Lack of records sinks employer…

The Employment Relations Authority has upheld a grievance for unpaid wages and holiday pay when there was a disagreement between the employee and the employer as to the hours worked.  The employer failed to provide a compliant set of records showing the hours worked and wages paid.  In those circumstances the Employment Relations Authority is able to accept the claims made by the employee without any written proof.  Therefore the employer was held liable for short paid wages as it had not paid all of the hours the employee claimed.  It was also liable to pay the Statutory Holidays which the employee had claimed and for the alternative holiday for working on the Statutory Holiday.  The employer had also not paid the employee any holiday pay. 

The onus is on the employer to record all of the hours worked and wages paid and a failure to keep adequate records puts the employer on the back foot when it comes to defending any claims for unpaid or short paid wages and holiday pay.  It pays to get your record keeping compliant with the law.

Alan Knowsley

Employment Lawyer Wellington

Alleged breaches of confidentiality and copyright fail in ERA...

The Employment Relations Authority has rejected an employer’s claims that a web designer it employed breached its confidentiality and copyright when he left their employment and went to work for an alternative employer.  It is alleged that he copied their website designs for the clients he had worked on with the employer at his new place of employment.

The ERA found that there were no breaches of confidential information as the website builder material that the employee used at the new place of employment was open source software and was not confidential information of the employer.

As there were no provisions in the employment agreement regarding copyright the ERA held that it could not inquire into any of the alleged breaches of copyright as they were not an employment issue and should be dealt with in the ordinary Courts.

If employers want to protect information they need to carefully draft there employment agreements to make sure that they cover the situation they want to protect.

Alan Knowsley

Employment Lawyer Wellington

Racist response to request for wages payment…

The Employment Relations Authority has upheld a personal grievance for unjustified disadvantage following an employee requesting that he be paid the wages he was owed for shifts worked.  The employer’s response was a series of abusive and racist texts telling the employee to return to his home country in rather colourful language.   In addition to the failure to pay any wages the employer had required the employee to pay it $250 for a uniform which it then did not provide to the employee.

The ERA awarded lost wages plus $2,250 compensation for hurt and humiliation and also awarded a penalty of $1,000 to be paid to the employee by the employer. 

From comments of the Employment Relations Authority it appears that the employee could have obtained orders for a lot more had he made a claim for unjustified dismissal and/or had sought higher penalties or compensation for the racist and abusive behaviour of the employer.  Unfortunately the employee was self-represented and may therefore not have been aware of the sort of levels of penalties and damages he could have sought.

Alan Knowsley

Employment Lawyer Wellington

Permanent, fixed term or casual employment…

The Employment Relations Authority has upheld a personal grievance for unjustified dismissal of a worker following confusion over the status of his employment agreement.  The employee alleged that he was a permanent employee while the employer alleged that the employee was on a casual employment agreement.

The employee’s claim of a permanent position failed as he accepted that he knew the employment would end when a full time employee was found for the job.  He also knew that he was able to apply for the full time position but decided not to.

The employer’s position that the employment was casual also failed despite being called a casual employment agreement in the written document.  The fact that it was called a casual employment agreement was the only factor pointing to it being casual as the employee was obliged to work and had no right to turn down work on a particular day.

The Employment Relations Authority found that in fact the employee was on a fixed term employment agreement but that the requirements of the Employment Relations Act as to fixed term positions were not complied with.  Therefore the employer could not rely on the fixed term nature of the agreement to bring the position to an end.  The employee was therefore unjustifiably dismissed and was awarded $7,700 for lost wages.  In an interesting twist the ERA refused to award any compensation for the dismissal as it held that the employee knew the position was going to come to an end and he gave no evidence as to any hurt and humiliation suffered despite claiming $15,000 on that matter.

It is important for employers to get the status of employees correct and to comply with the legal requirements for each possible status whether it’s casual, fixed term or permanent as a failure to do so will result in substantial awards for any lost wages and usually for hurt and humiliation.

Alan Knowsley

Employment Lawyer Wellington

Unjustified dismissal costs employer $13,000…

The Employment Relations Authority has upheld a personal grievance claim for unjustified dismissal after an employee used foul language to another employee in relation to her supervisor.  The employee was unwell and wished to take time off on sick pay but did not have enough sick leave to cover the period required.  She asked her supervisor to approve annual leave but this was refused.  After their meeting the employee complained to a co-worker.  The co-worker reported the exchange to management along with allegations of foul language.  Following an investigation the employee was dismissed for the use of the foul language.

The obscene language had been heard by two employees who confirmed to management what words were used.  However, the Employment Relations Authority found that there were inconsistencies in what the main employee who reported the language had recorded in a written statement of what was said compared to her later claim as to what was said.  The ERA found that the alleged foul language was not used and therefore the employer’s decision to dismiss was not one a reasonable employer could reach.  The discussion had been a private discussion between two employees and the language even if it had occurred was not directed to the supervisor.

The ERA awarded $6,700 being three months lost wages plus $6,000 compensation and costs.

Alan Knowsley

Employment Lawyer Wellington

Holiday pay should include commission payments...

The Employment Court has held that when an employer is making payments of holiday pay to a staff member whose pay is made up of a regular weekly pay plus commissions that holiday pay should be based both on the regular weekly pay and any commissions paid.

