Employment case notes (ET 115)

Scott v Quinns Fashions Ltd—ERA, Christchurch, August 2006

An employee’s claim she had been unjustifiably disadvantaged during her employment and had then been unjustifiably constructively dismissed was not upheld by the Employment Relations Authority.

Employed as a sales advisor, the woman worked for the company from August 2003 until February 2005. She resigned in January 2005 and, after working out her period of notice, moved on to another job. However, she then complained that, during her employment, she had been treated unfairly by one of her employers. She also claimed a provision of her employment agreement had been breached because she was required to work seven days in a row on a number of occasions.

The woman’s former employers denied that she had been unfairly treated while employed by the company, or that she had been unjustifiably constructively dismissed. They said the woman resigned of her own accord and left on amicable terms. They also denied breaching any of the terms of her employment agreement.

The authority found the evidence did not support any breach of contract by the woman’s employers in rostering her for seven days in a row on occasion. It also found there had been no breach of duty to provide the woman with a safe workplace by requiring her to work excessive hours.

Further, the authority concluded there had been no actions which could be seen as unreasonable or oppressive by the woman’s accused employer. There was no breach of duty of sufficient seriousness to make it reasonably foreseeable, by the employers, that the woman would not want to continue working for them.

While the authority found the woman had been unhappy during her employment, it determined she needed something more than unhappiness to establish a dismissal rather than a resignation offered at her own initiative. Therefore, the woman had not been unjustifiably constructively dismissed. Costs were reserved.

New Zealand Meatworkers’ Union Inc v Alliance Group Ltd—Employment Court, Christchurch, August 2006

Consideration of whether, under the Holidays Act 2003, meat workers who work on a seasonal basis resume work as new employees or as continuing employees ended with an Employment Court decision in favour of the company.

The company owns and operates seven meat works around New Zealand. Although different plants process different products, for a number of reasons most only operate for part of the year. The period when the plant is not operating is known as the ‘off season’. Even when the plant is in operation, the volume of work varies and the ‘season’ start and finish dates for employees can vary extensively.

Most of the meat workers are employed by the plaintiff union under a collective employment agreement which explicitly recognises the industry as a seasonal one. An important aspect of the agreement is the ‘seniority system’. This system ranks the workers in order of their initial start date at the department or plant. The higher the seniority, the longer the season, and the greater a worker’s earnings will be. Under this system, workers are also entitled to long service leave based on their years of ‘continuous service’ with the company. ‘Continuous service’ is defined as a seasonal worker at least two months in each season.

The Holidays Act requires that employees be employed continuously be the same employer for a period of six months before they become entitled to the benefit of the paid sick leave and bereavement leave provisions of the Act. The meat-workers’ collective agreement provides that sick leave be available immediately upon employment, while bereavement leave is available after one month. Crucially, the difference between the Act and the collective agreement is the rate of pay for leave. Under the Act, meat-workers would be entitled to more than the fixed rate of $10.47 which they are entitled to under their collective agreement.

Initially, the company treated the employment of the meat-workers as continuing during the off season for the purposes of qualifying for sick leave and bereavement leave under the Act. However, the company decided to change that practice because it thought the period between the lay-off in one season and the start of work in the next should not be taken into account as ‘current continuous employment’ for the purposes of the Act.

The union’s case was that the employment relationship continued through the seasonal lay-offs. This means returning employees would not be considered new employees; rather there would have been a temporary hiatus in their continuing employment relationship with the company. The company’s case was that a seasonal worker’s employment finishes at the end of the season and is not continuous from season to season.

The full court found that, overall, the Act and the case law cited favoured the company’s position, and that, for all relevant purposes, the employment of union meat-workers employed by the company should be regarded as having been terminated when they are laid off for the off season.

The judges concluded the meat-workers who are laid for seasonally are not in ‘current continuous employment’ during the seasonal lay-off, and have to re-establish their right to sick leave and bereavement leave under the Act by being continuously employed for over six months. Until that time they are entitled only to the sick leave and bereavement leave provided by their collective agreement.

Costs were reserved.

