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Employment case notes

ET143

Unilateral change of hours forced resignation
Bregmen-Lyon v Zhao & Dai Ltd t/a “Pizza Fresco”—Employment Relations Authority, Auckland, July 2009. Claim for constructive dismissal—successful.
The Employment Relations Authority has confirmed the implied terms of mutual trust, confidence and fair dealing in the case of an employee working for a pizza store as front-of-house manager. This role included preparing the weekly rosters.

The company’s director introduced a new roster that reduced the employee’s hours from around 55 per week to about 30. At the same time, his designation on the store’s computer changed from ‘manager’ to ‘cashier’. The employee had no notice of these changes. When he protested, he was told that the director would be preparing the roster from then on.

At the same time, there was a dispute about the employee’s entitlement to leave. When this was not resolved, he lodged a personal grievance for unjustified disadvantage with the Authority.

Ten days later, the employee was given a written warning, and a written record of a verbal warning about his conduct. The allegations made in the warnings had not been put to the employee first for comment and explanation. He resigned and claimed he had been constructively dismissed.

The Authority determined that even without a written employment agreement, there was an implied term of mutual trust, confidence and fair dealing. By changing the employee’s role and hours without notice or consultation, and unfairly issuing him with two warnings, the employer had breached that implied term. In such circumstances it was reasonably foreseeable that he would resign.

In relation to whether the employer could change the hours of work, the Authority determined: “While there was no agreed written term, an implied term can reasonably be inferred that the company would be entitled to change Mr Bregmen-Lyon’s hours after fair consultation and reasonable notice to him”. The required notice in this case would be no more than one month.

The employee was awarded lost wages and $3000 compensation for distress.

‘Sick’ employee well enough to visit pub
Woodhead v Resene Paints Ltd—Employment Relations Authority, July 2009. Claim of unjustified dismissal—unsuccessful.
The Employment Relations Authority has determined that an employer was justified in its view that if an employee on sick leave was well enough to visit the local tavern, he was well enough to respond to its disciplinary inquiry.

The employee was employed in a paint factory as a colour matcher. There was a meeting in June 2008 to discuss performance concerns about ongoing issues of inadequate colour matching, following which the employee was issued with a final written warning. In the same letter, concerns were raised about other issues that the company wished to discuss with the employee.

A meeting was subsequently held to discuss these issues, which related to unapproved overtime, productivity during paid overtime, time keeping, possible absences during claimed overtime and the use of internet facilities for personal use during overtime. The employee was off work on sick leave, but attended the meeting, which resulted in the final warning being restated to cover these other issues.

On the same day, the restated final written warning was sent, the employee was sent another letter raising further concerns about his colour matching because he had not met the agreed performance target. The employee’s representative emailed a ‘without prejudice’ offer of an exit deal whereby the employee would resign if the company paid him for some of his 60 days of accumulated sick leave. The company’s response was that the most recent performance concerns needed to be dealt with.

The employee’s representative claimed that the employee was suffering from work-related stress and would be unable to participate in a disciplinary investigation. The employee’s medical certificates had failed to give an explanation of why he was unfit to work.

The company gave the employee around a week to respond to the performance allegations in writing or through his representative. At this point, the company was aware that the employee was being seen regularly at the local tavern; he later claimed this was “part of his rehabilitation”.

He refused to respond to the performance allegations on the basis that he was too ill, and his employment was terminated with one week’s pay in lieu of notice in line with his employment agreement.

The Employment Relations Authority took the representative’s ‘without prejudice’ offer into consideration because it was sent before there was a dispute between the parties and therefore did not attract the protection of ‘without prejudice’ correspondence.

The Authority determined that the final warning should have been accompanied by some time period, perhaps a maximum of one year. Also, the company should not have incorporated fresh allegations into the first final warning letter. However, these failings were not so substantial as to make either of the warnings unjustifiable.