The two employees who brought the claim and worked for that company for 20 and 15 years respectively and their holiday pay had been incorrectly paid for almost all of that period.  The holiday pay had been based only on their weekly base earnings and had ignored the substantial commissions they had earned every month over those many years. 

Normally there would be a six year time limit on claiming back pay but in this case the company had through its actions agreed to pay the employees the incorrect pay dating back to when they commenced employment.  The company was therefore liable for 20 years and 15 years back pay on the incorrect holiday pay.

If you have been paying holiday pay based only on base salary then you will need to arrange to pay the back pay to employees. 

If you have been receiving holiday pay which has been incorrectly calculated only on your base salary and excluding commissions then you should talk to your employer about receiving the difference between what you were paid and the correct calculation.

Alan Knowsley

Employment Lawyer Wellington

Poor process costs employer $29,000…

The Employment Relations Authority has upheld a claim for unjustified dismissal following a personal grievance claim.  The employee had been dismissed for dishonesty after the employer found the employee at his own private workshop when he was supposed to be off sick and when he was supposed to meeting with clients.

The employer failed however to put the allegations to the employee at any stage or to give the employee any opportunity to explain their behaviour.  As a result the dismissal was unjustified and the ERA awarded $12,285 for lost income, $15,000 compensation for hurt and humiliation plus $1,946 costs.

If the employer had put the allegations to the employee it’s more than likely the employee would not have been able to justify their behaviour and so a dismissal might well have been justified.  It was the failure by the employer to even raise this matter with the employee that lead to the decision being held to be unjustified.

Alan Knowsley

Employment Lawyer Wellington

$11,500 costs award against employee…

The Employment Relations Authority has rejected three personal grievances brought by an employee against his employer claiming unjustified dismissal and unjustified disadvantage following his dismissal for failing to follow instructions in dealing with abusive customers. 

The ERA found that the employer had acted reasonably and that its decision was justified.  The costs award was almost three times the normal amount awarded because the employee had turned down several reasonable offers from the employer to settle the case.

Alan Knowsley            

Employment Lawyer Wellington

Insurance CEO dismissal justified...

The Employment Relations Authority has dismissed a claim for unjustified dismissal following the sacking of the CEO of one of New Zealand’s large insurance companies as a result of actions following the earthquakes in Canterbury and Wellington.

The employer decided that the CEO had been guilty of serious misconduct for breaching its rules around what properties it would insure in Wellington.  In particular this related to the quality and resilience of the buildings.  The CEO had failed to get a new portfolio of buildings signed off by two of the managers as required by the internal policy when more than a percentage of the buildings were located in Wellington.

The Employment Relations Authority found that the employer had followed a fair process because they had raised the allegations with the employee, given him an opportunity to respond and had advised him that he was entitled to be represented.  They had also warned him of the possible consequences including dismissal should serious misconduct be found.  The employer had fully investigated the allegations and considered the employee’s responses before reaching its conclusion of serious misconduct.  The ERA concluded that a reasonable employer could have reached that decision and therefore the dismissal was justified.

Alan Knowsley

Employment Lawyer Wellington

Employer gets everything wrong…

The Employment Relations Authority has upheld a personal grievance for unjustified dismissal after a worker was fired following a heated argument with his boss.  The employer felt threatened by the employee’s aggressive behaviour and fired him on the spot.

Unsurprisingly the ERA found that the employer had failed to follow a reasonable process in reaching its decision to dismiss.  No allegations were put to the employee and there was no opportunity for the employee to respond or have a support person present.

The ERA awarded $6,900.00 in unpaid wages and $6,000 compensation for hurt and humiliation.  Those awards would have been double but for the aggressive behaviour of the employee which put the employer in the position of feeling threatened and contributed to the dismissal.

In addition to the failure to carry out a fair process the employer also got most of its other dealings with the employee wrong.  It had characterised the employee as a contractor rather than an employee.  However, the ERA held that the employee was not a contractor as the employer had deducted PAYE and paid this to the IRD and had also paid the ACC levies.  In addition the employee did not provide any invoices or have any control over their own business and all tools were provided by the employer.  This meant that the employer had not paid for public holidays worked or for public holidays not worked.  It had also not provided an alternative holiday for the public holidays that were worked.

The employer had also been required to deduct fines from the employee’s wages and pay those to the Crown.  The employer had made the deductions but had not paid those over to the Crown in full and had delayed for about a year in making those payments.  The employer was fined $1,000 for the failure to make those payments with $750 of that going to the employee.

So the employer’s actions here cost them over $13,000 plus a likely award of costs to follow.

Alan Knowsley

Employment Lawyer Wellington

Dismissal for aggressive behaviour upheld...

The Employment Relations Authority has rejected a personal grievance claim for unjustified dismissal of an employee accused of aggressive behaviour towards other staff.

The ERA held that the allegations were clearly put to the employee, he was given a reasonable opportunity to respond to the allegations, to have a support person present and was made aware of the seriousness of the allegations.

The employer had recorded the disciplinary interview (which lasted about four hours) so there was a clear record of what had been said and it also showed the employee’s aggressive and belligerent attitude during the meeting as well.

The ERA held that a reasonable employer could reach the conclusion that the employer had done, which was that the allegations were correct and that the employee did not accept any fault and was unlikely to improve his behaviour.  The dismissal was therefore justified.

So by following a good and fair process the employer was able to deal with the employee’s behaviour and dismiss the employee for the protection of the business and its other staff.

