey [2022]  NZEmpC 76(external link)(external link) 

Employment Court – Employee status 

At issue was whether three former members of the Gloriavale Christian Community (Gloriavale) were employees. 

Each of the plaintiffs had been born at Gloriavale and had worked from the age of six. They were rostered on to work at dairy farms, at a moss factory and in a honey business. When the plaintiffs turned 15 years of age, they began working full time under a “transitional education/work experience programme”. The programme purported to provide them with work experience while they finished their last year of high school, but the plaintiffs gave evidence that they worked full time and did not enter a classroom at any point during that year. When the plaintiffs reached 16 years of age, they became Associate Partners, signing a “Deed of Adherence”.  As Associate Partners, the plaintiffs received payment for their work. However, Gloriavale controlled their bank accounts and transferred the money straight back to its shared account. The plaintiffs left the community before they became adults.  They sought a declaration they had been employees during their childhood. Gloriavale denied there had been an employment relationship. It claimed the employee/employer relationship model was contrary to its fundamental beliefs and values. 

The Court declared that the three plaintiffs had been employees under s 6(external link)(external link) of the Act during their time at Gloriavale (see para 203). In making its decision, the Court took into account: 

  • The Court acknowledged that “this case had a number of unusual factors” (see para 33). It stated its aim was to properly focus on the real nature of the relationship (see para 137).
  • The success of the Gloriavale businesses relied on child labour (see para 92). The mean age of members is 12 years (see para 9).         
  • The Court did not accept that the work children performed could be characterised as “chores”. It was instead work as work is normally understood. “It was laborious, often dangerous, required physical exertion over extended periods of time and it was for commercial benefit” (see para 55).
  • Although the leaders of Gloriavale could take preferences into account, the children and their families ultimately had no choice as to which of the Gloriavale businesses they were chosen to work for (see para 62).  The leaders made that choice according to business need (see para 94).
  • The Deed of Adherence the plaintiffs signed were not determinative. The plaintiffs felt they had no freedom to object to signing the agreement (see paras 81–83). They did not understand what they were signing (see para 194). The Court noted that parties cannot contract out of the Act (see para 188).
  • The plaintiffs had not been volunteers. They were “not offering to work as a matter of free choice” (see para 191). They were rewarded for their work with food, accommodation and the security and benefits of being a member of the community (see para 190).
  • The plaintiffs had not been independent contractors. They were not in business on their own account (see para 202).
  • The plaintiffs had not been partners. They were still legally minors (see para 202). There was no change to the fundamental nature of the relationship when the plaintiffs were labelled Associate Partners (see para 200). There was a significant power imbalance between the parties (see para 100). 

The Court reserved its decision on the identity of the employer (see para 204). 

Courage v Attorney-General [2022] NZEmpC 77 [PDF, 330KB](external link)(external link) 

Employment Court – Interpretation of collective agreement – Drug testing 

At issue was whether the employer or employee could determine the method of drug testing under the provisions of their collective agreement. 

The employer was a steel manufacturing distributor and processor. Health and safety was therefore of particular importance in its workplaces. The employer had a zero-tolerance policy. The policy provided that drug testing could be required pre-employment, for reasonable cause, following a workplace incident or as part of random testing. The relevant procedure document stated (see para 23): 

8.3.1 Prior to undergoing a test, a test consent form will be signed by the employee consenting to the relevant method(s) of testing

8.3.3 The employee will provide a hair or oral fluid sample for testing or, in private, a urine specimen. 

The union, on behalf of the employees, preferred oral fluid testing. The employer preferred urine sample testing.  The parties disputed whether the employer or employees were entitled to choose the method of testing. The employer asked the Court to find there was an implied term that the employer could select the method. The Court declined to do so (see para 170).  

The Court found there were several drafting errors in the relevant documents. The drug policy had a “gap on the issue of selection of method” (see paras 61 and 86). The Court found the parties had included both methods in the policy as a compromise after being unable to agree on the preferred method (see paras 153, 162 and 164). The Court held it could not imply the term the employer sought as it was not so obvious that it went without saying (see para 169). To do so would have amounted to an alteration of the parties’ bargain (see para 172). 

Vulcan Steel Ltd v Manufacturing & Construction Workers Union [2022] NZEmpC 78 [PDF, 410KB](external link)

Employment Relations Authority – Interpretation of collective agreement – Ability of employer to change hours of work 

At issue was whether the employer could change the roster of the employees without the agreement of the employees.  

The employer was a rail operator. The union represented 17 of its current employees who worked in a mechanical workshop.  For the past seven years, those employees have worked under a 12-hour fixed roster on a day shift or a night shift. The employer proposed changing that roster to an 8-hour rotating roster, under which the employees would work day, afternoon and night shifts. The employer sought the feedback of the employees, who objected to any alteration. The Employment Relations Authority (Authority) was asked to determine whether the collective agreement between the parties allowed the employer to change the roster without the agreement of the employees. 

The Authority found that the collective agreement did allow the employer to change the roster without the agreement of the employees. However, the discretion to do so was not unfettered (see paras 5 and 86). The Authority indicated the employer’s arguments that 8-hour shifts would better meet its health and safety obligations and customer needs may lack a strong evidential basis. And without that evidence, it would be difficult for constructive conversations to take place (see paras 72–73). 

The Authority found that personal grievances and breach of good faith claims were premature as the proposal for change process had not been completed (see paras 31, 99 and 104).

Rail and Maritime Transport Union v KiwiRail Ltd [2022] NZERA 222 [PDF, 90KB](external link)(external link) 

June 2021

Supreme Court – Settlement agreements – Mental incapacity – Enforceability of settlement agreement where party affected by incapacity 

Supreme Court – Settlement agreements – Mental incapacity – Contract law – Test in O’Connor v Hart – Application of O’Connor v Hart in employment context 

Supreme Court – Settlement agreements – Mental incapacity – Protection of Personal and Property Rights Act 1988, s 108B – Application of s 108B to employment settlement agreements 

At issue was whether a settlement agreement was enforceable where:

  • One party was affected by mental incapacity when she entered the settlement agreement.
  • The other party had no knowledge of the incapacity.
  • The settlement agreement was signed off by a mediator under the Employment Relations Act 2000, s 149(external link)(external link). 

To resolve the issue, the Supreme Court considered whether relevant law outside of the employment jurisdiction applied to employment settlement agreements. The Supreme Court considered:

  1. Whether the contract law test in O’Connor v Hart [1985] 2 All ER 880, [1985] 1 NZLR 159 (PC) (O’Connor v Hart) applies to employment settlement agreements. (Under O’Connor v Hart, “a contract is not voidable for mental incapacity unless the other contracting party has actual or constructive knowledge of the incapacity, or equitable fraud is established” (see para 4)).
  2. Whether s 108B(external link)(external link) of the Protection of Personal and Property Rights Act 1988 (the PPPRA) applies instead. (Section 108B “requires a court to approve a settlement of claims for money or damages where one of the parties is not capable of managing his or her own affairs” (see para 5).) 

The Supreme Court majority held that (see para 69):

  • The test in O’Connor v Hart does apply to mediated settlement agreements in the employment jurisdiction.
  • The Employment Relations Act 2000 governs the enforceability of employment settlement agreements; not s 108B of the PPPRA. 

Applying the test in O’Connor v Hart, the majority found the settlement agreement was enforceable, because the employer did not have actual or constructive knowledge that the employee lacked capacity when entering into the agreement (see para 69). 

TUV v Chief of New Zealand Defence Force [2022] NZSC 69(external link)(external link) 

Employment Court – Non-publication orders – Application for a non-publication order after determination issued – Whether determination needs to be recalled 

At issue was:

  • whether the Employment Relations Authority (Authority) erred when it declined to recall a determination in order to attach a non-publication order to it
  • whether the Authority erred when it said that if it had recalled the determination, it would not have granted a non-publication order. 

The Authority issued a determination dismissing the employee’s claim for a personal grievance and for breach of her employment agreement. The employee wished to get the Authority to remove personal details from the determination. The employee applied to the Authority to recall the determination, so that the Authority could attach a non-publication order to the personal details. 

The Authority declined to recall the determination on the basis that there was no “special reason” requiring it to recall the determination (see para 8). The Authority found that even if it could have recalled the determination, there were no grounds to make a non-publication order (see para 2). The employee applied to the Employment Court (Court) challenging the Authority’s determination. 

The Court found the Authority wrongly assumed that it was necessary to recall the determination in order to make a non-publication order (see para 20). The Court held that cl 10 of sch 2(external link)(external link) to the Employment Relations Act 2000 , which gives the Authority power to make non-publication orders, “does not indicate any temporal limit as to when the power can be exercised”. The Court considered that “this means that the Authority can exercise its power to prohibit publication at any time before or after proceedings have concluded” (see para 22). 

The Court found that grounds for non-publication were made out, as there was a material risk that publication of the employee’s name and identifying details would risk their safety or have a potentially negative impact on their mental health and employment prospects (see para 57). 

The Court made a permanent order preventing publication of the name and identifying details of the plaintiff (see para 58). 

