Employer fined for no employment agreement...

The Employment Relations Authority has upheld a claim for unjustified disadvantage of an employee who was not given an employment agreement despite asking the employer.  The law requires all employees to be given an employment agreement in writing.  The Employment Relations Authority held that the starting point for a fine (maximum $20,000) was in this case $10,000 but reduced the fine to $2,000 because the breach was not a deliberate one by the employer and because of the poor financial state of the employer.

The employee was also entitled to compensation for the employer holding back their final pay upon resignation.  The starting point for compensation here was $7,000 but this was reduced by 50% to $3,500 because the employee retained property belonging to the employer and said they would only return it when they were paid their outstanding wages.  The ERA was clear that the employer could not withhold payment of the final pay on the basis that the employee was refusing to return company property and equally clear that the employee could not retain company property on the basis that the employer was withholding final pay.

Any retention of monies owed to an employee by an employer can only be with consent of the employee and a general consent in an employment agreement is not sufficient.  Consent must be given in each particular circumstance at the time of withholding the funds.

Alan Knowsley

Employment Lawyer Wellington

Full pay for all hours on call...

The Court of Appeal has rejected an appeal by a District Health Board against decisions of the Employment Court and the Employment Relations Authority over how much should be paid to anaesthetic technicians for the time they are on call but not called into work.

The District Health Board was paying the technicians only for the time spent at the hospital during the time they were on call.  The Court decisions mean that they will now be paid for all hours on call irrespective of the time that they spend actually at work.  The technicians were required by their employment agreements to live within 10 minutes of the hospital while they were on call and this meant that many had to live away from their families during their on call periods and this was a significant hardship which must be compensated for in full.

Alan Knowsley

Employment Lawyer Wellington

What is a Constructive Dismissal?

Constructive dismissal claims often follow a resignation where the employee claims they were forced to resign or had no option but to resign.  If an employee claims that they were constructively dismissed, the onus is on them to establish they have been dismissed.

There are various kinds of pressure that can turn a resignation into a dismissal.  These can include the classic “resign or you will be fired” ultimatum, deliberate conduct to force a resignation and a breach of duty leading to a resignation.

Deliberate conduct might include such things as asking an employee to look for other employment or setting out to make the employee so uncomfortable in the role, with the aim of getting them to resign.

A breach of duty leading to a resignation could include failing to pay the employee, failing to provide a safe workplace, failing to provide appropriate work for the employee, changing the hours of work in breach of the terms of employment or insisting on a new agreement being signed which disadvantages the employee (these are only examples and the possible causes will be many and varied).

The causes of resignation can be built up over time until there is a “final straw” which triggers the resignation.  The final straw does not have to be as serious as the earlier steps, but it does have to be a breach of duty and not be of a trivial nature.

The test is “but for” the employer’s conduct the employee would not have resigned.  If the employer conducts itself in a way that is designed or likely to damage or destroy the trust and confidence between the employee and employer, that will amount to constructive dismissal, if it causes the resignation and it is reasonably foreseeable the employee would likely resign.

If the actions that lead to the resignation come from other employees and not the employer, it will not be a constructive dismissal e.g. if an employee resigns due to bullying by co-workers that is not the employer’s behaviour.  However, if the employee complained to the employer about the bullying and the employer failed to deal with the situation or was dismissive of the employee’s concerns without a proper investigation, that could amount to a constructive dismissal.

If the resignation is held to be a constructive dismissal, the dismissal will be unjustified as the employer will have failed to carry out a fair process to dismiss.

An employee who resigns during a disciplinary process might be able to claim constructive dismissal if the necessary behaviour of the employer exists e.g. an ultimatum to resign, deliberate conduct to force a resignation or a breach of process that leads the employee to resign.

An employer can take the heat out of a threatened constructive dismissal by addressing the employee’s concerns through a fair investigation of the employee’s allegations and reaching a conclusion a reasonable employer could make in the circumstances.

Alan Knowsley

Employment Lawyer Wellington

Home detention and $252,000 in penalties...

An employer who falsified immigration documents and misled Immigration NZ about his employees was sentenced to five months home detention. 

Penalties have now been imposed on the employer including $132,000 in unpaid wages and $120,000 penalties. 

The Labour Inspectorate investigation uncovered that employees were having their wages unlawfully deducted and were working long shifts where the hours were not recorded so they were not paid the wages they were due.

Alan Knowsley

Employment Lawyer Wellington

$15,000 for changing hours without agreement...

The Employment Relations Authority has upheld a claim for unjustified disadvantage of an employee whose hours were changed from a morning to night shift without her consent. 

The employee had an Employment Agreement which specified her hours as 7 am to 3 pm Monday to Friday with any changes only to be made by mutual agreement.  The employer decided to change her hours to 3 pm to 11 pm despite her disagreement with the change.

The Employment Relations Authority awarded $15,000 compensation for the hurt and humiliation suffered by the employee but declined to award any lost wages as the employee could have taken up the alternative shifts and therefore not lost any wages.

Alan Knowsley

Employment Lawyer Wellington

Employer banned for three years...

The Employment Court has banned the Director of a failed company for three years from being an employer of any employees, either directly, or as an officer of any employer.  The ban arose following multiple illegal breaches of the Holidays Act.

The employer, which has gone into receivership, had a clause in all of its Employment Agreements to the effect that, if employees failed to give six weeks’ notice of resignation, the employer could withhold any payment to them including any holiday pay.  The Court held that such clauses were penalties and unenforceable.

As the Director had been involved in numerous other companies which had also been involved with similar breaches, the Court banned him for three years from employing any staff.

In addition the Court imposed penalties totalling $20,000. The director has to pay $10,000 of this personally.