Alan Knowsley

Employment Lawyer Wellington

Failure to reveal theft charge...

The Employment Relations Authority has upheld a personal grievance claim when a job seeker had their offer of employment withdrawn after it was accepted by them.

The employee failed to mention in the process that they had faced a charge of theft from a previous employer.  They had been found not guilty of the charge.  Their CV left out the employment which related to the allegation of theft.

The ERA held that the employer failed to properly investigate the allegation or give the employee a proper opportunity to explain the allegations.

The ERA held that the offer could not be withdrawn after acceptance but as the woman had deliberately left the relevant details out of her CV to avoid the theft allegation complications her remedies were reduced by 25%.

She was awarded $6,000 compensation plus $1,684 lost income.

Alan Knowsley

Employment Lawyer Wellington

Employee awarded $1.7 million harassment damages …

An employee in Australia has been awarded a huge AUD$1.7 million compensation payment for being repeatedly harassed, mistreated, devalued and undermined by her CEO over almost a year.  The employee was diagnosed with a variety of illnesses including anxiety and depression and retired unable to return to work.

The behaviour complained about included public humiliation of the employee, refusing requests for information, isolating her from her co-workers and undermining her.

The Court found that this behaviour should have been recognised for what it was and stopped.  The employer’s failure to do so made it responsible for the CEO’s actions.  An interesting aspect of this case is that as this involved the CEO as the perpetrator, it would have involved a whistleblower or someone to let the board know of the CEO’s behaviour.  Not an easy position for a co-worker to be put in but this did not save the employer from liability for its CEO’s actions.

In New Zealand the behaviour of the CEO would be taken to be the actions of the employer as the CEO manages the staff.  If the perpetrator was another manager or colleague (not the CEO) then the employer will only be responsible if the behaviour was brought to the employer’s attention and it failed to deal properly with it.

 

Alan Knowsley

Employment Lawyer Wellington

I resign effective immediately - Yeah right...

When does an employee saying they “resign, effective immediately” not mean they want their resignation to be “effective immediately”?

That was the question answered recently by the Employment Relations Authority when it upheld a personal grievance for unjustified disadvantage following an employee resigning “effective immediately”.  The employee was going to a competitor, so when they put in their resignation they expected to be marched out the door immediately and that was what happened.  The employer claimed that they understood the employee’s written resignation which said it was “effective immediately” to mean just that i.e. they were finishing there and then.  No mention was made of what date they would finish and the employer never asked the employee for clarification that they were finishing that day.

After being marched out the employee sought to be paid out their notice period.  The employer refused on the basis that they had resigned “effective immediately” and had not given the required four weeks’ notice.

The Employment Relations Authority held that the employee never intended to resign without giving the required four weeks’ notice and that if the employer had asked they would have discovered that.

The ERA awarded lost wages of $1,600 plus $3,500 for the hurt and humiliation suffered by the employee because the employer had misunderstood the “effective immediately” to be “effective immediately” and did not ask the employee if that is what they meant.  The employer is also liable to pay the employee costs as well for the hearing.

So the lesson to be learned is that, if an employee says something, it pays to check to confirm they actually mean what they say before taking it at face value.  A failure to do so can be expensive.

Alan Knowsley

Employment Lawyer Wellington

Facebook posts breach confidentiality of settlement…

The parties signed a confidential settlement of an employment relationship dispute.  The settlement included a non-disparagement clause as well.

One of the parties then posted disparaging Facebook posts and sent disparaging emails about the other party.

The Employment Relations Authority has upheld a claim for penalties to be imposed for the breaches.  The ERA held that the breaches were intentional and damaging to the reputation of the two parties and occurred on multiple occasions.  The maximum penalty available was $100,000 but only a $6,000 penalty was imposed.  Of that $4,000 was ordered to be paid to the injured parties and $2,000 to the Crown.

The offending party claimed that the Facebook posts only went to his family and friends but even that was a breach of the confidentiality of the settlement.

Alan Knowsley

Employment Lawyer Wellington

Employer penalised $78,000 for failing to notify WorkSafe of workplace injuries…

An employer has been penalised after failing to report two separate workplace incidents.

Two employees sustained severe injuries to their hands while using a piece of machinery. As a result of the injuries, both employees required surgery and significant time off work.

WorkSafe became aware of the incidents after one of the injured employees made a complaint.

WorkSafe found that the employer had failed to implement systems to identify and manage workplace risks, and had failed to formally train the employees on how to safely operate the machine.

WorkSafe’s Inspector also found that less than 4 months earlier, the employer had been issued with an improvement notice which required the company to implement a hazard management and control system which had not been done.

The District Court penalised the employer $78,000 for breaching health and safety law.

Alan Knowsley

Employment Lawyer Wellington

Employers penalised over $12,000 after failing to follow proper termination process…

An employee has been successful in the Employment Relations Authority after raising a personal grievance claim for unjustified dismissal.

The employee was dismissed from his employment at a meeting with his employers after he had a dispute with a co-worker.

The employee was told that things were not working out and that he should look for another job. The employers thought things had gone too far between the two men and wanted to employ someone new.

The ERA found that no formal mutual agreement was reached between the employee and the employers to end the employment relationship.

Accordingly, the employers needed to follow a proper and fair process when dismissing the employee. The ERA found that the employers could not rely on the employee’s poor performance as justification for the dismissal as they had not raised their concerns with the employee about his quality of work or informed him that any failure to improve may result in his termination.   