JKL v Stirling Anderson Ltd [2022] NZEmpC 107 [PDF, 270KB](external link)(external link) 

Employment Relations Authority – Breaches of minimum employment standards – Quantum of penalties 

At issue was the quantum of penalties against the employer for breaches of minimum employment standards under the Employment Relations Act 2000 (ERA), the Minimum Wage Act 1983 (MWA), the Wages Protection Act 1983 (WPA) and the Holidays Act 2003 (HA). 

The employer ran several stores throughout New Zealand, offering services in beauty, cosmetic and personal care. Following an investigation, the Labour Inspector sought penalties against the company, its director, and the brother of the director (as a person involved), for several breaches of minimum employment standards at a Hamilton store, affecting three different employees. The employer paid all arrears to the relevant employees before the Authority investigation (see para 47). 

The employer accepted liability for the following breaches submitted by the Labour Inspector in relation to three employees: 

On the quantum of penalties, the Authority took into account:

  • The employer’s conduct fell short of good faith behaviour expected under the ERA and was exacerbated by the vulnerable immigration status of two of the affected employees (see paras 24, 25).
  • There was a total of 24 breaches of minimum employment standards affecting three employees (see para 33).
  • The breaches were of a systemic and deliberate nature spanning over a period of nearly four years (see para 28).
  • The presence of a ‘cash back scheme’, which required an employee to pay back certain amounts of their wages in cash, demonstrated particular intent (see paras 3943).
  • The fact that the employers paid the arrears in response to the Labour Inspector’s investigation did not reduce the potential penalties (see paras 4952).
  • The employers took advantage of the vulnerability of the employees (as non-New Zealand nationals or residents) due to their unfamiliarity with New Zealand employment law and their entitlements (see para 59).
  • There was a need for deterrence, particularly against the exploitation of migrant workers (see paras 62, 63).
  • The breaches against the three different employees should be treated separately, as each employee was affected by the breaches in their own way (see para 73). 

The Authority concluded that (see para 85):

  • The employer was to pay $54,000 for the breaches of minimum employment standards.
  • The director was to pay an additional $20,000 individually.
  • The brother of the director was to pay $9,000 individually for his level of involvement in the breaches.

Labour Inspector v RBM Communication Ltd [2022] NZERA 229 [PDF, 55KB](external link)(external link) 

Employment Relations Authority – Failure to provide records to Labour Inspector – Compliance orders – Penalty 

The key issue for the Authority to determine was whether two companies (the employers) failed to comply with the Labour Inspector’s request for records and employment agreements for their employees according to s 229(external link)(external link) of the Employment Relations Act 2000 (ERA). If so, whether the Authority should impose a penalty, and for what amount. 

The employers operated in the business of freight and furniture removal, located in Nelson. The Labour Inspector received several complaints from current and former employees of the employers concerning minimum employment entitlements. The Labour Inspector contacted the employers requesting wage and time records, holiday and leave records, and employment agreements for all of their employees. After a series of correspondence between 27 November 2020 and 15 June 2021 the employers failed to produce the records by the date requested. The Labour Inspector sought an order from the Authority that the employers comply with s 229 and produce the information, including a penalty for failing to comply. 

The Authority found a continuing failure to comply with s 229 notices issued by the Labour Inspector on 10 February 2021 (see para 37). The Authority decided that a penalty was necessary, reflecting the need to punish those who breach statutory obligations and hinder the Labour Inspector’s investigation (see para 44). 

On the quantum of penalties, the Authority considered that:

  • The failure to comply with the Labour Inspector’s requests for records and employment agreements was a serious and continuing breach (see para 62).
  • As a result of the employers’ actions, the Labour Inspector was unable to assess whether the employers had been compliant with minimum employment standards, and the extent of any breaches (see para 46).
  • Despite initial confusion, the email correspondence between the Labour Inspector and the employers clearly stated the records they were required to produce, so the failure to take appropriate steps to produce records was intentional (see para 49). 

The Authority ordered that the employers:

  • Comply with s 229 and produce wage and time, holiday and leave records, and employment agreements for all employees for the period of three years from 10 February 2018 to 10 February 2021 (see para 65).
  • Pay a penalty of $7,500 per company for breaching s 229 of the ERA (see para 66).

Labour Inspector v Star Moving Ltd [2022] NZERA 252 [PDF, 45KB](external link)(external link) 

Employment Relations Authority – Availability Provisions – Breach of Employment Relations Act 2000, s 67D – Unjustified Disadvantage – Compliance order 

At issue was whether the employee was disadvantaged by his employment agreement which contained an availability provision in breach of s 67D(external link)(external link) of the Employment Relations Act 2000 (ERA). 

The employee was a stevedore at a port. In 2018, the Authority determined that the provisions in his and other employee’s individual employment agreements were unlawful availability provisions, and not compliant with s 67D of the ERA. On appeal, the Employment Court confirmed this, and ordered the employer to cease including availability provisions that:

  • did not specify guaranteed hours of work
  • did not specify the period which employees are required to be available above those guaranteed hours. 

The employee raised a personal grievance against the employer.  He claimed that his employment agreement, which required him to be available for work 24/7 without reasonable compensation, disadvantaged him. He sought remedies in the form of compensation for a loss of benefit had the provision been compliant, and compensation for distress. 

The Authority found that the employee’s grievance of disadvantage was established for the following reasons:

  • The employee’s working arrangement caused a real intrusion into his private life (see para 83). He did not have any certainty in terms of the agreed hours of work, and the days and times in which they would fall (see para 68). Lack of certainty about shifts in advance meant that he could not make commitments, like booking appointments or picking his son up from school (see para 53).
  • The employee was not reasonably compensated for his availability as required under the ERA (see para 61).
  • Even though the employee had access to Planned Time Off (PTOs), using a PTO would mean he could not be offered an additional shift that fortnight and would be paid less than the guaranteed retainer (see para 68). PTOs could also be cancelled by the company and there were a limited number of PTO days which could be sought (see para 68). 

The Authority awarded the employee:

  • $22,500 in compensation, for a loss of benefit (based on the amount of compensation he should have received under the availability provisions of the ERA).
  • $15,000 compensation for humiliation, loss of dignity and injury to feelings. 

LYE v ISO Ltd [2022] NZERA 258 [PDF, 60KB](external link)(external link)

July 2021

Employment Court – Interpretation of collective agreement 

At issue was the correct interpretation of the phrase “when the school is not open for instruction” in cl 5.4 of the Secondary Teachers' Collective Agreement 2019—2022 (“the 2019 STCA”). 

The union and school disputed the interpretation and application of cl 5.4 of the 2019 STCA. This clause provided that teachers should be reimbursed for any actual and reasonable costs incurred if teachers were required to attend school or elsewhere when the school was not open for instruction. The parties sought clarification from the Employment Court (“Court”) on the meaning of “when the school is not open for instruction”. 

The Court interpreted the phrase by considering: 

  • the history of the negotiations in creating the clause. The final iteration of the clause was the “product of significant negotiation and compromise” (see para 73).
  • the clause in the context of the agreement as a whole (see para 79).
  • the successive STCAs, the Education Act 1989 and other relevant legislation (see paras 76 – 98).

The Court concluded that the words “times when the school is not open for instruction” meant “weekends, public holidays, Easter Tuesday, vacations and times before 8.30 am and after 4.30 pm on days during the school term” (see para 143). The Court found (at [144]):

This meaning is consistent with the purpose of the clause itself, which was to enable the employer to require teachers to be at school or elsewhere for professional development or administrative purposes at times when they could not previously be required to be at the workplace. 

New Zealand Post Primary Teachers’ Association v Board of Trustees for Rodney College [2022] NZEmpC 118 [PDF, 520KB](external link)(external link)

Employment Court – Vaccinations Order – Employee status – Care and support worker 

At issue was whether the plaintiff fell within the definition of “care and support worker” under the COVID-19 Public Health Response (Vaccinations) Order 2021(external link)(external link) (Vaccinations Order). And if so, whether she continued to be an employee of the employer until the termination of the employer’s contract with the Accident Compensation Corporation (ACC), despite her ongoing non-compliance with the Vaccinations Order.  

The employee was employed by the employer to provide paid care for her disabled son, who lived with her at her own home. The plaintiff chose not to receive the COVID-19 vaccinations. Therefore, her employment was terminated by the employer when the Vaccinations Order came into effect. The employee sought a declaration from the Court that she remained an employee when she continued to care for her son notwithstanding her refusal of the COVID-19 vaccinations. 

The Court considered the meaning of care and support worker as defined in the Vaccinations Order (at cl 4(external link)(external link)):

care and support worker means a person employed or engaged to provide care and support services within a home or place of residence. 

The Court considered that a broad interpretation would include a caregiver’s own home, but a narrow interpretation would not. The Court found that Parliament could not have intended a broad interpretation because it: 

  1. would not be consistent with the purposes of the Vaccinations order, nor with the broader statements of purpose of the Covid-19 Act, which was to limit the spread of COVID-19 (see para 83).
  2. would result in an “absurd” outcome, which could not have been intended by Parliament since no express reference was made to a caregiver’s own residence (see para 84).
  3. would contravene New Zealand’s international obligations under the Convention on the Rights of Persons with Disabilities (see para 85).

The Court held that the employee was therefore not a care and support worker under the Vaccinations Order, as it did not cover carers working in their own homes (see para 87). 