Given the employee’s long service (more than 15 years), one month to improve his performance was a reasonable period of time. The warning used an objective assessment of measurable targets.

The employee was able to garden and attend the local tavern twice a week while he was on sick leave and, in these circumstances, the disciplinary investigation could not be so stressful that he was unable to respond, at least in writing. Good faith runs both ways and “an employer is entitled to consider an employee is not acting in good faith if they take sick leave and will not attend a disciplinary meeting when they are able to socialise at the local tavern twice a week.”

With the benefit of hindsight, the employee could have been provided with another week to respond, but it would have made no difference in this case because the employee’s representative’s position was hardened on this matter.

The company had good grounds to doubt the employee’s claim that he was too ill to attend a disciplinary meeting because it knew he was regularly attending the local tavern and his representative had suggested that the employee would resign if he was paid out some of his 60 days of sick leave. The dismissal was justified.

No impediment to clear resignation by text
Leathard v S&S Foods Ltd—Employment Relations Authority, Auckland, July 2009. Claim of constructive dismissal—unsuccessful. Counterclaim of breach of confidentiality—partly successful.
The Employment Relations Authority has rejected the claim that a resignation by text message has no effect. The employee was the manager of one of the company’s stores. He was told that another staff member was to be promoted to the role of manager. However, there was to be no change to the employee’s title or remuneration.

According to the employee, he was told that he would be subordinate to the new manager. According to the company, the new manager was there to share the responsibilities because it was recognised that managing the store was a big job for one person. The company claimed that the plan was to open a new store in the area, and the promotion of the other member of staff was to retain his services as an experienced store manager in the meantime.

Either way, the result was that the employee resigned by text message. He was asked to confirm his resignation, which he did (although not in writing). After he left, the employee said he had been constructively dismissed, or unjustifiably dismissed, because of his demotion. The employee claimed he had received advice that resignation by text has no effect, in which case the company had dismissed him when it asked for his leaving date.

As a counterclaim, the company applied for a penalty against the employee for giving two of his former co-workers details of a confidential offer discussed during mediation, in breach of section 148 of the Employment Relations Act 2000. The co-workers gave evidence that the employee had told them what the company had offered to settle (the employee declined the offer), and had “bragged of his prospects of success in pursuing his claim”. The company was concerned that the breach of confidentiality presented a threat to its business if knowledge of it was to spread among staff and, as a result, the company could be at “risk of opportunistic claims”.

The Employment Relations Authority first dealt with the employee’s unjustified dismissal claim, determining that “there is no impediment to a text resignation so long as it is sufficiently clear”, which it was in this case. The employee had not been dismissed.

The employee had also not been constructively dismissed because he had not been demoted. There were no material changes to the employee’s responsibilities or work routine, responsibilities were shared between him and the other manager, and at no time was the employee given direction by the other manager.

In relation to the company’s claim of breach of confidentiality, the Authority was satisfied that the employee had breached section 148. However, it was not empowered under the Act to order a penalty because section 133, which provides for the Authority to impose penalties, does not include breaches of section 148.

Pilot appeals unsuccessful discrimination claim
McAlister v Air New Zealand Ltd—Supreme Court, July 2009. Appeal against decision on age discrimination—successful.
An Air New Zealand pilot whose claim of age discrimination was rejected by the Court of Appeal had his appeal considered by the Supreme Court.

The company had an employment policy which reflected the ‘Rule of 60’, under which commercial pilots could not operate as a pilot-in-command (PIC) on many international flights once they reached 60 years of age. The employee was told that he could not continue to be a Boeing 747-400 (B747) flight instructor once he turned 60 because he could not act as a PIC on sufficient international flights to maintain his flight instructor position. He was effectively demoted.

The company claimed that the age requirement was a genuine occupational qualification for the employee’s flight instructor position.