Glen v Modern Teaching Aids (NZ) Ltd—ERA, Christchurch, August 2006

Clumsy handling of an employee’s redundancy resulted in an Employment Relations Authority decision that the man had been unjustifiably dismissed by the company.

The man worked for the company from December 2004 until May 2005. During this time he was on a six month probationary period. This meant that during the probationary time the notice period required was just one week, whereas after the completion of the probationary period it was one month.

Early in May the man asked his manager to provide a letter which would assist him in securing the finance required for him to buy his first home. His manager provided an unsigned letter which confirmed the man’s employment status. It also stated he had “successfully concluded his employment probationary period” and was now a permanent fulltime employee.

Unfortunately, later that month, the company directors decided to disestablish the man’s role as the position was considered uneconomic. A director rang the employee and told him his employment was being terminated with immediate effect.

However, the man claimed he should have received more notice as he was no longer a probationary employee, that he was not offered any alternatives to the redundancy, and that he had already spent money on items like a computer in order to carry out company work. The company said the man was not a permanent employee and that he should not have spent the money unauthorised.

The authority determined that the man had reasonably believed he was a permanent employee, and should have received one month’s notice. This constituted a breach of due process, and meant the man did suffer an unjustified dismissal.

The authority awarded the man $5,812.50 compensation and $2,537.54 for reimbursement of lost wages. But it determined he should not be compensated for the loss of his job, and nor should the company be penalised. It also determined the man was not entitled to additional payment for the money he had spent on items like the computer.

Carson v Familton Holdings Ltd—ERA, Christchurch, August 2006

An employee’s claim that she had been constructively dismissed by the company, and therefore had a personal grievance, was upheld by the Employment Relations Authority.

The woman began work, as a part-time cook, at one of the company’s cafes in January 2005. In early February, the woman had a disagreement with one of the waiting staff. She and her employer were then involved in a series of misunderstandings, including a dispute over which of the company’s cafes she was meant to work in.

Shortly afterwards, the woman was told there was no more work for her—unless she worked in a particular one of the cafes. In early March she was told her hours were being reduced because of a downturn in business.

The employee was also told that, should she complain, it would be her employer’s word against hers and it was their word that would be believed. Feeling she could no longer trust her employer, the woman resigned.
The woman’s employer offered three different explanations for the chain of events leading to her resignation. The company also later denied it had ever employed the woman.

However, the authority determined the woman had been employed by the company and that her employers had breached their statutory obligation of good faith behaviour. It also determined that it was these breaches which had led the woman to resign, and that she had not contributed to the situation.

For these reasons, the authority found the woman had been constructively dismissed and had a valid personal grievance against the company. She was awarded compensation of $1850 for lost remuneration and $5000 for distress. Costs were reserved.

Corbett v Bendon Ltd—ERA, Auckland, May 2006

The unjustified dismissal claims of a saleswoman, who was developing her own lingerie line while working for Bendon, were rejected by the Employment Relations Authority.

Six weeks after the woman started work she was featured in a community newspaper article, as a lingerie designer, about participants in a ‘Big Break’ programme. The article also included details of the woman’s fledgling lingerie company, Toushe. Further research substantiated the article.

Bendon management considered these activities to constitute a conflict of interest and a breach of the woman’s employment agreement. That breach of duty was considered serious enough to justify summary dismissal.

However, the woman claimed there was no conflict of interest as Toushe was not operating or trading as an established business. She said there were no funds, no manufacturers, retailers, suppliers, or distributors for her creations and, therefore, no ‘business’ in existence and in competition with Bendon.

The authority found the woman’s lingerie design activity did constitute ‘business activity’ and that it was reasonable for Bendon to conclude this activity compromised her ability to discharge her responsibilities as an employee. It also found that the potential for damage to the company existed and that was sufficient to constitute a breach of duty.

A further claim, by the woman, that her dismissal had been procedurally unjustified was also not upheld by the authority as it found a substantially fair process had been followed.

The parties involved were ordered to consult on the issue of costs.

—Selected and written
by Miriam Bell

Previous Employment Case Notes

Issue 160
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