Contents
Introduction ............................................................................................................................................................................... 4
History ............................................................................................................................................................................................. 4
Legislation – good faith ................................................................................................................................................................... 4
Employment institutions ............................................................................................................................................................ 6
Fundamental concepts underpinning employment institutions .................................................................................................... 6
Equity and good conscience........................................................................................................................................................ 6
Employment relations problems................................................................................................................................................. 7
Without prejudice privilege ........................................................................................................................................................ 7
Calderbank offers ........................................................................................................................................................................ 8
Mediation ........................................................................................................................................................................................ 9
Confidentiality ........................................................................................................................................................................... 10
Settlements ............................................................................................................................................................................... 10
Labour Inspectors ......................................................................................................................................................................... 11
Employment Relations Authority .................................................................................................................................................. 12
Employment Court ........................................................................................................................................................................ 15
Court of Appeal and Supreme Court ............................................................................................................................................. 15
Recruitment ............................................................................................................................................................................. 17
Rules applicable to employers ...................................................................................................................................................... 17
General rule .............................................................................................................................................................................. 17
Advertising ................................................................................................................................................................................ 17
Discrimination ........................................................................................................................................................................... 18
Children’s workers – safety checks ........................................................................................................................................... 21
Immigrants ................................................................................................................................................................................ 22
Privacy ....................................................................................................................................................................................... 23
Rules applicable to applicants ............................................................................................... Ошибка! Закладка не определена.
Misrepresentations ........................................................................................................... Ошибка! Закладка не определена.
Criminal records ................................................................................................................ Ошибка! Закладка не определена.
Employees ................................................................................................................................................................................ 26
Who is an employee? .................................................................................................................................................................... 26
“The real nature of the relationship” ........................................................................................................................................ 27
The gig economy ....................................................................................................................................................................... 35
Legislative reform ......................................................................................................................................................................... 36
Miscellaneous categories .............................................................................................................................................................. 36
Employers ................................................................................................................................................................................ 40
General principles ......................................................................................................................................................................... 40
Issues when there are multiple entities relating to the employment of the employee ............................................................... 42
Triangular employment relationships ....................................................................................................................................... 42
Joint employment ..................................................................................................................................................................... 43
Piercing the corporate veil – parent and subsidiary companies ............................................................................................... 44
The public sector ........................................................................................................................................................................... 45
Options against third parties (not examinable) ............................................................................................................................ 45
Formation and induction .......................................................................................................................................................... 46
Formation of employment agreement ......................................................................................................................................... 46
Elements of a contract .............................................................................................................................................................. 46
Statutory requirements for employment agreements ............................................................................................................. 50
Induction – pre-employment trials ............................................................................................................................................... 55
Trial and probationary periods ................................................................................................................................................. 57
Trial periods .................................................................................................................................................................................. 57
Statutory provisions .................................................................................................................................................................. 57
Case law principles .................................................................................................................................................................... 57
Avoiding trial periods ................................................................................................................................................................ 63
Probationary periods (not examined) ........................................................................................................................................... 65
Statutory provision ................................................................................................................................................................... 65
Case law principles .................................................................................................................................................................... 65
Employment agreements ......................................................................................................................................................... 67
Preliminaries ................................................................................................................................................................................. 67
Requirements for employment agreements ................................................................................................................................ 67
Remuneration clauses ............................................................................................................................................................... 68
Other requirements .................................................................................................................................................................. 69
1
Other clauses ............................................................................................................................................................................ 69
Specific issues ............................................................................................................................................................................... 69
Notice of termination ............................................................................................................................................................... 69
Express and implied terms ........................................................................................................................................................ 70
Variations .................................................................................................................................................................................. 74
Fixed term and casual employment .......................................................................................................................................... 75
Fixed term employment................................................................................................................................................................ 75
Requirements for a fixed term employment ............................................................................................................................ 75
Case law principles .................................................................................................................................................................... 75
Casual employment ...................................................................................................................................................................... 80
Is the employment casual or fixed term? ................................................................................................................................. 80
Inconsistent provisions ............................................................................................................................................................. 83
Entitlements to holiday pay and leave .......................................................................................................................................... 83
The minimum code................................................................................................................................................................... 86
Hours of work ............................................................................................................................................................................... 86
Availability provisions ............................................................................................................................................................... 86
Cancellation of shifts ................................................................................................................................................................. 88
Flexible working arrangements ................................................................................................................................................. 89
Employee pay ................................................................................................................................................................................ 89
Minimum Wage ........................................................................................................................................................................ 89
Overtime ................................................................................................................................................................................... 92
Equal pay ................................................................................................................................................................................... 92
Wages Protection Act 1983 ...................................................................................................................................................... 93
Employee holidays and leave (Holidays Act 2003)........................................................................................................................ 95
Preliminaries ............................................................................................................................................................................. 95
Annual holidays ......................................................................................................................................................................... 96
Public holidays ........................................................................................................................................................................ 100
Sick leave ................................................................................................................................................................................. 101
Bereavement leave ................................................................................................................................................................. 101
Family violence leave .............................................................................................................................................................. 102
Parental Leave and Employment Protection Act 1987 ........................................................................................................... 102
Personal grievances ................................................................................................................................................................ 105
What is a personal grievance? .................................................................................................................................................... 105
Raising a personal grievance ....................................................................................................................................................... 105
When does raising a complaint become “raising” a personal grievance? .............................................................................. 105
Timing and knowledge issues – when a personal grievance can be raised ............................................................................ 108
Extending the 90-day period ................................................................................................................................................... 111
Without prejudice rule ................................................................................................................................................................ 113
Justifying a dismissal .............................................................................................................................................................. 113
Onus of proof .............................................................................................................................................................................. 114
Substantive justification .............................................................................................................................................................. 114
Procedural justification – factors to consider under subsection (3) ........................................................................................... 115
Did the employer sufficiently investigate the allegations against the employee? ................................................................. 115
Did the employer raise the concerns it had with the employee before taking action? ......................................................... 116
Did the employer give the employee a reasonable opportunity to respond? ........................................................................ 118
Did the employer genuinely consider any explanation by the employee? ............................................................................. 121
Any other relevant factors can be considered (section 103A(4)) ........................................................................................... 122
Grounds for personal grievance ............................................................................................................................................. 126
Unjustified disadvantage ............................................................................................................................................................ 126
Bullying, harassment and discrimination .................................................................................................................................... 133
Workplace bullying ................................................................................................................................................................. 133
Harassment ............................................................................................................................................................................. 138
Constructive dismissals ............................................................................................................................................................... 145
What is a constructive dismissal? ........................................................................................................................................... 145
Types of constructive dismissals ............................................................................................................................................. 146
“The final straw” cases ............................................................................................................................................................ 151
Resignation due to future events............................................................................................................................................ 152
Medical incapacity.................................................................................................................................................................. 153
Procedure for termination due to medical incapacity ................................................................................................................ 153
Reasonable opportunity to recover ........................................................................................................................................ 153
Fair and reasonable inquiry .................................................................................................................................................... 155
2
Fair consideration ................................................................................................................................................................... 157
Engagement ............................................................................................................................................................................ 159
Redundancy ........................................................................................................................................................................... 163
What is redundancy? .................................................................................................................................................................. 163
Substantive justification .............................................................................................................................................................. 163
Procedural justification ............................................................................................................................................................... 167
Procedure for redundancy ...................................................................................................................................................... 167
Specific issues ......................................................................................................................................................................... 171
COVID-19 redundancy decisions ................................................................................................................................................. 174
Termination due to employee conduct................................................................................................................................... 176
Misrepresentation ...................................................................................................................................................................... 176
Dishonesty .................................................................................................................................................................................. 177
Bullying, harassment, fighting, insubordination ......................................................................................................................... 178
Failure to follow a lawful and reasonable instruction ................................................................................................................ 179
Misuse of email or internet......................................................................................................................................................... 180
Breach of fidelity ......................................................................................................................................................................... 180
Breach of work rules ................................................................................................................................................................... 180
Strikes and lockouts / Industrial conflict ................................................................................................................................. 182
Strikes.......................................................................................................................................................................................... 182
What is a strike?...................................................................................................................................................................... 182
Parties to a strike .................................................................................................................................................................... 183
Partial strikes .......................................................................................................................................................................... 183
Lockouts ...................................................................................................................................................................................... 183
What is a lockout?................................................................................................................................................................... 183
Partial lockout ......................................................................................................................................................................... 185
Lockout of one employee ....................................................................................................................................................... 185
Lawful or unlawful industrial action ........................................................................................................................................... 185
Lawful strikes and lockouts ..................................................................................................................................................... 185
Unlawful strikes or lockouts .................................................................................................................................................... 186
Replacement labour .................................................................................................................................................................... 189
Suspension of striking employees ............................................................................................................................................... 189
Remedies ............................................................................................................................................................................... 191
Reinstatement............................................................................................................................................................................. 191
3
1. INTRODUCTION

Employment law is important because either:
 You are an employee and you want to know your rights or a union wants to protect the rights of others.
 You are an employer, and you want to know how to manage your staff lawfully – the consequences of unlawful
management can be a big financial risk.


Employment law was initially comprised of contract (employment agreements) and tort
Employment law then developed into statutes over time:
HISTORY
MASTER AND SERVANTS ACT 1823 (UK)

This legislation was enacted because a number of poor people were being treated badly and there were bad working
conditions
INDUSTRIAL CONCILIATION AND ARBITRATION ACT 1894


This created a system of compulsory arbitration – rather than engaging in strikes and lockouts, the affected parties would
go to arbitration and make a decision on pay, working conditions etc.
This worked to a degree, but there were still strikes and lockouts
INDUSTRIAL RELATIONS ACT 1973




New Zealand established a regime of personal grievances
Strikes and lockouts dealt with the problem from a “collective bargaining / industrial conflict” point of view
The personal grievance process allowed for dealings with specific individuals who were dismissed and want their job back –
you can deal with the issue on an individual basis rather than having “sympathy strikes” over unfair dismissals
Reinforced by the Labour Relations Act 1987.
EMPLOYMENT CONTRACTS ACT 1991


The purpose of this Act was seen to be to destroy unions – but this may be harsh.
The legislation was primarily focused on individualized employment and to give individuals employment rights (but this
effectively means collective rights were eroded).
EMPLOYMENT RELATIONS ACT 2000 – CURRENT LEGISLATION


Objectives of good faith
Viewed the employment relation as not just a contract – it is a workplace relationship and should be treated as such
 Therefore, language changed from “employment contract” to “employment agreement”
 We are dealing with a relationship rather than a strict contract – although employment law is still based in contract law,
we are also dealing with broader policy issues rather than dealing with just the written contract.

Another basis for employment law is the EIGHT FUNDAMENTAL CONVENTIONS IN THE INTERNATIONAL LABOUR
ORGANISATION STANDARDS (a variety of union and business groups that form conventions on how employment relations
should be dealt with):
o Freedom of Association and Protection of the Right to Organise Convention 1948
o Right to Organise and Collective Bargaining Convention 1949
o Forced Labour Convention 1930
o Abolition of Forced Labour Convention 1957
o Minimum Age Convention 1973
o Worst Forms of Child Labour Convention 1999
o Equal Remuneration Convention 1951
o Discrimination (Employment and Occupation) Convention 1958
EMPLOYMENT RELATIONS ACT 2000 - GOOD FAITH







Employment Relations Act 2000 – the main statute
Holidays Act 2003
Minimum Wage Act 1983
Wages Protection Act 1983
Income Tax Act 2007
KiwiSaver Act 2006
Human Rights Act 1993
4




Equal Pay Act 1972
Privacy Act 2020
Protected Disclosures Act 2000
Health and Safety at Work Act 2015
S3
OBJECT OF THIS ACT (EMPLOYMENT RELATIONS ACT 2000)
(1)
The object of this Act is—
(a)
to build productive employment relationships through the promotion of good faith in all aspects of the
employment environment and of the employment relationship—
(i)
by recognising that employment relationships must be built not only on the implied mutual obligations of
trust and confidence, but also on a legislative requirement for good faith behaviour; and
(ii)
by acknowledging and addressing the inherent inequality of power in employment relationships; and
(iii)
by promoting collective bargaining; and
(iv)
by protecting the integrity of individual choice; and
(v)
by promoting mediation as the primary problem-solving mechanism other than for enforcing employment
standards; and
(vi)
by reducing the need for judicial intervention; and
(ab) to promote the effective enforcement of employment standards, in particular by conferring enforcement powers
on Labour Inspectors, the Authority, and the court; and
(b)
to promote observance in New Zealand of the principles underlying International Labour Organisation Convention
87 on Freedom of Association, and Convention 98 on the Right to Organise and Bargain Collectively.
S4
PARTIES TO EMPLOYMENT RELATIONSHIP TO DEAL WITH EACH OTHER IN GOOD FAITH
(1)
The parties to an employment relationship specified in subsection (2)—
(a)
must deal with each other in good faith; and
(b)
without limiting paragraph (a), must not, whether directly or indirectly, do anything—
(i)
to mislead or deceive each other; or
(ii)
that is likely to mislead or deceive each other.
The duty of good faith in subsection (1)—
(a)
is wider in scope than the implied mutual obligations of trust and confidence; and
(b)
requires the parties to an employment relationship to be active and constructive in establishing and maintaining a
productive employment relationship in which the parties are, among other things, responsive and communicative;
and
(c)
without limiting paragraph (b), requires an employer who is proposing to make a decision that will, or is likely to,
have an adverse effect on the continuation of employment of 1 or more of his or her employees to provide to the
employees affected—
(i)
access to information, relevant to the continuation of the employees’ employment, about the decision; and
(ii)
an opportunity to comment on the information to their employer before the decision is made.
(1A)


