Forensic examination of employee’s computer…

The Employment Court has held that the Employment Relations Authority can summons an employee to attend at the Authority and be required to bring their personal computers with them. 

The employee was leaving the employment of their employer to set up in competition.  The previous employer believed that the employee was using confidential information in their new company which was owned by the employer. The employer sought an examination of the employee’s personal computers and that of the company they had set up in competition.

The ERA ordered that the employee attend and bring all computers and passwords and allow the ERA and a forensic expert to examine the computers for evidence of the use of the confidential information.

The employee challenged that order in the Employment Court, but the Court held that the ERA was within its rights to require them to attend and to bring their computers and passwords for examination.

It remains to be seen what information is found on the computers during the examination, so watch this space.

Alan Knowsley

Employment Lawyer Wellington

Fixed term contracts – funding reasons not reasonable…

The Employment Court has held that a fixed term contract for an employee was not based on reasonable grounds.  The employer held a contract for the provision of services, but this was subject to yearly renewal.  The employer claimed that, because it did not know from year to year whether it would be given a new contract, meant it could have a fixed term for its employees working on that contract.

The Court held that even though the financial uncertainty of the new contracts was genuine, the specifying of a fixed term was not based on reasonable grounds.  If the contract was not won in a year the employer would merely have to follow a redundancy process.  The lack of certainty over funding from year to year was no different to any other employer who has to be financially stable to keep employing its employees.  Allowing fixed terms based on financial uncertainty of the business would undermine the restrictions on allowing fixed term contracts to be only for genuine reasons, based on reasonable grounds.

The Court also said that the mere rolling over multiple times of the fixed term contract does not make it a non-genuine reason for a fixed term, but will be a flag to the Court the need for scrutiny of the reasons given.

As the fixed term clause was held not to be based on reasonable grounds, the employee was deemed to be a permanent employee.  His employment could therefore not come to end just by the end of the fixed term.

Alan Knowsley

Employment Lawyer Wellington

Clarification of what is included within “ordinary weekly pay”…

The Employment Court has clarified what is included within “ordinary weekly pay” when calculating what should be paid by way of holiday pay to an employee.  The case arose around commissions which were paid on irregular intervals to employees.

The dispute arose as to whether these commissions were part of the ordinary weekly pay or could be included in the average weekly earnings for an employee for the calculation of holiday pay.

The Court found that in this case the commission payments were irregular and for varying lengths of time and therefore were not part of a regular commission payment.

Regular commission payments must be included in the calculation of ordinary weekly pay, whereas irregular payments which occur over periods of longer than a week do not have to be included in the ordinary weekly pay for calculation of annual leave entitlements.

Alan Knowsley

Employment Lawyer Wellington

Poor process costs employer again…

The Employment Relations Authority has upheld a personal grievance claim for unjustified dismissal after a worker was fired after eight hours employment.

The employee was on a trial period, but had not been provided with a written employment agreement because the employer had a policy of only providing written employment agreements at the end of the trial period.

The failure to provide a written employment agreement incorporating the 90 day trial period was fatal to the employer’s ability to dismiss under the trial period, because such trial periods must be in writing.

The ERA awarded the employee lost wages and $3,000 compensation for the hurt and humiliation suffered after being fired at the end of his first day.

Alan Knowsley

Employment Lawyer Wellington

Iwi manager reinstated pending hearing…

The Employment Relations Authority has ordered the interim reinstatement of an Iwi Manager who was dismissed from her position after refusing to sign a new employment agreement with reduced terms.

The manager had been on a fixed term contract, but when that term ended it was rolled over and another fixed term was offered.  When that fixed term ended it was again rolled over and another fixed term entered into.  At the end of that term the employee was offered a full time permanent contract, but on reduced benefits.  She advised the employer that she was considering the matter and taking legal advice and during that time she was dismissed on the basis that her fixed term had come to an end.

The ERA held that she had a good claim to be reinstated in the interim, as despite the breakdown in her working relationship with the current Chairman of the employer, another board member could take on that liaison role pending the outcome of the full hearing.

Employers need to be aware that fixed term employment agreements can become permanent if they are rolled over and if there is no longer a genuine reason for the fixed term.  There must be a genuine reason on each occasion that a fixed term is extended and the reason for that fixed term must be expressed in the employment agreement.

Alan Knowsley

Employment Lawyer Wellington

Unjustified dismissal costs $23,200…

The Employment Relations Authority has found that an employee was unjustifiably dismissed by her employer when she turned up for work.  She had not even got out of her car when the employer approached her and told her not to bother to get out of the car and that she wasn’t to come to work.  The employer also demanded her work keys and was acting in a very furious and agitated manner.

The ERA held that there was no proper process followed for the employee’s dismissal and that contrary to what the employer claimed at the ERA hearing it did not have the right to make unilateral changes to an employee’s working hours without raising matters with the employee.

It took the employee 24 weeks to obtain alternative employment and she was entitled to be paid for the lost wages of $23,200.

Alan Knowsley

Employment Lawyer Wellington

No consultation over redundancy…

The Employment Relations Authority has upheld a personal grievance claim for an unjustified disadvantage in relation to a redundancy.  The employer had notified the employee that they were closing the store where she worked and that she would be likely be made redundant.  It then went on sometime later to confirm the closing of the store and her redundancy.  It made no effort to consult with her over the redundancy or any options for redeployment in any of the other stores that it owned.

The ERA said that even though the options for alternative employment were limited and unlikely the employer still had the obligation to consult with the employee over redundancy and failed to do so.  She was awarded $750 compensation for the disadvantage she suffered, but no lost wages.

No wages were awarded because while she was working out her notice of redundancy the employee was dismissed for serious misconduct for falsifying wage and time records and failing to follow instructions.

