Employment case notes

Employment case notes (Issue 122)

Accused of theft
Corps v AFFCO New Zealand Ltd—Employment Relations Authority, Wellington, July 2007 Unjustified dismissal claim—upheld: Unfounded managerial accusations of theft resulted in a meatworker’s dismissal, but the Employment Relations Authority found in favour of the employee and awarded him almost $46,000.
The employee had worked at the plant since 1977, and had been employed in a full-time salaried position since 1981. Over that time, the plant manager(s) to whom he reported had never raised any performance issues with his work.

In 2005-2006 a new computerised inventory control system was adopted at the plant. The system made use of new software for which no operating manuals existed. There were also implementation difficulties with the system, and this resulted in suspicions about the data as well as many mistakes being made.

At the same time, company management began an investigation into some serious thefts at the plant. Attention was focused on the inventory and security of the freezer operation at the plant. During the investigation, some questions were raised about the employee’s involvement with the inventory system, but the plant manager condoned the employee’s performance in regards to the system.

However, that plant manager then left the company and the report into the investigation came to some damning conclusions about the employee’s operation of the inventory system. The employee was never given a copy of the report, but was asked to attend a meeting about the findings.

After the meeting, the company management decided they were not satisfied with the employee’s explanations about the problems with the inventory system and suspended him. Further investigations were conducted, and the employee was told his actions were negligent and lacked integrity. Company management said they had lost confidence in him and he was dismissed.

The Authority accepted the employee’s explanation of his use of the inventory system and found there was no evidence to back up the allegations made against him. It also found the investigation process was confused as well as hastily and poorly executed, that company management had consistently failed to comply with the procedures laid out in their own HR manual, and that it was unclear how company management had come to the conclusions that it had about the employee.

The Authority found that a fair and reasonable employer would not have dismissed the employee in the circumstances. It further found that the breaches of process made by company management undermined their attempts to justify their actions. As a result, the Authority concluded the employee had been unjustifiably dismissed, and awarded him $27,796 in lost wages and $18,000 compensation.

See no evil
Howard v Inner City Interagency Trust—Employment Relations Authority, Christchurch, July 2007 Unjustified dismissal claim—upheld: Accusations that a community worker ignored drug-taking at a community centre led to her dismissal, but the Employment Relations Authority upheld her claim that the dismissal was unjustified.

The employee, who had only been employed at the centre for a short time, was said to be in the centre’s lounge while a visitor was inhaling a white powder. Two unidentified people complained about the incident, and claimed the employee had seen and ignored it

After these complaints, the employee was suspended without warning or discussion. She was then asked to attend an investigation meeting about the incident. The employee said she had not seen the incident and would have intervened if she had—as she had in a similar incident which had occurred just days before. However, centre management decided it did not accept her version of her events, and that her behaviour constituted serious misconduct. Shortly after the meeting, her employment was terminated.

The Authority found the employee to be “a very credible witness and a person of integrity”, and accepted her evidence that she did not see the drug-taking incident. It also found that, given her willingness to intervene in the earlier incident, she would not have been afraid to intervene on the occasion in question.

While the Authority found the centre management had conducted a generally satisfactory investigation—apart from the summary suspension of the employee—it also found they had given far too little weight to the employee’s handling of difficult situations prior to the incident.

For this reason, the Authority found that a fair and reasonable employer would have decided on a remedy short of dismissal, and that the employee had been unjustifiably dismissed. The employee was awarded $5712 in lost wages and $5000 compensation.

The whole kit and caboodle
Abernethy v Dynea New Zealand Ltd—Employment Court, Christchurch, July 2007 Statutory interpretation—s179 of the Employment Relations Act 2000: A recent Employment Court decision, on challenges to Employment Relations Authority determinations, means that the entire employment relationship problem can go to the court—even if an aspect of it has earlier been resolved by the Authority.

An employee who claimed unjustified dismissal and sought interim reinstatement to a former role was dissatisfied with a preliminary determination from the Authority. The Authority had determined he could not pursue his personal grievance against his former employer because, under verbally agreed terms, he had received accord and satisfaction. The employee, who denied reaching accord and satisfaction with his employer, challenged the Authority’s determination.

However, the issue the court had to decide was whether, on his challenge to the Authority’s determination that his personal grievances had been settled, the employee was also entitled to have the court determine the questions of his dismissal and reinstatement application. The employee contended that once a challenge is brought to an Authority determination, the court could then resolve all of the related issues put before it. The employer argued the court did not have jurisdiction over any of the issues outside the Authority’s determination.

