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Commissioner of Police v Hawkins—Court of Appeal, May 2009. Appeal against liability and remedy for personal grievance—unsuccessful.
An appeal against the Employment Court’s ruling that a police officer could raise a personal grievance outside of the 90-day period, and after taking voluntary disengagement, has been heard by the Court of Appeal. The appellant also disputed the remedies awarded to the police officer.
Hawkins was a sergeant in the police. He was granted permission to take voluntary disengagement on medical grounds in June 2001, which he had applied for after being accused of assaulting two young men in the police cells.
Hawkins’ lawyer wrote to the employer notifying the employer that he had been engaged to raise a personal grievance on behalf of Hawkins and that he would be in touch with details. This letter was only just within the 90-day time limit. The employer acknowledged this letter, and acknowledged that further details would be provided in due course. The employer made no protest that the details of Hawkins’ grievance would be provided outside of the time limit.
Some two weeks later, the lawyer wrote again with more details of Hawkins’ grievance. These were relatively vague, and the employer responded by asking for full details. The full details were not provided until 2003, after Hawkins was cleared of the assault charges. Mediation followed, but was not successful.
At the heart of Hawkins’ claim was that he had been driven out of the police by a sustained course of bullying tactics by his commanding officer. Hawkins claimed that he had felt obliged to apply for disengagement on medical grounds.
The Employment Court held that although the Commissioner did not expressly give Hawkins consent to file a personal grievance outside of the 90-day period, the Commissioner’s lack of protest and active engagement with Hawkins implied consent.
The Court accepted Hawkins’ claim of constructive dismissal, finding that the Commissioner was liable for systemic dysfunction. The Court ordered that Hawkins be reinstated, even though seven years had elapsed. The Commissioner was also ordered to pay lost remuneration and $35,000 in compensation. The Commissioner appealed against the Employment Court’s findings and the remedies awarded.
The Court of Appeal dismissed the appeal. It held that the issue was not whether the employer had turned its mind to the 90-day limit, but whether its conduct indicated that it had accepted an extension of the time limit. In this case, the Commissioner’s conduct had indicated this. In relation to the remedies, most compensation awards are under $27,000, but the amount of compensation that may be awarded is not capped. The amount awarded to Hawkins and the order of reinstatement were appropriate.
Stewart v Industrial Services Nelson Ltd—Employment Relations Authority, Christchurch, June 2009. Claims for constructive dismissal, breach of the Fair Trading Act 1986, and breach of contract—successful.
An employee who was given false information about the financial health of the employer has had her various claims accepted by the Employment Relations Authority. The woman was interviewed for an office administrator’s position. During the interview, she asked about the financial health of the company because she didn’t want to be in the position of ‘placating unpaid creditors’, as she had for other employers. The general manager assured her that working capital was available.
The woman accepted the position and signed an employment agreement stating her salary was $50,000. After she began working for the company, it became apparent that the company was in financial difficulty and had unpaid creditors. She was also not paid the agreed salary.
When the company’s director, who was based in a different city, discovered that the general manager had agreed a salary of $50,000 for the woman, he said they could not afford to pay that much. As a result, the general manager negotiated a variation with the woman for a salary of $45,000 plus $2500 per year in petrol through the company’s fuel card. As it transpired, the woman was not able to use the fuel card because it was linked to a specific company vehicle.
The woman was subsequently diagnosed by her doctor as suffering from “acute stress”. She resigned twice, but was persuaded to rescind her resignation on the assurance that there would be significant improvements. None materialised, and she resigned a final time.
The Employment Relations Authority determined that the assurance given to the women that the company had sufficient working capital was a breach of the Fair Trading Act. The Authority also determined that the company had breached the employment agreement by failing to pay the woman’s salary correctly in the first few weeks, and had breached the implied terms of fair dealing.
Furthermore, the employer had failed to provide a safe workplace (in relation to the stress suffered by the woman), and had failed to comply with its good faith obligations when negotiating the variation to the employment agreement. It was foreseeable that the woman would resign as a result of these breaches, especially given two previous attempts at resigning.
The Authority ordered the employer to pay the woman lost wages, and $8000 compensation for stress, hurt and humiliation. It also imposed a $2000 penalty for the breaches.
Air New Zealand Ltd v V—Employment Court, Auckland, June 2009. Appeal against Employment Relations Authority’s determination of unjustified dismissal—successful.
The Employment Court has reversed an Employment Relations Authority determination that an employee who tested positive for drugs was unjustifiably dismissed. The employee’s work included the use of heavy machinery, which meant that he was in a ‘safety sensitive’ role. As such, he could be subject to random drug tests under the employer’s alcohol and drug policy.
The employer’s policy required zero blood alcohol and a drug-free status. The policy strongly encouraged employees who felt they might have an alcohol or drug abuse problem to declare it by ‘self referral’, in which case the policy provided they may be given rehabilitation support. The policy made it clear, however, that if an employee declared an alcohol or drug problem immediately before or after testing, it was not considered to be self referral. The policy also warned that a positive drug or alcohol test result could lead to an investigation and disciplinary action, including dismissal. Another clause stated that the offer of rehabilitation to an employee was at the discretion of the company.
In a random test, the employee tested positive for cannabis at 20 times the threshold level. An investigation was carried out, during which the employee openly admitted he had a problem with cannabis and said that he used it to help deal with his domestic problems, which included caring for his chronically ill mother. He said that he had not smoked cannabis since his drug test, and that he was prepared to give it up and participate in rehabilitation. However, he did not agree that he needed to give up alcohol, and denied that his drug use had endangered anybody in the workplace.