The ERA considered whether her behaviour meant that her remedies should be reduced but concluded that she did not contribute to the failure to consult with her over the redundancy and that the dismissal for serious misconduct was totally unrelated.

Alan Knowsley

Employment Lawyer Wellington

Unjustified dismissal following bullying allegations…

The Employment Relations Authority has upheld a personal grievance for constructive dismissal and unjustified disadvantage.  The ERA has ordered the employer to pay over $28,600 to the employee.

The employee raised concerns she had with another employee bullying her and asked the employer to help resolve those issues.  The employer arranged a meeting with the employee to talk about the bullying concerns, but when the employee arrived the employer refused to meet her and his wife told the employee to start looking for another job.

The employee was then sent a letter raising serious disciplinary concerns and invited to a meeting to discuss those.  When she turned up at the meeting she discovered that the person she alleged to have bullied her was present at the disciplinary meeting.  The employer then proceeded to raise matters in front of the other employee including regarding the employee’s past employment.

In addition the support person who attended with the employee was not allowed to speak at the meeting and was shut down by the employer whenever they attempted to do so.  The disciplinary meeting was followed up by a letter from the employer saying that he expected a much improved attitude and behaviour from the employee.

The employee went off on stress leave as a result of the employer’s behaviour.  While she was on stress leave the employer reduced her hours from 42 hours per week to 25 hours per week and gave the additional hours to the alleged bully.  In addition the employer demanded that the employee, who had raised the concerns about bullying, pay him $500 to compensate him for his wasted time dealing with the bullying complaints.

The employee resigned and alleged that she had been constructively dismissed.

The ERA agreed that the employee had been constructively dismissed because the employer had failed to communicate with her fairly or reasonably and it failed to properly investigate her complaints of bullying.  Having the alleged bully present at the disciplinary meeting was also not appropriate, as was demanding the employee pay for the investigation. Failing to let the employee’s representative speak at the disciplinary meeting was also in error.

The employer was ordered to pay over $8,200 in lost wages, $850 for unpaid Kiwisaver contribution, $224 for a day worked, but not paid, and $1,230 holiday pay which was unpaid plus interest.  In addition the employer was ordered to pay $18,000 compensation for the way they had handled the matter.

It pays to take advice from an experienced professional when dealing with issues of bullying and discipline in the work force.  A failure to get matters right can be very expensive.

Alan Knowsley

Employment Lawyer Wellington

Unjustified dismissal for swearing at customers…

The Employment Relations Authority has upheld a personal grievance claim for unjustified dismissal after an employee was fired for swearing at customers.

The ERA found that the employee had been using colourful language with customers for several years without complaint and without the employer taking any action.  The ERA found that the employer’s decision to dismiss the employee for the colourful language was unreasonable given their previous attitude towards it.

The ERA held that the employer should have warned the employee not to continue using such language and have then only taken action if there had been a repeat of the behaviour.  That did not happen and the employee was fired for language used before she was warned to stop using the language.

Even though the employer relied on a customer complaint about the language that complaint related to a date before the warning was given.

The ERA awarded $4,000 in lost wages for the period the employee was out of work, plus $16,000 compensation for the hurt and humiliation suffered.

When carrying out a disciplinary process it is important to ensure that you properly put all allegations to the employee and ensure that your facts are correct.  In addition you can only discipline employees for matters that they know are wrong and it is not appropriate to ambush employees with allegations after having put up with the behaviour for several years.

If you want behaviour to change then you need to put a line in the sand and measure the employee’s behaviour after that point and not rely on incidents from before that point.

Alan Knowsley

Employment Lawyer Wellington

Employer fined for incorrect holiday pay…

The Employment Relations Authority has found an employer guilty of not complying with an Improvement Notice from a Labour Inspector in relation to Public Holiday pay.

The Inspector had issued an Improvement Notice after inspecting the wage and time records of the employer and discovering that people who worked on Public Holidays were not correctly paid for the time worked and were not given an alternative day’s paid holiday.

In addition people who did not work on a Public Holiday, but who would otherwise have worked, were not paid for the Public Holiday.

The employer claimed that the workers did not normally work on the day of the week the Public Holiday fell and therefore were not entitled to be paid.  However, on examination of the records it showed that on average the workers worked 32 of the previous 35 weeks on the day when the Public Holiday fell.

The ERA found that the employer was not paying the correct holiday pay as an illegal business decision to save money.

As well as ordering that all former employees be paid the back pay owed to them for the Public Holiday and alternative days, it also fined the employer $7,000.

It is important to get your pay systems in line with the legislation.  Any failure to do so can result in significant penalties.

Alan Knowsley

Employment Lawyer Wellington

Employee ordered to pay $28,500 costs…

The Employment Court has rejected a claim from an employee over a settlement agreement.  The settlement agreement was signed between the employee and the employer, but the employee then claimed that her lawyer had entered into the settlement agreement contrary to her instructions.  That claim was rejected by the Employment Court and the Court held that the employee had authorised the settlement.

The Court went on to award the employer $27,000 costs for the failed claim by the employee plus a further $1,500 costs for the employee’s argument about costs.

All parties need to bear in mind, that when they embark on a Court hearing there is a potential for substantial costs should they be unsuccessful.

Alan Knowsley

Employment Lawyer Wellington

Unjustified dismissal but remedies reduced by 50%...

The Employment Relations Authority has upheld a personal grievance claim for unjustified disadvantage and unjustified dismissal, but because of the employee’s conduct has reduced the remedies awarded by 50%.

The unjustified disadvantage came about because the employer suspended the employee without an opportunity for the employee to comment on the suspension.  Following the meeting at which the suspension occurred the employer denied having suspended the employee, but notes made by another manager at the meeting recorded “employee suspended on pay”.  The ERA accepted that the employee had been suspended and disadvantaged by the lack of any process.

