Employment case notes (ET 117)

McAlister v Air New Zealand Ltd—Employment Court, Auckland, November 2006

In a landmark decision by the Employment Court, Air New Zealand’s policy preventing an employee, who had reached the age of 60, from holding a senior pilot position was found to be discriminatory and unlawful.

The employee had worked for Air New Zealand for 35 years and, in that time, had attained the rank of captain of Boeing 747-400 fleet (B747) as pilot-in-command (PIC). He was also a standards captain undertaking flight instruction duties.

When the employee turned 60, Air New Zealand removed him from his flight instructor position, the rank of captain and, instead, made him a first officer on B747 planes. The airline’s reason for this was that no pilot of 60 or over was able to hold the employee’s positions while the main operation of 747 and 767 planes was to or through countries which have adopted ICAO and US FAA regulations about the age of PICs. Although New Zealand has elected not to adopt the ICAO regulation relating to age, it does fly into or through the airspace of many countries which have. The US FAA regulation prohibits Air New Zealand from using a PIC over 60 in the USA’s territorial airspace.

The employee protested this decision and offered three suggestions as to how his age could be accommodated by the airline, so that the airline’s international regulations were not breached, while allowing him enough long haul flights to meet his line and flying duties. However, Air New Zealand—although it accepted the employee’s abilities had not changed since he turned 60—declined to alter its position.

As a result, the employee brought a personal grievance against the airline, alleging that the airline had discriminated against him by reason of his age, and that the airline had acted unjustifiably to his disadvantage. Air New Zealand denied these allegations and said its actions had been determined by its international obligations.

Judge Coral Shaw found the application of the airline’s age policy was based on a prohibited ground of discrimination (age), and that this subjected the employee to detriment under the Employment Relations Act. The exception of genuine occupational qualification did not apply, meaning Air New Zealand had discriminated against the employee because of his age—as opposed to doing so because of its international obligations.

The airline had not afforded the employee the same terms of employment available to other employees, said Judge Shaw. While the genuine occupational qualification exception may apply to some discriminatory acts, Air New Zealand had failed to establish that age is a genuine occupation requirement for the positions of pilot and/or flight instructor. For this reason, the exception did not apply to the employee.

Judge Shaw also found the airline had acted unjustifiably towards the employee by applying a fixed policy to him which was discriminatory and had affected his employment to his disadvantage.

In the absence of any agreement between the parties, issues relating to costs, damages or reinstatement were to be dealt with in a further hearing of the court.

Anderson v CanWest RadioWorks Ltd—ERA, Auckland, November 2006

The Employment Relations Authority resolved a disagreement over what exactly the employment relationship of a man and the media company he had been working for was, in favour of the man.

When the man received his work permit and immigrated to New Zealand, he had entered into a written agreement with the company in which he was described as an independent contractor. He worked for the company for about 18 months during which time he worked full-time and exclusively for them, was fully integrated into the organisation, and generally treated like any other staff member.

After he left the company in December 2005, ACC attempted to recover levies from the man on the grounds that he was a self-employed contractor. However, the man disputed that he was self-employed and asked the authority for a determination on his employment status.

The authority was provided with evidence from the company that proved, that despite the wording in his written agreement, the man had been an employee of the company. As a result, the authority found the real nature of the relationship between the parties involved was one of employment, and that meant the man did not have to bear the tax responsibilities of a self-employed person in relation to the work he performed for the company.

Ayers v Advertising Works Ogilvy Ltd—ERA, Auckland, October 2006

In a case of conflicting interpretations over whether or not an employee had resigned of his own accord, the Employment Relations Authority found in favour of the employee.

The employee had worked for the company for six years, and had been in a well-remunerated, senior creative director position for just over one year. In April 2006, the employee attended a meeting with the company’s managing director during which he was informed the company had purchased another advertising agency. As the employee knew the people filling the new agency’s senior roles were viewed as ‘creative gurus’, he came to the conclusion his role was in jeopardy.

However, his managing director claimed the employee would not be losing his job and offered him three options. All three options were unacceptable to the employee, and left him extremely upset, so he sought legal advice. His lawyers then emailed the managing director, raising a personal grievance on his behalf, and also suggesting a range of possible settlement options. The managing director was not happy with the email, but agreed to mediation.