These provisions of good faith are about achieving natural justice – we want to ensure honesty and good faith to
maintain productive employment relationships
Note that this obligation of good faith only applies once the parties have an employment agreement – before a
contract is signed, there is no obligation of good faith.
Auckland City Council v New Zealand Public Service Association Inc [2004] 2 NZLR 10 (CA)
 The employer did not consult with the union, of which one of its members were being affected in a
FACTS
HELD




restructuring process.
There was a breach of the good faith obligations.
“It is not possible to lay down rules or protocols defining what may or may not constitute dealing in good
faith. The statute is seeking to promote good employment relationships. It seeks to have the parties
embrace that objective and to deal openly and fairly to that end. That will not exclude vigorous
bargaining and even industrial action. But even these cauldrons must be tempered by behaviour that
avoids the corrosiveness of bad faith. It is necessary only to contemplate those situations to realise that
any general requirement of ‘energetic and positive displaying of good faith behaviour’ goes too far.” (at
[26])
You need to promote positive employment relationships, but this does not require an energetic and
positive displaying of good faith behaviour.
Chief Judge Christina Inglis “Defining good faith (and Mona Lisa's smile)” (Law @ Work Conference, Auckland, 30 July
2019):
5

“So, like Mona Lisa’s smile, good faith cannot (and should not) be pinned down and defined by way of reference to a
clear-cut legal rule. Rather, it is a standard which applies flexibly depending on the particular circumstances of the
case. It necessitates an evaluation of the alleged breach in its human dimension.” (at 7)
2. EMPLOYMENT INSTITUTIONS
FUNDAMENTAL CONCEPTS UNDERPINNING EMPLOYMENT
INSTITUTIONS
THERE ARE SEVERAL DIFFERENT EMPLOYMENT LAW INSTITUTIONS:

Mediation
o The first thing to do when raising a personal grievance is to seek mediation
o Mediation is an informal process – the parties meet and the employee usually talks first, then the employer talks,
then they go into separate rooms and then discuss the terms of any settlement (usually money, as the employee is
usually exited from the workplace at this point).

Employment Relations Authority
o This is similar to mediation – there is a member at the head of the table, and the employee and employer sit
together, and witnesses may come and go
o This is an informal process, and the ERA has an investigatory jurisdiction – the ERA drives the investigation rather
than an adversarial and decision-making process.

Employment Court
o The EC is more like a court, with similar powers to the High Court
o It is a specialized institution (because it has an equity and good conscience jurisdiction) that is the equivalent of the
High Court.


Court of Appeal
Supreme Court
EQUITY AND GOOD CONSCIENCE
S189
(1)
(2)

EQUITY AND GOOD CONSCIENCE
In all matters before it, the court has, for the purpose of supporting successful employment relationships and promoting
good faith behaviour, jurisdiction to determine them in such manner and to make such decisions or orders, not
inconsistent with this or any other Act or with any applicable collective agreement or the particular individual
employment agreement, as in equity and good conscience it thinks fit.
The court may accept, admit, and call for such evidence and information as in equity and good conscience it thinks fit,
whether strictly legal evidence or not.
The reason why employment institutions are different to normal institutions is because of the equity and good conscience
jurisdiction:
o The court will have regard to its equity and good conscience jurisdiction to determine matters
o Section 189(2) means that the normal rules of evidence do not apply
 Evidence that would normally be inadmissible may be admitted if it is equitable and conscionable to do so
 This addresses the significant power imbalance between the employer and employee – the employer will
often be able to afford legal representation whereas the employee may not
Canterbury Spinners v Vaughan [2003] 1 NZLR 176 (CA)
 “As this Court has often emphasised, the institutions … to deal with employment matters have special
HELD

characteristics … The Employment Relations Act 2000 continues to require this Court when hearing
appeals from the Employment Court to have regard to the special jurisdiction and powers of the Court, as
well as the object of the Act and of its relevant parts and certain provisions of the Act (s 216). Among
those provisions are the equity and good conscience direction to the Employment Court in s 189 and the
strong (and now very rare) privative clause protecting decisions of the Court from judicial review in s 193.”
(at [1]).
This shows that the equity and good conscience jurisdiction is the key aspect of employment institutions
6

Judge Bruce Corkill “Issues relating to Employment Court Hearings – A Judge’s Perspective” in New Zealand Law Society
Employment Law Conference – Justice at Work? (New Zealand Law Society, Wellington, 2020) 421
 “The term “equity and good conscience” is not defined. It is one of those concepts where you know it when you see
it.” (at 422).
o The term “equity” suggests fairness, impartiality, and even-handed dealing; the body of principles
constituting what is fair and right. Early writers have suggested that in ordinary language “equity” means
natural justice, although concepts of equity tend to be understood as relating to discrete legal principles,
whereas natural justice is a more flexible concept because the extent of such obligations will vary depending
on the subject matter.
o “Good conscience” extends the required approach. This phrase invokes the idea of a moral sense of right and
wrong.
 This means that the courts will apply the law to the case like normal, but then stand back and determine whether this
is the right decision in equity and good conscience.
Kidd v Cowan [2020] NZCA 68
Could the employer set off the value of the land against the wages owed?
ISSUE
 The employee was owed a lot of wages
FACTS
HELD



The employer gave the employee a plot of land worth $80,000
“Furthermore, the section on which the Partnership would base its appeal, s 189 of the Act, does not — on
its own terms — provide an untrammelled discretion to act in equity and good conscience where that
would be contrary to express statutory provisions …” (at [30])
The ERA and EC must exercise the equity and good conscience jurisdiction consistent with the Act
EMPLOYMENT RELATIONS PROBLEMS
S143
OBJECT OF THIS PART
The object of this Part is to establish procedures and institutions that—
(a)
support successful employment relationships and the good faith obligations that underpin them; and
(b)
recognise that employment relationships are more likely to be successful if problems in those relationships are
resolved promptly by the parties themselves; and
(c)
recognise that, if problems in employment relationships are to be resolved promptly, expert problem-solving
support, information, and assistance needs to be available at short notice to the parties to those relationships; and
(d)
recognise that the procedures for problem-solving need to be flexible; and (e.g. video call mediations)
(da) recognise that the person who provides mediation services can manage any mediation process actively; and
(e)
recognise that there will always be some cases that require judicial intervention; and
(f)
recognise that judicial intervention at the lowest level needs to be that of a specialist decision-making body that is
not inhibited by strict procedural requirements; and (i.e. the ERA)
(fa) ensure that investigations by the specialist decision-making body are, generally, concluded before any higher court
exercises its jurisdiction in relation to the investigations; and
(g)
recognise that difficult issues of law will need to be determined by higher courts.
S5
INTERPRETATION
In this Act, unless the context otherwise requires,—
…
employment relationship problem includes a personal grievance, a dispute, and any other problem relating to or arising
out of an employment relationship, but does not include any problem with the fixing of new terms and conditions of
employment
WITHOUT PREJUDICE PRIVILEGE

rd
Thanki The Law of Privilege (3 ed, Oxford, Oxford University Press, 2017
 “The without prejudice rule applies to exclude all negotiations genuinely aimed at settlement, whether oral or in writing,
from being given in evidence.” (at 314)
 Even before mediation, the parties may engage in negotiations that are aimed at resolving the dispute
o Without prejudice privilege means anything said in those negotiations is inadmissible in evidence
o The privilege covers a whole chain of communication – even though there is no specific offer of compromise in one
specific communication, if the whole chain indicates without prejudice discussion, then it will all be privileged
Morgan v Whanganui College Board of Trustees [2014] NZCA 340
Are the comments said in the meeting admissible?
ISSUE
7
FACTS





HELD

Morgan was a teacher trying to break up a fight that erupted between two students – he put one of the
students in a headlock
Morgan told another teacher about this, and they went to the headmaster to discuss
Morgan immediately admitted that his actions might constitute serious misconduct and apologised, but
said a dismissal was unnecessary
A meeting was held on a without prejudice basis
During the meeting, the headmaster and chairman of the Board said those actions constituted serious
misconduct that would justify dismissal, and asked Morgan whether he wanted to end his career as a
person dismissed for serious misconduct or resign
The comments during the meeting are privileged
 “The rule protecting without prejudice communications from admission as evidence in Court
proceedings is well settled. Its existence is justifiable on two complementary bases. First, as a matter
of public policy, the rule is designed to encourage parties to negotiate settlements of disputes …
secure in the knowledge of two things – that whatever is said openly and honestly for that purpose
will remain confidential; and that if those negotiations are unsuccessful any statements or offers
made adverse to the maker cannot be considered in determining liability in later litigation. Second,
as a matter of contract, the law should recognise the sanctity of the parties’ agreement to
communicate on a without prejudice basis with its underlying expectations of absolute
confidentiality and protection.” (at [11])
 THERE ARE THREE REQUIREMENTS FOR WITHOUT PREJUDICE PRIVILEGE TO APPLY:
1.
2.
3.
REASONING 
S57
There is a serious employment relationship problem (dispute)
The problem must be one that could give rise to litigation, the result of which might be affected by an
admission made during negotiations
There is an agreement that the discussion is made on a without prejudice basis (including opening
shots, such as “do you want a without prejudice conversation?”)
Discussion between the two was privileged thus those discussions couldn't be taken into account when
considering the unfairness of the subsequent dismissal of Mr. Morgan for putting the students and a law
student in a headlock.
PRIVILEGE FOR SETTLEMENT NEGOTIATIONS, MEDIATION, OR PLEA DISCUSSIONS (EVIDENCE ACT 2006)
(1)
A person who is a party to, or a mediator in, a dispute of a kind for which relief may be given in a civil proceeding has a
privilege in respect of any communication between that person and any other person who is a party to the dispute if the
communication—
(a)
was intended to be confidential; and
(b)
was made in connection with an attempt to settle or mediate the dispute between the persons.
 EXCEPTIONS TO WITHOUT PRIVILEGE RULES:
 Without prejudice privilege does not apply where:
 The words used were not created for the purposes of a bona fide offer of compromise, but was written to threaten, or
to put unfair pressure on a party to settle litigation (Van der Sluis v Health Waikato Ltd [1995] 1 ERNZ 478 (EmpC))
o Example: “on a without prejudice basis, you should resign or be seen as dismissed for serious misconduct” –
even though the words “without prejudice” were used, this is not a bona fide offer.




There is unambiguous impropriety (e.g. blackmail, duress) (Hamon v Coromandel Independent Living Trust [2013]
NZEmpC 56)
The discussions need to be used to interpret a settlement agreement (Kaipara District Council v McKerchar [2017]
NZEmpC 55)
The privilege is waived (Puru v Aronui Technical Training Council [2014] NZERA Auckland 431)
There was a series of emails involved, and the question was whether they were privileged or not. Court held that
although the first email had been written on a without prejudice basis, the reality was that it had been sent to a third
party and so I didn't involve the privilege. But the subsequent emails did involve settlement offers Gestro v Ralph
[2021]
CALDERBANK OFFERS
GORDON ANDERSON AND OTHERS MAZENGARB’S EMPLOYMENT LAW (ONLINE ED, LEXISNEXIS)
 Otherwise known as a “without prejudice save as to costs”
8

“A Calderbank offer is an offer of settlement made by one party to the other prior to the hearing. If a party refuses
the offer and is successful in the hearing, but is awarded an amount that is less than that contained in the offer, the party
who made the offer may put the offer before the Court for its consideration in fixing costs. The name derives from the
English case of Calderbank v Calderbank [1975] 3 All ER 333 (CA).” (at [ERASCH3.19.6]).