In relation to the dismissal the employee was on a guaranteed 80 hours per fortnight and her employment agreement provided a consultation process to discuss a reduction in hours if the employer’s circumstances changed.  Those circumstances had changed due to a reduction of the number of clients for the employee to work with so the employer could have invoked this clause, consulted with the employee and then reduced the hours guaranteed.  Rather than doing that the employer said it was considering redundancy to disestablish the employee’s position unless she agreed to less hours.  That was not justified as the position was still required, just with less hours.  The dismissal of the employee for redundancy was therefore unjustified.

The ERA would have awarded three months wages and $20,000 compensation for hurt and humiliation, but for three aspects of the employee’s behaviour.  The employee had refused extra hours offered outside of her normal hours of work, she had told a client of her suspension in breach of her code of conduct and had arranged for a family member to contact a client in breach of an instruction not to contact that client.  Those three actions justified a 50% reduction in her remedies.

It is important for employer’s to read and understand their employment agreements and to adhere to them when discussing matters with employees.  Likewise employees should abide by their agreements and should not act in breach of their code of conduct or any instructions given by the employer.

Alan Knowsley

Employment Lawyer Wellington

Breach of settlement agreement results in penalty…

The Employment Relations Authority has ordered an employer to pay a penalty of $600 after it failed to honour the mediated settlement entered into.

One of the settlement terms was that the employer paid $1,150 legal fees to the employee’s advocate.  The employer failed to pay those and gave varying reasons for not paying.

The employer claimed they did not have the financial resources to pay the amount, but would enter into a repayment plan.  They then claimed that they would not pay the legal costs because the employee had breached the terms of the settlement agreement. 

The ERA found that both reasons given did not justify not paying the legal fees agreed to be paid.  If the employer was not in a position to pay the amount, it should never have entered into the settlement agreement.  In addition the alleged breaches of the agreement by the employee did not entitle the employer to fail to keep its side of the bargain and it should have paid the legal fees.  There were no grounds for the employer to claim that the employee had breached the agreement.

As well as being ordered to pay a penalty of $600 (which would have been $2,000 but for the financial difficulties of the employer) it also was ordered to pay the $1,150 legal fees and ordered to pay $1,428 costs and disbursements.  So the failure to pay the legal fees ended up adding over $2,000 to the employer’s bill.

Alan Knowsley

Employment Lawyer Wellington

Misrepresentation makes settlement agreement invalid…

The Employment Relations Authority has held that a settlement entered into at mediation was invalid.  An employer was looking at a possible redundancy situation and entered into negotiations with the employee which arrived at a settlement with compensation.  During the negotiations the employer mistakenly advised the employee that no redundancy compensation would be payable if the employee was made redundant.  That was not correct and under his employment agreement the employee would have been entitled to redundancy compensation.

The employee later realised that they would have been entitled to redundancy compensation and sought to set aside the settlement agreement.  They brought the claim in the Employment Relations Authority and the Authority agreed that, because of the mistaken misrepresentation by the employer, leading to both parties having a mistaken view, the settlement agreement entered into was invalid.

The ERA then went on to consider what the employee would have been entitled to by way of redundancy and found that the settlement agreement actually paid him more than the redundancy.  Therefore although it set aside the settlement as invalid it did not award any remedies because the employee had already been paid more than he would have been entitled to by way of redundancy.

Costs were not awarded to either party because both were at fault.  The employer for misleading the employee accidentally, and the employee for lodging launching into proceedings which were not going to bring a better result than they had already achieved.

Alan Knowsley

Employment Lawyer Wellington

Employee fined for breaching settlement agreement confidentiality…

The Employment Relations Authority has found that an employee breached the confidentiality and non-disparaging clauses of a mediated settlement agreement and has fined the employee $800.

The employee and employer went to mediation and agreed to settle their differences.  As part of the terms of that agreement the employee was to keep all matters confidential and not to make any disparaging remarks about the employer.

Immediately upon conclusion of the settlement agreement the employee went back to the workplace to collect his personal effects and while in the workplace told employees about his settlement and made disparaging remarks about the employer.  Two of his colleagues advised the employer of the employee’s actions. 

The ERA held that the breaches of the agreement were deliberate, but at a low level and were confined to the two employees in question.  It therefore imposed a small fine on the employee for the breaches.  The maximum fine could have been up to $20,000.

Alan Knowsley

Employment Lawyer Wellington

Worker accident results in over $700,000 in penalties…

The District Court has penalised an employer after it pleaded guilty following the death of one of its employees who fell off a ladder at work.  The worker had climbed up the ladder to carry out some repairs, but the ladder was not secured and there was no edge protection where the worker was standing.  The worker landed on concrete and suffered a head injury from which he tragically died a short time later.

The Court awarded $70,000 in reparation be paid to the employee’s wife and a further $100,000 be paid to his five children equally. 

In addition the Court ordered that the company pay a fine $506,000, which took into account the guilty plea and remorse shown by the employer, plus the reparation already paid to the spouse and children and the support given to the family following the accident.  The Court also ordered the company to pay $36,000 in costs for the prosecution.  Total penalties and costs amounted to $712,000.

The Court said that the company’s culpability was at the high end of the scale, because it had failed to appreciate in sufficient detail the risks to employees from working from ladders and it failed to adequately deal with those risks when they were obvious.  Though the company was working on plans to assess and deal with the risks, its steps were inadequate, given the simple actions which could have been taken to prevent the worker’s death.

Employers must assess risks in the workplace and take all practical steps to eliminate or minimise those risks and a failure to do so will have a significant impact by way of fines and penalties imposed over and above the trauma suffered because of a tragic accident.

Alan Knowsley

Employment Lawyer Wellington

Unjustified dismissal but no remedies awarded ...