The ERA ordered the employer to pay the employee over $5,000 in lost wages plus $7,000 in compensation for humiliation, loss of dignity and injury to feelings.

Alan Knowsley

Employment Lawyer Wellington

"Employee" not "contractor" leads to $15,000 penalties...

The Employment Relations Authority has found that a worker was an employee and not an independent contractor as claimed by the employer.

As the employer claimed the person was not an employee they also claimed they did not have to provide an employment agreement and did not have to record hours worked, wages paid or holiday pay earned.

This all came back to bite them when the ERA held the worker was an employee because the employer had failed to comply with its obligations to provide the employee with a written employment agreement and to provide a copy to the Labour Inspector.  They also failed to provide the required wage and time records.  The ERA fined the employer $15,000.  $5,000 of this is to go to the employee to cover unpaid holiday pay.

Alan Knowsley

Employment Lawyer Wellington

Raising Health & Safety concerns leads to loss of job...

Ignoring a manager’s health & safety concerns held not to be the actions of a fair and reasonable employer.  The Employment Relations Authority has upheld an employee’s claim for an unjustified disadvantage and awarded lost wages of $5,400 and compensation for hurt and humiliation of $7,000.

The employee was engaged as a manager of a licenced premises. She raised concerns over fire exits being obstructed by boxes stacked over the exits, an exit door not unlocking during a fire alarm and the emergency plan not giving proper instructions.  The emergency plan required patrons to assemble in the car park but the premises did not have a car park.

The manager also raised concerns about the serving of alcohol to intoxicated patrons.  She found as a result that her hours were reduced on rosters to the point where she was given no shifts at all and the alarm code was altered without her knowledge.  Although she was never actually “dismissed” the ERA held that she was effectively out of work due to the lack of rostered shifts and therefore awarded her lost wages until she found a new position.

In addition to the employment issues over the way she was treated this case raised serious issues about the Health and Safety procedure of this workplace.

1. Fire exits were blocked.
2. Fire exit doors did not unlock in a fire alarm situation as they were supposed to do.
3. The emergency plan had little relevance to the actual premises.  It may have been a cut and paste but no one had given much thought to its application to the building occupied.  To be appropriate an emergency plan musts be effective.  Check out your business plan to ensure it fits your circumstances.
   Alan Knowsley

Employment Lawyer Wellington

Unjustly fired but awarded zero damages...

In a rare outcome the Employment Relations Authority has upheld a claim for unjustified dismissal but refused to award any damages at all due to the employee’s conduct.

The employer raised an accusation of offering illicit drugs in the workplace but failed to follow the correct procedures as it did not give the employee an opportunity to comment on the accusations before it decided to dismiss the employee.

The ERA held that the poor process meant the dismissal was unjustified but had the employer followed a proper process it could have concluded the employee had offered illegal drugs to fellow employees and could have dismissed.  This outrageous conduct of the employee meant that it was appropriate to award no damages to them for the breach of process.

Alan Knowsley

Employment Lawyer Wellington

Failure to clarify nature of relationship costs employer...

The Employment Relations Authority has upheld a personal grievance claim for unjustified dismissal after a painter was told there was no more work for him.

An issue arose whether the painter was an employee or independent contractor.  This had not been discussed between them.  The employer considered him to be a contractor.  The employee considered himself to be an employee but neither discussed their understanding with the other.

After looking at all the relevant factors (control, integration in the business, written documentation, tax situation, payment provisions, nature of the relationship, ability to work for others, ability to subcontract, provision of tools of trade, own business and the parties’ intentions) the ERA concluded that almost all factors pointed to him being an employee.

As the employer had not followed any proper process in the dismissal it followed the dismissal as unjustified.

The employee was awarded lost wages ($2,200) and compensation for distress ($3,500) plus costs.

It pays to clearly communicate and document what sort of relationship is being entered into to avoid acquiring employees when that was not the intention.

Alan Knowsley

Employment Lawyer Wellington

Remedies reduced by 50% due to employee's conduct...

The Employment Relations Authority has upheld a personal grievance for unjustified dismissal but then reduced the remedies by 50% because of the conduct of the employee.

The employee had been dismissed without a proper process as no opportunity was given for the employee to respond to the allegations made by the employer.

The Authority found that lost wages of three months ($10,500) plus compensation of $10,000 would have been appropriate.  However, the employee contributed to the situation by repeatedly arriving late for work, failing to follow reasonable instructions and poor workmanship.  The remedies were halved as a result.

Alan Knowsley

Employment Lawyer Wellington

Poor process costs employer over $26,000...

An employee has succeeded in their personal grievance for unjustified dismissal once again because the employer failed to follow proper processes when dealing with issues of poor performance.

The employee was under a 90 day trial provision.  This means they could have been dismissed without any reason being necessary if that had been done during the 90 days.  However, the employer waited until after the 90 days to dismiss.  It also failed to raise with the employee its concerns over her performance so she had no opportunity to respond before she was dismissed.

The Employment Relations Authority ordered payment of $12,000 lost wages, $13,000 compensation for hurt and humiliation plus costs.

Alan Knowsley

Employment Lawyer Wellington

Misleading an employee leads to unjustified dismissal...

The Employment Relations Authority has upheld a personal grievance for unjustified dismissal after finding several failings in the employer’s process for dealing with a redundancy.