Example:
o The defendant does not want to go to litigation, so offers the plaintiff $10,000 for settlement on a without prejudice
save as to costs basis
o The plaintiff rejects the offer because they think they can get more from the court, and goes to litigation – they win
$8000
o The defendant can show the court the offer and claim costs against the plaintiff
REQUIREMENTS FOR CALDERBANK OFFERS
(a) Be marked “without prejudice save as to costs”, refer to the principles of Calderbank v Calderbank and / or state that the
offeror reserves its right to tender the offer on an application for costs if rejected;
(b) Have clear and certain terms for acceptance;
(c) Make provision for vindication; (e.g. an apology or contrition like staff training on workplace bullying)
(d) Provide a reasonable time in which the offer must be accepted;
(e) Be made after evidence has been provided and/or reasons for acceptance are given;
(f) Be made at a time when there is not a significant change in the case;
(g) Make provision for costs; and
(h) Contain a genuine element of compromise.
VINDICATION
Bluestar Print Group (NZ) Ltd v Mitchell [2010] NZCA 385
HELD
 “We accept that there may be cases where vindication through seeking a statement of principle in the




employment context may be relevant to the exercise of the Court’s discretion. Thus the relevance of
reputational factors means that cost assessments are not confined solely to economic considerations.
But equally, an offer to pay compensation at a level that is reasonable might well be regarded as
conveying a distinct element of vindication to the plaintiff.” (at [19])
“We consider that the potential for vindication to be a relevant factor does not mean that the developed
jurisprudence under the High Court Rules costs regime should be ignored. We reject Mr Churchman’s
submission that the principles applicable to Calderbank offers should be adjusted or ignored in
employment cases merely because of the nature of the employment relationship and because employees
may in certain cases be motivated in part by the desire for vindication. As this Court has previously said a
“steely” approach is required. It has been repeatedly emphasised that the scarce resources of the Courts
should not be burdened by litigants who choose to reject reasonable settlement offers, proceed with
litigation and then fail to achieve any more than was previously offered. Where defendants have acted
reasonably in such circumstances, they should not be further penalised by an award of costs in favour of
the plaintiff in the absence of compelling countervailing factors. The importance of Calderbank offers is
emphasised by reg 68(1). It is the only factor relevant to the conduct of the parties specifically identified
as having relevance to the issue of costs.” (at [20])
A Calderbank offer is not immediately made invalid solely on the basis of omitting provision for
vindication
Vindication may be particularly relevant where reinstatement is the required remedy but the employer
offers money instead
An offer to pay compensation at a reasonable level may be enough vindication, even if there is no
apology
MEDIATION
S144
(1)
MEDIATION SERVICES
The chief executive must employ or engage persons to provide mediation services to support all employment
relationships.
9
(2)
Those mediation services may include—
(a)
the provision of general information about employment rights and obligations:
(b)
the provision of information about what services are available for persons (including unions and other bodies
corporate) who have employment relationship problems:
(c)
other services that assist the smooth conduct of employment relationships:
(d)
other services (of a type that can address a variety of circumstances) that assist persons to resolve, promptly and
effectively, their employment relationship problems:
(e)
services that assist persons to resolve any problem with the fixing of new terms and conditions of employment.
CONFIDENTIALITY
S148
(1)
CONFIDENTIALITY
Except with the consent of the parties or the relevant party, a person who—
(a)
provides mediation services; or
(b)
is a person to whom mediation services are provided; or
(c)
is a person employed or engaged by the department; or
(d)
is a person who assists either a person who provides mediation services or a person to whom mediation services
are provided—
must keep confidential any statement, admission, or document created or made for the purposes of the mediation and
any information that, for the purposes of the mediation, is disclosed orally in the course of the mediation.
No person who provides mediation services may give evidence in any proceedings, whether under this Act or any other
Act, about—
(a)
the provision of the services; or
(b)
anything, related to the provision of the services, that comes to his or her knowledge in the course of the
provision of the services.
No evidence is admissible in any court, or before any person acting judicially, of any statement, admission, document, or
information that, by subsection (1), is required to be kept confidential.
(2)
(3)
Just Hotel Ltd v Jesudhass [2007] ERNZ 817 (CA)
Could the employer set off the value of the land against the wages owed?
ISSUE
 The employee claimed that during the mediation, the employer told him that he would be dismissed
FACTS
HELD



immediately after the end of the mediation
The employee wanted to produce evidence of this to prove that the subsequent dismissal was unjustified
““We do not see any ambiguity in the words of s 148(1). All communications “for the purposes of the
mediation” attract the statutory confidentiality, except possibly (as we discuss later in this judgment at
paras 41 to 43) where public policy dictates otherwise.” (at [31])
 Section 148 provides that all those conversations were confidential
 However, criminal conduct during mediation (e.g. blackmail and bribery) is admissible
“In accordance with the ordinary meaning of the word “purpose”, that of the intended object of an
activity, a communication (written or oral) is protected unless it is created or made independently of the
mediation.” (at [32])
SETTLEMENTS
S149
(1)
(2)
(3)
SETTLEMENTS
Where a problem is resolved, whether through the provision of mediation services or otherwise, any person—
(a)
who is employed or engaged by the chief executive to provide the services; and
(b)
who holds a general authority, given by the chief executive, to sign, for the purposes of this section, agreed terms
of settlement,—
may, at the request of the parties to the problem, and under that general authority, sign the agreed terms of settlement.
Any person who receives a request under subsection (1) must, before signing the agreed terms of settlement,—
(a)
explain to the parties the effect of subsection (3); and
(b)
be satisfied that, knowing the effect of that subsection, the parties affirm their request.
Where, following the affirmation referred to in subsection (2) of a request made under subsection (1), the agreed terms
of settlement to which the request relates are signed by the person empowered to do so,—
(a)
those terms are final and binding on, and enforceable by, the parties; and
(ab) the terms may not be cancelled under section 7 of the Contractual Remedies Act 1979; and
(b)
except for enforcement purposes, no party may seek to bring those terms before the Authority or the court,
whether by action, appeal, application for review, or otherwise.
10
(3A)
For the purposes of subsection (3), a minor aged 16 years or over may be a party to agreed terms of settlement, and be
bound by that settlement, as if the minor were a person of full age and capacity.
A person who breaches an agreed term of settlement to which subsection (3) applies is liable to a penalty imposed by the
Authority.
(4)

A signed record of settlement essentially becomes a binding contract between the parties
MENTAL INCAPACITY TO SIGN A SETTLEMENT AGREEMENT
TUV v Chief of New Zealand Defence Force [2020] NZCA 12
 The employee signed a record of settlement not in mediation, but as a result of discussions between the
FACTS

HELD


parties
The employee then tried to get out of the agreement – she had psychiatric evidence showing that she
was under considerable mental stress at the time such that she was mentally incapable of entering into
and signing the agreement
“Section 149 refers to the “agreed terms of settlement”. It is those agreed terms of settlement that
cannot be challenged before a Court. But the existence of agreed terms of settlement depends on there
being a valid contract between the parties in which those terms are incorporated. If a settlement
agreement is voidable because a party lacked capacity, and is set aside, there is no contract and the
parties are restored to their pre-contract position. So there are no “agreed terms of settlement”.”
However, in this case, the employee is bound by section 149 and the settlement agreement
 Under ordinary principles of contract, the other party needs to know of the mental incapacity in
order to take advantage of it – if they do not know about the mental incapacity, then they should be
able to rely on section 149
 Often high level of pressure to sign where these issues may arise, in this case the employer did not
recognise/know that mental incapacity was an issue because the employee had not made it clear
that the s149 settlement agreement was still binding.
PENALTY CLAUSES

A settlement agreement cannot include a penalty clause (a penalty that is out of all proportion to the breach) – the clause
will be unenforceable
8i Corp v Marino [2017] NZEmpC 69
 The employee purportedly breached a record of settlement – under a clause in the contract, this breach
FACTS
required him to forego his shares in a company, which were worth a substantial sum
HELD


“A penalty clause is unlawful and unenforceable. Properly interpreted, s 149(3) does not prevent the
Court from inquiring into the enforceability of the terms of an agreement.” (at [48])
“If I am wrong about that, I would have found that it is not within the scope of a mediator’s discretionary
power to certify a s 149 settlement agreement which contained a penalty clause and, if that had been
done, the certification would be ineffective. While the plaintiffs’ contention as to the nature and scope of
the sign-off process has some immediate appeal, it does not withstand analysis. The argument that a
mediator can sign any agreement he/she likes provided the s 149(3) mantra has been faithfully recited,
cannot be correct. It cannot have been Parliament’s intention to allow a mediator to ignore and undo
well established rules of contract law with the sweep of a pen. A narrow reading of the s 149 safeguard
process would render it virtually devoid of utility.” (at [49])
LABOUR INSPECTORS
S223A FUNCTIONS OF LABOUR INSPECTOR
The functions of a Labour Inspector include—
(a)
determining whether the provisions of the relevant Acts have been complied with; and
(b)
taking all reasonable steps to ensure that the relevant Acts are complied with; and
(c)
monitoring and enforcing compliance with employment standards; and
11
(d)

performing any other functions conferred by or under the relevant Acts.
Labour inspectors can go into workplaces and ensure that employers are complying with employment standards
GSTech Ltd v Labour Inspector [2018] NZEmpC 84
 A Labour Inspector looked at the employment contract and decided that the employee was underpaid in
FACTS
accordance with his contractual obligations
HELD


“The Authority is a creature of statute and only has the powers conferred under its empowering
legislation, either expressly or by necessary implication. Similarly, the Labour Inspector’s role in terms of
bringing matters before the employment institutions is statutorily constrained.” (at [8])
“The Authority’s jurisdiction is set out in s 161 of the Employment Relations Act 2000 (the Act). Section
161(1)(q) relevantly provides that the Authority has jurisdiction in relation to actions referred to in s
228(1). Section 228(1) refers to actions brought by the Labour Inspector on behalf of an employee to
recover any wages or other money payable by an employer to that employee under the Minimum Wage
Act 1983 and the Holidays Act 2003. It is immediately apparent that the Labour Inspector has no power
under s 228(1) (or under any other provision) to pursue a claim on behalf of an employee for the
recovery of wages under any other statutory or contractual provision. It must be a claim under either the
Minimum Wage Act or the Holidays Act or both.” (at [9])
o Labour Inspectors have no power to ensure proper payment of wages above minimum
wage – they can only ensure that at least minimum wage is applied (the claim must be
made by the employee and not the Labour Inspector)
EMPLOYMENT RELATIONS AUTHORITY
S157
(1)
(2)
(3)
ROLE OF AUTHORITY
The Authority is an investigative body that has the role of resolving employment relationship problems by establishing
the facts and making a determination according to the substantial merits of the case, without regard to technicalities.
The Authority must, in carrying out its role,—
(a)
comply with the principles of natural justice; and
(b)
aim to promote good faith behaviour; and
(c)
support successful employment relationships; and
(d)
generally further the object of this Act.
The Authority must act as it thinks fit in equity and good conscience, but may not do anything that is inconsistent with—
(a)
this Act; or
(b)
any regulations made under this Act; or
(c)
the relevant employment agreement.
Bay of Plenty District Health Board v Culturesafe New Zealand Ltd [2020] NZEmpC 149
 The employer’s representative would write negative things about the employer publicly
FACTS

HELD



The employee privately said to the employer that they should not use their representative and discuss
the matter directly with the employee
The ERA ordered that the employee not talk to the employer without their representative present
“The Authority is a creature of statute, and one which does not possess an inherent jurisdiction. For
purposes of the present case, there must therefore be a strong focus on the applicable statutory
provisions. Ms Sawyer submitted that the Authority could not do whatever it wants to do. I agree. It is
trite that the Authority must stay within the confines of its statutory mandate.” (at [43])
The ERA should not make ex parte orders in this case, but it was something more than just a public
mediation service – the ERA did have statutory powers to make takedown orders
 THE PROCESS TO SUBMIT A CLAIM TO THE ERA
 Statement of Problem
 Statement in Reply
 Case Management Conference
 Witness Statements
 Investigation Meeting
 Oral Determinations / Oral Indication of Preliminary Findings / Reserved Determination
12
JURISDICTION
S161
(1)
JURISDICTION
The Authority has exclusive jurisdiction to make determinations about employment relationship problems generally,
including—
(a)
disputes about the interpretation, application, or operation of an employment agreement:
(b)
matters related to a breach of an employment agreement:
(c)
matters about whether a person is an employee (not being matters arising on an application under section 6(5)):
(ca) facilitating bargaining under sections 50A to 50I:
(cb) fixing the provisions of a collective agreement under section 50J:
(d)
matters alleged to arise under section 68 because a party to an individual employment agreement has bargained
unfairly:
(daa) determining whether an employer has complied with section 69AAE:
(dab) determining whether an employer has complied with section 69ABE (including, without limitation, whether the
employer has avoided non-compliance with section 69ABE, as that term is defined in section 69ABA):
(da) investigating bargaining under section 69O and, if necessary, determining redundancy entitlements under that
section:
(e)
personal grievances:
(ea) joining a controlling third party to a personal grievance under section 103B:
(f)
matters about whether the good faith obligations imposed by this Act (including those that apply where a union
and an employer bargain for a collective agreement) have been complied with in a particular case:
(g)
matters about the recovery of wages or other money under section 131:
(ga) determining the apportionment of liability for the costs of service-related entitlements under section 69LB(4):
(h)
matters about whether the rules of a union, or of an incorporated society that wishes to register as a union,
comply with the provisions of this Act:
(i)
matters about whether an incorporated society is entitled to register under this Act as a union or is entitled to
continue to be so registered:
(j)
matters about whether a person is entitled to be a member of a union:
(k)
matters related to a failure by a union to comply with its rules:
(l)
any proceedings related to a strike or lockout (other than those founded on tort or seeking an injunction):
(m) actions for the recovery of penalties—
(i)
under this Act for a breach of an employment agreement:
(ii)
under this Act for a breach of any provision of this Act (being a provision that provides for the penalty to be
recovered in the Authority):
(iia) under the Support Workers (Pay Equity) Settlements Act 2017:
(iib) under section 18 of the Equal Pay Act 1972:
(iii)
under section 76 of the Holidays Act 2003:
(iiia) under section 25 of the Home and Community Support (Payment for Travel Between Clients) Settlement
Act 2016:
(iv)
under section 10 of the Minimum Wage Act 1983:
(v)
under section 13 of the Wages Protection Act 1983:
(n)
compliance orders under section 137:
(o)
objections under section 225 to demand notices:
(p)
orders for interim reinstatement under section 127:
(q)
actions of the type referred to in section 228(1):
(qa) disputes about an invention made by an employee (either alone or jointly with any other person) or any patent
granted, or to be granted, in respect of that invention:
(qb) reviews under section 30 of the Patents Act 2013:
(qc) determining whether an employer has complied with section 30D of the Parental Leave and Employment
Protection Act 1987:
(qd) all matters arising under the Equal Pay Act 1972 and, in particular,—
(i)
determining equal pay claims and unlawful discrimination claims:
(ii)
determining disputes as to whether a pay equity claim is arguable:
(iii)
determining disputes as to whether work is comparable work for the purpose of assessing a pay equity
claim:
(iv)
determining disputes as to whether work is in fact undervalued:
(v)
fixing remuneration that is consistent with pay equity under that Act:
(vi)
determining whether the terms and conditions of employment in an employee’s employment agreement
are more or less favourable than the terms and conditions of employment in a pay equity claim settlement
for the purposes of section 13ZM of that Act:
(vii) determining whether to provide for recovery of an amount of remuneration for past work, and the amount
to provide, under section 13ZZD of that Act:
13
(viii) determining the applicable start date for the purposes of section 13ZZE of that Act:
any other action (being an action that is not directly within the jurisdiction of the court) arising from or related to
the employment relationship or related to the interpretation of this Act (other than an action founded on tort):
(s)
determinations under such other powers and functions as are conferred on it by this or any other Act.
Except as provided in subsection (1)(ca), (cb), (d), (da), (f), and (qd), the Authority does not have jurisdiction to make a
determination about any matter relating to—
(a)
bargaining; or
(b)
the fixing of new terms and conditions of employment.
Except as provided in this Act, no court has jurisdiction in relation to any matter that, under subsection (1), is within the
exclusive jurisdiction of the Authority.
(r)
(2)
(3)
FMV v TZB [2021] NZSC
HELD
 [92] In enacting s 161(1), the legislature specifically chose not to ground the Authority’s jurisdiction in
the way claims might be pleaded or traditionally categorised. It used a non-technical term,
“problem”, to ensure legal form did not distract the decision maker from focusing on the factual
substance of the difficulty confronting the parties. That is the reason “problem” is not a legal
category alongside property, or tort, or equity, but a supervening class that may encompass all of
these legal forms as long as the problem relates to or arises from an employment relationship. And that
means the character of a problem is not to be found in its legal presentation.