The Employment Relations Authority has upheld a personal grievance for unjustified dismissal, but in an unusual twist, refused to grant the employee any remedies. 

The employee was an electrical apprentice in his third year of training.  On a job he wired up a connection in an unsafe manner, despite knowing the correct way to carry out the wiring job.  Luckily another apprentice, who was connecting something to the wiring, discovered the unsafe job and alerted management to the problem.

The employee admitted that he had been lazy in completing the connection and that all other connections in the building, that he had done, were done in the same unsafe manner.

The employer carried out an investigation into serious misconduct and dismissed the employee.  The employee raised a personal grievance claiming unjustified dismissal and this was upheld by the ERA.

The ERA found that the employer had predetermined the issue of serious misconduct.  It even said that serious misconduct had occurred in its letter raising the matter with the employee.  In addition incorrect information was given to the employee about the events subject to the disciplinary investigation and what he was accused of would only have been subject to a warning under the employer’s policies (because they were poorly worded).

The ERA held that, despite these failings, they were not going to award any compensation or damages to the employee because his behaviour in not wiring the connection according to the standards could have led to fatally serious consequences.  His excuse of being lazy was not acceptable and he had been warned numerous times about following proper standards and about his poor work practises.  The ERA found that it would be unconscionable to grant any remedies in those circumstances where his behaviour could have led to fatal consequences in the apartment building where he had been working.

It is important that employers follow a fair and proper process even when the evidence seems overwhelming against an employee.  Allegations should be put to the employee and their responses sought to the allegations.  The allegations should then be investigated fully without any predetermination of the outcome.

Alan Knowsley

Employment Lawyer Wellington

Restraint of trade claim fails…

The Employment Relations Authority has rejected a claim for a restraint of trade injunction and also one for a breach of confidential information.

The ERA concluded that there was no evidence that the employee had used any confidential information of the employer and therefore there was no breach of that clause of the employment agreement. 

In relation to the restraint of trade the ERA concluded that setting up a business to repair machinery of the same brand as the employer could amount to a breach of the restraint of trade clause, but that the 12 month time limit on the restraint was unreasonable and that a three month limit would have been appropriate.  As the claim was not filed until after the three months had already passed, there was no reason to give an interim injunction against the employee and so orders on the restraint of trade were also refused.

If the employer had brought a claim on the restraint of trade clause for damages then damages might have been found to have arisen from the breach, but that matter was never argued by the employer. They merely sought an injunction to stop him carrying out repairs on the same type of machinery that they worked on.

If you are subject to a restraint of trade clause or looking at enforcing a restraint of trade clause (or drafting one to include in an employment agreement) it is important to take advice from a professional experienced in this area.

Alan Knowsley

Employment Lawyer Wellington

$4,000 penalty for breach of mediated settlement…

The Employment Relations Authority has found that an employer breached a settlement agreement by commenting on the agreement and making disparaging remarks about the employee on a company website.

The mediated agreement provided that neither party would comment on the apology given by the employee to the employer or make any disparaging remarks about the other.

The company’s breach of this agreement was regarded as serious and they were penalised $4,000.  Of that $4,000, $3,000 is to be paid to the employee and $1,000 to the Crown.

Mediated settlement terms, such as confidentiality and not making any disparaging comments about the other party, are to be taken seriously and will be enforced strictly by the Employment Relations Authority.

Alan Knowsley

Employment Lawyer Wellington

$15,000 penalty for non-payment of wages…

The Employment Relations Authority has fined a company $15,000 after it failed to pay wages awarded of $4,383 in a previous Employment Relations Authority hearing.  A maximum fine for this breach would have been $20,000 and the failure to pay was regarded as serious and intentional.

The company had also failed to pay the damages awarded previously for hurt and humiliation of $5,000.  The ERA has no authority to order a penalty in this regard but the employee can apply to the Employment Court for a fine of up to $40,000 and for imprisonment of the directors of the employing company.  Watch this space.

Alan Knowsley

Employment Lawyer Wellington

Unjustified dismissal follows faulty investigation…

The Employment Relations Authority has upheld a personal grievance claim for an unjustified dismissal after an employee was sacked for stealing alcohol from the workplace.

In carrying out the investigation into the alleged theft the employer had viewed camera footage of various areas of the workplace.  Part of that camera footage was clear and showed the employee working and moving around the premises at or about the time of the thefts. It also showed him leaving the premises carrying a plastic bag which had something in it, but the contents could not be seen. 

Also viewed was unclear camera footage, which showed a person entering the fridge where the alcohol was stored and leaving the fridge sometime later.  Only the employee who was alleged to have stolen the alcohol and one other employee’s whereabouts could not be ascertained at the time the mystery person was in the fridge, so that narrowed the possibilities down to the two of the employees working at the time.  What the employer failed to consider was whether other employees had returned to the workplace after their shift had ended as these people were possible suspects as well.

The employer concluded that the employee was guilty of stealing the alcohol because he was seen leaving the area where he should have been working on cameras and then seen returning to that area shortly thereafter.  In between his leaving and returning the other camera footage showed a person entering the fridge and leaving the fridge.

The ERA however, on a close examination of the footage, discovered that there was only a very short few second gap between the offender leaving the fridge and other camera footage showing the employee re-entering another part of the workplace without carrying any alcohol.  This means that if he was the offender, he had to have exited the fridge, hidden the alcohol and made his way to another part of the premises in only 17 seconds.  The ERA concluded that a reasonable employer could not have reached the conclusion that this employee was guilty of the thefts based on unclear video footage and assumptions which did not appear to be correct.

Also the employer failed to take into account that the employee had worked for the employer for 17 years with a completely unblemished record and did not drink alcohol.