The employer advised the employee that her employment would terminate as the business had been sold to a new company and all employment agreements were ending.  This was not correct as no new company was buying the business.  The transaction was only a sale of shares in the existing business so the employer did not change.

The employer also failed to consult properly with the employee over what new position would be offered and unilaterally reduced her hours, pay and status.

The ERA awarded $2,200 lost wages plus $12,000 compensation for the employer’s breaches of good faith in the process.

Alan Knowsley

Employment Lawyer Wellington

Employer penalised $40,000 for inaccurate wage records…

The Employment Relations Authority has penalised an employer $40,000 for substantial under recording of working hours.  The employer had 16 workers and under recorded the hours for each on a daily basis.  The 16 employees were short-paid $87,000 as a result.

The $40,000 penalty was imposed because of the number of breaches, size of the harm done and as a deterrent to the employer and other employers from similar actions.

Alan Knowsley

Employment Lawyer Wellington

$2,000 penalty for failing to provide wages records…

The Employment Relations Authority has upheld a personal grievance claim and penalised an employer who failed to immediately provide copies of an employee’s wage and time records.

The employee was working out their notice period and felt they had been short paid so requested copies of the records.  The employer failed to provide these details.

The penalty for the three offences was up to $60,000 but this was reduced to $2,000 due to the circumstances of the company and how the breaches had occurred.  Just because the employment was about to end was no excuse for not complying with the law.

Alan Knowsley

Employment Lawyer Wellington

Costs awarded against unsuccessful employee in ERA decision…

An employee’s personal grievance claim for unjustified dismissal has been rejected by the Employment Relations Authority.

The employee was dismissed by the employer for serious misconduct for breaching his delegated authority. The employee’s action breached the employer’s policies on gifting and sensitive expenditure, and had the potential to become a conflict of interest for the employee when he undertook further work for the client.

The ERA found that the employer had acted as a fair and reasonable employer could in all of the circumstances.

The ERA was satisfied that the employee had received full information about the allegations and had been provided with an opportunity for representation and a chance to respond to the allegations. Adjournments were taken throughout the disciplinary meetings to allow the employer to consider the employee’s explanations and to conduct further enquiries. The employee was aware of the seriousness of the investigation and that it could lead to his dismissal. The employee was advised by the employer of the preliminary findings and was advised of the proposal to terminate his employment. The employee was given a chance to consider the proposal and an opportunity to comment on it.

The ERA held that the employee’s dismissal was justified and that the process followed by the employer contained no elements of unfairness.

The employee was ordered to pay $4,500 towards the employer’s costs.

It is important that you seek legal advice prior to making an application to the ERA so that you can have an objective third party weigh up your chances of success. If you are unsuccessful you may potentially be liable to pay or contribute to the other party’s legal fees.

Alan Knowsley

Employment Lawyer Wellington

Employer penalised over $12,500 after failing to disclose material information to employee during disciplinary investigation…

An employee has been summarily dismissed after failing to immediately report a health and safety incident. The employee cleaned up the accident but did not report the incident until before his shift the next day.

The Employment Relations Authority upheld the employee’s personal grievance claim for unjustified dismissal.

During the disciplinary meeting the employer focussed on the employee’s failure to report the incident during the shift or at the end of his shift. No consideration was given to the employee’s assertion that he had reported the incident as soon as he arrived at work the next day. The employer did not indicate that had the incident been reported before the start of his next shift, the employee would not have been dismissed.

The ERA held that this information would have likely influenced the employee’s answers and the focus at the meeting. The ERA noted that this failure to disclose material information undermined the fairness of the process which was followed.

The ERA awarded 3 months lost wages plus $12,500 compensation to the employee for humiliation, loss of dignity and injury to feelings.

Alan Knowsley

Employment Lawyer Wellington

Poor process trips up employer again...

The Employment Relations Authority has found that an employer would have been justified in dismissing an employee for serious misconduct if it had got its process right.

The employer had a policy of no alcohol on the premises which the employee breached on two occasions.  When the employer found out it suspended the employee and commenced a disciplinary investigation.  However, it failed to give the employee an opportunity to discuss the suspension before it was imposed.

In addition the employee failed to turn up to the disciplinary meeting and instead sent in a medical certificate claiming sickness.  The employer proceeded to make a preliminary finding of serious misconduct when it should have held off doing so until the employee had another opportunity to respond to the allegations.

The ERA refused to award any lost wages as the employee failed to give evidence of attempts to find another job.  The ERA also said the damages awarded must be caused by the breach by the employer.  As the employer would have been justified in dismissing, the damages could only arise from the poor process, not the dismissal itself.

The appropriate compensation was said to only be $2,000 and this was reduced to $1,000 for the contributory conduct of the employee.

Alan Knowsley

Employment Lawyer Wellington

Dismissal justified after party scam...

The Employment Relations Authority has rejected a personal grievance claim for unjustified dismissal and ordered the former employee to pay costs of $4,500 to his ex-employer.

The employee was arranging an office Christmas party and his request for company funding for alcohol was refused.  It was alleged he asked a client to supply the alcohol and offered a purchase order so the client could claim the cost back from the employer.

The client contacted the company about the request and the employee was questioned about his conduct.  He originally accepted offering a purchase order, but changed his story to deny doing so.  His version of events changed again to the client requesting one.