Alan Knowsley

Employment Lawyer Wellington

Employer fined $40,000 for underpaying staff...

The Labour Inspectorate has taken action against an employer for failing to pay minimum wages and holiday pay and failing to keep correct employment records.  The fine is in addition to $24,000 in arrears that had to be paid to employees.

The employer has around 120 staff and was found to be repeatedly breaching their minimum rights despite follow ups from the Labour Inspectors and the previous Improvement Notice to get their records and practices in order.

The Labour Inspector indicated that employers should expect that they will be followed up for any non-compliance with a zero tolerance approach and that additional strong penalties will be sought where any ongoing non-compliance is discovered.

Alan Knowsley

Employment Lawyer Wellington

Dismissal decision justified…

The Employment Relations Authority has rejected a claim for unjustified dismissal.  The employee was dismissed after an investigation into two incidents of the employee failing to comply with legal requirements and breaching the employer’s rules over reporting incidents to the General Manager.

In relation to both incidents the ERA found that the matters alleged had occurred and that they amounted to serious misconduct and justified the employee’s dismissal.  The ERA was not satisfied as to the employee’s honesty in giving his responses to the employer during the investigation and also during the ERA hearing.  CCTV footage showed that the employee was not where he alleged he was during one of the incidents.

The employer had failed to provide the CCTV footage to the employee during the investigation but the ERA held that that failure did not make the process unfair as the footage clearly showed the employee to not be where he claimed he was at the time of the incident.

In this case the employer had clearly put the allegations to the employee and advised him of how serious the allegations were and given him a very fair opportunity to comment on the allegations.  It had then considered the employee’s responses and carried out a fair investigation before deciding that serious misconduct had occurred and that the employee should be dismissed for those multiple instances of serious misconduct.

Alan Knowsley

Employment Lawyer Wellington

Getting redundancy process right...

The Employment Relations Authority has dismissed a claim for unjustified dismissal following a redundancy process of a Senior Manager.  Prior to the redundancy process the employee made redundant had raised complaints about the Manager who was one of the people carrying out the redundancy process and those complaints had been dealt with by the company and a resolution reached.  The employee had been told that if any further problems arose he was to discuss those or report them to Senior Management.  He did not raise any further issues or complaints.  However, as part of the redundancy process he alleged that the earlier incidents meant that he did not receive a fair consideration for the position he applied for.

The ERA rejected those complaints as there was no evidence of predetermination or bias.  The ERA held that the employer had followed a fair and proper process and had made fair decisions in relation to the redundancy.  This included having a good business decision for the redundancy and putting a proposed restructure to the employee and giving them the opportunity to take advice and to comment on the proposal before any decisions were made.  The employee did take advice but did not bring their representative to the meetings.  They also made very limited comments on the restructuring proposal.

When the employee applied for one of the new positions they were not successful and another employee whose position was also made redundant was appointed to that role.  The ERA held that the employer was justified in making the decision to appoint the other employee because of their greater skill and competencies for the role.

This case is an example of the employee getting both its business justification and its process right when carrying out a redundancy process and the ERA held that the employer had acted as a fair and reasonable employer in the circumstances.

Alan Knowsley

Employment Lawyer Wellington

Forged signature on employment agreement...

The Employment Relations Authority has upheld a personal grievance for unjustified dismissal and unpaid wages from an employee who was dismissed under a 90 day trial period. 

The employer claimed that the Employment Agreement with the employee contained a 90 day trial period clause and that the employee was dismissed under that clause.  If that was true there would be a prohibition on the employee bringing a claim for unjustified dismissal.  However, the employee denied ever having signed an Employment Agreement and produced evidence to show that the signature on the agreement did not match their signatures on other documents such as their Driver’s Licence.  The Employment Relations Authority found that the signature on the document was not that of the employee and that the agreement had therefore not been signed by the employee and could not be relied upon by the employer to enforce the 90 day trial period.  As a result of the 90 day trial period not being valid there was no proper process for the dismissal and the employer was ordered to pay lost wages and compensation to the employee.  The compensation ordered was $8,000 for the hurt and humiliation and $3,500 lost wages plus 8% holiday pay.

The employer was also fined for failing to pay wages on time.  The employer was ordered to pay legal costs.

Alan Knowsley

Employment Lawyer Wellington

Unjustified dismissal from shift changes...

The Employment Relations Authority has upheld a claim for unjustified dismissal from an employee who was subjected to shift changes by the employer without agreement.  The employee had for a number of years worked regular shifts, but the employer sought to change those when it had difficulty getting people to work on a Sunday.  The employee did not agree to the change of shifts as they clashed with other employment they held.  The employer persisted with rostering the employee on the Sundays despite the employee’s objections and this lead to an acrimonious falling out between the employer and employee.  The employer then stopped offering any shifts to the employee at all.

 

The Employment Relations Authority held that this was an unjustified dismissal as the changes of shift had been without agreement and the failure to offer any shifts was a breach of the Employment Agreement.  Normally in such circumstance the ERA could order up to three month’s lost wages but this was reduced to only four weeks lost wages because the employee had failed to seek any other work and so had not mitigated her losses.

 

In addition to the lost wages the employer was also ordered to pay Kiwisaver contributions and $3,000 compensation for the distress caused to the employee.

There was a 10% reduction in all of the awards made to the employee because of contributory conduct.  The employee had engaged in making derogatory comments about the employer on social media.

 

A side issue of this case was the identity of the employer.  The Employment Agreement, which had been signed, referred to a trading name only, but there was no company registered in that name.  The ERA held that the owner of the business was a limited liability company and that that company was the employer.

 

Alan Knowsley

Employment Lawyer Wellington