The employee was awarded $8,900 lost wages plus $12,000 compensation for hurt and humiliation.  He did not seek reinstatement to his position.

When carrying out an investigation it is vitally important that employers carefully consider all of the evidence and put any evidence available to the employee to comment on.  In this case the employer had only put some of the video footage to the employee and not the video footage which might have cleared him.

Alan Knowsley

Employment Lawyer Wellington

Unjustified dismissal from improper redundancy process…

The Employment Relations Authority has found that an employee had a personal grievance and was unjustifiably dismissed after she was made redundant.  The employee had raised concerns over bullying in the months prior to the redundancy process, but those bullying allegations had not been upheld.

The ERA found that the employer had commenced the redundancy process with the ulterior motive of removing a troublesome employee, rather than a genuine redundancy.  The ERA found that the employer had pre-determined the outcome of the process and had closed their minds to the possibility of redeployment.

There was a new role available within the workplace which contained significant aspects of the current role.  The ERA found that although some training and professional development might have been required to put the employee into this role, a fair and reasonable employer would not automatically have closed off the possibility of redeployment. 

In addition the ERA found that holding the meeting at the employer’s lawyer’s offices, with the lawyer playing a significant part in the meeting was inconsistent with good faith because no prior notice, that the lawyer would be taking part in the meeting, was given to the employee.

The employer also failed to provide the employee with sufficient information along with the redundancy proposal to allow them to give a considered response.

All of those factors meant the redundancy process was not genuine and the dismissal was therefore unjustified.  The ERA awarded three months lost wages and holiday plus $18,000 compensation for the hurt and humiliation suffered.

It is important that employers have a genuine reason for redundancy and do not seek to disguise a performance or discipline matter as a redundancy.

Alan Knowsley

Employment Lawyer Wellington

Employer ordered to pay former employee for unpaid minimum entitlements…

An employer has been ordered to pay a former employee over $21,000 for unpaid minimum entitlements. 

The employee, who began work in 2003, ceased work in October 2014. A dispute later arose whether or not the employer had paid the correct amount of wages, public holiday and annual leave entitlements. 

The ERA awarded the employee $21,150 plus interest as a result of finding that the employer, who was described as an experienced business man, had not made the correct payments. The investigation meeting was held in December 2018, over 4 years after the employee has ceased working for the employer.

While the employer had some wage and time records, it was not able to show that the employee was paid correctly.

This again demonstrates clearly that it is important to keep accurate records, including after employees cease to be employed.

Ben Ruback

Employment Lawyer Wellington

Employer ordered to pay almost $34,000 after it illegally charged an employee to keep employment...

An employer has been ordered to pay an employee almost $34,000 because the employer was illegally making the employee “pay back” part of his wages.

The employee worked for the employer between December 2011 and February 2017, and during most of this time the employee was making weekly payments to the employer of approximately $200.

The employer initially explained these payments as rent, however, at no time did the employee reside at the premises owned by the employer. The employer later changed its story which further questioned the employer’s credibility.

The ERA found that the payments were more than likely to have been required by the employer to support the employee’s immigration application.

The employer was paying the employee at a rate which met the required threshold for immigration, but the payments back to the employer by the employee meant that the employer did not actually pay at the correct rate as contained in the employment agreement.

The ERA described the employee’s weekly payment as premiums which were illegally sought and received by the employer.

The employee was awarded the total amount of premiums paid plus interest.

Under New Zealand law, it is illegal for an employer to charge an employee a fee for their employment. In recent cases it has been seen that some employers have exploited migrant workers by charging them money in exchange for giving them a job, so the employee can obtain work visas.

If an employer engages in this type of behaviour, not only will it be required to pay the money back to the employee, but in addition, the ERA is likely to impose penalties.

Ben Ruback

Employment Lawyer Wellington

$40,000 compensation for bullying and overwork…

The Employment Relations Authority has upheld claims for personal grievances against two employers of the same employee in relation to claims that she was bullied and harassed at work and was overworked beyond her required hours without compensation.

In relation to the first employer the ERA found than the employer failed to provide a healthy and safe working environment.  The employer had knowledge of bullying and harassment by a manager as well as requirements to work extra hours without pay.  The ERA held that the employer failed to take any real steps to deal with these issues.  The employer was ordered to pay $15,000 compensation for the emotional distress suffered by the employee for the failure to provide a healthy and safe working environment.

In addition, the employer was ordered to pay $6,471 unpaid wages for the extra hours worked over and above the contracted hours.  The employer failed to provide any wage and time records and therefore the ERA accepted the employee’s calculations of the overtime worked.

The employee resigned from that employer and took up employment with a second employer which was part of the same group of companies.  She did this because she thought that the new employer would provide her with fixed hours and a better working environment.  However, that did not prove to be the case and she continued to be subject to an unsafe work environment and requirements to do excessive overtime, which was unpaid.  She was also once again subjected to bullying and harassment.

The employee suffered a breakdown as a result of the conduct of the employer and resigned from her employment claiming constructive dismissal.  This claim was upheld.  She was awarded three months lost wages and $25,000 compensation for the hurt and humiliation, for the failure to provide a safe working environment and for requiring excessive overtime.

Employers need to be aware that they must provide a healthy and safe working environment and that includes safety from bullying and harassment and also overwork.  A failure to take steps to deal with these issues will result in significant compensation awards to employees who suffer as a result of the unsafe workplace.

Alan Knowsley

Employment Lawyer Wellington

Law clerk unjustifiably disadvantaged by employer…

The Employment Relations Authority has upheld a claim by a law clerk that they were unjustifiably disadvantaged by their employer.  The employer had issued a verbal warning in relation to her work practices.  However, the warning was issued before the employer gave the employee an opportunity to comment on the reasons for the warning and was therefore invalid.  The ERA found that the warning should not have been given until the employee had been told of the allegations relating to performance and given an opportunity to respond to the allegations first. Giving the warning first showed that the decision had been predetermined.