The employer was concerned about his actions in asking the client to pay for the party alcohol as well as the lies in his response.  He was dismissed for serious misconduct.  The ERA agreed that the employer’s process was appropriate and the decision to dismiss was one a reasonable employer could make in the circumstances.

 

Alan Knowsley

Employment Lawyer Wellington

$16,000 penalties for lack of records...

The Employment Relations Authority has penalised an employer $16,000 for failure to keep proper wage and time records, failing to pay minimum wages, failing to provide employment agreements and making unlawful deductions.

The starting point for the penalty was assessed at $56,000 but reduced due to the employer’s poor financial situation and inability to pay.  In addition the employer was ordered to pay $5,000 unpaid wages and holiday pay.

Alan Knowsley

Employment Lawyer Wellington

Dismissal unjustified for poor process and not warranted…

The Employment Relations Authority has found an accounting firm liable for an unjustified dismissal of an accountant.

The accountant was accused of putting confidential information in her rubbish bin rather than the destruction bin.  She was also accused of emailing client information to her personal email address and excessive use of the office email for private matters.

The Authority found that the employer had failed to give the employee an opportunity to comment on her suspension before it was imposed which was unreasonable.  In addition there was no power to suspend in her employment agreement so unless there were genuine safety concerns requiring suspension there was no power to do so.  $3,000 compensation was awarded for the unjustified suspension. The employee was dismissed for serious misconduct on all three allegations but the Authority found none would justify a dismissal in the circumstances.

The putting confidential material in the rubbish bin should have resulted in a most a final warning.  The sending material to her home email was to continue to work on the material at home and not theft as was suggested.  Her actions did not justify a dismissal.  In addition the process followed had not been fair as she was expected to respond in far too short a timeframe (the next day) to get proper advice and assistance and prepare her response.  Also the employer’s decision to dismiss was made too quickly without adequate consideration of the response provided.

The allegation of excessive use of the firm’s email for personal use also failed the firm policy allowed reasonable use but it was never explained what amounted to reasonable.  The sending of one email per day was not excessive.  The inclusion of the firm’s sign off was automatic and required by firm policy so was not a disciplinary matter.  If of concern the employer should have raised those concerns with the employee both as to content of personal emails and the amount sent.

The employee was awarded $6,100 plus $6,200 lost wages for the six weeks it took her to find another position.

Remedies were reduced by 7.5% due to the employee’s contribution for placing confidential material in the wrong bin, sending personal emails and failing to seek permission to work from home and send material to her home to do so.

Alan Knowsley

Employment Lawyer Wellington

Bullied employee is awarded $98,000 by ERA…

An employee was pressured into resigning after she was bullied by her manager. The manager had previously received a number of complaints from other staff.

The Employment Relations Authority upheld the employee’s personal grievance claim for unjustified dismissal.

The employee was placed on special leave while the complaint was investigated and was asked to take part in a ‘guided mediation meeting’ with all staff present, during which she received no apology or admission of bullying from the manager. The employer told the employee that any acknowledgement of wrongdoing or recognition of the adverse effect of the manager’s behaviour on the employee was never going to happen.

After mediation also proved unsuccessful, the employee was given the choice between resigning or returning to work and being subject to a work plan in full and final settlement of her complaint.  When the employee failed to respond to the settlement offer, the employer took her silence as resignation.

The ERA found that the employer had failed to act as a fair and reasonable employer could in all of the circumstances, and awarded the employee 17 months’ lost wages plus $15,000 in compensation for hurt, humiliation and loss of dignity.

The award made in this case is significantly higher than the usual amount paid out to employees, and could act as a precedent in future cases to justify a higher pay out to victims of workplace bullying.

Alan Knowsley

Employment Lawyer Wellington

Disguising dismissal as redundancy costs employer over $25,000…

A recent Employment Relations Authority decision has upheld a claim for disadvantage and unjustified dismissal. The employee and employer traded arguments at a performance meeting. The employee was suspended without pay or any process to discuss the suspension. The employee was then dismissed for redundancy without any opportunity to comment on the redundancy.

 

The ERA held that the suspension without a proper process was unlawful. Payment of wages should have been made and the employee should have had the opportunity to comment before the decision was made.

 

The employer also messaged other employees attacking the character of the suspended employee. This was held to have aggravated the damages to be awarded.

 

The employer then dressed up a dismissal as a redundancy but provided no supporting material to justify a decision on cost saving grounds and gave the employee no opportunity to comment on the proposal. It was presented as a “done deal”.

 

The ERA held the redundancy to have not been genuine and awarded 13 weeks lost wages ($13,700) plus $12,000 compensation for the hurt and humiliation suffered by the employee as a result of the employer’s illegal actions.

 

A Knowsley

Employment Lawyer Wellington

Jury Service...

From time to time employees are summoned for jury service.  Does the employer have to agree?

Employees must attend jury service and employers must also allow the employees to attend jury service, unless the employee’s absence will cause difficulty for the employer. 

If special commitments will cause difficulty, the employer can provide the employee with a letter to support their application to be excused from jury service, or to have the jury service deferred to another time.

If an employer dismisses their employee, or threatens to dismiss them, or otherwise threatens their position, the employer can be convicted of an offence and also receive a fine of up to $10,000.  An employee may also bring a personal grievance against the Employer.

Payment during the time of jury service

The Ministry of Justice usually pays a small attendance fee to jury members.  Employers don’t have to pay employees while they are doing their jury service, but may choose to top up the money the employee receives from the Ministry of Justice.

