Issue 160
An incomplete trial period clause could not be relied upon to dismiss a new employee who was not suitable for the job. The employee in question was employed for a short time—11 days—before she was dismissed. During that period, there was discussion about differences in work methods and about customer complaints. The employee was told what was expected of her, but not warned that her job was at risk if the expectations weren’t met.
When the employee raised a personal grievance for unjustified dismissal, the employer relied on the trial period provision in the employment agreement. The clause in its entirety stated: “A trial period will apply for the first 90 days of employment to assess and confirm suitability for the position.”
The Employment Relations Authority determined that this provision did not meet the requirement of section 67A of the Employment Relations Act 2000. It did not state that the employer may dismiss the employee during the trial period, nor did it say that the employee was not entitled to bring a personal grievance in respect of any such dismissal.
The law relating to unjustifiable dismissal therefore applied, albeit in the context of a probationary clause. The Authority noted that in circumstances where there is a probationary clause, the requirements of procedural fairness and reasonableness may be less rigorous than usual, but certain basic obligations must nonetheless be met.
The key elements of a fair procedure were missing in the dismissal. The employee was not warned that her employment was in jeopardy or given notice of termination (her employment agreement required two weeks). Her dismissal was unjustified.
When deliberating on the amount of compensation, the Authority said the employee’s conduct was very damaging to the newly established employment relationship. She believed her way of working was the only way and was not prepared to change. Taking this contribution into account, the employee was entitled to $4000 compensation for hurt and humiliation.
Mitchell v Calla Bridal Ltd ERA Auckland, 16 March 2011
An employee is to be paid twice for leave entitlements after his employer paid out his accrued leave when he changed clients. The worker was a security guard assigned to one of the employer’s clients for about seven months. He was offered work by another client and his employer agreed, but told him he would be given a new employment agreement for the job with the new client.
Before starting work for the new client, the employee was paid for his accrued leave. The employer’s contract with the new client stipulated that sick leave and holiday entitlements were not available to the employee until after six months’ employment. A labour inspector claimed that the employee’s employment was continuous and the employer had failed to recognise and pay his minimum statutory entitlements.
The Employment Relations Authority compared the two employment agreements. Many of the clauses were identical, including those relating to minimum entitlements. Both agreements gave the employer the right to transfer the employee to any of its client locations.
The second agreement contained different clauses on remuneration, role and job description, employment location, training, and uniform and equipment. However, the ERA determined that these matters did not support a conclusion that the employee’s employment was not continuous. Such matters are regularly the subject of negotiations between employers and employees, resulting in variations to the terms and conditions of the employment agreement. They do not cause a break in the continuity of the employment relationship.
The Authority concluded that the employee’s employment was continuous. The arrangements between the employer and the client could not restrict or exclude the employee’s statutory entitlements. In terms of annual leave, the employer was not legally entitled to pay out the employee’s accrued holiday entitlement when he was transferred from one client to another. The employer was ordered to reinstate the employee’s statutory entitlements to what they would have been had they not been paid out.
Keightley (Labour Inspector) v Allied Security Ltd ERA Auckland, 10 February 2011
An bus driver who wanted her employer to pay her legal costs for defending a careless driving charge arising from an incident at work (she struck a stationary car when she cut across a corner) has lost her appeal against the Employment Relations Authority’s determination. She admitted the accident was her fault on the insurance form and was charged with careless driving by the police. She was discharged without conviction, which is deemed to be an acquittal.
The employee claimed her employer should pay her legal costs of over $500, on the basis that it was obliged to indemnify her for the successful defence of a prosecution. The employment agreement did not cover indemnification, so the case had to be determined according to common law.
The Authority rejected the claim, saying the employee was not entitled to be indemnified for an admitted breach of duty. She appealed, her defence being that she was engaged in her employment activities when the accident occurred and was “not off on a frolic of her own”. It was claimed that her statement of fault on the insurance form wasn’t relevant as she was in a state of shock when she made it.
The Employment Court held that the fact that the employee was acquitted was not the end of the matter. It was still necessary for the court to look at all the circumstances and determine whether the employee had established the expenses she sought to recover arose out of some breach of duty, negligence or other fault on her part.
The Court held that it was clear the accident was caused solely through the employee’s negligence. In other words, the accident arose through a breach of her obligations to take all reasonable skill and care in the course of her employment. Her claim was dismissed.
Katz v Mana Coach Services Ltd EC Wellington, 25 May 2011
A company that issued a final warning of indefinite duration for failing to report a work injury has been ordered to replace the warning and pay compensation.
An employee injured his arm at work and recorded it on the accident register. Eleven days later, he aggravated the injury and sent a text to his supervisor saying “Been sick overnight and still not right. Hope to be in tomorrow”. The next day, he advised by text that he was still “not right” and later, after seeing his doctor, texted to say he would be back to work in three days.
On his return, the employee presented a medical certificate that identified a work-related injury as the cause of his absence. He was required to meet with the information centre manager, the business unit manager, and the national risk manager to discuss his non-reporting of a work injury. Other meetings followed with the senior human resources manager and the general manager by teleconference.