The ERA awarded $2,000 compensation for disadvantage over the verbal warning.

The employee also brought complaints of bullying and constructive dismissal but both of those were rejected by the Employment Relations Authority.  The employer’s requirements for the employee to follow proper processes with her work were not unreasonable and the employee’s decision to resign from her work was not as a result of any improper actions by the employer.

Alan Knowsley

Employment Lawyer Wellington

ERA orders employer to pay $3k over social media comments

The Employment Relations Authority has ordered an employer to pay $3,000, after it breached a Record of Settlement, which included a clause that the employer and employee would not make disparaging comments about one another after the Record of Settlement was signed.

The employer posted harmful comments about the former employee on Facebook. This caused the employee to raise it with his new employer and subsequently led to the employee leaving his new employment.

The ERA ordered the employer to pay a fine of $3000. The ERA said it was to serve as a deterrent to others.

This is a timely reminder that a Record of Settlement is a legally binding agreement and once it is signed, the terms must be adhered to. If a party does not comply with the terms, penalties can be imposed by the ERA such as in the case above.

Ben Ruback

Employment Lawyer Wellington

$500,000 cost of failing to enforce existing health and safety policies…

The District Court has ordered a company to pay over $500,000 in fines and reparations, after it was found that it had failed to enforce the necessary health and safety policies which were in place.

In 2017, an employee died in an incident where a dump truck he was operating rolled down a bank. The employee was not licensed to drive the heavy vehicle and had never driven the vehicle on a public road before.

His supervisor knew that he was unlicensed, but took no action. The Court found that although the company did have the necessary health and safety policies in place, they were not communicated to the employees, or monitored/enforced by the employer.

All employers should ensure that the company’s health and safety policies are not only in place, but are understood and followed by all employees.

Ben Ruback

Employment Lawyer

Employee awarded $9,000 for one day’s work …

In a recent case the Employment Relations Authority ordered an employer to pay $9,000 to a woman who worked for one day as a trial period, without pay.

Following an interview, the woman was invited to undergo a trial period. However, after completing the work she was told that all of her work was part of an unpaid trial. The employer said that it did not consider her an employee as she had only completed one day of work, and that they did not pay for people to undertake trial days.

The ERA considered the woman to be an employee, even though the parties had not yet signed an employment agreement. The woman was awarded $9,000 which included payment of a four week notice period.

Employers may ask prospective employees to undertake a workplace trial. However, if an employee undertakes a full day’s work, or contributes to the commercial activities of the business, then he or she may be considered an employee, regardless of whether or not the parties have signed an employment agreement or have reached an agreement about performing an unpaid work trial.

Ben Ruback

Employment Lawyer Wellington

Failure to keep wage records costs employer…

The Employment Relations Authority has upheld a claim for short paid wages, Kiwisaver and holiday pay.  The employee claimed that she had not been paid her base salary, nor had she been paid for extra hours worked following the departure of another employee.  She claimed she worked 70 hours per week for a four week period instead of her contracted 30 hours.

The employer denied that the employee had been short paid and denied that the employee had worked the additional hours. However, the employer was not able to produce any wage and time records to back up their claim as to what the employee had worked or had been paid.

The employer was ordered to pay $7,000 short paid wages and Kiwisaver contributions plus holiday pay to be calculated.

The Employment Relations Authority is obliged to accept a claim by an employee if they have been hampered in the preparation of their claim by the lack of records from the employer.  It pays to keep full wage and time records to be able to show what the employee was paid and how many hours they worked.  A failure to do so can prove very expensive.

Alan Knowsley

Employment Lawyer Wellington

 

 

Workplace fatality leads to over $466,000 in penalties…

The Blenheim District Court has convicted and fined a construction company following the death of one of its employees in a motor vehicle accident.

The employee was not licensed to drive a heavy vehicle but was allowed to drive a dump truck on a public road by his supervisor.  This was contrary to all of the company’s health and safety policies, but they were not communicated properly and not enforced. 

The vehicle rolled down a steep bank killing the employee.  The Court held that the risks of allowing an unlicensed driver to drive a heavy vehicle on a public road was not only serious but also obvious.  The company was ordered to pay $115,000 in reparation to members of the employee’s family and was also fined over $350,000.

Just having policies in place is of no use if those policies are not communicated to staff and enforced.  All employers should have processes in place to not only develop policies on health and safety in their workplace, but to ensure that they are communicated to all staff and to check up that the policies are being implemented at all times.

Employment Lawyer Wellington

Unjustified dismissal following poor process…

The Employment Relations Authority has upheld a claim for unjustified dismissal after an employee was told he was being laid off due to lack of work.  The ERA held the dismissal to be unjustified because there was no proper process followed by the employer.  It did not give the employee any opportunity to give feedback on the proposed dismissal for lack of work and the employer did not advise the employee he was entitled to a support person during the process.  The ERA ordered that the employee be paid $4,450 for lost wages and $7,000 compensation for the hurt and humiliation suffered.

If the employer had followed a proper process of letting the employee know they were considering having to lay him off due to a lack of work, had provided him with an opportunity to give feedback and to be assisted by a support person, then the dismissal would have been upheld as being justified. The employer would have not been liable for any lost wages or compensation.  It is important to make sure you get the process right if you want to avoid expensive lessons in employment situations.

Alan Knowsley

Employment Lawyer Wellington

Employer ordered to pay $8,700 wage arrears…

The Employment Relations Authority has ordered an employer to pay wage arrears to an employee after a claim for short payment of wages.