The Court made a declaration that the employee was still working for the employer for the period between the implementation of the Vaccinations Order and ACC’s termination of the contract with the employer (see para 146). 

CSN v Royal District Nursing Service New Zealand Ltd [2022] NZEmpC 123 [PDF, 380KB](external link)(external link) 

Employment Court – Raising personal grievance 

At issue was whether the employee raised personal grievances against the employer within the 90-day period required by s 114(external link)(external link) of the Employment Relations Act 2000 (Act). 

The employee and his manager argued on three occasions. The employer’s lawyer wrote an email to the employee on 7 August 2020 stating that his behaviour was potentially serious misconduct which could result in immediate dismissal. The lawyer went on to say that as the employee had proposed an “exit plan” and indicated he did not want to return to his role, the employment relationship was no longer tenable. The lawyer wrote the employer therefore considered the employment terminated. The employee was reminded of his post-employment obligations. 

The employer asked the Court to find that the employee did not raise a personal grievance within 90 days. The employer said it did not receive the employee’s grievance until it was served with the statement of problem lodged in the Employment Relations Authority (“Authority”) on 10 November 2020. That would have been five days over the 90-day period. 

The Court looked at the correspondence between the parties in the days following the dismissal and decided the employee had done enough to raise a personal grievance. The Court found the communications made it clear the employee disputed both the allegations regarding his conduct, and that he had not wished to return to his role (see para 21). The employee had considered the employment relationship still existed and the parties needed to resolve their dispute (see para 24). The Court concluded the dismissal grievance was raised with “sufficient particularity as to inform the employer of his position and what it needed to do to put things right” (see para 30). There was insufficient evidence to find that another personal grievance for a disadvantage had been raised (see para 32). 

Teddy and Friends Ltd v Page [2022] NZEmpC 129 [PDF, 240KB](external link)(external link) 

Employment Court – Validity of 90-day trial 

At issue was whether the employer could rely on a 90-day trial contained in the employment agreement when dismissing the employee. 

The employee and employer discussed a trainee orchard manager role in a four-hour onsite interview. The parties disputed whether a 90-day trial was discussed during that interview. The parties shook hands on a verbal offer. The employer later provided the employee with an employment agreement containing both a probation period and a 90-day trial period. The employment agreement did not include many of the inclusions necessary under s 65(external link)(external link) of the Act, such as the employee’s name, description of the work or the salary. The covering email said that the employment agreement was negotiable. 

The employee started work. The parties disagreed as to when a completed employment agreement was provided to the employee, but the Court found it was probably on the first day of his employment (see para 96). One week later the employee returned a signed contract to the employer. Within the first 90 days of his employment, the employer terminated the employment, purporting to rely on the 90-day trial under s 67B(external link)(external link) of the Act. 

The Court found the 90-day trial provision was invalid for the following reasons:

  • When the employee moved from Auckland to Kerikeri to take up the role, he was unaware a 90-day trial was a required term (see para 80).
  • There was insufficient evidence the employer had discussed a 90-day trial during the initial interview (see para 52).
  • The employer claimed the employee had promised to sign the employment agreement before starting work on his first day, but the Court found that inherently unlikely (see para 89).
  • The employment agreement was not executed prior to the commencement of employment which was fatal to the employer’s claim (see paras 97 and 101–102). 

The challenge was dismissed and the employer was ordered to pay the remedies ordered by the Authority (see paras 116 and 118). 

Farrand Orchards Ltd v Tane [2022] NZEmpC 131 [PDF, 340KB](external link)(external link) 

Employment Relations Authority – Personal grievance – Unjustified dismissal - Interim reinstatement 

At issue was whether the Authority would reinstate the employee to his position on an interim basis pending the Authority’s substantive determination of the employee’s claim for unjustified dismissal.

The employee had a Ministry of Health exemption from wearing a face mask under the Vaccinations Order. His employment was terminated for refusing to comply with the employer’s requirement to wear a face mask at the workplace. The employee raised a personal grievance claim of unjustified dismissal against his employer. The employer claimed that it had undertaken a risk assessment and explored alternatives to masks but had found no other available options that could sufficiently address the health and safety risk. The employer noted that the employee had worn respirators at work on a regular basis without reported concerns and he was only required to wear a face mask in limited circumstances. The employee sought interim reinstatement from the Authority until his substantive claim for unjustified dismissal could be investigated and determined.

The Authority granted his application for interim reinstatement. The Authority found there was a seriously arguable case to be tried for the following reasons: 

  • It was arguable that there were accommodations that could have been made to mitigate risk and dismissal was premature (see para 69).
  • The employer had continued doubt about the employee’s inability to wear a mask, which impacted its decision making. It was possible those doubts also impacted on any assessment of accommodation that could reasonably have been made. Arguably there were some limits on the requirements of an employer for an employee to prove they have a disability (see para 74).
  • The employee wore a face shield in the workplace after the implementation of the rule. Arguably that face shield provided more limited protection but packaged with testing daily may have mitigated risk (see para 88).
  • The balance of convenience favoured the employee. The Authority considered the employee’s substantive claim for unjustified dismissal and permanent reinstatement to be strongly arguable. It had not been subjected to case law to date and it was not a straightforward matter (see para 106).
  • Overall justice favoured ordering the interim reinstatement of the employee on the condition that the employer might, at its discretion, comply with the order by reinstating him only to the payroll without requiring him to attend work. If the employee were required to attend work, he would be required to wear a face shield, take a daily rapid antigen test, observe strict handwashing standards, and report and stay away from work if he developed COVID-19 symptoms (see para 109). 

The Authority noted that this was the first case concerning mask exemptions. Mask wearing provided known public health benefits. Whether there were suitable alternatives in workplaces was one of many issues that would be addressed in the Authority’s substantive investigation (see para 111). 

CAE v Hexion (N.Z.) Limited [2022] NZERA 325 [PDF, 3MB](external link)(external link)

August 2021

Court of Appeal – Jurisdiction of the Employment Court – Accident Compensation Act 2001 – Mental Injury 

At issue was whether the Employment Court had jurisdiction to hear a proceeding in which a claimant made claims under the Accident Compensation Act 2001 (AC Act) but review and appeal rights under that Act were not exhausted. 

The employees worked as guidance counsellors at a school. The employees suffered post-traumatic stress disorder during their 16-year employment. The employees lodged claims with the Accident Compensation Corporation (ACC) for work-related mental injuries. The ACC declined the claims. The employees sought to review the decision. Before the review and appeal process was exhausted, the employees agreed with ACC that they were not entitled to cover because their mental state was not linked to a single event as required under s 21B(external link)(external link) of AC Act (see para 9). They discontinued their ACC claim. 

The employees then initiated proceedings in the Employment Court (Court) alleging the employer breached its health and safety obligation. The employer argued that the Court had no jurisdiction as per s 133(5)(external link)(external link) because the employees had not exhausted their review and appeal rights (see para 2). 

The Court decided s 133(5)(external link)(external link) had no application in the present circumstances. The Court “could not see why ‘needless litigation within the ACC regime’ could have been intended” (see para 11). 

The Court of Appeal held that the Court had jurisdiction to hear the proceedings based on the circumstances of this case. The Court of Appeal held: 

  • The dispute resolution process ran its course when the employees agreed with ACC that they had no cover under the Act (see para 23). 
  • It could not have been Parliament’s intention that a claimant who accepted the Corporation’s decision would be required to “challenge” that decision, by way or review or appeal, before being able to pursue remedies elsewhere. It would likely be regarded as frivolous, an abuse of process and contrary to Parliament’s intention that disputes about cover should be resolved speedily and efficiently (see para 24). 

The appeal was dismissed. 

The Board of Trustees of Melville High School v Cronin-Lampe [2022] NZCA 407 [PDF, 200KB](external link)(external link)

Employment Court – Dispute – Holidays Act 2003 – Annual leave 

The main issue was whether the employer could require the employees to use the annual leave entitlements under the Holidays Act 2003 (HA 2003) during the third and fourth week of a nationwide lockdown. 

The employer was preparing to shut down its plants across the country in response to a nationwide Alert Level 4 lockdown. Two days before the lockdown, the employer sent out an email. It announced that the employees would be kept on full pay for the first two weeks of the lockdown. They were required to take annual leave for the remainder of the lockdown to keep their full pay. This required the employees to use eight days of their annual leave entitlements. 

An employee forwarded this email to the union. The union emailed the employer the next day. It stated its opposition on the employer’s requirements and asked the employer to apply for a wage subsidy to cover the employees’ pay. The employer did not respond to this email. Six days later, the union sent a follow-up email and still received no response from the employer. 

A week later, the New Zealand Government granted a wage subsidy to the employer. The union again emailed the employer. The employer later responded and reiterated its original policy. Meanwhile, the employer asked the employees to complete health and safety training modules. 80 per cent of its workforce completed the modules. A month after the lockdown ended, the employer made about 70 per cent of its workforce redundant. 

The Court considered the relevant facts and concluded: 

  • The employer made no attempt to engage with its employees prior to making the decision about annual holidays (see para 67). 
  • The employer did not respond to the union’s email in a timely manner when the union engaged with the employer constructively. It was not responsive and communicative; it failed its good faith obligation (see para 68, 69). 
  • It was not inevitable that an agreement would not have been able to be reached if the employer had engaged with the union (see para 72). 