It is recommended that Employment Agreements deal with jury service so that both parties know where they stand.

Jeanine Badenhorst

Employment Lawyer Wellington

Advocate barred from representing employer…

In a rare move the Employment Relations Authority has ordered that the employer’s advocate is barred from representing them in the ERA hearing for unjustified dismissal.

The firm representing the employer had previously represented the employee in the disciplinary hearings held by the employer.

The ERA held that even though a different advocate was representing the employer now, the firm’s previous representation of the employee meant that it would be placing the employee at a disadvantage if the same firm represented his employer.  He had communicated matters to his advocate which he was entitled to regard as confidential.  In addition his advocate advised the ERA that they would give evidence for the employer as to what had transpired at the disciplinary meeting.   The ERA held that allowing the firm to represent the employer would be breach of natural justice and potentially constitute an abuse of the Authority’s process.

It is worth noting that advocates can represent parties in the ERA and Employment Court without needing to belong to any organisation that imposes rules of conduct (such as the Employment Law Institute) in a similar way to the Law Society Rules for lawyers.

Alan Knowsley

Employment Lawyer Wellington

Employee resignation jumps the gun…

An employee has resigned after alleging that her employer failed to maintain a safe workplace. The employee was verbally abused by a colleague to which the employer responded by meeting with the colleague. At the meeting the employer gave the colleague a final warning, and requested that he apologise to the employee.  On hearing the action taken, the employee was unsatisfied and consequently resigned.

The Employment Relations Authority dismissed the employee’s personal grievance claim for constructive unjustified dismissal.

The ERA found that the employer was attempting to resolve the dispute between the two employees, and that he had reasonable grounds to believe that his actions of warning were sufficient to prevent further incidents.

The ERA held that the employee failed to adequately raise her concerns with the employer before resigning and that the employer could not, based on the information he had before him, have done anything more.

The ERA held that the employee’s resignation was premature as the employer had no opportunity to consider her response and therefore did not breach any duty. The ERA noted that potential solutions to the matter were cut short and that parties owe each other a duty to refer the dispute at least to mediation.

Alan Knowsley

Employment Lawyer Wellington

Employee awarded over $21,000 for unjustified dismissal…

The Employment Relations Authority has awarded an employee over $21,000 after the employee was unjustifiably dismissed.

The employee raised a personal grievance after his employer accused him of breaching company policy which amounted to serious misconduct.

The employee responded to the allegation saying that he had acted consistently with the training he received when he first took the role, and common work practise.

The ERA found that the company did not have a proper policy or procedure and relied on on the job training. The ERA found that the employee had been improperly trained and had not been instructed to depart from his training.

The ERA awarded the employee over $9,800 in lost wages plus $12,000 in compensation for humiliation, loss of dignity and injury to feelings.

Alan Knowsley

Employment Lawyer Wellington

Employment Court makes compliance order after party breaches out of court settlement agreement…

Parties to an employment dispute reached an agreement to settle the matter outside of Court. Under the agreement, party A was required to pay party B the sum of $300,000 in accordance with an agreed payment plan. The parties agreed that the Court would make a compliance order if party A failed to make payment on time.

The Employment Court was required to make a compliance order directing party A to pay party B $40,000 in accordance with the payment plan. This was the seventh compliance order required in this case. The Court noted that if party A failed to pay, party B could enforce payment of the debt.

The Court also ordered party A to pay party B over $2,000 in interest on the unpaid sum from the date of the default until the date of the compliance order plus over $4,800 for legal costs and disbursements, in accordance with the settlement agreement.

Alan Knowsley

Employment Lawyer Wellington

Telling boss to "shove" the job not a resignation…

The Employment Relations Authority has upheld a personal grievance claim for constructive dismissal.  After an argument over back pay the employee told her boss he could “shove the job.  She came back to work the next day and was told to put her resignation in writing.  She replied that she was not sure if she wanted to resign but was told it was too late and to put the resignation in writing.

The ERA held there was no resignation but she was constructively dismissed.  It awarded her $8,000 compensation for hurt and humiliation, $7,900 lost wages and $24,000 unpaid back pay.

Alan Knowsley

Employment Lawyer Wellington

What are the requirements for good faith in employment…

The Employment Relations Act 2000 requires employees and employers to deal with each other in “good faith”. 

What does good faith mean?

Parties must not act in a misleading or deceptive way in their dealings with each other.  The employer must also discuss with the employee before making a decision which may negatively impact on the employee’s job.  The employer must give the employee an opportunity to comment and get advice, or have a support person, (for instance if there is a disciplinary or performance review process in place).  Good faith also requires the parties treat each other fairly including

• being honest and open,
• raising any issues early,
• being constructive and positive towards each other,
• being open minded about issues and particular solutions, and
• treating each other with respect.

Employees have a duty to raise any issues they are having at work early, so that the parties can work together to resolve the issues.

If an employee fails to raise issues it may make things worse.

Where an employer does not follow the rules of good faith, an employee may raise a personal grievance against the employer.

The Employment Relations Authority or Employment Court can also award a penalty against an employer who breached the duty of good faith.

Jaenine Badenhorst

Employment Lawyer Wellington

Christmas kindness catches out employer...

The Employment Relations Authority has upheld a claim for unjustified dismissal after an employee was dismissed under a 90 day trial period.