At the end of the investigation, the decision was made to dismiss the employee for serious misconduct. The Employment Relations Authority determined that the employee’s actions constituted serious misconduct, but that the employer’s failure to offer him rehabilitation meant that his summary dismissal was unjustified. The Authority concluded that rehabilitation was a more prominent feature of the policy than summary dismissal, and that dismissal and rehabilitation were mutually exclusive under the policy.
The Employment Court, however, held that the employer was justified in dismissing the employee. The Authority had erred by merging the discretion to offer rehabilitation, which was outside the disciplinary investigation, with the disciplinary investigation itself. The company was entitled take into account the employee’s denial that he had endangered workers or should give up alcohol. The company had acted as a fair and reasonable employer in accordance with its published policy. It was discretionary as to whether rehabilitation should be offered. The employee’s personal grievance claim was dismissed.
Watson v Ryjack Holdings Ltd—Employment Relations Authority, Auckland, June 2009. Claim for unjustified dismissal—successful.
An employee who was signed off work by his doctor for “medical reasons”, but then refused to communicate any further with his employer, has had his unjustified dismissal claim accepted by the Employment Relations Authority.
The employee had been working for the company for over two years as a sales person. He became dissatisfied at having to take his lunch breaks in the workplace, and requested mediation. During mediation, the parties agreed on lunch breaks and also that the employee would be provided with a written employment agreement, as he did not have one.
The employer provided the employee with a draft agreement as agreed, and he took it home to consider and seek advice. However, over the weekend, the employee became anxious and stressed over a number of errors in the agreement. The errors included having the employee’s name in the space designated for ‘the employer’ and the company name in the space designated for ‘the employee’. Another mistake was that the date given for commencement of the agreement was the date after mediation, not the date on which he had started working for the employer, some two years previously.
As a result of his anxiety, the employee visited his doctor on the Monday morning. She provided a medical note signing the employee “off work for medical reasons”, and stating that he would be off work indefinitely and that she would assess him again in four weeks. No specific illness or injury was given. The employee faxed this medical note to his employer and did not attend work that day.
The employee’s indefinite absence put the employer in a difficult position as the only other member of staff was away on annual leave at the time. The employer tried to contact the employee 11 times during the day to obtain more information on what was wrong and when the employee was likely to return to work.
The employee would not answer the phone, and when he finally did, he simply referred his employer to the medical note. As a result, and after contacting the Department of Labour for advice, the employer wrote out a note of summary dismissal the for the employee and delivered it to his house.
The Employment Relations Authority accepted that the dismissal was unjustified, but only because a fair and reasonable employer would have dismissed the employee on notice (which was two weeks) in the circumstances, and not summarily.
The employer was put in the position of having to make a decision whether to continue the employee’s employment without knowing when or even whether he would return to work, or whether in the interests of the business he needed to quickly try to find someone else to do the job. The employee’s failure to respond and communicate adequately to reasonable inquiries by his employer was in breach of his duty of good faith under section 4(1A) of the Employment Relations Act 2000.
The Authority also commented on the medical note supplied by the employee’s doctor. It said that entitlement to take paid sick leave is not triggered by a note signed by a doctor. In this case, the doctor’s note did not amount to proof of sickness or injury for the purposes of section 68 of the Holidays Act 2003. Although provided by a medical practitioner, the note did not certify, or even state, that the employee was “not fit to attend work because of sickness or injury”. Section 68 requires a “certificate,” the purpose of which is to provide “proof of sickness or injury.” The purpose of the certificate is also to confirm that the employee is “not fit to attend work” because of the sickness or injury. These requirements were not met by the employee’s medical note.
The employer was ordered to pay the employee two weeks’ pay in lieu of notice. There was no order for compensation.
Matson v Fourth Generation Solutions Ltd and Nimkovsky—ERA, Auckland, June 2009. Claim for unjustified dismissal and application for a penalty for breach of good faith—partly successful.
The Employment Relations Authority has determined that a restructuring clause and redundancy clause in an employment agreement are sequential, not alternatives.
An employment agreement was drawn up for an employee who managed a lunch bar using the ‘employment agreement builder’ on the Department of Labour’s website. It contained a restructuring clause that provided that the employer would negotiate with the new owner if the business was sold. It also included a redundancy clause that provided for three weeks’ notice of redundancy and two weeks’ pay as redundancy compensation.
The business was later sold and the new owner wanted to manage the lunch bar, thus rendering the employee’s position redundant. The employer phoned the Department of Labour’s helpline and was advised that either the restructuring or the redundancy clause applied, but not both. The employee was told there had been a restructuring, the new employer did not require her services, the redundancy clause did not apply, and she should look for another job.
The Authority determined that the dismissal was unjustified—the restructuring and redundancy clauses were sequential, not alternatives. The sale of the business was a restructuring because someone else was to undertake the work done by the employee. However, as no arrangements were made for her employment to transfer to the new owner, she remained an employee of the employer, and the redundancy clause came into effect.
The Authority determined, however, that the employer’s actions did not amount to a lack of good faith warranting a penalty because he relied on the (wrong) advice from a Department of Labour officer. The employer was ordered to pay the employee $3000 compensation for distress and five weeks’ pay, being three weeks’ notice and two weeks’ redundancy compensation.
—Selected and written
by Louisa Clery
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