The Court held that the employer could not require the employees to use their annual leave entitlements during the third and fourth week of the lockdown (see para 92). 

E Tū Inc v Carter Holt Harvey LvL Ltd [2022] NZEmpC 141 [PDF, 360KB](external link)(external link)

Employment Court – Personal grievance – Unjustified dismissal – Remedies

Employment Court – Personal grievance – Disadvantage 

At issues were: 

  • whether the employer unjustifiably dismissed the employee.
  • whether the employer unjustifiably disadvantaged the employee by failing to provide a written individual employment agreement (IEA). 

The employee started working for the employer at a sushi restaurant after he obtained a work visa. His wife also started working for the employer three weeks later. However, a conflict developed between the employee’s wife and the wife of the employer director, the head chef. The tension escalated into an argument between them, with the employee’s wife walking out her job after two weeks in the role. The employee then left the restaurant following his wife’s exit. 

After the incident, the employee sent a text message to the director to seek clarification about what happened next. The director’s wife replied to his text and suggested the parties to “go their separate ways”. The employee also noticed the employer posted job advertising for his wife’s role. The employee later applied for mediation. Further discussions continued between the parties over the employee’s returning to work. It was at this point that the employee requested the employer to provide an IEA. The employer provided a draft IEA to the employee two days later. There were further disagreements between the parties over the proposed terms and conditions which could not be resolved by the mediation. 

The employee subsequently lodged a personal grievance claim on the grounds of unjustified dismissal and unjustifiable disadvantage for the employer’s failure to provide an IEA. 

The Court found: 

  • The employee and his wife reasonably understood they were dismissed based on the subsequent text exchange and the job advertisements (see paras 123, 125 and 140). 
  • The directors’ wife held the apparent authority of the employer in sending the texts that reinforced the employee’s impression of dismissal (see para 131). 
  • The employer did not unjustifiably disadvantage the employee by failing to provide an IEA, as the employee was able to source advice from a Citizens’ Advice Bureau, contacted Ministry of Business Innovation and Employment to arrange a mediation and continued negotiation with the employer. These actions were consistent with what might have happened if there had been an IEA (see para 163). 

The Court held: 

  1. the dismissal grievance was established (see para 158).
  2. the disadvantage grievance was not established (see para 165). 

The Court ordered the employer to pay lost wages and $20,000 compensation to the employee (see para 185). 

Kang v Saena Company Ltd [2022] NZEmpC 151 [PDF, 380KB](external link)(external link) 

Employment Relations Authority – Employee status – Conditional offer of employment 

At issues were: 

  • whether the job applicant (applicant) was an employee under s 6(external link)(external link) of the Employment Relations Act 2000 (the Act) after accepting a conditional offer of employment from the employer. 
  • whether the Authority had jurisdiction to determine the applicant’s personal grievance claim. 

The applicant was conditionally offered a role at the employer’s store. He received the offer of employment in the form of an employment agreement (the IEA).  The front page stated the offer of the employment was subject to reference and pre-employment checks to the employer’s sole satisfaction. Subsequently, both parties signed the IEA and agreed the starting date. The applicant authorised the pre-employment checks. The employer sent tax forms, policies, and roster options to the employee; and provided updates on the progress of the pre-employment checks. 

The employer received an adverse reference and decided to withdraw the job offer. The employer phoned the applicant, withdrew the job offer and told the applicant that it had appointed someone else for the role. 

The applicant later raised a personal grievance claim for unjustified dismissal, despite never commencing work with the employer. 

To determine whether the applicant was an employee, the Authority considered whether the applicant was a “person intending to work” under the Act. The Authority concluded that the applicant was not a person intending to work because: 

  • The employer made a conditional offer of employment. It clearly communicated about the fulfilment of the conditions. The employer maintained this position throughout and did not waive any of the conditions. The applicant accepted the conditional offer. The applicant did not fulfil all the conditions, resulting in the employer withdrawing the offer of employment before he could start work (see para 21). 
  • The offer of the employment was conditional not the contract. As the applicant did not fulfil all the conditions attached to the offer, there was never a completed offer and acceptance. The applicant “had not accepted an offer of employment as it was incapable of being accepted before the conditions attached to it were fulfilled” (see para 24). 
  • It was clear that the employer did not want either party to perform obligations under the IEA until the conditions were met. That was evidenced by correspondence about the proposed start date and the reference checks needing to be completed (see para 25). 
  • Expressing the offer as being conditional was in contrast to when a contract is expressed as conditional (see para 25). 

The Authority concluded that the applicant was not an employee under s 6(external link)(external link)  of the Act and the Authority had no jurisdiction to determine his personal grievance claim (see para 26). 

Kennedy v Field Nelson Holdings Ltd [2022] NZERA 421 [PDF, 45KB](external link)(external link)

September 2021

Employment Court – Public holiday entitlements – Otherwise working day 

At issue was whether the employee was entitled to be paid for public holidays that fell during the employer’s Christmas closedown period. 

The employee was a chef at the boarding hostel of a high school. The school did not accommodate students during holidays but did sometimes host outside groups. The employee primarily worked during the school term and the Term 1 and Term 3 holidays. For many years, he was paid public holiday entitlements for Christmas Day, Boxing Day, New Year’s Day and the day after New Year’s Day. A dispute arose between the employee and the employer when the employer ceased paying public holiday entitlements for those days. The employer argued they were not “otherwise working days” unders 12(external link)(external link) of the Holidays Act 2003 (Holidays Act). 

The Employment Court (Court) found the four days were otherwise working days; and the employer was required to pay the employee public holiday entitlements for them (see para 103). The Court gave the following reasons: 

  • The school required the employee to take his annual leave over the Term 4 holiday, which was consistent with it being a closedown period as defined in s 29(external link)(external link) of the Holidays Act (see para 83).
  • Under s 12(3A) of the Holidays Act, if the public holiday falls during a closedown period, whether it was an otherwise working day must be ascertained as if the closedown period were not in effect (see para 55).
  • The Court held that the effect of s 12(3A) was that “the Christmas break must be put to one side” (see para 92).
  • The employee usually worked on the days of the week on which the public holidays fell, and therefore they were otherwise working days (see para 97). 

The Court made a declaration accordingly (see para 103). Conversely, the Court held that the employee was not entitled to public holiday payments for Easter because there was no closedown period over the Easter break (see paras 100–101). 

Zink v Board of Trustees of Southland Boys High School [2022] NZEmpC 164 [PDF, 80 KB](external link)(external link) 

Employment Court – Judicial review – Confidentiality of records of settlement – Application to strike out proceeding 

At issue was whether the application for judicial review of a series of determinations made by the Employment Relations Authority (Authority) should be struck out. 

The applicant was an employment advocate who was not a lawyer. The advocate signed a record of settlement under s 149(external link)(external link) of the Employment Relations Act 2000 (Act) along with his client, an employee, and his client’s previous employer. The settlement agreement stipulated that neither party, nor their representatives, would make “disparaging or negative remarks” about one another (see para 8). The advocate then made numerous disparaging comments about the employer on social media. 

The employer commenced proceedings in the Authority. In a series of seven determinations issued over 11 months, the Authority issued non-publication orders, compliance orders and penalties in response to the advocate’s behaviour (see para 13). The Authority found the advocate and his company, CultureSafe NZ Ltd, had breached the record of settlement 26 times and non-publication orders 24 times. The Authority ordered the advocate and his company pay $52,800 in penalties and $30,000 towards the employer’s legal costs. 

The advocate applied to the Court for judicial review of those seven determinations and three other decisions. The advocate claimed the Authority did not have jurisdiction to make determinations against “third parties” who were neither the employee nor the employer in an employment relationship. The advocate also claimed Parliament did not intend to give the Authority jurisdiction to “override the fundamental right to justice” or “suppress the fundamental right of freedom of expression” (see para 17). 

The Court did not accept the advocate’s submissions (see para 62). The Court noted that s 137(external link)(external link) of the Act gave the Authority jurisdiction to order compliance when “any person” had not complied with a record of settlement. The Court considered previous cases that had discussed the confidentiality of mediation and settlement agreements. It held that if the Authority had no jurisdiction over participants other than the employees and employers, those participants would be able to breach confidentiality without sanction. Such breaches of confidentiality would undermine the intention of Parliament (see paras 64–67). The advocate had signed the record of settlement and had obtained a financial benefit from it. 

The Act also confers jurisdiction to the Authority to make non-publication orders (see para 76). The Court struck out the application for judicial review because the claims were not amenable to review, disputed the clear jurisdiction of the Authority or were an abuse of process (see paras 90, 97). 

Halse v Employment Relations Authority [2022] NZEmpC 167 [PDF, 220 KB](external link)(external link) 

Employment Court – Quantum of lost remuneration – Quantum of distress compensation 

At issue was the appropriate amount of lost remuneration and distress compensation that should be awarded to the employee, after she was unjustifiably dismissed. 

The employee worked as a cook on the employer’s research vessel for nearly 20 years. In 2009, the employee made a sexual harassment complaint against the (then) First Mate. The employer upheld the complaint. Two years later, the employer promoted the First Mate to the position of Master. The employee then had to report to him. 