The employee alleged that they worked a certain number of hours per day, but were only paid for the hours set out in their employment agreement.  The employer challenged the employee’s claim that they worked a longer number of hours, but could not produce any time sheets to show the hours the employee worked.

In addition the employee could only produce wage slips where the payments did not accord with the employment agreement, nor were the hours the same as the employer claimed the employee worked.  The Employment Relations Authority therefore preferred the evidence of the employee as to the amount of hours worked and ordered the employer to pay the $8,700, being the shortfall between the amounts paid and the hours the employee claimed to have worked. 

The onus is on an employer to keep records of hours worked and wages paid. If they cannot produce such records to the Employment Relations Authority or Labour Inspector then the ERA and Labour Inspector can assume that the employees claim for wages is correct. The employer becomes liable for whatever wages the employee claims.  It is vital therefore to keep full records and produce them to the ERA and Labour Inspector when required.

Alan Knowsley

Employment Lawyer Wellington

90 day trial period invalid due to no notice…

The Employment Relations Authority has upheld a claim for unjustified dismissal under a 90 day trial period.  The trial period provided that if termination was to be given under the trial period that the termination could be given immediately.  The ERA held that this termination without any period of notice was invalid because a termination without notice cannot be a notice period.  A notice period is required to notify the employee when in the future the dismissal will take effect.

This was not a situation where there was no notice period specified in the termination clause.  In that situation, notice would be reasonable notice and that would be interpreted by the Court, usually to equal any other notice periods in the contract or based on the pay period.  However, in this case the clause did provide a notice period, but one which had stated was of immediate effect.  As this was invalid there was no notice period and therefore the termination was itself invalid.

As the notice given was invalid the employee was unjustifiably dismissed and was awarded $7,600 in lost wages and $15,000 compensation for hurt and humiliation.

It appears that the employer was trying to be tough when it drafted its employment agreements to provide for no notice period under a 90 day trial and this has come back to bite them.  If they had just specified a shorter notice period, then that would most likely have been upheld by the ERA and the termination would have been justified.

Alan Knowsley

Employment Lawyer Wellington

Employee fixed terms genuine and reasonable…

The Employment Relations Authority has upheld the fixed term nature of an employee’s contracts despite the employee being employed on a series of fixed terms from 2010 until 2019.  To be on a fixed term contract the employer and employee must sign a written agreement which details the fixed term nature and the reasons for it.  Those reasons must both be genuine reasons and based on reasonable grounds.

The ERA decided that the employer here did have genuine reasons and they were based on reasonable grounds.  The employee was a teacher aid for special needs children in a school and the fixed term nature of the agreements offered to her was because of the funding arrangements for special needs children.  The school could not be sure of the number of special needs children attending nor of the funding provided for each teacher aid.

The ERA held that these were genuine and reasonable reasons to offer fixed terms because there was no other mechanism for employing the teacher under the collective agreement which would enable her employment to be terminated without having to pay redundancy pay which the school was not funded for.

The Employment Relations Authority distinguished an earlier case where a special needs teacher had been found to be a permanent employee.  In that case there was a waiting list of special needs children and therefore no danger that the funding would cease where as in the present case the funding could cease at any time that a student or students stopped being enrolled at the school and there was no waiting list of students.

When considering whether there are genuine reasons on reasonable grounds it is important to work through those justifications to ensure that they will stand scrutiny of the Employment Relations Authority should the nature of the employment be challenged by the employee.  It may not be possible to rely on the fixed term nature of the agreement if the reasons are not upheld.  That would expose the employer to an unjustified dismissal claim and substantial damages for lost wages and hurt and humiliation.

Alan Knowsley

Employment Lawyer Wellington

$23,000 penalties for wage deductions…

The Employment Relations Authority has fined an employer and the director of the employer for unlawful deductions from employees’ wages.

The employees of a service station had wages deducted whenever a customer drove off without paying.  The ERA held that such deductions are unlawful and both the employer and the director of the employer were penalised for the breaches.  The fine for the employer was $20,000 and for the director $3,000.

The company claims to have removed the deduction clauses from its employment contracts and to have repaid the workers who had deductions made.

Employers should be very cautious when making deductions from employee’s wages for the actions of employees and this can only be done with the agreement of the employee.  That agreement has to happen on each occasion of a deduction. A general provision for deductions in an employment agreement cannot suffice.

Alan Knowsley

Employment Lawyer Wellington

Unjustified dismissal under 90 day trial provision…

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

The ERA held that although there was a 90 day trial clause in the employment agreement, that employment agreement was never signed by the employee.  This means the employer cannot rely on the 90 day trial clause and must satisfy the ERA that the process followed for termination was fair and reasonable in the circumstances.

The ERA held that the employer failed to show that the process followed was correct because it did not properly raise performance concerns with the employee.  It did not give the employee any time to prepare a response.  It did not make the consequences of failing to reach the required standards clear.  It did not provide the employee with any assistance to improve his performance and there was no review of the performance made by the employer.  In actual terms the employer gave the employee no opportunity to comment on the concerns before the dismissal was made.

The employee managed to find work quite quickly so it was awarded $1,800 lost wages but was also awarded $10,000 compensation for the unjustified dismissal.

To rely on a 90 day trial period clause, both the employer and the employee must sign the agreement before the employee commences work.  If that has not been done, the employee has already been employed by the employer prior to the clause being signed and such a clause is invalid.

Alan Knowsley

Employment Lawyer Wellington

Dismissal for social media post justified…

The Employment Relations Authority has rejected a personal grievance claim for an unjustified dismissal from an employee who posted an aggressive and offensive post on Facebook.