The 90 day period was due to expire just before Christmas and the employer intended to dismiss the employee at that time.  However, the employee requested an extension to the trial period to give him a further chance to improve.  The employer decided as it was just prior to Christmas that it would be unfair on the employee to dismiss him then.  It therefore agreed to a one month extension.  The employee was dismissed at the end of the extended trial period.

The ERA held that there is no power to extend a 90 day trial period beyond 90 days even at the employee’s request.  Therefore the dismissal was not valid under the 90 day trial period provision and was not justified.

The employee was awarded $6,600 lost wages, $8,000 compensation plus unpaid holiday pay ($800) and legal costs ($2,300).  This made a very expensive $17,500 lesson for the employer for its Christmas generosity.

Alan Knowsley

Employment Lawyer Wellington

Employee penalised for breach of mediation agreement...

The Employment Relations Authority has found that an employee breached a mediation agreement by sending a disparaging email about his employer.

This was contrary to the agreement not to speak disparagingly about each other.

The ERA made an order requiring the employee to adhere to the agreed settlement terms and penalised him $2,000.  $1,500 of that is to be paid to the employer.  The employee was also ordered to pay $1,871 costs to the employer.

Alan Knowsley

Employment Lawyer Wellington

Ex-employees electronic devices to be seized

The Employment Court has ordered that electronic devises held by a former employee are to be seized and searched.  This follows the employee going to a competitor of the employer, the copying of material by the employee onto private devices and the destruction of parts of the employer’s records by the employee before he left.

The Court was satisfied that there was a strong case against the employee, the loss or damage to the employer was serious if the search order was not made, there was strong evidence that the ex-employee held relevant evidence and a real possibility the ex-employee might destroy or hide such evidence.  The order also requires the ex-employee to allow access to his premises for the search and seizure of the devices.

Alan Knowsley

Employment Lawyer Wellington

Public Holidays

There are 11 Public Holidays, also known as “statutory or stat. holidays”.  On these days employees can have the day off work and still be paid. 

If, however, an employee does work on a Public Holiday, they get paid “time and a half”, plus receive another day off at a different time, called a “day in lieu”.

Employees can only be made to work on Public Holidays if it is a day they would usually work and their Employment Agreement says they have to.  Employees may also agree to do work, even if they do not have to under their Employment Agreement.

What happens if a Public Holiday falls on a weekend?

If a stat. holiday falls on a weekend day, and the employee doesn’t normally work on weekends, the employee may take the following Monday as the stat day.

If the employee normally works on the weekend then the stat. day remains on the relevant weekend day.

If an employee does not have a regular work pattern, it could be hard to determine which day the employee needs to take the stat. day.  You can use the “Otherwise Working Day Calculator” to assist you.  It is available from the Ministry of Business Innovations and Employment website, https://www.employment.govt.nz/leave-and-holidays/calculating-payments-for-leave-and-holidays/otherwise-working-day/.

If the employee usually works on both the weekend day and the following Monday, the stat. day’s date will be unchanged, the employee will get paid time and a half, and receive another day off work.

The day off… “day in lieu”…

The alternative day off is also known as a “day in lieu”.  The employee can take the day in lieu on a day agreed with the employer that is usually a working day for them.  The day must not be a stat. day.  The employee will get a whole working day off, even if they did not work a whole working day on the stat. day.

If the employer and employee cannot agree on which day the day in lieu should be taken, the employer can give the employee at least 14 days’ notice of the date they want the employee to take the day in lieu.  The employee will receive their normal daily pay for the day in lieu.

If the employee does not take a day in lieu within 12 months of becoming entitled to it, then the employer and employee may agree for the employee to be paid out for that day instead.  If the employee’s employment ends before the employee took the day in lieu, they will be paid out for their day in lieu.

If the stat. day falls within a period where the employee is already on annual leave the employee gets paid their usual daily pay, but the employee does not have that day counted as annual leave.  If the employee is on parental leave, the employer would not have to pay for the stat. day because the employee would not normally work on that day.

If an employee is sick or bereaved on a stat. day and they would normally work on that day, then the employee would receive their normal daily rate for the stat. day but the day would not be deducted from their entitlement to sick/bereavement days.  For instance, if an employee has 5 sick days available, and then falls ill on a stat. day, the employee would get paid their usual rate for that day.  The employee would also still have 5 sick days remaining.

Restricted shop trading days…

There are 3½ days each year when almost all shops must be closed (some exemptions apply).  The days are Christmas Day, Good Friday, Anzac Day until 1:00pm, and Easter Sunday.

From August 2016 local authorities may put in place policies which will allow shops within their area to trade on Easter Sunday.  Employees and employers will need to check their local region’s policies with the Ministry of Business Innovation and Employment.

The important thing to note is that all employees have the right to refuse working on Easter Sunday without giving a reason.

If an employee agrees to work on Easter Sunday, the employee will receive their usual pay for that day, and will not receive a day in lieu because Easter Sunday is not a stat. day. 

If an employee usually works on a Sunday, but does not work on Easter Sunday because their workplace is closed due to trading restrictions, then what they get paid for that day depends on the terms and conditions of their Employment Agreement. 

Usually, if an employee is able to work on a day that is a contracted day for them to work, the employer has to provide them with work for that day. 

If the employer does not provide the employee with work, they may have to pay the employee what they would have paid them if they did work, unless the Employment Agreement specifically says otherwise.

 

Jaenine Badenhorst