In 2014, the employee raised concerns that the Master was bullying her. She requested a shift change, but the employer did not agree. The employee later became upset when she learned there had been a privacy breach about her historic sexual harassment complaint. She raised a formal complaint and again requested a shift change. When the employer did not transfer her, the employee took sick leave. 

The parties tried facilitation, mediation and an investigation. These steps did not resolve the issue. The employer terminated the employee’s employment on the grounds of incompatibility. The employee raised a personal grievance claim. In Ashby v NIWA Vessel Management Ltd [2019] NZERA 571(external link)(external link) the Authority found the dismissal was unjustified. The Authority awarded the employee the $20,000 she sought in compensation and three months’ lost wages. 

The employee challenged the quantum of remedies. In the Court she sought $100,000 in compensation and further lost wages. The employer noted the employee had only claimed $20,000 in compensation in the Authority. It argued she should not later be able to claim the Authority should have awarded her more (see para 41). The Court held that although the Court could not award more than the amount claimed, the Authority could. The Court held that “provided it complied with the rules of natural justice, it was open to the Authority to award more than the amount claimed in the statement of problem” (see para 48). 

In considering the award for distress compensation, the Court found that the impact of the dismissal was significant for the employee because: 

  • The employee had long service with the employer. She enjoyed her role and it was well remunerated (see para 70). 
  • Until the privacy breach, the employee had self-managed her discomfort with working under the Master. Her “distress was exacerbated by being denied the opportunity to continue to perform in her role due to the repeated dismissal of her requests to change to another shift” (see paras 75, 77). 
  • The employee was impacted by the sexual harassment and alleged bullying. This left her in a vulnerable state when the employer dismissed her (see para 76). 
  • After the dismissal, the employee was quite unwell. The employee’s long-term personal relationship also broke down (see para 80). 

The Court awarded 12 months’ lost wages and $35,000 in compensation to the employee (see paras 74, 83). 

Ashby v NIWA Vessel Management Ltd [2022] NZEmpC 174 [PDF, 310 KB](external link)(external link) 

Employment Court – Minimum standards breaches – Person involved – Penalties 

At issue was whether the employer had breached minimum standards breaches and should be ordered to pay arrears and penalties. 

The employee worked in the employer’s convenience store. The employee was originally on a student visa that allowed him to work up to 20 hours a week. The employer said the employee agreed to pay $250 a week for board but was not required to pay that until he had finished studying. The employee was later permitted to work up to 40 hours a week. He then began working full time. The employee claimed he worked 95 hours a week. The employer claimed it was 40–48 hours a week. However, the employer continued to only pay him wages for 20 hours a week. The employer claimed that the remaining wages were to cover his board and repay his previous board. 

The Court found the employee worked 75.5 hours a week (see para 37). The Court calculated the employee’s wages at the minimum wage rate at the time, deducting 15 per cent for board according to s 7(external link)(external link) of the Minimum Wage Act 1983 (see para 38). The Court ordered the employer pay the employee wage arrears of $18,147.13 and holiday pay of $1,853.24 as well as interest on the sums (see paras 39–40). 

The Court held that the director of the company was a “person involved” in the minimum standards breaches under Part 9A(external link)(external link) of the Act (see para 44). The Court ordered the employer to pay $19,200 and the director to pay $9,600 in penalties for the breaches (see para 86). In doing so, the Court considered the vulnerability of the migrant employee (see para 69) and that the employer knew the employee was working well over the number of hours he was being paid for (see para 64). 

Shah Enterprise NZ Ltd v Labour Inspector of Ministry of Business, Innovation and Employment [2022] NZEmpC 177 [PDF, 160 KB](external link)

Employment Relations Authority – Changing location of employment – Interpretation of collective agreement – Terms implied by custom and practice 

At issue was whether the employer could change the location of the employees’ employment without the agreement of the employees or the union. 

The employer was a railway operator. The employees were remote control operators (RCOs), responsible for rail shunting yard operations. The employees were union members. The employer and union were parties to a collective agreement. The employer employed two yard-operations employees in Balclutha. One of the two Balclutha based employees transferred to Picton, creating a vacancy. The employer proposed to employ the replacement as an RCO in Dunedin and roster the Dunedin RCOs to regularly travel to Balclutha. The union sought a determination from the Authority that the proposed roster breached the collective agreement and a term implied by custom and practice. 

The Authority determined the Dunedin based RCOs could not be required to work in Balclutha without their express agreement (see para 47). In making that determination, the Authority found:

  • Documentation such as position descriptions and letters of offer were inconclusive. Some indicated the employees may be required to work in other locations and others did not (see paras 10–12). Likewise, the provisions of the collective agreement were not definitive (see paras 13–21).
  • In order to imply terms by custom and practice, the Authority would have to find that the custom was certain, reasonable and not inconsistent with the express contract. The custom “must have acquired such notoriety that the parties must be taken as knowing of it and intended it should form part of the contract” (see para 25).
  • There was an implied term that the Dunedin based RCOs worked in Dunedin and Port Chalmers, including the mainline between those yards (see para 46). That geographical boundary was certain and reasonable (see paras 26–27). It was not inconsistent with any express terms in the documentation or collective agreement (see para 45).
  • The implied term could only be varied by agreement (see para 47). 

Rail and Maritime Transport Union Inc v KiwiRail Ltd [2022] NZERA 470 [PDF, 130 KB](external link)(external link)

October 2021

Employment Court – Application to reopen – Inducement to enter a Record of Settlement – Misrepresentation 

At issue was whether the plaintiffs were induced to enter into a Record of Settlement on the basis of the defendant’s misrepresentation and, if so, whether the plaintiffs were entitled to cancel the contract. 

The plaintiffs had two adult children with intellectual disabilities. Their children required full-time care.  It was difficult for the plaintiffs to care for their children. The Ministry of Health funded Access Community Health (Access) to provide additional carers to relieve the parents. The parents commenced a claim in the Employment Court (Court) seeking better support and the ability to train their children’s carers. The parties came to an agreement following a judicial settlement conference. The draft Record of Settlement contained the following clause (see para 15):

… the Ministry of Health will cover training costs for two weeks for Mrs Sushila Butt to train the carers once agreed upon as between Access and the Butts.

The representatives for each side had a one-minute telephone conversation. The defendant then removed that clause from the agreement, noting in a track change “Access tells us that additional funding isn’t required for training” (see para 21). The plaintiff’s solicitor believed from the combination of the conversation and the note that the clause was not needed because Access already had funding to pay the plaintiffs to train their children’s carers (see para 77). The defendant’s solicitor knew that Access would not pay, or even allow, the plaintiffs to train their children’s carers (see para 50). 

The Court found the plaintiffs had been induced to enter into the Record of Settlement by a misrepresentation (see para 91) for the following reasons: 

  • The combination of the telephone conversation, the defendant’s solicitor’s silence on Access’ position regarding training and the note on the amended agreement “painted an erroneous picture to the plaintiffs” (see para 87). It amounted to misrepresentation (see para 89).
  • The plaintiffs emphasised from the beginning of the proceedings that the training issue was important to them. But for the misrepresentation, the plaintiffs would not have signed the Record of Settlement (see para 90). 

Under s 37(external link)(external link) of the Contract and Commercial Law Act 2017, a party to a contract may cancel it if the effect of a misrepresentation was “substantially to reduce the benefit of the contract to the cancelling party”. The Court found the draft clause that was removed would have been beneficial to the plaintiffs in two ways (see para 110): 

  1. The plaintiffs would have benefitted from being paid to train the carers for two weeks.
  2. Arguably more importantly, the plaintiffs would have carers for their children that were trained to their satisfaction. 

The misrepresentation substantially reduced the benefit of the contract to the plaintiffs, and they were entitled to cancel the Record of Settlement (see paras 113–114). The plaintiffs were entitled to proceed with their claim (see para 118). 

Butt v Attorney-General [2022] NZEmpC 183 [PDF, 370KB](external link)(external link) 

Employment Court – Declaration of employment status – Uber drivers 

At issue was whether the plaintiff Uber drivers were “employees” of Uber under s 6(external link)(external link) of the Employment Relations Act 2000. 

Four Uber drivers sought declarations of employment status from the Employment Court (Court). The drivers worked providing Uber taxi rides and Uber Eats deliveries. Each of the plaintiff drivers gave evidence that in practice they acted as employees of Uber. 

The Court found that the “real nature of the relationship” between Uber and the plaintiff drivers was one of employment for the following reasons:   

  • Uber retained a significant level of control and subordination over the plaintiff drivers (see para 32). The plaintiff drivers had no control over the setting of fares for trips, which was solely determined by the App (see para 35). Their performance was “encouraged” and strictly monitored through a rating and disciplinary system, with the potential for deactivation from the App (see para 44).
  • The plaintiff drivers had “little to no opportunity to improve their economic position through professional or entrepreneurial skill”, so the ability to “grow their own business was virtually non-existent” (see para 46-47). They were not able to advertise for customers, nor were they able to increase profit by any means beyond working longer hours (see para 47, 49).
  • The degree “flexibility” and “choice” afforded to drivers in choosing their hours was largely illusory due to incentives and negative consequences for failing to maintain a high volume of rides and ratings (see para 55).
  • Flexibility is a feature of most modern employment relationships (casual employees also have no obligation to accept work) (see para 54).
  • The plaintiff drivers identified themselves as drivers for Uber, and part of the Uber business, when they logged onto the App and when picking up and delivering riders (see para 65-66).
  • The plaintiff drivers were provided with contracts on a take-it-or-leave-it basis (see para 76), with no realistic opportunity to negotiate the terms and conditions in which they were expected to work (see para 78). 