The ERA found that the employer carried out a fair and reasonable investigation into the allegations before reaching a conclusion that it would dismiss the employee.  The ERA found that:

1. the employer investigated the allegations sufficiently;
2. the employer fairly outlined the allegations and explained the implications if serious misconduct was found;
3. the employer gave the employee a reasonable opportunity to respond to the allegations before it made its decision on the allegations;
4. the employer properly considered the explanations given by the employee;
5. the employer gave the employee a reasonable opportunity to respond to its decision to dismiss before it imposed that section; and
6. the employer considered the responses from the employee before it finalised its dismissal decision.
   The employee at the disciplinary meeting admitted making the social media post and admitted that it breached the organisation’s policies.  This meant that the employer was right to conclude that the aggressive and offensive language used in the Facebook post was in breach of its policies on social media use and went against the values of organisation.

The employer was justified in reaching a decision to dismiss the employee because this was serious misconduct and the employee was on a final warning for prior threatening and intimidating behaviour.  Even if the employee had not been on a final warning, the behaviour in this case would have justified dismissal as serious misconduct on its own, even though the employee had worked there for 27 years.

Employer penalised for breach of mediated settlement agreement…

The Employment Relations Authority has fined an employer $2,000 for failing to adhere to the terms of a mediated settlement agreement.

During the course of employment an issue had arisen between an employee and the employer.  To resolve that they attended mediation and agreed on a settlement whereby the employer was to pay the employee $12,500 by weekly instalments of $500.

The employer paid some of the weekly instalments but failed to pay $7,000 of the agreed sum.

The ERA ordered the employer was to pay the balance immediately and also imposed the $2,000 penalty for the deliberate breach of the mediated agreement.

If you agree to terms at a mediation and those terms are recorded in the mediation agreement then you must adhere to them.  Failure to do so can result in a penalty from the Employment Relations Authority.

Alan Knowsley

Employment Lawyer Wellington

Constructive dismissal following suspension without pay…

The Employment Relations Authority has upheld a claim for personal grievance for a constructive dismissal.  The employer suspected that the employee had stolen company property and suspended the employee pending an investigation into those allegations. 

The employee, however, was suspended without the opportunity to comment on the suspension and without pay.  Both of those failings, along with a failing to keep the employee advised of progress of the theft investigation, meant that it was reasonable for the employee to refuse to work under those circumstances and he was entitled to resign and bring a claim for constructive dismissal.

The employee was awarded $3,800 lost wages for the period while he was suspended without pay and also for the period he was out of work after he resigned.  The employee was also awarded $10,000 compensation and $2,000 holiday pay.

However, after the employee commenced his claim in the Employments Relation Authority the defendant company was placed into liquidation, so it is probably unlikely that the employee will receive any of the compensation awarded.

Alan Knowsley

Employment Lawyer Wellington

Unlawful charge for employment…

The Employment Court has held that a payment to the employer as part of an employment package was an unlawful premium in breach of the Wages Protection Act.

The claimant was an accountant who signed up to work for an accountancy group.  As part of the deal she paid $125,000 for the right to be a regional partner and work for the group.  She did not become a partner in the sense of an owner in the group, but was an employee.

The Court held that without paying the $125,000 entrance fee she had no right to work for the group and therefore the payment was a premium for employment and unlawful.  The accountancy group was ordered to repay the $125,000 immediately and also ordered to pay an $8,000 penalty to the plaintiff.

This situation of an employee paying for the right to work was contrasted by the Court with a situation where an employee pays to undertake some training to acquire qualifications before being employed.  In that case the qualification was of value to the employee and could be used by them to obtain employment at any other employer in the industry.

It is very important not to charge employees for offering employment and if an employer is contemplating making a charge for some reason, then it would be important to get advice from an experienced professional before doing so.

Alan Knowsley

Employment Lawyer Wellington

Personal grievance out of time allowed by Court…

The Employment Court has found that exceptional circumstances existed to allow an employee to bring a personal grievance outside the 90 day time limit.

The employee had been dismissed from his employment and had engaged lawyers to assist him with the claim.  Despite making contact with the lawyers on multiple occasions they failed to raise a personal grievance within the 90 day time limit.

The employee therefore took it upon himself to raise the grievance, but instead of sending that the employer he sent it to the Employment Relations Authority.  He sent it on the evening of the last day of the 90 day time limit, but it did not arrive by way of email until the following morning at 1 a.m.   This meant that it was out of time by the time it arrived at the Employment Relations Authority.   The ERA staff then sent it on to the employer the following day but that made it two days outside the 90 day time limit.

The Court considered all matters including that the employee was under significant stress as a result of the events giving rise to his dismissal and as a result of that significant stress he was not able to properly appreciate or undertake the processes needed to file his personal grievance within time.

The Court therefore allowed him to file out of time because of the short two delay in getting the matter to the employer which did not cause them any prejudice.

The Court emphasised that an extension will only be given in exceptional circumstances and that here both the mental state of the employee and the fact that he had been abandoned by his lawyers without assistance were exceptional factors justifying an extension of time.

Alan Knowsley

Employment Lawyer Wellington

Poor process results in unjustified dismissal…

The Employment Relations Authority has upheld a personal grievance claim for unjustified dismissal after an employee was dismissed during an investigation meeting.

The employer alleged that the employee had self-harmed in the workplace because he did not want to carry out tasks assigned. 

The employer called the employee to a disciplinary meeting, but only gave 24 hours’ notice of that meeting.  During the meeting the employer did give the employee an opportunity to give explanations, but immediately dismissed him during the meeting.  The Employment Relations Authority held that there was obviously no consideration of the employee’s responses before the employer moved to immediate dismissal.

In addition the employer had failed to provide the employee with any information to support the allegations, for example, statements from witnesses to the incident. 

Those failings meant that the dismissal was unjustified and the employee was awarded $11,700 lost wages and $15,000 compensation for hurt and humiliation.

Alan Knowsley

Employment Lawyer Wellington