Employment case notes (ET 109)

Khan v Uno Design Ltd—ERA, Auckland, December 2005

The Employment Relations Authority did not uphold a woman’s claim for unpaid salary and expenses because it determined she was not employed by the company as an employee.

The woman had worked for the company since 2001, but in 2002 she entered into an agreement with the company’s directors whereby she would work for one year without remuneration, in exchange for a share transfer of five percent of shares from each of the directors’ holdings. In addition, it was agreed she would become a director.

As agreed, the woman worked for one year without remuneration. In 2003 she sought to acquire the promised shares, but the shares were never transferred to her. She was then paid wages until her eventual resignation later that year. The woman then made a formal demand for unpaid wages because the agreement to transfer the shares to her was not honoured.

The authority determined the woman was not employed by the company as an employee, rather she was involved with the company as a de facto director. For this reason, the woman was not entitled to recover arrears of wages and other expenses. No formal orders were issued in relation to this.

But the authority also determined the woman had met her obligations under the agreement and continued to remain entitled to a shareholding in the company. Her remedies for this lay elsewhere. The parties were invited to resolve the matter of costs themselves.

Meat & Related Trades Workers Union of Aotearoa v Progressive Meats—ERA, Wellington, December 2005

A dispute between a meat processing company and its workers’ union, about the interpretation of the Holidays Act in relation to provisions in their collective employment agreement, led to an Employment Relations Authority determination on the matter.

The company argued that the employees of certain departments would not have worked on Queen’s Birthday 2004, and were not entitled to be paid the relevant daily rate of pay, because of the seasonal nature of their work. These employees were paid the non-production rate of pay instead of the relevant daily rate of pay, which the union considered they should have received.

A decision on the meaning of the words ‘would otherwise be a working day for the employee’ was necessary before any progress could be made in the dispute. The union argued that all the criteria in s12(3) of the Holidays Act had to be taken into account when deciding what the term in question means. But the company argued the matter rested on the interpretation of the Act.

The authority agreed with the union. It found it was only necessary to establish that the day of the week in question would normally be a working day for the provision under the Act to apply, even if no production was planned for that day.

This meant the workers were entitled to the relevant daily rate of pay. However, the authority also found there were different circumstances and rates for different workers, and this issue needed to be resolved in order to end the problem.

Butcher v Presbyterian Support Central—ERA, Wellington, December 2005

An Employment Relations Authority determination found against an employee who claimed to have been unjustifiably disadvantaged, in her employment, by way of a unilateral suspension.

The employee worked for PSC, a non-profit charitable trust, as a caregiver at a residential facility for elderly people which the trust operated. Over the course of her employment, there had been several complaints from other staff members about the employee’s behaviour towards them.

However, the employee’s suspension related to one particular incident in which her manager sent her home for health and safety reasons, after serious allegations were made about her by another staff member. The employee’s advocate filed a personal grievance several days later.

While the employee continued to work for the trust, the parties were unable to settle their employment relationship problem. The employee claimed the disciplinary process used was unfair and that she was disadvantaged and humiliated as a result. The trust accepted the suspension was not strictly in accordance with its procedures, but argued the action was reasonable in the circumstances.

The authority agreed with the trust and determined their actions were not unjustified. It also determined the employee had not been damaged to an extent where monetary compensation was necessary, and had no personal grievance against the trust. Costs were reserved.

Bright v Eastern Equities Corporation Ltd—ERA, Auckland, December 2005

An employee’s claim that his dismissal was procedurally unfair and substantively unjustified was upheld by an Employment Relations Authority determination.

The employee was dismissed for poor performance after a series of meetings over the six months prior to his dismissal. The company claimed the employee had not managed to achieve the standard required of a branch manager, although he was told what was required of him and given a reasonable period of time in which to improve. Unfortunately, he did not and dismissal was unable to be averted.

However, the employee disputed his performance was inadequate. He also said it was not made clear to him what improvements were required, that he was not given support and training, and that he was not warned his job was in jeopardy.

While the authority accepted the company had developed genuine concerns about the employee’s performance, it determined the employee had not been properly informed of his employer’s dissatisfaction with his performance at any stage. It also determined the employee was given no timeframe for his performance to improve.

Further, the authority determined no proper disciplinary process had been embarked on, a fair process was not undertaken, and the employee was given no opportunity to address the company’s concerns.

Overall, the authority found in favour of the employee, and ordered the company to pay him $5000 compensation for hurt and humiliation and $2000 for gross lost remuneration.

Joseph v Lakes District Health Board— Employment Court, Auckland, November 2005

The Employment Court upheld an Employment Relations Authority determination dismissing an employee’s claim that his sick leave pay had been less than he was entitled to, and had also been unfairly discontinued.

As a result of ill health the employee, who was employed by the board as a specialist anaesthetist, was unable to work and on sick leave for 23 weeks from August 2002 till February 2003. During most of this leave the employee was paid, but he believed he was paid less than he should have been. In mid January 2003 his sick pay was discontinued, which the employee believes the board was not entitled to do.

Whether the employee received the correct rate of pay during his sick leave came down to the issue of “on call” payments, which the pay the employee received did not include. The employee claimed such payments were part of his base salary, while the board claimed they were not.

A further issue was the ceasing of the employee’s sick leave pay. The board claimed it was entitled to stop payment because his entitlement to ‘reasonable leave’ had run out. The employee disagreed.

Judge Couch found the employee’s collective agreement stated in clear terms that anaesthetists should only be paid for “on call” work which was actually done. Because he performed no “on call” work while on sick leave, he was not entitled to any payment for it. For this reason, the judge found the sick leave pay received was the correct amount.

He also found the overall process adopted and followed by the board, in deciding whether to continue sick leave payment to the employee, was fair and appropriate. Further, the judge found it was reasonable for the board to discontinue the employee’s sick pay.

Judge Couch invited the parties to agree on costs.

—Selected and written
by Miriam Bell

Previous Employment Case Notes

Issue 160
Issue 159
Issue 158
Issue 157
Issue 156
Issue 155
Issue 154
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Issue 152
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Issue 149
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