For the reasons above, the Court concluded that each of the plaintiff drivers were in an employment relationship when driving for the benefit of the Uber businesses (see para 82). 

The Court noted that the declarations made in respect of the four plaintiff drivers did not automatically extend to all Uber drivers. Employment status will continue to be determined on a case-by-case basis (see para 95). 

E tū Inc v Rasier Operations BV [2022] NZEmpC 192 [PDF, 480KB](external link)(external link) 

Employment Court – Minimum wage – Monthly commission – Method of calculation – Averaging –Improvement Notice 

At issue was whether the employer’s method of calculating wages complied with the Minimum Wage Act 1983 and relevant orders (Minimum Wage Act).  

The employees were salespeople who sold vehicles. They were paid an increasing rate of commission depending on how many vehicles they sold. The employees were paid a weekly advance payment which was deducted from their commission at the end of the month. The employees also earned bonuses and incentives.  

The employer’s calculated wages by (see para 33): 

  1. calculating the value of all commission, advances and bonus payments to the employee for each calendar month.
  2. evenly apportioning those payments to the calendar weeks.
  3. assessing whether the employees received at least the minimum wage for each hour worked in each week (or later, fortnight).
  4. topping up the wages of any employee who did not. 

After undertaking an investigation, the Labour Inspector found that the employer’s method of calculating the wages did not comply with the Minimum Wage Act. The Labour Inspector considered the method used averaging, which was impermissible (see para 35). The Labour Inspector issued the employer with an improvement notice. 

The Court found the employer’s method of calculation did comply with the Minimum Wage Act (see para 66). The Court held the method did not attempt to off-set an underpayment in one week (or fortnight) against earnings in another period, and therefore differed to impermissible averaging (see para 62). The Court found it allowed for the variable nature of the industry (see para 64). The Court amended the improvement notice (see para 81). 

Enterprise Motor Group (New Lynn) Ltd v Labour Inspector of the Ministry of Business, Innovation and Employment [2022] NZEmpC 194 [PDF, 270KB](external link)

Employment Relations Authority – Minimum employment standards breaches – Recovery of arrears 

At issue was whether the employer breached several minimum employment standards under the Employment Relations Act 2000 (ERA), the Holidays Act 2003 (HA), the Minimum Wage Act 1983 (MWA), the Wages Protection Act 1983 (WPA). 

The employee worked at a pizza making business from July 2012 to September 2020. The employee started his employment as a migrant on a sponsored work visa from the employer. The employee was not provided with an employment agreement. The employee claimed that he worked in excess of 50 hours per week but was only paid for 40-hour weeks. The employee also claimed that he was provided with no annual leave, paid sick leave or public holiday pay. 

The employee sought arrears of wages for unpaid hours worked, holiday pay and interest on such. The arrears were sought against the sole director and shareholder personally, after the company went into liquidation. The Employment Relations Authority (Authority) accepted that the director was an active party to the alleged breaches and liable to any arrears or penalties awarded. 

The Authority found that the employer was liable to several breaches of minimum employment standards, including (see paras 24–29, 35, 37, 43):

The Authority awarded the following against the director (see para 47–48): 

  • arrears of wages in the amount of $69,981 with interest
  • arrears of holiday pay in the amount of $28,153.14 with interest. 

Dhiman v Naanak Ltd (In liquidation) [2022] NZERA 510 [PDF, 60KB](external link)(external link)

November 2021

Court of Appeal – Jurisdiction – Employment Court – Jurisdiction to stay Employment Relations Authority costs

Court of Appeal – Jurisdiction – Employment Court – Security for costs

Court of Appeal – Statutory interpretation – Meaning of “legally aided”

At issue was:

  • Whether the Employment Court (the Court) erred in holding it had no jurisdiction to stay the awarding of costs against the employee by the Employment Relations Authority (Authority).
  • Whether the Court erred in awarding security for costs against the employee on the basis that it could do so because he was not legally aided.

The employee sought to challenge an Authority determination. The employee also sought a stay on costs against him in relation to the same proceedings. At the time the employee made the application for a stay, the Authority had not yet issued its costs determination.

In a counter-claim, the employer sought $10,000 from the employee for security for costs for the challenge to the Court.

The Court declined a stay because the employee had not challenged the Authority costs determination (which was yet to be issued) under s 179(external link)(external link) of the Employment Relations Act 2000 (the Act). In the alternative, the Court held it could not award a stay to prevent the Authority from issuing a costs determination, as the Court could not direct the Authority about its procedures (see para 5).

The Court awarded $10,000 security for costs against the employee. The Court considered it could award security for costs because the employee was not “legally aided” (see para 17). The employee had previously had an interim legal aid grant. The employee had withdrawn instructions from the barrister he obtained under that grant. At the time of the Court judgment, the employee was waiting for a replacement grant of legal aid. Legal Services approved a change of lawyer after the Court judgment was delivered.

The Court of Appeal found the Court erred in finding it had no jurisdiction to award a stay of costs (see paras 10–16). The Court of Appeal held that if the employee was seeking a stay of costs on the basis the substantive determination was incorrect, the employee did not have to challenge a costs determination under s 179(external link)(external link), before the Court could order a stay (see paras 14, 15).

The Court of Appeal held the Court erred in awarding security for costs against the employee on the basis it was allowed to do so because the employee was not legally aided. The Court of Appeal found the employee was legally aided. The Court of Appeal held the employee came within the meaning of “aided person” in the Legal Services Act 2011, ss 4(1)(external link)(external link) and 16(3)(external link)(external link) (see para 21).

Maheta v Skybus NZ Ltd (formerly Airbus Express Ltd) [2022] NZCA 516 [PDF, 216KB](external link)(external link)

Employment Court – COVID-19 – Unjustified dismissal – Non-compliance with vaccine mandate – Interim reinstatement

At issue was whether the employee should be awarded interim reinstatement, pending a hearing into his unjustified dismissal claim.

The employee was employed as a tug engineer in a port. Under the COVID-19 Public Health Response (Vaccinations) Order 2021(external link)(external link) (the vaccination order), the employee was required to be vaccinated to perform his role. The employee was dismissed for not complying with the vaccination order. 

Following his dismissal, the employee was involved in or wrote various anti-vaccination communications that were sent to the employer. The communications threatened the employer with criminal complaints, accused it of murder, demanded $100 million as settlement and demanded that it “[c]ease and desist all coercion to comply to the procurement and administration of the COVID-19 vaccination” (see para 12).

The employee sought interim reinstatement in the Authority, pending a hearing into his claim of unjustified dismissal. The employee sought reinstatement on the basis (see para 19):

(a) He was not a person covered by the vaccination order.

(b) He had valid exemptions from the vaccination.

(c) The employer had failed to properly consider any modifications to his role that would allow him to continue working without vaccination.

The Authority declined to order reinstatement. The employee appealed the determination in the Court. In the interim, the Government revoked the vaccination order.

The Court declined to order interim reinstatement, as it considered permanent reinstatement was not seriously arguable (see para 30). The Court took into account that:

  • Another person had been appointed to the role (see para 26).
  • The employee’s “extreme” conduct after the dismissal meant trust and confidence no longer existed (see paras 26–29).

The Court considered that the balance of convenience and overall justice also did not favour the employee; interim reinstatement would affect the person who had taken over the role and other employees against whom the employee had made “serious allegations and implied threats”; whereas the employee had had some work since his employment ended (see para 33, 34). The Court considered the employee also had a “relatively weak case for unjustifiable dismissal and his post-employment conduct [had] almost certainly cause irreparable harm to the relationship with the employer” (see para 35).

HLI v VMZ [2022] NZEmpC 201 [PDF, 189KB](external link)(external link)

Employment Relations Authority – Breach of confidentiality – Special damages – Costs of related High Court proceedings

In earlier proceedings, the employer pursued a claim in the High Court, against a former employee, for breach of confidentiality. At issue in this case was the quantum of special damages the Authority should award to cover the employer’s High Court costs.

The employer’s former employee retained and misused the employer’s confidential information, in breach of the employment agreement. To protect its business following the breach, the employer took action against the former employee in the Authority and High Court. The employer sought special damages to cover its full costs in the High Court.

The Authority ordered the former employee to pay $93,120.97 (with interest) in special damages to cover the “legal costs actually, reasonably and appropriately incurred” in the High Court proceedings (see paras 61, 62, 65). In awarding special damages that fully covered the High Court costs, the Authority relied on the Court of Appeal decision Binnie v Pacific Health Ltd [2002] 1 ERNZ 438 (CA), para 18, which held that with special damages, costs “would be recoverable in full” (see para 60).