To reach a conclusion, the court explored interpretations of section 179 of the ERA. The judges decided that if one of the parties involved in a case challenges an Authority determination, which has resolved the employment relationship problem before it, the entire problem can then go to the court for resolution. The judges also said their decision would also mean quicker resolution of cases, more efficient use of resources, and greater clarity for those involved.

Judge Travis is now considering the case which prompted the decision. If he decides there was no accord and satisfaction, the employee’s dismissal and application for reinstatement will be heard by the court as part of the challenge.

Caught napping
Richard v Winston Wallboards Ltd—Employment Relations Authority, Auckland, June 2007 Unjustified dismissal claim—dismissed: Photographic evidence of a man sleeping on the job led to his dismissal, which the Employment Relations Authority found to be justified.

The employee, who had worked at the company for 15 years, held a supervisory position. His manager had had several discussions with him about his performance as a team leader and, as a result, he had been issued with three informal warnings. In early 2006, his manager also found him asleep on duty. While his explanation for this conduct was accepted, he was told that such behaviour constituted serious misconduct and that he could be dismissed if he did it again.

In early December 2006, the employee’s manager received a photo of the employee lying underneath a sheet of paper on top of a pallet. After investigating further, the manager collected two statements from the employee’s team members saying he had been asleep for about half an hour and the photo was taken as evidence.

The manager informed the employee of the photo and the statements, and asked him to attend a meeting to discuss the incident. At the meeting, which the employee attended with a support person, the employee said he was not asleep in the photo. Instead he claimed he had been lying down to do exercises for his back.

He also asked to be told the identity of the people who had provided the statements saying he was asleep. The manager declined to tell him the identity of the statement providers as they were concerned about reprisals and had requested anonymity.

After two more meetings, during which the employee continued to maintain he was not sleeping, the company decided the employee had been asleep. This was a breach of the company’s code of conduct and the employee was dismissed.

However, he argued his dismissal was unjustified because it had been in breach of his employment agreement and that the company had not exercised any discretion once the misconduct had been established. He also claimed the investigation had been unfair because the identity of the witnesses was not disclosed.

The Authority found the employee’s employment agreement had not been breached by the company, that they did not take a narrow and blinkered view when deciding the employee’s penalty, and that the investigation had not been unfair.

The Authority concluded that, given the employee’s work history and the very clear evidence against him, the company was justified in finding him guilty of serious misconduct and in dismissing him.

Resigned or not?
Baskett v B&M Entertainment Ltd—Employment Relations Authority, Wellington, March 2007 Unjustified dismissal claim—upheld: The Employment Relations Authority upheld a brothel manager’s claim of unjustified dismissal and ordered her former employers to pay her over $20,000.

The employee, who was an experienced manager, started work for the company in 2005. After she had managed first one, then another, of the company’s clubs, her employers decided to restructure their operation. The employee was appointed to the position of group manager. Although the employee was ambitious and willing to work long hours, she was required to work at least 80 hours a week with no support.

When the employee complained about overwork, one of her employers told her that he was her boss and she was expected to action all his requirements. In response, the employee resigned with one month’s notice. Then, after a number of consultations with her employers, she agreed to withdraw her resignation. She expected that her employment would continue as though she had never resigned.

However, her employers decided they were not happy with the restructuring and wanted to return to their old management structure. Around this time, the employee became ill and had to take a week off work. While she was off work, her employers returned to the old management structure and then offered her a job as manager of one of the clubs.

The employee rejected this offer and said that, as her position as group manager had been disestablished overnight, she would like to be paid four weeks pay. Her employers refused to do this, asked her to return all company property, and said she was not required to work out her notice. The employee considered this to constitute unjustified dismissal. Her employers disagreed and said she had resigned earlier anyway.

The Authority found it was clear the employee’s resignation had been withdrawn by agreement. This meant her position as group manager had effectively been disestablished overnight, and that was a change she did not have to agree to. It also found her employers were mistaken to think that they could continue to rely on her earlier resignation.

As a result, the Authority found the employee had been dismissed and that, because of the lack of consultation about her changed role, her dismissal was unjustified. The Authority awarded the employee $12,318 in lost earnings and $8000 in compensation.

—Selected and written by Miriam Bell

Employment case notes (Issue 121)

Lewis & Edwards v Talleys Fisheries Ltd—High Court, Wellington, June 2007
Gender discrimination claim—upheld: Gender discrimination in the allotment of jobs was practised at South Island fish processing plant Talleys Fisheries Ltd, according to a High Court decision.