MAJ adopted a universalist approach – because the employment relationship problem is described as a
problem, you first need to undertake an enquiry into the nature of that problem and does it fall within
the Employment Relations Act. If it does. Then, it means that the authority has jurisdiction.

You look at the factual matrix of the problem, and once you've identified the at the nature of that
problem, if it can be pleaded within the jurisdiction of the Employment Relations Authority and
Employment Court, then it goes to those institutions.

William Young says the MAJ approach is too rigid and adopts a parliamentary contemplation test – to ask
what parliament intended in the situation.
JP Morgan Chase Bank NZ v Lewis [2015] ERNZ 37 (CA)
 The record of settlement was not signed under section 149
FACTS
HELD




There was no longer an employment relationship
“In accordance with the definition in s 5 an “employ[ment] relationship problem”, must relate to or arise
out of an employment relationship. We consider this means that the problem must be one that directly
and essentially concerns the employment relationship.” (at [95])
The ERA and EC do not have jurisdiction over this case – this was an interpretation of a settlement
agreement, and did not fall under an “employment relationship problem”
BDM Grange Ltd v Parker [2006] 1 NZLR 353 (HC)
o Facts
 A former employer claimed against some employees in respect of tortious claims
o Judgment
 “Had Parliament intended that [the Employment Relations Authority] have general tort jurisdiction one
could reasonably have expected that the power to deal with such matters as defamation, conversion and
breach of copyright, would have been given specific acknowledgement as part of the new provisions. To
confer such jurisdiction would represent a significant change in the law, far beyond what would actually
be required to give effect to the objectives of the ERA. We conclude that if the words "relating to" in the
definition of "employment relationship problem" were construed so that any conduct touching on the
relationship between employer and employee constitutes an employment relationship problem, then the
net would be cast far wider than the objectives of the ERA require.” (at [65])

“We express our essential agreement, at greater length, with the analysis of Panckhurst J [in Pain
Management Systems (NZ) Ltd v McCallum HC Christchurch CP72/01, 14 August 2001] that "relating to" in
the definition of "employment relationship problem" must be read in a limited way to mean any cause of
action, the essential character of which is to be found entirely within the employment relationship itself.
This would not encompass claims arising from tortious conduct even if arising between an employer and
14
employee, since the relationship merely provides the factual setting for the cause of action; the duty
arises independently.” (at [66])
 The ERA has jurisdiction over only “employment relations problems”
 Torts are generally outside the jurisdiction of the ERA and EC, but they do have jurisdiction over
torts in respect of strikes and lockouts under section 161
EMPLOYMENT COURT
S186
(1)
EMPLOYMENT COURT
This section establishes a court of record, called the Employment Court, which, in addition to the jurisdiction and powers
specially conferred on it by this Act or any other Act, has all the powers inherent in a court of record.
The court established by subsection (1) is declared to be the same court as the Employment Court established by section
103 of the Employment Contracts Act 1991.
(2)

S187
(1)
(2)
(3)
Process:
1. Statement of Claim
2. Statement of Defence
3. Directions Conference
4. Judicial Settlement Conference
5. Interlocutories
6. Briefs of Evidence
7. Hearing
JURISDICTION
The court has exclusive jurisdiction—
(a)
to hear and determine elections under section 179 for a hearing of a matter previously determined by the
Authority, whether under this Act or any other Act conferring jurisdiction on the Authority:
(b)
to hear and determine actions for the recovery of penalties under this Act for a breach of any provision of this Act
(being a provision that provides for the penalty to be recovered in the court):
(c)
to hear and determine questions of law referred to it by the Authority under section 177:
(d)
to hear and determine applications for leave to have matters before the Authority removed into the court
under section 178(3):
(e)
to hear and determine matters removed into the court under section 178:
(f)
to hear and determine, under section 6(5), any question whether any person is to be declared to be—
(i)
an employee within the meaning of this Act; or
(ii)
a worker or employee within the meaning of any of the Acts referred to in section 223(1):
(g)
to order compliance under section 139:
(ga) to hear and determine proceedings for a declaration of breach, pecuniary penalty order, compensation order, or
banning order under Part 9A:
(h)
to hear and determine proceedings founded on tort and resulting from or related to a strike or lockout:
(i)
to hear and determine any application for an injunction of a type specified in section 100:
(j)
to hear and determine any application for review of the type referred to in section 194:
(k)
to issue warrants under section 231:
(ka) to hear and determine any application for review of the type referred to in section 237D:
(l)
to exercise its powers in respect of any offence against this Act:
(m) to exercise such other functions and powers as are conferred on it by this or any other Act.
The court does not have jurisdiction to entertain an application for summary judgment.
Except as provided in this Act, no other court has jurisdiction in relation to any matter that, under subsection (1), is within
the exclusive jurisdiction of the court.
COURT OF APPEAL AND SUPREME COURT
S214
(1)
(2)
APPEALS ON QUESTION OF LAW
A party to a proceeding under this Act who is dissatisfied with a decision of the court (other than a decision on the
construction of an individual employment agreement or a collective employment agreement) as being wrong in law may,
with the leave of the Court of Appeal, appeal to the Court of Appeal against the decision; and section 56 of the Senior
Courts Act 2016 applies to any such appeal.
A party desiring to appeal to the Court of Appeal under this section against a decision of the Employment Court must,
within 28 days after the date of the issue of the decision or within such further time as the Court of Appeal may allow,
apply to the Court of Appeal, in such manner as may be directed by rules of court, for leave to appeal to that court.
15
(3)
(4)
(5)
(6)
The Court of Appeal may grant leave accordingly if, in the opinion of that court, the question of law involved in that
appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the
Court of Appeal for decision.
The Court of Appeal, in granting leave under this section, may, in its discretion, impose such conditions as it thinks fit,
whether as to costs or otherwise.
In its determination of an appeal, the Court of Appeal may confirm, modify, or reverse the decision appealed against or
any part of that decision.
Neither an application for leave to appeal nor an appeal operates as a stay of proceedings on the decision to which the
application or the appeal relates unless the court or the Court of Appeal so orders.
S214A APPEALS TO SUPREME COURT ON QUESTION OF LAW IN EXCEPTIONAL CIRCUMSTANCES
(1)
(2)
(3)
(4)
A party to a proceeding under this Act who is dissatisfied with a decision of the court (other than a decision on the
construction of an individual employment agreement or a collective employment agreement) as being wrong in law may,
with the leave of the Supreme Court, appeal to the Supreme Court against the decision.
In its determination of the appeal, the Supreme Court may confirm, modify, or reverse the decision appealed against or
any part of that decision.
Neither an application for leave to appeal nor an appeal operates as a stay of proceedings on the decision to which the
application or the appeal relates unless the court or the Supreme Court so orders.
This section is subject to section 75 of the Senior Courts Act 2016 (which provides that the Supreme Court must not give
leave to appeal directly to it against a decision made in a court other than the Court of Appeal unless it is satisfied that
there are exceptional circumstances that justify taking the proposed appeal directly to the Supreme Court).
16
2. RECRUITMENT


Recruitment is about how to legally employ an employee.
The difficulty with recruitment is that you are asked a number of questions, some of which can be invasive – so, where is
the line between what breaches privacy and what is allowable or even required?
RULES APPLICABLE TO EMPLOYERS
GENERAL RULE
Allen v Flood [1898] AC 1 (HL)
 Iron workers worked on a ship
FACTS

HELD




The trade union for the ship was not happy about these particular iron workers doing the job – they said
to the employer that unless the iron workers were discharged, the union workers would be called off and
go on strike
The employers fired all the iron workers
“An employer may discharge a workman (with whom he has no contract) or may refuse to employ one
from the most mistaken, capricious, malicious or morally reprehensible motives that can be conceived,
but the workman has no right of action against him... A man has no right to be employed by any
particular employer and has no right to any particular employment if it depends on the will of another.”
(at 172–173)
At common law, there was no breach of any obligation.
There could potentially be a breach of contract, but there was no breach of contract on the facts in this
case.
Gibbs v Crest Commercial Cleaning Ltd [2005] ERNZ 399 (EmpC)
 Concerned a “vulnerable employee” (types of employees like cleaners and caterers) – their employment
FACTS



HELD



arrangements are constantly reviewed and there is constant contracting in and out
To avoid this, Parliament enacted Part 6A (transfer of employees), which requires vulnerable employees
be transferred to the new employer on similar terms and conditions – this raises difficulties because a
new employer may do things differently
The employees of a cleaning company cleaned kindergartens
The employees were eventually not necessary to meet the vendor’s requirements, so their employments
were ended
The incoming employer did not employ them, but appointed franchisees.
“It is also a fundamental common law freedom of an employer to choose to engage or not any
particular employee in an employment relationship subject to constraints on that choice under human
rights legislation ...”
Just as an employer is not required to take on any person as an employee, they cannot also require an
employee to work – they can only take disciplinary actions.
ADVERTISING
S12
MISLEADING CONDUCT IN RELATION TO EMPLOYMENT (FAIR TRADING ACT 1986)
No person shall, in relation to employment that is, or is to be, or may be offered by that person or any other person, engage in
conduct that is misleading or deceptive, or is likely to mislead or deceive, as to the availability, nature, terms or conditions, or
any other matter relating to their employment.
 Section 12 FTA means that an employer cannot put anything misleading or deceptive in an advertisement for employment
George v Attorney-General [1994] 1 ERNZ 933 (EmpC)
 Constables for the police force had been offered to them (in writing and verbally) a starting salary of
FACTS

HELD

$39,161 – but when they finished their training course, they were offered $36,225
The reason for the change in salary was collective negotiations with the New Zealand Police Association
(union for the police)
“It seems me that the plaintiffs are entitled to succeed in the alternative under the Fair Trading Act 1986.
I have no hesitation in holding that in his dealings with members of the public contemplating entering the
police, the commissioner and through him the Crown engages in trade. He is active in the labour market.
Trade is given a very wide definition, the most apt component of which is acquisition of services. To
17

acquire, in relation to services, is defined in s 2(1) as including to accept them. The prohibition in s 9 of
the Act is against engaging in conduct that is misleading or deceptive.” (at 948)
This is a misrepresentation – the employees were offered one salary, but is now given another
 Although the misrepresentation was innocent (as opposed to fraudulent), it was deliberate as the
correct information could have been provided had the employers turned their mind to the situation
 The employees were entitled to recover damages as if the misrepresentation was a term of the
contract that had been breached
DISCRIMINATION – HUMAN RIGHTS ACT

Section 22 of the Human Rights Act prohibits refusing to employ an applicant based on the prohibited discriminatory
grounds outlined in section 21.
SEXUAL DISCRIMINATION
Proceedings Commissioner v Armourguard Security Ltd (1991) 4 NZELC 98,127 (EOT)
 AGS did not allow women work at night even though the work was available and the women were
FACTS
HELD




qualified to do the work
Men were paid more for doing work during those hours
“We make a declaration under section 36(6)(a) that the defendant has committed the breach of section
15(1)(a), (b) and (c) of the Human Rights Commission Act 1977 in that, being an employer the defendant:
 (a) Refused or omitted to employ women, by reason of their sex, as armoured car crew, cash
carriers and for security guard work between the hours of midnight and 6:00am all of which
work was available and for which there were women qualified; and/or
 (b) Omitted to offer or afford women employees, by reason of their sex, the same terms of
employment and opportunities for training, promotion and transfer relating to armoured car
crewing, carrying cash and security guard work between the hours of midnight and 6:00am of all
which work was available and for which there were women qualified, such terms of employment
and opportunities being made available to its male employees of the same or substantially
similar qualifications employed in the same or substantially similar circumstances, and/or
 (c) Subjected women employees, by reason of their sex, to detriment that it precluded women
from work attracting higher rates of pay as armoured car crew, as cash carriers and as security
guards between the hours of midnight and 6:00am. In circumstances in which male persons
employed by the defendant were not subject to that detriment.”
Women were not offered the same terms and conditions, were refused employment on the ships, and
subject them to detriment (due to lower pay from not being able to work night hours) by reason of their
sex.
 WHAT IS THE CAUSATION? WHAT IS THE ACTUAL DIFFERENCE???
MARITAL DISCRIMINATION
C103/93 [1993] NZHRCCN 6
 The complainant approached the Commission after telephoning to ask why she had been unsuccessful
FACTS


HELD

for a position as a regional organiser in the national organisation for which she worked as a researcher
She said she had been told by the Field Manager that the income generated by the position was
insufficient for a single income family. Because she was on her own there was no-one there as a back-up
person. The workload was at times very heavy … The Manager had cited examples of other widowed,
divorced women who'd been unable to cope and a woman with a two year old who'd been unable to
attend to her during group briefings. The Field Manager felt that was unfair on the child "as we only have
our children once."
The manager said that she'd maybe reconsider the complainant in several years’ time when the
complainant’s daughter was older. She preferred older women with older grown-up families
The lack of a partner was a substantive factor in the field manager’s explanation to the complainant – this
was a breach of the Human Rights Act
RELIGIOUS DISCRIMINATION
Human Rights Commission v Eric Sides Motor Co Ltd (1981) 2 NZAR 447 (EOT)
 There was an advertisement looking for a “keen Christian person with a good education”.
FACTS

HELD

“keen Christian” meant that the applicant needs good morals – therefore, it doesn’t matter whether the
applicant was Christian or not so this is not discriminatory
The advertisement breached legislation as the advertiser essentially said they will refuse to employ by
reason of religious or ethical belief (lack of Christian belief)
18


“… We regard the actual wording of the advertisements as the matter of crucial significance. As Mr.
Hodder pointed out, the text of the advertisement which appeared in The Press has the words “keen
Christian” as the controlling or key phrase. Mr. Hodder also pointed out that it is difficult to read the
word “keen” as meaning “eager” or “hardworking”, because that is specifically stated in the balance of
the advertisement. A more reasonable reading is that “keen” qualifies and reinforces the word
“Christian”. Similarly, a common sense reading of the advertisement makes it difficult to suggest that
“Christian” was merely a shorthand for the desirable qualities of an employee, because other qualities
are listed separately.”
“… Viewing the advertisements objectively, we are of the opinion that an ordinary reasonable person
reading the advertisements would conclude that they indicated an intention to commit a breach of
Section 15(1) of the Act, i.e. that the advertiser would refuse or omit to employ by reason of religious or
ethical belief (lack of Christian belief).”
RACE DISCRIMINATION
Race Relations Conciliator v Marshall [1993] 2 ERNZ 290 (CRT)
 Marshall was interested in taking on staff because her rest home was going to expand its operation in the
FACTS


HELD

near future
An interview was arranged for Manuofetoa for 11:00 that morning
After the interview, Marshall said that she did not find anything wrong with Manuofetoa, but she was
apprehensive about how her residents would react to waking up and seeing a dark face looking at them
Clear racial discrimination here.
DISABILITY DISCRIMINATION
C191/95 [1996] NZHRCCN 6
 The plaintiff was deaf and applied to be a bus driver
FACTS

HELD



The employers refused to give additional time to complete numeracy and literacy tests, made him
conduct the examination with a high level of background noise, did not give him an interpreter and said
that as a consequence of his hearing disability and the occupational requirement, the plaintiff could not
be employed as a bus driver
The Human Rights Act 1993 required more from an employer than these tests – the employer needs to
conduct an assessment of whether they can reasonably accommodate disabled applicants.
 The employer needs to consider whether it could reasonably provide special services or facilities
to enable a person with a disability to perform the duties of the position satisfactorily (s
29(1)(a))
 Secondly, it was obliged to consider whether the duties were such that the person could
perform them only with a risk of harm, and whether that risk could be reduced to a normal level
without unreasonable disruption (s 29(1)(b)).
 Each case needed to be considered on an individual basis.
There are various things the employer can do to ensure someone can drive a bus without hearing
Important not to take things at face value, there may a reason why a person may not be able to meet a
particular test and it incumbent ion the employer to think very carefully whether that test is required for
the job.
AGE DISCRIMINATION
Waters v Alpine Energy Ltd (Discovery No. 2) [2014] NZHRRT 8
 Waters (age 62) applied for a job working for Alpine Energy in various engineering positions
FACTS



HELD

Waters tried to get disclosure of the CVs of other applicants, including those who were successful, to
show that he should have been appointed to the position, or that he had been discriminated against on
the basis of his age
Full access to all documents properly discoverable is required by him as they might assist in establishing,
albeit indirectly, that the “record” shows that persons of younger age, with lesser skills, lesser
qualifications, lesser direct experience and lesser time engaged in similar work or in similar positions
were considered more favourably and were ultimately successful in being appointed to the two
advertised positions
Waters also argued that it is possible that in relation to one position the disappointing response to the
advertisements led to the position being re-defined and re-advertised. He has sought disclosure in
relation to that circumstance, if indeed he is correct in asserting that the position was re-advertised.
There was an element of age discrimination present here.
19
POLITICAL OPINION DISCRIMINATION
C123/96 [1996] NZHRCCN 17
 An advertisement had been placed in a journal notifying teacher vacancies by a secondary school –
FACTS
HELD



it sought applicants who would "put professional matters before union matters" and "happily support
the direct resourcing of teachers' salaries commencing 1996"
The complainant alleged that the advertisement discriminated by reason of political opinion
The Commission considered that issue could not be taken with the first of the two clauses (“put
professional matters before union matters”). Whilst the expression suggested that professionalism and
unions were mutually exclusive, and that was probably not appropriate, it was legitimate to emphasise
professionalism and to do so did not constitute discrimination on the ground of political opinion
The Commission considered that to require actual support for direct resourcing of teachers' salaries was
to require that applicants held a particular political opinion concerning a controversial policy of the
government of the day. The Commission noted that the definition of political opinion in s 21 was
described as "including the lack of a particular political opinion". The Commission was therefore of the
opinion that the advertisement contravened the Act by indicating an intention to discriminate on the
ground of political opinion. The respondent was to be asked to give an assurance under s 81(5)(b) that
there would be no repetition of the conduct that was the subject matter of the complaint.
EQUAL EMPLOYMENT OPPORTUNITIES
S73
CHIEF EXECUTIVE OF DEPARTMENT AND BOARD OF AN INTERDEPARTMENTAL VENTURE TO BE GOOD
EMPLOYER (PUBLIC SERVICE ACT 2020)
(1)
A chief executive of a department and a board of an interdepartmental venture must—
(a)
operate an employment policy that complies with the principle of being a good employer; and
(b)
make that policy (including the equal employment opportunities programme) available to its employees; and
(c)
ensure its compliance with that policy (including its equal employment opportunities programme) and report in its
annual report on the extent of its compliance.


This policy applies to employers of the public sector
The only way to ensure compliance with this policy is to measure diversity by asking people questions that would ordinarily
be discriminatory (e.g. sex, age, race, region) – but they do it on a voluntary and anonymous basis
New Zealand Education Institute v Beckenham School Board of Trustees [1990] 2 NZILR 187 (LC)
 A woman applied for deputy principal at a school but was declined
FACTS
HELD


The woman argued that the school was not complying with the equal opportunities policy.
“[T]he institute contends - but not, I find, persuasively upon the evidence which impinges upon this very
important question - that the "Beckenham School has not demonstrated a recognition of the
employment requirements of women". Upon the evidence I have heard to the contrary during the
immediate hearing, this contention, in my view, comprises conjectural speculation by the institute, which
is essentially founded in the applicant's contention that, because Mrs Clyne was not appointed to the
position of assistant principal, the respondent board, through its appointments committee, preferring Mr
Watson, the board, through such appointment, "has not demonstrated a recognition of the employment
requirements of women".” (at 204)
NOTE:
 This shows how difficult it can be to prove indirect discrimination – it is easy for an employer to say they
rejected the applicant for lack of experience or qualities, when in fact there is an element of unconscious
bias.
 One way to prove this is to get disclosure of the other applicants’ CVs.
CONTRACT AND COMMERCIAL LAW ACT 2017
S37 Party may cancel contract if induced to enter into it by misrepresentation or if term is or will be breached
20
(1) A party to a contract may cancel it if—
(a) the party has been induced to enter into it by a misrepresentation, whether innocent or fraudulent, made by or on
behalf of another party to the contract; or
(b) a term in the contract is breached by another party to the contract; or
(c) it is clear that a term in the contract will be breached by another party to the contract.
(2) If subsection (1)(a), (b), or (c) applies, a party may exercise the right to cancel the contract if, and only if,—
(a) the parties have expressly or impliedly agreed that the truth of the representation or, as the case may require, the
performance of the term is essential to the cancelling party; or
(b) the effect of the misrepresentation or breach of the contract is, or, in the case of an anticipated breach, will be,—
(i) substantially to reduce the benefit of the contract to the cancelling party; or
(ii) substantially to increase the burden of the cancelling party under the contract; or
(iii) in relation to the cancelling party, to make the benefit or burden of the contract substantially different
from that represented or contracted for.
Skywards Catering Ltd t/a Wings Bar and Restaurant v Apthorp-Hall [1995] 2 ERNZ 218 (EmpC) at 225
 A dismissal based upon a misrepresentation... that does not meet the requirements for
HELD

cancellation for misrepresentation contained in the Contractual Remedies Act 1979 will be wrongful
and therefore unjustifiable as well.
However, a dismissal that does meet the requirements of the Contractual Remedies Act 1979 and is
therefore not wrongful may nevertheless be unjustifiable if it suffers from defects in procedure or is
substantively unfair.
CRIMINAL RECORDS (CLEAN SLATE) ACT 2004
S14
EFFECT OF CLEAN SLATE SCHEME ON ELIGIBLE INDIVIDUAL
(1) If an individual is an eligible individual, he or she is deemed to have no criminal record for the purposes of any question
asked of him or her about his or her criminal record.
(2) An eligible individual may answer a question asked of him or her about his or her criminal record by stating that he or she has
no criminal record.
(3) Nothing in subsection (1) or subsection (2)—
(a) prevents an eligible individual stating that he or she has a criminal record, disclosing his or her criminal record, or
consenting to the disclosure of his or her criminal record; or
(b) authorises an individual to answer a question asked of him or her about his or her criminal record by stating that he
or she has no criminal record if the question is asked—
(i) under the jurisdiction of the law of a foreign country while an eligible individual is outside New Zealand; or
(ii) while he or she is in New Zealand but relates to a matter dealt with by the law of a foreign country (for
example, a question asked on an application form by the immigration or customs agency of a foreign country).
(4) Subsections (1) and (2) are subject to the exceptions in section 19.
CRIMINAL RECORDS
Murray v Attorney-General [2002] 1 ERNZ 184 (EmpC)
 [47] In terms of legal analysis, therefore, the Murrays were not bound to volunteer the fact of their
HELD
offending when applying for their jobs although it would have been more prudent, not to say more
straightforward, to have done so in the context of the strong emphasis placed in the defendant's preemployment paperwork on the need for a clean bill of health in matters of criminality and tax
compliance.
CHILDREN’S WORKERS – SAFETY CHECKS


For children’s workers, there are various requirements for checking the background of applicants
Children’s Act 2014:
o s 25 Safety checks of new children’s workers
o s 26 Safety checks of existing children’s workers
o s 27 Periodic safety checks of children’s workers
o s 28 Core worker convicted of specified offence not to be employed or engaged
o S 29 Defence of taking all reasonable steps
o S 30 Defence relating to short-term emergencies

Children’s (Requirements for Safety Checks of Children’s Workers) Regulations 2015:
o Identity confirmation (reg 5)
21
o
o
o
o
o
o
New Zealand Police vetting check (reg 6(1))
Referee check (professional or personal) (reg 7(3))
Summary of work history (reg 7(1)(a)(iii))
Professional membership / licensing / registration check (reg 7(2))
Interview with the applicant (reg 7(1)(b))
Risk assessment (reg 8)
Tuilaepa v Chief Executive of the Ministry of Social Development [2016] NZERA Auckland 176
 T was a social worker and got in an altercation with a 15-year-old boy he was looking after – he was
FACTS
dismissed
HELD


“The finding of abuse was said by MSD to be relevant to its mandatory “safety checks” of all current
employees, including Mr Tuilaepa if he were permanently reinstated, under s 26 and s 31 of the
Vulnerable Children Act 2014 (the VCA) and the Vulnerable Children (Requirements for Safety Checks of
Children’s Workers) Regulations 2015.” (at [10]) – noted the importance of safety checks
Note that the Employment Court overturned this determination on the facts in Chief Executive of the
Ministry of Social Development v Tuilaepa [2017] NZEmpC 84
IMMIGRANTS
S350 OFFENCES BY EMPLOYERS (IMMIGRATION ACT 2009)
(1)
(2)
(3)
(4)
(5)
(6)
(7)

Every employer commits an offence against this Act who—
(a)
allows or continues to allow any person to work in that employer’s service, knowing that the person is not entitled
under this Act to do that work; or
(b)
allows a person who is not entitled under this Act to work in the employer’s service to do that work.
Subsection (1)(a) applies whether the person commenced work in the employer’s service before or after the
commencement of this section.
It is a defence to a charge under subsection (1)(b) that the employer—
(a)
did not know that the person was not entitled to do the work; and
(b)
took reasonable precautions and exercised due diligence to ascertain whether the person was entitled to do the
work.
Except as provided in subsection (3), it is not a defence to a charge under subsection (1)(b) that the employer did not
know that the person was not entitled under this Act to do that work.
A charge alleging an offence against this section may specify any day on which it is alleged the person was working for the
employer, and need not state the day on which that work is alleged to have commenced.
For the purposes of this section, an employer is treated as knowing that an employee is not entitled under this Act to do
any particular work if, at any time in the preceding 12 months (whether before or after the commencement of this
section), the employer has been informed of that fact in writing by an immigration officer.
No employer is liable for an offence against this section in respect of any period during which the employer continues to
allow any person to work in the employer’s service in compliance with the minimum requirements of any employment
agreement (within the meaning of the Employment Relations Act 2000) relating to the giving of notice on termination of
employment.
It is an offence for an employer to allow an employee without the appropriate visas to continue to work.
Whanau Tahi Ltd v Dasari [2016] NZEmpC 120
 T was a social worker and got in an altercation with a 15-year-old boy he was looking after – he was
FACTS
dismissed
HELD



“Applying these principles to the dual pleadings in the present case, the tests for holding that the
employment agreement was frustrated or void for illegality are simply not met. Whanau Tahi in this
particular case fails to meet the high threshold required to prove that performance had become
impossible. There is nothing contained in the Immigration Act expressly providing that a breach of its
terms renders an employment agreement illegal. Nor is there anything contained in that Act from which
such an implication could be made.” (at [63])
Just because an employee is in breach of the Immigration does not mean that the employment
agreement is frustrated or illegal – the Employment Relations Act still applies and employers must still go
through a fair process.
So just because it's because what you're doing is illegal and immigration field does not mean that it's
illegal and the employment field, and it has the effect of ensuring that vulnerable employees, generally
22
migrant workers, are paid their entitlements because if you were to trade, the contract is void for
illegality, that employee would walk away with nothing.

And so this is why employees, although they're working illegally under the Immigration Act, are still
entitled to their entitlements under the Employment Relations Act.

There is nothing contained in the Immigration Act expressly providing that a breach of its terms renders
an employment agreement illegal.

It is illegal for the work to take place. It's not illegal for there to be an employment agreement.
PRIVACY

Privacy Act 2020 requirements:
 Principles 1 to 4 govern the collection of personal information. This includes the reasons why personal information may
be collected, where it may be collected from, and how it is collected.
 Principle 5 governs the way personal information is stored. It is designed to protect personal information from
unauthorised use or disclosure.
 Principle 6 gives individuals the right to access information about themselves.
 Principle 7 gives individuals the right to correct information about themselves.
 Principles 8 to 11 place restrictions on how people and organisations can use or disclose personal information. These
include ensuring information is accurate and up-to-date, and that it isn't improperly disclosed.
 Principle 12 governs how "unique identifiers" - such as IRD numbers, bank client numbers, driver's licence and passport
numbers - can be used.
MEDICAL HISTORY
Imperial Enterprises Ltd v Attwood [2002] 2 ERNZ 740 (EmpC)
HELD
 An employer cannot ask an employee broadly whether they have any disability or medical history – they

must tie it to the requirements for the job (e.g. “do you have any disability which would affect your
ability to carry out your duties under this employment agreement?”)
“The question ["Do you have any medical problems of any kind?”] does not provide any safeguards
against discrimination on the grounds of disability including physical illness. It enables an employer
potentially to reject an applicant on the basis that she suffers from a disability or medical condition even
if it would have minimal or no impact on her job. If the question were framed so as to ascertain
information to establish that an employer is justified in treating the individual differently under s 29 then
conceivably the inquiry would be acceptable but that is not the situation in this case.”
PRE-EMPLOYMENT DRUG TESTING
New Zealand Amalgamated Engineering etc Union Inc v Air New Zealand [2004] 1 ERNZ 614 (EmpC)
HELD
 “We also accept that the Health and Safety in Employment Act and the general law impose absolute

duties on employers to take all practicable steps to eliminate significant hazards to employees and
others. Such hazards may include temporary manifestations of behaviour resulting from the taking of
alcohol or drugs.” (at [247])
“Because of the Act's accent on safety, it is reasonable that employers should be able to discharge this
duty by a variety of available practicable means, including drug testing in safety sensitive areas.” (at
[248])
Maritime Union of New Zealand Inc v TLNZ Ltd (2007) 5 NZELR 87 (EmpC)
 “… the evidence establishes that drug and alcohol policies including testing regimes are now widespread
HELD

in New Zealand including within unionised workforces. There is a variety of policies and, in particular,
testing regimes that have developed, sometimes consistently and sometimes ad hoc, usually at the
initiative of employers but sometimes in conjunction with or even at the instigation of unions. However
undesirable inconsistency and the absence of minimum standards may be, the reality of the position is
that policies addressing drug and alcohol impairment at work are a feature of many workplaces. Although
not the subject of this case, the evidence tends to suggest also that pre-employment drug and alcohol
testing during employment is now widespread, perhaps even standard in many sectors or enterprises.”
(at [73])
Set out the principles which are useful in balancing privacy and human rights obligations in terms of
having drug and alcohol policies which comply with those obligations.
23
Case note 275234 [2016] NZ PrivCmr 9
 An employee objected to the urine testing process.
HELD



The testing complied with the Privacy Act
“We found that a monitored collection was acceptable in the context of the circumstances. While it was
intrusive, it was only as intrusive as it needed to be to collect the information required and ensure the
integrity of that information.”
“This meant in spite of the intrusiveness, our view was that it was not any more intrusive than it needed
to be, given the circumstances of the case. The man was applying for a job where drug use had the
potential to pose a health and safety risk, and the manner in which the agency collected the urine was
proportional to the impact of not collecting it.”
COVID-19 VACCINATIONS






Some workplaces that have risks (e.g. working at a rest home with regular contact with the elderly, hospitals)potentially
require employees to get vaccinations – this will not breach the Privacy Act
Other workplaces with little risk will unlikely comply with the Privacy Act by requiring vaccinations.
Body temperature checks using digital infrared thermometers
Polymerase Chain Reaction (PCR) and Rapid Antigen Testing (RAT).
Remote monitoring software for employees working from home such as RescueTime.
Spatial monitoring to enforce social distancing through contract tracing, trackers and CCTV.


Credit checks must be relevant to the role.
If the role does not involve financial risk, then there is no need to do a credit check
CREDIT CHECKS
Case note 298263 [2019] NZ PrivCmr 8
 “[We] concluded that the employer had breached principle 1 of the Privacy Act, since the role did not
HELD





involve significant financial risk. Even if there was a contractual term that requested a credit check, the
employer was still obliged to comply with the requirements of principle 1.”
Held that that was in breach of the principle, one of privacy, because it wasn't tied to the role.
You can't just ask someone about their credit score when they're not dealing with money, they've got no
reason to steal money.
You know, they're not dealing with millions of dollars. We eat this just not in the nature of the role that
was offered. So it was held that that amounts to a breach of the Privacy Act.
Personality testing can be relevant. But in this particular case, it was held back because they and the
applicant was not advised that they heard the name and address in the questionnaire would be seen
elsewhere that there had been a breach of principle 3. So while this personality testing can be justified, it
will not always be justified and usually justified in terms of working in a team.
You've got to be able to show that you are able to work within a team, but if you're working from home
by yourself, they need for a personality test as part of a pre-employment process is arguably of dubious
value.
PSYCHOMETRIC TESTING
Gilbert v Transfield Services (New Zealand) Ltd [2013] NZEmpC 71
 “… as well as the psychometric test for recruitment purposes being of dubious value to the very different
HELD

exercise of selection for redundancy, Transfield created an additional problem for itself by purchasing
and using an assessment tool which it could not and did not understand or explain to affected employees
or indeed to the Court at the hearing.”
The question here is, do you actually need it and what does it prove? If you're going to do a taste, what
information is obtained in that case and you're going to need to disclose that information to the
applicant?
SOCIAL MEDIA CHECKS
Case Note 240409 [2016] NZ PrivCmr 2
 A teenage girl was accused of shoplifting with a group of friends in a clothing shop. The shop manager
FACTS
used security camera footage to post photos of the group on the business’ Facebook page
24

HELD





The father of the teenager complained to the shop about the photos which he said unfairly branded his
daughter as a shoplifter. He said that his daughter was innocent and she had not been aware that two of
the others in the group had taken items from the shop without paying for them.
There can be a breach of the Privacy Act if social media checks reveal information that you are not
putting to the applicant.
Got to be very careful with social media chiefs not to take into account anything that's irrelevant.
Held that they had in fact, been a breach of principles.
Even by posting the photos online because they couldn't be sure that she was involved with a shoplifting
that her friends were and were involved with.
So it shows you the difficulties of relying on social media and undertaking a pre-employment test.
FINGER SCANNING

Finger scanning is generally allowed provided that it is necessary for the workplace.
Case Note 33623 [2003] NZPrivCmr 5
 An employer is legally entitled to collect information to ensure that workers are meeting the terms of
HELD

their employment contracts. The Company was of the view that the collection was reasonably necessary
to address attendance issues.
On the basis of this information, I was satisfied that the collection of the information in question was
necessary for the Company's purpose. I took the view that the collection was both lawful and necessary.
There was no breach of principle 1.
FACE SCANNING

Face scanning is generally allowed provided that it is necessary for the workplace
Fensom v KME Services New Zealand Pty Ltd [2019] NZERA 728
 The employer introduced face scanning without properly consulting the employees
FACTS
HELD



An employee was dismissed because he did not want to be face scanned.
“Failing to properly consult staff about a change that would require them to provide biometric data, in
the way that KME went about it, was not what a fair and reasonable employer could have done in all the
circumstances at the time. KME’s failure was an unjustified action.” (at [35])
“Secondly, KME’s attempts to answer concerns about potential privacy issues with the collection and use
of the biometric data of its workers, particularly facial recognition scanning, were inadequate and to
some extent misleading.” (at [36])
REFERENCES

A former employer who talks about the employee negatively to another employer is at risk of breaching the Privacy Act
Hammond v Credit Union Baywide [2015] NZHRRT 6
 The HR manager went around town and told everyone not to recruit the employee.
FACTS
 This was a breach of the Privacy Act.
HELD


The important point to take away from references is is what is has been authorised and what hasn't been
authorised.
It's very dangerous when a employee is asked the question Would you employ this person again? A wise
employer would refuse to answer the question if the employee wasn't very good at their job, because if
they say that they're not very good at the job, they've probably.
PERSONAL GRIEVANCES

It may not be reasonable and necessary to publicize personal grievances.
Case Note 211715 [2010] NZPrivCmr 9
 A woman resigned from her job and took a personal grievance against her former employer
FACTS


HELD

The former employer posted on its website a copy of the personal grievance the woman had filed in the
Employment Relations Authority
The former employer also posted a number of other statements from other employees rebutting the
content of the personal grievance.
This was a breach of the Privacy Act Princple 11.
25
3. EMPLOYEES
WHO IS AN EMPLOYEE?

The starting point to determining who is an employee is section 6 of the Employment Relations Act
S6
(1)
(1A)
(2)
(3)
MEANING OF EMPLOYEE
In this Act, unless the context otherwise requires, employee—
(a)
means any person of any age employed by an employer to do any work for hire or reward under a contract of
service; and (to be distinguished from a contract for services, which is an independent contractor)
(b)
includes—
(i)
a homeworker; or
(ii)
a person intending to work; but
(c)
excludes a volunteer who—
(i)
does not expect to be rewarded for work to be performed as a volunteer; and
(ii)
receives no reward for work performed as a volunteer; and
(d)
excludes, in relation to a film production, any of the following persons:
(i)
a person engaged in film production work as an actor, voice-over actor, stand-in, body double, stunt
performer, extra, singer, musician, dancer, or entertainer:
(ii)
a person engaged in film production work in any other capacity.
However, subsection (1)(d) does not apply if the person is a party to, or covered by, a written employment agreement
that provides that the person is an employee.
In deciding for the purposes of subsection (1)(a) whether a person is employed by another person under a contract of
service, the court or the Authority (as the case may be) must determine the real nature of the relationship between
them.
For the purposes of subsection (2), the court or the Authority—
(a)
must consider all relevant matters, including any matters that indicate the intention of the persons; and
(b)
is not to treat as a determining matter any statement by the persons that describes the nature of their
relationship

The REAL NATURE OF THE RELATIONSHIP BETWEEN TWO PERSONS is the key to whether one is an employee:
 If the real nature of the relationship is an employment relationship, then all the rights attach
 If the real nature of the relationship is something like a volunteer, independent contractor, or family, then it will not be
an employment relationship.

In determining the real nature of the relationship, the court:
 Must consider all relevant matters, including the intentions of the persons.
 Must not treat any self-serving statements (e.g. “I am an employee”) as holding weight.
 And determining what the real nature is, you must consider all relevant factors, including any matches that indicate the
intentions of the persons and is not to trait as determining matter.
 Any statement by the persons that describe the nature of the relationship.
 So just because the parties say it's an independent contractor relationship or at least one of the pocket-sized is an
independent contractor relationship, that's not the be all and end all. That's certainly not decisive. We've got to look at
the real nature of the relationship.
Leota v Parcel Express Ltd [2020] NZEmpC 61
 A woman resigned from her job and took a personal grievance against her former employer
FACTS


HELD

The former employer posted on its website a copy of the personal grievance the woman had filed in the
Employment Relations Authority
The former employer also posted a number of other statements from other employees rebutting the
content of the personal grievance.
Why is it important whether someone in an employee or not?
 “Employee status is an important issue. It provides gateway access to a range of statutory
entitlements, including minimum wages and holiday pay, redundancy, parental leave, KiwiSaver
contributions, and the personal grievance procedures and remedies provided for under
the Employment Relations Act 2000 (the Act). It also provides the gateway to accessing other rights,
such as the right to collectively bargain.” (at [2])
 Being defined as an employee is important because it allows access to a variety of rights that are
mostly taken for granted
26

List of factors to consider:
1. INTENTION FACTORS:
 Agreement terms
2. CONTROL TEST FACTORS:
 Hirer exercising control
 Worker supplying own tools
3. INTEGRATION TEST FACTORS:
 Worker integrated into organisation
 Worker required to wear uniform or other insignia associated with the business
 Paid holidays or sick leave
4. FUNDAMENTAL TEST FACTORS:
 Payment according to task completion or wages?
 Worker bears any risk of loss or have a chance of making a profit
 Worker free to work for others at the same time
 Worker can subcontract or delegate the work
 Taxation
 Business goodwill accruing to hirer
“THE REAL NATURE OF THE RELATIONSHIP” – FIVE TEST’S
APPROACH
Bryson v Three Foot Six Ltd [2005] 3 NZLR 721 (SC)
 Bryson worked as a model technician (we made the models for the Lord of the Rings trilogy)
FACTS



He wasn’t given a written employment agreement, but when he started work, there was a crew deal
memo – it referred to him as an independent contractor
He worked full-time and paid a regular rate, and his invoices were generated by Three Foot Six to record
the hours he worked
The production was slowly downsizing – Bryson was told that he wouldn’t be given any further work
27


HELD
Bryson brought a personal grievance against TFS alleging that he was an employee
“"All relevant matters" certainly include the written and oral terms of the contract between the parties,
which will usually contain indications of their common intention concerning the status of their
relationship. They will also include any divergences from or supplementation of those terms and
conditions which are apparent in the way in which the relationship has operated in practice. It is
important that the Court or the Authority should consider the way in which the parties have actually
behaved in implementing their contract. How their relationship operates in practice is crucial to a
determination of its real nature. "All relevant matters" equally clearly requires the Court or the Authority
to have regard to features of control and integration and to whether the contracted person has been
effectively working on his or her own account (the fundamental test), which were important
determinants of the relationship at common law. It is not until the Court or Authority has examined the
terms and conditions of the contract and the way in which it actually operated in practice, that it will
usually be possible to examine the relationship in light of the control, integration and fundamental tests”
(at [32])
IN DETERMINING THE REAL NATURE OF THE RELATIONSHIP, THE COURT SHOULD LOOK AT:
 The intentions of the parties in defining their relationship, which can be found by:
 The written and oral terms of the contract, can indicate intention
 The conduct of the parties (how they carried out the contract in practice) which may either support
or diverge from the contractual terms – this means that what might start as an independent
contractor relationship may morph into an employment relationship over time based on the conduct
of the parties
 Features of control and integration.
 Whether the contracted person has been effectively working on their own account (the fundamental
test).
IN THIS CASE:
 The legal documents did not make clear what kind of relationship was intended between the parties
 However, Bryson was found to be an employee due to the large degree of control exercised over his work
o
o
NOTE
 As a result of this case, the government provided that film production workers are to be treated as
independent contractors (section 6(1)(d)) because film producers wanted the flexibility of an
independent contractor relationship (otherwise, employees have rights which meant that they were
required to do particular jobs and employers must go through normal processes in respect of their
employment)
1. INTENTIONS OF THE PARTIES
Barry v CI Builders Ltd [2021] NZEmpC 82
 Mr Barry was a builder, and the parties had agreed to an independent contracting relationship, although
FACTS

HELD

there was never any written contract confirming that and he worked for about three years with CIA
voters before being terminated.
And the question was whether he was an employee and an right, they had all the rights to raise a
personal grievance in respect of minimum entitlements or not.
[6] As s 6(2) makes clear, the task for the Court is to determine the real nature of the relationship. As s
6(3) makes clear, the mutual intention of the parties (if it can be ascertained) will be relevant to
undertaking that task, as will the way in which the parties may have labelled their relationship. But what
is equally clear from the express wording of s 6(3)(a) and (b), is that neither intention nor labelling are
determinative: both are pieces of the larger s 6(2) real-nature-of-the-relationship puzzle. If it were
otherwise, the underlying purpose of s 6 in particular, and the objectives of the legislation more
generally, would be undermined. In this regard one of the objectives of the Act is to acknowledge and
address the inherent inequality of bargaining power. As the explanatory note to the Employment
Relations Bill 2000 made plain, the Employment Relations Act was designed to provide a better
framework for employment relations, and to recognise that the relationship was not simply a
contractual, economic exchange.
28


Chief Judge Engels in these cases has focused on the intentions of the parties and her view is to limit the
extent to which the written contract between the parties is to have relevance.
Here, she rejected the idea that there was a presumptive bar once ascertained the common intentions of
the parties that will be relevant to the undertaking of the task of determining whether to what is the real
nature of the relationship.
Leota v Parcel Express Ltd [2020] NZEmpC 61
 Leota was a courier driver and English was his second language
FACTS
HELD
 The terms of the contract can inform the real nature test – but if the worker has no appreciation of the

terms of the contract, then there are difficulties in showing that they are intending to be bound by the
contract
 “Parcel Express made much of the fact that Mr Leota signed an agreement which referred to him as
an independent contractor, that he knew that this was so and that he went into the arrangement
with his “eyes wide open”. Mr Leota speaks English as a second language. He did not have a grasp of
the legal requirements relating to status (independent contractor versus employee). Nor did he have
a grasp of the agreement that Parcel Express drafted and which he was asked to sign, or the
associated documentation he was given.” (at [5])
 The Court emphasised the importance of the vulnerability of the worker – while the objective
intention of the parties was to have an independent contractor relationship, the fact was that Leota
did not have an appreciation of this, so this supports the conclusion that he was an employee
There were also a number of factors in relation to control and integration which showed that Leota was
part of Parcel Express’ business and that he didn’t have the ability to be in business on his own account
(the fundamental test)
Arachchige v Rasier New Zealand Ltd [2020] NZEmpC 230 – MORE TRADITIONAL APPROACH
 Rasier is the arm of Uber for New Zealand
FACTS
HELD



There were a variety of requirements for the driver to fulfil in order to become an Uber driver
He knew how the taxi industry worked because he had driven for a taxi company before
However, he claimed that he didn’t know the legal consequences of being an independent contractor
when entering into the agreement.

“While there are aspects of the relationship between UBER and Mr Arachchige that may point to
employment, the intent of the parties throughout their relationship was that Mr Arachchige would
operate his own business in the manner and at the times he wished. His work was not directed or
controlled by UBER beyond some matters that might be expected given Mr Arachchige was operating
using the Uber ‘brand’. The agreement between UBER and Mr Arachchige reflected the parties’ intention,
and the parties acted in accordance with the agreement.” (at [56])
The court was not sympathetic to the worker not knowing what he was entering into because of his
knowledge and experience of the taxi industry.
The agreement makes it clear that he was an independent contractor, and the elements of vulnerability
referred to in Leota do not exist in this case
Uber structured its business model in a way which set apart the work of the drivers from what Uber
provided (a service in connecting customers with drivers), and Uber has very little control over the way
drivers carry out the work – this structure supports the conclusion that there was an independent
contractor relationship.
The judge and said there was sufficient flexibility and the way in which Uber operated that there wasn't
sufficient control by Uber.
He determines whether and for how long he undertook the services, he provided all the necessary
equipment and tools to undertake the work. Including vehicle, smart phone advice, a plan and insurance.
So there we have a divergence of authority. Essentially, the chief judge has gone and created their own
test to determine the real nature of the relationship, and you've got another line of authority established
earlier and consistent with Bryson to follow this framework of intentions, control, integration,
fundamental test and followed by the mixed-factor test.






29
Clark v Northland Hunt Inc (2006) 4 NZELR 23 (EmpC)
 Clark was a huntsman
FACTS




HELD


He signed an agreement which said that the parties were one of principal and independent contractor
Clark occupied a house in land owned by Northland Hunt – no rent was payable
New conditions were created for Clark, including drug and alcohol provisions – Clark did not like these
provisions, and refused on the advice that he was an employee
Clark was then terminated.
“In determining the real nature of the relationship between the parties a clear starting point is the way
the parties negotiated the relationship to exist between them. If a written document is executed in
advance then it gives a clear indication as to their intentions. Mutuality may not exist where the party
paying the consideration is in an overbearing position as a result of unequal bargaining power. However, I
do not perceive that to be the position in Mr Clark's case …” (at [28])
 In determining the real nature of the relationship, a good starting point is the terms of the contract
and how it shows the parties’ intentions
 The Employment Relations Act does account for unequal bargaining power (section 3) – the parties
may not have a common intention if there is unequal bargaining power
 However, in this case, Clark was not in a position of unequal bargaining power
“Simply because a contract contains a provision, which the Courts have sometimes frowned upon as
being mere labelling, that does not mean in every case where such terminology is used its weight will be
diminished. There is a clear distinction between the contractual formalities that existed between Mr
Clark and Northland Hunt and those which Judge Shaw saw in dealing with what was purported to be the
formal contractual arrangements between Mr Bryson and his employer but, which in reality, were far
from that.” (at [29])
 “Mere labelling” provisions are things like “You acknowledge that you are an independent
contractor” – but the courts will not ignore the weight of these provisions
DISTINGUISHED THE FACTS OF BRYSON:
 In that case, the documents did not make it clear the intention of the parties in defining their relationship
 In this case, the agreement made it clear that the intention of the parties was for Clark to be an
independent contractor.
Rothesay Bay Physiotherapy (2000) Ltd v Pryce-Jones [2015] NZEmpC 224
 There were three written agreements between the parties:
FACTS



HELD


The first was an independent contractor agreement forwarded to Immigration New Zealand to get PryceJones a job – INZ said you cannot have an independent contractor relationship and need an employment
relationship
Therefore, to progress the application for a work visa, an employment agreement was created and
forwarded – INZ granted the visa on the basis of this agreement
The third agreement that was signed when PJ came to New Zealand was an independent contractor
agreement.
PJ was held not to be an employee
 The employment agreement was purely for immigration purposes, and the apparent
intentions of the parties were for an independent contractor relationship
When you have three conflicting written agreements, it is hard to discern the intentions of the parties
 Therefore, in these types of cases, the intentions of the parties will be of less importance
compared to how the relationship operated in practice (control, integration and the
fundamental test)
NOTE:
 The difficulty with this decision is that INZ had an employment agreement which explicitly said PJ was an
employee, and this was the basis upon which the work visa was granted – so, for Immigration Act
purposes she was an employee but for Employment Relations Act purposes she was an independent
contractor
30

You are basically saying that the employer is breaching the Immigration Act by not complying with the
work visa (which requires for the worker to be an employee), but to say that the real nature of the
relationship was an employment relationship would breach the Employment Relations Act
2. THE CONTROL TEST
Downey v New Zealand Greyhound Racing Association Inc (2006) 3 NZELR 501 (EmpC)
 Downey was a stipendiary steward for the NZGRA – he was terminated after some disagreement.
FACTS
HELD
 “Mr Downey occupied a totally different position. While there were duties required to comply with the






rules of racing, and in performance of his judicial functions, he was not required for specified hours on a
week by week basis. Indeed he was on call although he knew well in advance the race meeting he was
required to attend. He would, if he agreed, attend meetings outside his usual area if a stipendiary
steward in another area could not attend. He worked from home. Apart from the pressing nature of
some of his duties he was very much a free agent.” (at [28])
Downey was controlled to a degree by being required to work in accordance with the rules relating to
racing (i.e. he knew when a race would happen and would have to do things), but outside of those
requirements, there were periods of time where he was not controlled – therefore, he was an
independent contractor.
The question was, well, did that level of control point towards an employment relationship or otherwise
and end down?
They see that the balance in favour of an independent contractor relationship.
He knew that he was being engaged as an independent contractor and it was important not to confuse
the sometimes onerous statutory and regulatory functions of a steward with the control which an
employer might normally exercise over an employee.
Mr Downey was unable to establish the way his work was structured was an integral part of the business,
which I think is the point causes that is relatively independent and at the way in which he was paid, just
taxation and so forth, indicated that he was in business on his own account.
And you can definitely draw some analogies here with the problem question you probably want to have a
look at Downey because of the nature of the judicial functions that undertaken and that, in turn, is why
the control exists.
Yang v L E Builders Ltd [2012] NZEmpC 185
 Yang was a carpenter by trade and was asked to work by LEB.
FACTS
HELD


Worked 9hrs a day and on Saturday with lesser hrs.
There was no documentation.