Key Industries Ltd v Perrin [2022] NZERA 573 [PDF, 43KB](external link)(external link)

Employment Court – Unjustified disadvantage – Individual employment agreement – Non-compliant availability provision

At issue was whether the employee was unjustifiably disadvantaged by the existence of availability provisions in his employment agreement that did not comply with s 67D(3)(b)(external link)(external link) of the Act. 

The employee was employed in a seasonal position at a meat-processing plant. The employee’s individual employment agreement required the employee to work extra hours as required, but did not include any compensation provision, as required by s 67D(3)(b)(external link)(external link) of the Act. The employer subsequently offered to employ the employee under an employment agreement that included a 1.5 per cent pay rise, as compensation for availability. The employee declined the offer. The employee considered a 1.5 per cent rise did not amount to compensation for availability when it worked out at “a little over 14 dollars a week”. The employee claimed he was unjustifiably disadvantaged by the existence of a non-compliant availability provision in his employment agreement. The employer claimed he was not disadvantaged because the employer had never enforced the provision against him. The employer had not needed to enforce the provision, because the employee had not refused to work overtime.

The Authority found the availability provisions in the employment agreement breached s 67D(3)(b)(external link)(external link) of the Act. However, the Authority found the employee was not disadvantaged by the breach, because the employer had not enforced the availability provision. The employee challenged that finding in the Court.

The Court found the employee was disadvantaged by the inclusion of the availability provisions in the employment agreement, when the employer had not provided consideration for the availability (see paras 49, 91). The Court directed the parties to try to determine the amount of compensation themselves. The Court held that if the parties were not able to agree, the Court had jurisdiction to award an amount of compensation under s 123(1)(c)(ii)(external link)(external link) of the Act (see para 86).

Stewart v AFFCO New Zealand Ltd [2022] NZEmpC 200 [PDF, 309KB](external link)(external link)

Employment Relations Authority – Contractual interpretation – Provision providing indemnity against cost of criminal proceedings – Discharge without conviction

At issue was whether the employer should cover the employee’s legal costs when he was found guilty of a crime, but was discharged without conviction.

The collective agreement between the union and the employer stated that the employer would pay the legal fees of any driver who “successfully defends” charges against them. An employee was found guilty of operating a vehicle carelessly causing injury, but was discharged without conviction. The employer refused to cover the employee’s legal costs because the employee was found guilty. The union considered the focus was on the outcome for the employee, and not having a conviction equated to successfully defending a charge.

The Authority determined that what was important was the finding of guilt or fault, not the sentencing outcome:

[29] If, in the course of receiving a discharge without conviction, it is accepted or found an offence occurred, then it follows the charges cannot have been successfully defended, regardless of the sentencing outcome.

The Authority preferred the employer’s interpretation of the indemnity provision:

[30] I prefer [the employer]’s interpretation of clause 24, that for the purposes of an employer reimbursing legal costs incurred by an employee in relation to criminal charges connected with that employee’s work, that the meaning of to “successfully defend” does not include a discharge without conviction.

New Zealand Tramways and Public Passenger Transport Employees Union v Wellington City Transport Ltd [2022] NZERA 629 [PDF 222KB](external link)

Employment Relations Authority – Unjustified disadvantage – Constructive dismissal – Bullying – Failure to take reasonable steps to prevent harm 

At issue was whether the employer unjustifiably constructively dismissed the employee when it failed to take action to protect the employee from harm from bullying.

The employee was employed in a district council as the manager of the Environmental Services Unit (ESU). The employee had an executive assistant (EA) who reported to her. The employee’s manager and the EA had a close relationship going back many years. The effect of the relationship was that they would discuss operational matters to do with the ESU and effectively bypass and undermine the employee in her role as ESU manager.

The employee had numerous discussions with Human Resources (HR) about the pair’s behaviour, over more than a year. The employee told them she was feeling harassed by her EA and not supported by her manager; that she was stressed and tired of the lies and manipulation; that her EA would constantly report to her manager behind her back; that there was no respect and that she was being ignored and shut out.

HR repeatedly responded by advising her to discuss her concerns with her manager and to performance manage her EA.  The employee’s attempts to performance manage the EA failed. HR escalated the employee’s concerns to the Chief Executive.

The Chief Executive discussed with the employee’s manager the possibility of him moving into a special project role or another such arrangement, pending his retirement; in the meantime, the manager remained in his existing role. The Chief Executive did not follow up with the employee how she was coping or if anything else was required; he considered the matter was resolved with the prospect of the manager moving on at some time.

The employee’s manager worked another two months in his role before resigning with three months’ notice. The employee continued to have the same problems with her manager and the EA while the manager worked out his notice. The employee continued to raise issues with HR without any result.

Nearly six months after raising matters with the Chief Executive, the employee resigned, saying she was feeling strained and harassed by her EA ignoring her; and had become upset and overwhelmed with her manager undermining her and escalating tensions with ESU staff. The employee claimed she was unjustifiably constructively dismissed, as the employer had breached its duty to provide a safe workplace.

The Authority accepted the employee was unjustifiably constructively dismissed. The Authority determined that the employer “failed to meet its duty to provide a safe workplace and in the circumstances, this was sufficiently serious to warrant [the employee] resigning” (see para 41). The Authority found the employer’s “response to the foreseeable and actual bullying…was wholly inadequate” (see para 40). The Authority stated that the employer (see para 37):

responded to the complaints and the knowledge it had in addition to those complaints by continually expecting [the employee] to manage her own relationships with [the pair]. This was wholly inadequate. It was clear that this was not working and more was required both for [the employee] and for the ESU team.

The Authority said the bullying had been foreseeable as witnesses gave evidence of a previous ESU manager having a similar experience (see para 36). The Authority took into account that the employer had taken no action in relation to the EA; the Authority considered that even with the employee’s manager resigning, problems with the EA would have continued (see paras 45, 47).

The Authority found that the employer should have initiated an independent investigation and then taken appropriate action based on the outcome. The Authority considered the employer knew that, but chose not to take those steps because of the long service and pending retirement of the employee’s manager (see para 39).

The Authority ordered the employer to pay (see para 72):

Quinton-Boundy v Waimakariri District Council [2022] NZERA 616 [PDF 59KB](external link)

December 2021

Employment Court – Personal grievance – Serious misconduct – Unjustified dismissal – Remedies

At issue was:

  • Whether the employee was unjustifiably dismissed for serious misconduct.
  • If so, what remedies should be awarded.

The employee worked as a residential youth worker at a secure residence for children and young persons.

The employee was filmed on CCTV appearing to have an altercation with a young person in their room. The CCTV recorded the incident without sound. The shift leader on duty at the time witnessed part of the incident.

The CCTV captured an image of the employee “briefly closing his hand and slightly pulling his arm back” (the hand image). The employer suspended the employee after reviewing the CCTV footage. The employer raised six allegations of potential serious misconduct and invited the employee to a disciplinary meeting. The employer concluded the employee had “formed a fist and was preparing to punch the young person”. The employer summarily dismissed the employee after finding most of the allegations were substantiated.

The employee raised a personal grievance for unjustified dismissal. The Employment Relations Authority (Authority) dismissed the claim. The employee challenged the determination in the Employment Court (Court).

The Court found the employee was unjustifiably dismissed. The Court took into account that

  • The employer relied “almost exclusively” on the CCTV footage and drew inferences from it without adequately taking into account its deficiencies (see paras 53, 59).
  • There was no basis for the employer to prefer its own interpretation of the CCTV footage over the employee’s explanations and the shift leader’s evidence (see para 78).
  • The employer never interviewed the young person concerned during the investigation (see para 57).
  • The employer rejected the employee’s explanations as “untruthful” when they were considered “plausible” (see para 58). The hand image, which appeared briefly on CCTV footage, only “lasted less than one second”. The employer had not fairly assessed the employee’s explanation that it was a reflex (see para 66).
  • The employee was justified in restraining the young person according to the relevant regulations (see para 75).

The Court held that the employee was unjustifiably dismissed because the employer’s decision to summarily dismiss the employee, viewed objectively, was not what a fair and reasonable employer could have done in all the circumstances at the time of the dismissal (see paras 48, 82). The financial loss and harm the employee suffered, which “flowed entirely from the employer’s decision of dismissal”, were “significant” (see paras 94, 95, 98).

The Court awarded the employee the following remedies (see paras 91, 95, 109):

  • reinstatement of the employee to his former position or one no less advantageous to him
  • lost remuneration from the date of the dismissal until the date of the judgment
  • $30,000 in compensation for humiliation and injury to feelings.

Baillie v Chief Executive of Oranga Tamariki  Ministry for Children [2022] NZEmpC 233 [PDF, 280KB](external link)(external link)

Employment Court – Breaches of minimum employment standards – Penalties – Banning orders

At issue was: 

  • Whether the Court should impose penalties on the four employer companies (the employers) and their director for breaches of minimum employment standards, and if so, for what amount. 
  • Whether the Court should impose banning orders against the employers and the director, and if so, for how long. 