The employee was issued with a first and final written warning for not notifying his work injury when he was absent and not notifying that he had attended his family doctor. Under the company’s safety procedures, work injuries had to be seen by the company’s doctor.
The warning was to remain on his file for the duration of his employment, and his employment could be terminated if further disciplinary measures were required. The employee challenged the warning, saying that it caused him an unjustified disadvantage.
The Employment Relations Authority (ERA) agreed it was more likely than not that the employee was aware of the requirement to attend the company’s doctor for a work injury. The ERA also concluded that the employee, who had an aversion to light duties, had deliberately misled his supervisor that he was sick while absent.
The employee’s actions were misconduct and disciplinary action was appropriate. However, the involvement of so many senior managers was an over-reaction. Given the employee’s unblemished 10-year record, the issuing of a final written warning that was to remain for the duration of his employment was unfair and unreasonable.
The Authority ordered the company to remove the first and final warning from the employee’s personal file and replace it with a first written warning that would expire a year from the date on which the original warning was issued. The company was also ordered to pay $1000 compensation for hurt and humiliation, taking into account the employee’s “significant contribution”.
Rubie v Brambles New Zealand Ltd t/a Recall New Zealand ERA Auckland, 17 February 2011
Whether workers who are not “vulnerable” are protected under subpart 1 of Part 6A of the Employment Relations Act 2000 has been tested in the Employment Court.
The employee was said to be employed as a “senior ground steward”, although his role differed from others with that job title. He was paid over twice as much, reported directly to the managing director, and provided staff training. His actual ground steward duties only took up two hours a day, one hour of which was for Singapore Airlines.
The company lost the Singapore Airlines catering contract to LSG. The employee’s employment was terminated as a result. He elected to transfer on the same terms and conditions to LSG under subpart 1. However, LSG contended that by virtue of his management responsibilities, he was not a vulnerable worker and therefore not protected by subpart 1.
The Court noted that the word “vulnerable” does not appear in Part 6A, but the Bill introducing Part 6A gave its purpose as being “to provide a higher level of statutory protection to groups of employees that are considered particularly vulnerable to and disadvantaged by change of employer”.
The Court held that the absence of the words “vulnerable workers” in the Act meant that the protection afforded by Part 6A could not be limited to such persons. Had those words appeared in Part 6A, the employee, with his substantial salary package and redundancy compensation, might not have been regarded as “vulnerable”.
It noted that there was no guidance in the Act as to the meaning of “food catering services”. However, the explanatory note in the Bill indicated it was “the preparation and delivery or serving of food to third parties for consumption in a catering situation”. The employee’s job included delivering food to aircraft for consumption by passengers, and so his work came under this meaning.
Section 69I provides that an employee who elects to transfer to the new employer becomes an employee of the new employer to the extent that the employee’s work is to be performed by the new employer. LSG claimed that this meant the employee was only entitled to be transferred to work for LSG for one hour per day, being the amount of time he performed ground steward duties for Singapore Airlines.
However, the Court accepted that the employee’s work was affected to the extent that his full-time employment with his previous employer was terminated. The wording of section 69I(2) was ambiguous and should be construed in light of the purpose of subpart 1. The Court concluded that the only workable interpretation in the circumstances was the employee was entitled to transfer as a full-time employee.
Matsuoka v LSG Sky Chefs New Zealand Ltd EC Auckland, 18 May 2011
A final warning issued to a manager accused of bullying was determined to be justified by the Employment Relations Authority because the employer did more than just take the complainant’s word for it.
The manager had been the subject of three complaints about her behaviour towards staff. The third was a formal complaint that resulted in the manager being given a first written warning (in early 2008).
The warning required her to treat other employees with courtesy and respect. She was also sent on a management course on effective communication and managing conflict.
In mid-2009, a complaint was made by “L”, an employee who was supervised by the manager, describing her conduct towards him as bullying and disrespectful.
L gave specific examples and referred more generally to the manager giving him evil looks, not talking to him (sometimes for an entire shift), complaining about work not being done when he had done it, and constantly finding problems with anything he did.
When L’s allegations were put to the manager, she claimed L was trying to deflect attention away from himself and that he wanted her job. She denied bullying L or treating him differently to other employees. She also provided six letters of support from her staff.
Management spoke to the employees who had provided the manager with letters of support, and they all indicated that she was treating L differently to the rest of them. The manager was issued with a final written warning, which she challenged, along with her dismissal—she was later dismissed for an unrelated incident.
The Authority acknowledged that the employer was obliged to investigate L’s complaint. When making the decision to issue a final written warning, the employer had not simply relied on L’s version of events.
It also took into account what other staff had said about the manager’s treatment of L, previous complaints of similar behaviour, and partial admissions on the manager’s part (she accepted she talked to L less than other staff, for example). It was, therefore, not simply L’s word against the manager’s.
The Authority determined that the employer could fairly conclude that this was not conduct involving a single incident or of an intermittent nature, but was ongoing. It was fair for the employer to conclude that this was not simply a personality conflict or that the manager’s conduct was a reasonable response to L’s behaviour. The warning was justified.
Moodie v The Mill LiquorSave Ltd ERA Christchurch, 17 February 2011
—Cases selected and written
by Louisa Clery
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