The Employment Court held that the policy breached section 104(1) of the Employment Relations Act 2000, and that the employee had been discriminated against on the grounds of age. In reaching this conclusion, the Court held that the comparison was between a flight instructor/PIC who has reached age 60 and those flight instructors/PICs who were under 60, but doing work of same description as the employee before reaching 60.

The Court of Appeal then overturned this decision, ruling that the Employment Court had used the wrong comparison. The Court of Appeal said that the comparison should have been between pilots who suffered from no operational restrictions and pilots who did suffer from operational restrictions. There were reasons other than age that would impose operational restrictions on pilots, such as if the pilot did something that dis-entitled them from entering the United States.

On appeal, the Supreme Court ruled that it was the Court of Appeal that had applied the wrong comparator. According to the Supreme Court, the comparison should simply have been with a similar pilot aged under 60.

The Supreme Court considered whether age was a genuine occupational qualification for the employee in terms of section 30 of the Human Rights Act 1993 and concluded that it was. However, the Court remitted the case to the Employment Court for a decision on whether the company can establish that it was, reasonably, unable to adjust its activities to accommodate the restriction placed on the employee by the US rule.

Dismissal justified for rule-breaking whistleblower
White v Chief Executive of the Department of Corrections—Employment Relations Authority, Auckland, July 2009. Claim of unjustified dismissal—unsuccessful.

The Employment Relations Authority has rejected the unjustified dismissal claim of an employee who held on to details of a colleague’s criminal record information for seven months before disclosing to the union.

The employee was a corrections officer. He had two current written warnings against him, both of which were for non-compliance with the employer’s rules. The first warning was for using his personal handcuffs for restraining a prisoner, and the second one was for having weapons made by prisoners in his locker.

Through a friend in the police force, the employee obtained information on one of the Department’s unit managers. The information included a ‘mug shot’ of the manager in question, along with information about his police and criminal history. The employee kept this information for around seven months, then faxed it to the president of his union.

The Department became aware of the situation when the union president, intending to fax the photo and information to the union’s lawyer, accidentally faxed it to a medical practice, which then contacted the Department.

An investigation was carried out and the decision was made to summarily dismiss the employee. The manager who made this decision determined that the appropriate disciplinary response would ordinarily be a final written warning. However, in light of the two previous warnings, the employee was dismissed.

The reason for dismissal was that the employer considered that the three incidents showed that the employee was not prepared to follow the rules and, as a result, the employer had lost trust and confidence in the employee.

The Employment Relations Authority noted that an employee’s communications with their union is not the employer’s business at all, and that there was nothing inherently wrongful or improper in an employee passing on information about a colleague’s alleged wrongdoing to the union.

However, given the lengthy period between the employee obtaining the information and using it, and the fact that he did not provide his employer with the information about the unit manager, the employer did not believe that the employee was acting out of a genuine concern about corruption in the Department.

The employer’s finding that the officer had failed to fulfil his duties, or serve his employer faithfully, with professionalism and integrity (as required by the code of conduct) was correct. His dismissal was justified.

—Selected and written by Louisa Clery

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Previous Employment Case Notes


Issue 162
Issue 161
Issue 160
Issue 159
Issue 158
Issue 157
Issue 156
Issue 155
Issue 154
Issue 153
Issue 152
Issue 151
Issue 150
Issue 149
Issue 148
Issue 147
Issue 146
Issue 145
Issue 144
Issue 143
Issue 142
Issue 141
Issue 140
Issue 139
Issue 138
Issue 137
Issue 136
Issue 135
Issue 134
Issue 133
Issue 132
Issue 131
Issue 130
Issue 129
Issue 128
Issue 127
Issue 126
Issue 125
Issue 124
Issue 123
Issue 122
Issue 121

Issue 120
Issue 119
Issue 118
Issue 117
Issue 116
Issue 115
Issue 114
Issue 113
Issue 112
Issue 111
Issue 110
Issue 109
Issue 108
Issue 107
Issue 106
Issue 105
Issue 104
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Issue 102

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