The four employers operated multiple liquor stores in Bay of Plenty. The employers all had the same director. A Labour Inspector investigation found that the employers had committed numerous breaches of minimum employment standards against four employees during a four-year period. The employers breached the Employment Relations Act (Act), the Holidays Act 2003, the Minimum Wages Act 1983 and the Wages Protection Act 1983. The breaches included: 

  • failing to pay the employees their minimum wages for all hours worked
  • seeking unlawful premiums
  • breaching employment record keeping requirements
  • failing to consistently provide statutory leave and holiday entitlements
  • failing to pay the statutory entitlements for working on public holidays
  • failing to provide compliant individual employment agreements 

In an earlier decision, the Court made declarations of breaches of minimum employment entitlements against the employers and the director:

Labour Inspector v Samra Holdings Ltd t/a Te Puna Liquor Centre [2021] NZEmpC 149 [PDF, 210KB](external link)(external link)

The employers had since paid all the arrears owed to the employees. 

In this decision, the Court considered whether to impose penalties and banning orders against the employers and the directors, for the same breaches. The Labour Inspector sought total penalties of approximately $3.2 million and banning orders against the employer and the director. 

The Court held that the penalties against the employers and the director were warranted (see para 19). In determining the final amount, the Court explained: 

  • The case involved serious and sustained breaches of minimum employment standards over a period of four years. The evidence showed the breaches were “the result of a deliberate course of conduct” (see paras 108, 257).
  • The case involved “systemic and deliberate exploitation of migrant workers”. The director “had showed no remorse or insight into his actions” (see paras 120, 254).
  • The payment of arrears “was not evidence of contrition” (see para 119).
  • The employer “obtained significant commercial benefit from their unlawful conduct and caused material loss and harm to the employees involved” (see paras 257).
  • The record keeping failures “significantly contributed to the financial disadvantage suffered by the employees” (see para 115).
  • Imposing banning orders was “appropriate” in light of the severity of the breaches and the risk of repetition. Prospective employees should be protected from the employers and the director (see para 254). 

The Court imposed: 

  • $1,544,075.00 in penalties on the employers and the director (see paras 220, 259)
  • two-year banning orders against the employers (see paras 256, 261)
  • a three-year banning order against the director (see paras 256, 261). 

Labour Inspector v Samra Holdings Ltd t/a Te Puna Liquor Centre [2022] NZEmpC 234 [PDF, 685KB](external link)

Employment Relations Authority – Bonus payment – Wage increase – Arrears – Remedies

At issue was: 

  • Whether the employer owed a bonus payment and wage increase to the employee.
  • If so, what remedies should be awarded to the employee. 

The employer had two directors, K and L. K took care of “governance”; L had the responsibility for day-to-day operations, including tasks relating to staffing, customers and contractors. The employee was hired by and reported to L.

L wrote to the employee informing him of a $40,000 bonus and a 5% pay rise as a “cost-of-living raise”. The letter had the company letterhead and L signed the letter as “Managing Director”.

K disagreed with the bonus and pay rise. K disputed L’s ability to authorise them without gaining K’s prior consent. K claimed the company constitution required all significant payments to be approved by both directors. Since K did not agree to the bonus award and wage increase, L could not commit to these payments alone. The employer never paid the bonus or the wage increase.

The employee lodged a claim in the Authority and sought: 

  • payment of the bonus and wage increase
  • interest on the amounts owing
  • compensation.

The Authority found that the employer entered into “a binding promise” to the employee on the payments of the bonus and pay rise, as set out explicitly in the letter signed by L, on the company letterhead (see paras 24, 32). The Authority took into account that:

  • the employee accepted and acted on the promises and performed additional duties and made an extra effort in response to them. Such promises amounted to a “binding contractual agreement of the employer in the employment relationship, which had the special characteristics of being a fiduciary relationship, and with the mutual statutory obligations of good faith” (see para 32).
  • The employer could not automatically avoid its obligations by arguing that the promise was entered in a manner that did not comply with the company constitution or its own internal requirements (see paras 31, 33, 34).
  • The employee “had no actual knowledge” of the specific provision which K relied on to prevent L from properly awarding her bonus and pay rise (see para 36).
  • K also never communicated his views to the employee that L was not “authorised” to make decisions around staff payments without his consent (see para 39).

The Authority concluded that the employer owed the employee the bonus payment and the 5% wage increase. The Authority ordered the employer to pay the employee the $40,000 bonus payment, wage arrears, interest, and $5,000 compensation for hurt and humiliation (see paras 42, 56).

Ong v Comsol (Computer Solutions) Ltd [2022] NZERA 667 [PDF, 285KB](external link)(external link) 

Employment Relations Authority – Redundancies – Breaches of collective employment agreement – Compliance order

At issue was:

  • Whether the employer breached Part 10 of the Collective Employment Agreement (CEA) when it restructured the organisation. 
  • If so, whether the Authority should issue a compliance order requiring the employer to remedy the breaches.

The employer, a university, planned to undertake a significant organisational restructuring. The employer concluded the change would affect some 170 academic positions.  Within a week, the employer made three calls for voluntary severance. The first call was made to all employees whose positions were within the scope of proposed changes, without referencing their names and positions. The second call did not identify specific positions. The third call was made to the named employees whose positions were identified as potentially surplus to requirements. The three calls resulted in 80 positions being accepted for voluntary severance. The positions of those employees who either did not apply for voluntary severance, or whose applications for severance were not accepted, were to be disestablished. The employer then sent out severance letters, terminating the affected employees’ employment with two-month’s notice.

The union contended that the employer breached the relevant provisions under Part 10 of the CEA. Part 10 of the CEA set out the process that the employer must follow in any organisational change resulting in staff surpluses. Clause 10.3.2(b) required the employer to determine the process and/or criteria for deciding the ‘specific positions’ to be declared for surplus. Clause 10.3.3(i) required the employer to call for voluntary severance from the potentially affected employees “once specific positions have been identified as surplus”. The union alleged that the employer failed to comply with these provisions. The union applied to the Authority for a compliance order.

The Authority concluded the employer breached clauses 10.3.2(b) and 10.3.3(i) (para 31, 39). It found that the employer should have established and applied selection criteria to identify “specific positions” that were surplus; and the names of the employees holding those positions (paras 29, 30). Once the employer identified the relevant employees, those employees should have been given the opportunity to apply for voluntary severance. However, the employer offered voluntary severance before identifying particular surplus positions and before individual employees knew they were selected for severance (see para 33). In deciding to call for voluntary severance without first identifying potentially affected employees, the employer had breached Part 10 of the CEA (see para 39).

The Authority ordered the employer to suspend or withdraw the termination notice (see para 45). The Authority gave the parties three days to consider the determination and advise whether a compliance order was required (see para 55).

Tertiary Education Union v Vice Chancellor of Auckland University of Technology [2022] NZERA 676 [PDF, 50KB](external link)(external link)

Three days later, the Authority issued a compliance order to require the employer to remedy the breaches.

Tertiary Education Union v Vice Chancellor of Auckland University of Technology [2022] NZERA 690 [PDF, 485KB](external link)(external link)

Employment Relations Authority – Personal grievance – Unjustified disadvantage – Unjustified dismissal – Remedies

At issue was:

  • Whether the employer unjustifiably dismissed the employee for failing to comply with a Covid Vaccination Certificate(external link)(external link) (CVC mandate) and the employer’s vaccination policy.
  • Whether the employer disadvantaged the employee by failing to keep the employee safe at work.
  • If so, what remedies should be awarded.

The employee worked as the Director of Golf for a golf club. The role included working in the employer’s retail shop.

The employer met with workers and proposed implementing a “no jab, no play” policy. The policy required both staff and members of the club to have full COVID-19 vaccinations to access the club premises.

The employee completed a WorkSafe NZ COVID-19 assessment at the employer’s request. While the employee rated his risk as low/medium, the employer rated him as high risk. The employee wrote to the employer to express concerns about the COVID-19 vaccination and asked the employer to revoke the vaccination request.

The employer replied to the employee reiterating the requirement for full vaccination to access the employer’s pro shop and club house. The employer required the employee to show evidence of full vaccination by Christmas Day, or his employment would be terminated. The employer also stated that redeployment was unlikely because the vaccination policy applied to all staff in all positions.

The employer later wrote to the employee again saying that due to the rolling out of the CVC mandate, he would receive four weeks’ notice of dismissal if he remained unvaccinated by a specific date. As the employee did not comply with that notice, the employer gave the employee the four-week notice for dismissal for failing to comply with the vaccination policy.

A week later, the employer sent another letter to the employee dismissing him with notice. The letter explained there had been a change in the CVC mandate, which meant the employee was no longer required to be vaccinated. Despite this, the employer stated it was keeping its vaccination policy based on a survey of members and its own risk assessment.

The employee raised a personal grievance for unjustified dismissal and disadvantage with the employer.

The Authority concluded the employee was unjustifiably dismissed (see para 45). The Authority found that the employer had not discharged the statutory requirements to give reasonable written notice of the specified date for vaccination, as set out in Clause 3, Schedule 3A of the Employment Relations Act 2000(external link)(external link) (paras 41–44).

The Authority awarded the employee two-month lost remuneration and $15,000 in compensation (see para 52).

Harwood v Whangamata Golf Club Inc [2022] NZERA 693 [PDF, 2.4MB](external link)(external link)

  • Published:
  • Last modified:
  • Written for: Everyone
  • Share this page:
  • Print this page: