Issue 147
McDonald v Ontrack Infrastructure Ltd and Allied Work Force Ltd—Employment Relations Authority, Christchurch, September 2009. Claim for unjustified dismissal—unsuccessful.
The Employment Relations Authority has rejected a temporary agency worker’s claim that he was employed by the client with whom he was placed.
Allied was a labour hire company that had a casual employment agreement with McDonald. He was sent on his first placement by Allied in September 2006 and he worked for various clients thereafter. In March 2007, McDonald was placed with Ontrack as a trainee track repairer with a spot re-sleeper gang.
McDonald worked with the gang for eight months. During that period, Allied supplied his weekly wages, pay slips, and paid holiday pay on a ‘pay as you go’ basis. Other than that, Allied had no contact with McDonald.
Ontrack provided McDonald with training, an in-house staff booklet, safety equipment, and paid him a tax-free overnight accommodation allowance. McDonald was under Ontrack’s control and he was expected to notify them if he was unable to work due to sickness.
After an Ontrack supervisor advised McDonald of the termination of his placement, he claimed that he had been unjustifiably dismissed.
The Employment Relations Authority noted that the traditional tests for determining whether McDonald was in an employment relationship with Ontrack may not be straightforward, given the tripartite arrangement between the parties. The Authority determined that it was the intention of the parties though express contractual arrangements that McDonald was to be employed by Allied and placed with clients. It was not intended for McDonald to have an employment relationship with Ontrack.
The Authority then considered whether the parties’ conduct later displaced that intention. Although the direct payment of an overnight accommodation allowance was unusual and the lack of contact that Allied had with McDonald during his placement was “remiss”, neither was sufficient to displace the express intentions.
The Authority commented that whether or not an employment relationship could be implied between an agency worker and a client did not appear to have been addressed in a New Zealand employment case, although there had been such cases in England and Australia. Looking at the relevant overseas precedents and the facts of this case, the Authority determined that it was not necessary to imply an agreement of employment between McDonald and Ontrack.
The Authority determined that Ontrack did not terminate McDonald’s employment, rather it ended its commercial arrangement with Allied for his placement. Under the employment agreement, McDonald was not obliged to accept further placements from Allied, and Allied was not obliged to provide further assignments to McDonald. He had not been unjustifiably dismissed.
Atley v Southland District Health Board—Employment Relations Authority, Christchurch, September 2009. Claim of disability discrimination—successful.
An employer has been ordered by the Employment Relations Authority to pay compensation to a nurse who was unable to work nights for medical reasons.
Atley was a registered nurse working in the emergency department. The department had a compulsory rotating shift that included night shifts. Atley provided a medical report from a specialist disclosing that she had been diagnosed as suffering from a bipolar affective disorder. The report said her condition was incompatible with working intermittent night shifts.
The Board had a policy that emergency department nurses rotated through all three shifts, rather than having fixed shifts. On the basis of Atley’s medical advice, it was decided she could not work night shifts for health and safety reasons. The employer was not prepared to allow her to only work morning and afternoon shifts because it would create a precedent that would “prove destructive to the department”. This was despite the offer from several nurses to cover Atley’s night shift.
Atley was given work in other departments, which resulted in a drop in hours and pay. Atley claimed she had been discriminated against on the grounds of her disability and this had unjustifiably disadvantaged her.
The Employment Relations Authority noted that different treatment based on disability is not prohibited (under the Human Rights Act 1993) if there would be a risk of harm if the person performs their duties, and it is not reasonable to take this risk. However, this exception does not apply if the employer could, without unreasonable disruption, take reasonable steps to reduce the risk to a normal level.
In Atley’s case, there was a risk of harm if she worked night shifts, and it wasn’t reasonable to take this risk. However, deploying other nurses with their agreement and not requiring Atley to work night shifts were reasonable measures that would not have caused unreasonable disruption. It followed that the employer discriminated against Atley on the basis of her disability, in breach of section 104(1)( b) of the Employment Relations Act 2000.
The employer was ordered to pay Atley 75 percent of her lost wages (the difference between her current earnings and what she had earned as a nurse in the emergency department) and $7500 compensation for humiliation, loss of dignity and injury to feelings.
These awards took into account a 25 percent contribution because Atley, as an oversight, had failed to disclose her condition during pre-employment screening, when she was specifically asked if she had ever suffered from a mental health or stress-related condition.
Smith v Konica Minolta (NZ) Ltd—Employment Relations Authority, Wellington, September 2009. Claim for unjustified dismissal—successful.
The Employment Relations Authority determined that although the employer and employee tried to renegotiate the employment agreement during the employment relationship, the failure of the parties to agree meant that the redundancy compensation provided for in draft agreement did not apply. However, the process followed for making the employee redundant rendered the dismissal unjustified.
Smith worked for the company as a service technician for over 13 years. There was a proposal to restructure the branch. After a series of meetings to consult with the potentially affected staff (including providing them with the selection criteria), Smith’s manager of seven months selected him for redundancy. Smith claimed that his dismissal was unjustified, in terms of both the reason and the process. He also claimed that he had signed a new employment agreement (in 2005) that entitled him to redundancy compensation.
The Authority started with the redundancy compensation claim. There was no evidence the 2005 agreement had been finalised. The employer provided Smith with a copy, he made substantial changes and returned it. The employer did not agree to the changes (which would have been worth $30,000 to Smith in addition to the employer’s original offer).
The parties could not be said to have reached agreement, and Smith’s employment agreement, signed in 1996, therefore applied. There was no provision for redundancy compensation under that agreement.
Turning to the redundancy process, the Authority noted that the manager’s rating of Smith against the selection criteria reflected the fact that complaints had been made about Smith. These complaints had never been put to Smith. Also, the manager had not been there long enough to give Smith a performance review, nor did he take into account Smith’s previous performance review when rating him.
The Authority determined that a fair and reasonable employer would have advised Smith of these matters and given him an opportunity to comment before relying on them to make him redundant. Smith’s side of the story in respect of the complaints could have transformed his manager’s assessment ratings.
The employer would also have had regard to Smith’s previous performance review, especially as the manager had limited experience of working with Smith and had never formally reviewed his performance.
The Authority concluded that Smith’s dismissal was flawed because of a lack of transparency in the process. The employer was ordered to pay him $8000 compensation for humiliation.
Lewis v Howick College Board of Trustees—Employment Court, Auckland, January 2010. Claim for unjustified dismissal—successful.
An employer’s failure to follow its own complaints policy has led to a finding of unjustified dismissal by the Employment Relations Authority. A head of department lodged a formal complaint of bullying and harassment against Lewis, a teacher at the college for around 20 years. The Board sent him a letter outlining the allegations. Lewis responded that the complaints were “vexatious” and that they constituted workplace bullying (there was a history of conflict between the two).
A board sub-committee investigated the complaints. The principal was overseas, so did not participate in the investigation. The sub-committee invited Lewis to attend an investigatory meeting. Before the meeting, the chairperson of the sub-committee walked past a classroom in which Lewis was teaching. Lewis left the room and followed her down the corridor, which she found intimidating. As a result of this, and reports of his erratic and bizarre behaviour, Lewis was suspended during the investigation.
He commenced action in the Employment Relations Authority for unjustified disadvantage and would not participate in the investigation. When asked if there were any health issues that might explain his behaviour and should be considered by the sub-committee, Lewis did not reply.
A preliminary decision was made to dismiss Lewis for serious misconduct. He was asked to consider medical retirement or put forward alternative suggestions. He reiterated his intention to pursue a personal grievance, refused to make further submissions, and claimed he had referred the Board to the Department of Labour for breaching the Health and Safety in Employment Act. The decision to dismiss him went ahead.
The Employment Court noted that: “allegations of misconduct or incompetence place teachers (and other similarly registered occupations) in double jeopardy of their livelihoods. Accordingly, employers of teachers must act to a high standard when their decisions can have these consequences.”
The Court held that the Board’s failure to follow its own complaints policy (that said all complaints involving teacher conduct or competence would be dealt with by the principal) meant the disciplinary process was not fair or reasonable. It said policies and procedures are more than a requirement to be prepared and updated and to tick the boxes. “They are living documents in the integrity of which affected persons are entitled to place their reliance. They cannot be read down or ignored when perceived to be inconvenient or inappropriate in a particular case … A fair and reasonable employer will comply with its own relevant policies.”
The Court also held that the employer was obliged to identify witnesses who may be able to corroborate the parties’ accounts in a dispute such as this. Another staff member’s evidence to the Court supported Lewis’s version of events.
The Court noted it was not fair or reasonable for the chairperson of the sub-committee to be a decision-maker after she had made a complaint about Lewis’s conduct towards her. It said “Her roles as witness, complainant, and decision maker were in such conflict that she could not have been seen to have brought an objective and unbiased mind to the important decisions, as employer, to first suspend, and then dismiss the plaintiff summarily.”
The employer was ordered to pay Lewis three months’ lost remuneration and $10,000 compensation for hurt and humiliation. The award took into account Lewis’s failure to notify the Board of a diagnosed mental illness (that explained his erratic behaviour), his discourteous and unprofessional treatment of some of his colleagues, his failure to address the head’s complaint and his premature disengagement from the Board’s investigation.
—Selected and written
by Louisa Clery
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