After the mediation, which the employee felt had not resolved the issue, the managing director sent an email to the entire company saying the employee had resigned, and would not be returning to the company. The employee felt he had not resigned and claims the company’s actions were precipitous, a rejection of his proposals, and also constituted a dismissal.

The authority determined that, while aspects of the personal grievance email were problematic, the employee had not actually resigned and had, in fact, submitted a number of proposals to resolve the issue.

Furthermore, the authority determined the company did not honestly consider the employee to have resigned, and that their public announcement had rendered his continued employment untenable. The employee had, therefore, been unjustifiably dismissed and, as his employer had not behaved as a fair and reasonable employer would, had a personal grievance.

Due to the salary the employee was paid, the authority awarded him $93,333 for four months’ lost salary, $15,000 as compensation for hurt and humiliation, and $21.538 as compensation for loss of a future benefit.

Keast v Stainless Design Ltd—ERA, Auckland, August 2006

The Employment Relations Authority found the dismissal of a general manager, for ignoring health and safety instructions from the company’s managing director, was justified.  

Since December 2003, the employee had been the general manager of the company. In 2005, the managing director introduced a new and thorough induction process as he was dissatisfied with the old, “poor” induction practices being followed. Two new employees joined the company in August, 2005. As their first language was Dutch, the manager director thought a comprehensive induction was important. It was to be the first time the new process was used and the managing director told the employee he wanted them to have proper induction before starting work.

The employee did not conduct an induction with the new employees and the company’s health and safety co-ordinator reported this to the managing director. In response, the employee was instructed to stop the employees working and do the induction immediately. This order was followed but the managing director asked him to attend a disciplinary meeting to address his concerns. After further investigation and another disciplinary meeting, the employee was dismissed.

The employee claimed he had been unjustifiably dismissed because he had not realised the new induction policy had been implemented, the H&S co-ordinator had misreported his comments, and the wearing of safety footwear was not mandatory under the HSE Act.

However, the managing director claimed he had been very clear about the new induction process both before, and throughout, the incident. He claimed the incident had left him upset, shocked and unable to trust the employee. He also said Keast’s dismissal came at the end of a fair and reasonable investigation and disciplinary process.

The authority found the employee was aware of, and carried responsibility for, the observance and implementation of company policies. It also found he had been given specific instructions about the induction of the new employees, and that the induction process included providing them with safety footwear.

It also found the managing director’s investigation into the matter had been meticulous, that the employee had been treated fairly in the process, and that his dismissal was justified. As a result, he was not entitled to the remedies he sought.

Costs were reserved.

O’Donnell v Christian Healthcare Trust—ERA, Auckland, October 2006

An employee’s complaint of unfair process in issuing a formal warning, and disadvantage in employment because of that warning, was upheld by the Employment Relations Authority.

The trust purchased the retirement home in which the employee worked, as the manager of the home, in July 2005. In December 2005 the employee, who as the senior employee reported to the trust’s chief executive, was issued with an employment warning by the chief executive. The warning was given after the chief executive saw the employee involved in a tense exchange with a potential client who wanted to look around the home by themselves. The employee would not allow the person to do so for safety and privacy reasons.

In over 40 years of employment in nursing, the employee had never received an employment warning and was extremely distressed as a result. She claimed the chief executive had been procedurally unfair when issuing the warning, as he did not tell her the meeting in which she received the warning was going to be a disciplinary one. She also claimed that he had never properly followed up on the meeting. These factors had influenced her decision to resign, and also made the work environment distressing for her.

While the chief executive’s interpretation of events was different to the employee’s, the authority found in the employee’s favour. It found the whole process was fundamentally flawed because of the chief executive’s failure to inform the employee the meeting, in which the warning was issued, was a disciplinary one. In the absence of a fair and thorough process, the authority said the warning was not substantively justified.

The authority also found the warning had impacted on the employee’s work environment to such an extent it was a disadvantage in itself. This distressed the employee to a great extent, and the authority awarded her $500 compensation as a result.

Further costs were reserved.

—Selected and written
by Miriam Bell

Previous Employment Case Notes

Issue 160
Issue 159
Issue 158
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