“As there was no documentation, the court had to rely less on the intentions of the parties and more on
the control, integration and fundamental tests
“… Mr Yang had no control over what work he did. The foreman directed him as to what to do and when.
Nor did he have any control over who he was working with, either on his own or with various
combinations of other workers.” (at [10])
 There was a high level of control over Yang’s work – therefore, he was an employee
 This means that if there is a high level of control and a failure to formalise the relationship, then
there is a real risk that it is an employment relationship.
A high degree of control may also mean that there is a high degree of integration of the worker into
the principal’s workplace and thus make them an employee


Noble v Ballooning Canterbury.com Ltd [2019] NZEmpC 98
 Noble worked as a hot air balloon pilot from the US.
FACTS


The chief pilot went on holiday, and there were some difficulties with Noble’s activities:
o Noble also operated as a “receptionist” as he had to tell customers whether or not it was safe to
fly on the day – he did not like this because he believed it wasn’t his job
o Noble flew over a pig farm at a low altitude and the pigs scattered, which led to the death of one
and injury of several others – he says he didn’t know there was a pig farm in the area or that he
couldn’t fly over it
Noble was subsequently terminated
31
HELD


“I conclude that BCL’s ability to control Mr Noble’s work could only be undertaken in light of the CAA
obligations. The central point is that the various elements of control would have been the same whether
Mr Noble was an employee or a contractor. In my view, the control test does not lead to a conclusion
that Mr Noble must have been an employee. He could equally have been a contractor. This test is
neutral/factor considered neutral.” (at [113])
Noble was strictly controlled by the company due to Civil Aviation Act obligations, but this did not point
to him being an employee because those obligations would have stayed the same whether he was an
employee or a contractor.
3. INTEGRATION
Southern Taxis Ltd and Grant v Labour Inspector [2020] NZEmpC 63
 ST did not initially have a written agreement with its drivers
FACTS





HELD



ST operated six cars, and there was a commission arrangement
In 2005, ST obtained a contract for airport shuttle work – they were paid an hourly rate (plus holiday pay
and sick pay)
ST lost the contract, but did obtain an entitlement to use the taxi rank at the airport
At this time, Inland Revenue said these workers should have PAYE deducted (which is indicative of an
employment relationship because PAYE applies to employees)
ST produced a document which was styled as a contract for taxi driving services – the four drivers did not
sign this document.
“Under this test, if a person is employed as part of the business and his or work is done as an integral
aspect of it, there is a contract of service. This is not the case if the work, although done for the
business, is not integrated into it but is only an accessory to it. In Challenge Realty Ltd v Commissioner of
Inland Revenue, the Court of Appeal said that an element of this assessment is whether the person was
part and parcel of or integrated into the enterprise of the work operation.” (at [95])
“In my view, STL operated a taxi business for which it needed drivers to operate the branded vehicles
which it owned for the purposes of operating an economic taxi business.” (at [98])
The drivers were employees

So classic example of integration systems uniforms if you're required to wear a uniform that points
towards an employee relationship, if you are required to wear a branded, you have branded van or
branded equipment, then that again points towards an employee's status.

If you want to come in and people are instantly able to recognise you as a third party for example, as a
plumber that comes on and is working on the taps and the bathroom, that indicates that they are
accessory to the business rather than being integrated as part of this business.

That would be different if you're applying business, which would point towards you being an employee if
you are tightly controlled and told what to do. So it all depends on the facts.
NOTE
 Examples of the integration test:would
 Courier drivers drive vans that have the company logo on them whereas Uber drivers cannot display
any Uber signages
 Is the person part and parcel of the team of the organisation, or are they the electrician that comes
and fixes something on occasion?
Kiwikiwi v Maori Television Service (2007) 5 NZELR 6 (EmpC)
 Involved a teleprompter who wanted a full-time position
FACTS
 “I find that from the evidence of the MTS managers and the witness from TVNZ that teleprompters are a
HELD

small but important cog in the larger wheel of television production. If there is no teleprompter there is
no script for a presenter to read. The position is not an adjunct which the television station could do
without. It is an integral part of the production process.” (at [42])
Because the teleprompter’s role was essential to running the business, they were integrated into the
business and thus the real nature of the relationship was that the worker was an employee.
Atkinson v Phoenix Commercial Cleaners Ltd [2015] NZEmpC 19
32
FACTS




HELD

The worker brought a claim for unjustified dismissal
She signed an NDA which described her as a “sub-contractor”
When she commenced work, she was presented with a draft subcontractor agreement – she refused to
sign as she had previously worked for other cleaning companies as an employee and wanted that status
However, she began and continued intermittent cleaning work for some 3 years
“I have concluded that the plaintiff was more integrated than not into the business of the defendant at
the time when their commercial relationship ceased finally. She wore Phoenix uniform clothing and, at
least for a not insignificant portion of the time, drove between assignments in a Phoenix sign-written
van. Apart from completing her fortnightly timesheet, all ‘paper work’ to do with the plaintiff’s work
was undertaken by Phoenix or its chartered accountants. A neutral but interested observer of Mrs
Atkinson performing her duties on any evening or over a weekend would identify her as a Phoenix
cleaner.” (at [67])
NOTE
 The integration test focuses on what a reasonable objective third person observer would think about the
worker – would they think the worker is an integral part of the team or just an accessory to it?
4. THE FUNDAMENTAL TEST

The fundamental test is whether you are in business on your own account – if so, then you are an independent contractor
Singh v Eric James & Associates Ltd [2010] NZEmpC 1
 Singh was a sales advisor involved in assurance brokerage services
FACTS
HELD
 “This examines whether it may truly be said that Mr Singh was in business on his own account rather

than employed by EJAL. I conclude that Mr Singh was in business on his own account as a sales agent for
an entity (EJAL) that was entrepreneurial, in the original sense of the word, selling on commission
policies of insurance or assurance of specified contracted insurance companies. The nature of Mr Singh’s
position was sub-entrepreneurial in the same original sense of the word. The plaintiff took substantial
business risks of the sort not seen in employment relationships but equally had the opportunity to take
significant benefits in a way also not seen in employment relationships. In these circumstances I conclude
that Mr Singh was truly in business on his own account.”
Factors considered:
a) Is any part of the business entrepreneurial?
b) Is there an ability for the worker to take business risks?
c) Is the way the worker earns remuneration a commission-based structure (the more work they do,
the more money they make), or just an ordinary salary that will remain the same no matter how
much work you do?

So that commission arrangements in that situation pointed squarely towards an independent contractor
relationship.

But that does not mean that every time you've got a commission arrangement that is not an employment
relationship because there's plenty of employment relationships with commission structures.

All of these tests actually sort of rehash the same question, which is ultimately what you've got an
employee or a contractor. But this can be seen as the opposite to some of the other Tests site. Look at
the degree of control integration exercised by the business.

This is a question about how free is the work and the business to make money?
Franix Construction Ltd v Tozer [2014] ERNZ 347 (EmpC)
 Tozer was a manager for a construction company who was to oversee and administer subcontractor
FACTS
activities, deal with invoices and telephone calls etc.
HELD

“In some respects this is the mirror image of the integration test and the same considerations apply to
each. Mr Tozer was not able to profit from the work performed by him to any greater degree than his
fixed rate of remuneration allowed. I am satisfied that, despite Mr Davies’ assertions to the contrary,
Franix contracted for Mr Tozer’s personal services. It would not have agreed to Mr Tozer’s substitution of
another person of Mr Tozer’s choosing to perform his work. Rather, what happened in practice, if
someone was absent, was that the remaining office and managerial staff of the company covered that
33


person’s work for the period of their absence as, for example, when Mr Tozer took pre-approved
holidays.” (at [39])
(Applying the integration test) Furthermore, Tozer was provided with a business card that describes him
as a manager and make an impression that he was authorized to represent the company – to a
reasonable outside observer, he would appear to be a senior managerial employee and not an
independent contractor.
Were there tax deductions made or costs incurred which would indicate an independent contractor
relationship, or is it more analogous to an employment relationship?
5. THE MIXED FACTOR TEST
This is an older test than the “real nature of the relationship” test, but the factors to consider are still relevant:
 INDUSTRY PRACTICE – may inform the intention of the parties
 METHOD OF PAYMENT – a commission-based scheme or a set remuneration like a salary?
 Normally a commission-based scheme (e.g. getting paid after the work is done) indicates an independent contractor
relationship, but note that electricians and plumbers (who generally are independent contractors) bill by the hour (set
remuneration), so you cannot rely solely on method of payment
 TAXATION – PAYE or withholding tax?
 But just because a worker is treated as an employee or independent contractor for taxation purposes does not
necessarily mean this will be the case for employment purposes
 DELEGATION – if the worker is absent for work, do they themselves have to find a replacement or do they have to tell
their manager to find one?
 OPERATION IN PRACTICE – how does the relationship operate in practice?
 INDIVISIBILITY – theoretically you cannot be an independent contractor for some purposes (e.g. under the ERA) and an
employee for another (e.g. for immigration or taxation purposes); but the cases show that this does not mean much in
practice – are you fundamentally part of the business?
LEOTA V PARCEL EXPRESS LTD [2020] TABLE OF FACTORS
34

Simon has issues with the last question because he thinks that should come first (a pretty good place to start is the contract
between the parties), but that is not how the chief judge sees it.

So when answering this question for the problem question, you can either adopt one of two approaches, you can either
adopt the. Five Test Approach, you go through and intention, control, integration, fundamental and the mixed-factor test,
and that it's one way of looking at it - That's the traditional way.


Or you can go through this table. The danger with the table is that you answer the questions yes or no without analysis.

What I would say is that I don't think any of the outcomes of the chief judges cases would have changed even if you'd
applied the traditional tastes. The level of emphasis on particular matters would change.

In recent years, there have been discussion about gig economy workers – workers that work based on an online platform
(application) to provide a service (e.g. Uber)
 The problem with a gig economy is that it is based on independent contractors, who don’t have the same rights as
employees – therefore, we see a lot of challenges to the status of these workers so that they get the rights of
employees (e.g. under Minimum Wage Act, Holiday provisions)
So if you're going to use the table and we are sure to answer your questions and the problem questions, answer to WHAT
EXTENT each question in the table is answered.
THE GIG ECONOMY
Uber BV v Aslam [2021] UKSC 5
HELD
 Held that Uber drivers in the UK fall within another category of workers (employees, workers,


independent contractors) – they are entitled to minimum rights granted to employees, but not rights to
claim for personal grievance.
In assessing the nature of the relationship, the court should not be looking at the contract terms as a
starting point because the whole test is a question of statutory interpretation
 If you start with the contract and rely on it too heavily, the risk is that you devalue the test – that
the real nature of the relationship is to be determined by what is happening in practice
“The general purpose of the employment legislation … is to protect vulnerable workers from being paid
too little for the work they do, required to work excessive hours or subjected to other forms of unfair
treatment (such as being victimised for whistleblowing). The paradigm case of a worker whom the
legislation is designed to protect is an employee, defined as an individual who works under a contract of
employment.” (at [71])
35

“Once this is recognised, it can immediately be seen that it would be inconsistent with the purpose of
this legislation to treat the terms of a written contract as the starting point in determining whether an
individual falls within the definition of a “worker” … The efficacy of such protection would be seriously
undermined if the putative employer could by the way in which the relationship is characterised in the
written contract determine, even prima facie, whether or not the other party is to be classified as a
worker. Laws such as the National Minimum Wage Act were manifestly enacted to protect those whom
Parliament considers to be in need of protection and not just those who are designated by their
employer as qualifying for it. (at [76])
 It shouldn’t be up to the employer to decide whether someone is entitled to the minimum rights of
employment.

New Zealand’s judgment concerning Uber in Arachchige isn’t necessarily wrong because it was clear that the intentions of
the parties was to create an independent contractor relationship
o However, the difficulty with this case is that where you have vulnerable workers (people who don’t entirely
understand the contract), we might want to give more weight to the purpose of section 6 (which is to provide
protection to especially vulnerable workers) rather than start with the terms of the contract

Australia has greater protections for independent contractors than New Zealand, so they may be more inclined to find
that Uber drivers are independent contractors

There is currently a fair-trading amendment bill going through Parliament – this bill allows the Commerce Commission to
prosecute organisations which have unfair contractual terms with its workers
 This may change a lot of how independent contractors are treated in New Zealand – by removing some of those
clauses, we may see a move towards the Australian approach and away from the UK approach

Ministry of Business, Innovation and Employment “Better Protections for Contractors: Discussion document for public
feedback” (26 November 2019) <https://www.mbie.govt.nz/> at 10-11
 Independent contractors have fewer rights and protections than employees, and as a result can experience poor
outcomes. There are growing concerns about workers in the following situations:
o Workers who are, in substance, employees, but are misclassified as ‘independent contractors’ by firms to reduce
their entitlements. These workers are often subject to a high degree of control (e.g. perform tasks under close
supervision and cannot send someone else to do the job on their behalf), but lack basic employment rights. They
are often paid less than the minimum wage, have no paid holidays and can be dismissed without notice.
o Workers who are in the ‘grey zone’ between employee and contractor status. They operate their own businesses
and may use their own equipment, but depend on one from for most of their income and have little control over
their daily work. These workers do not enjoy the choice and flexibility commonly associated with selfemployment and they do not have the same legal protections as employees.
 Workers in both of the situations above are in a vulnerable position, lacking both the protections offered to
employees by law, as well as the power to negotiate a better deal. The changing nature of work, including the
expansion of the ‘gig’ economy, means that these issues may impact a growing number of workers in New Zealand.

The Labour Inspector is becoming more active in this area:
 Vulnerability can be seen where contracts are stylized as providing an independent contractor relationship, but if the
worker does not sign the contract, they won’t have a job – so there is unequal bargaining power
LEGISLATIVE REFORM
MISCELLANEOUS CATEGORIES
INDEPENDENT CONTRACTORS




FILM PRODUCTION WORKERS (Employment Relations Act, section 6(1)(d); Screen Industry Workers Bill currently before
Parliament)
REAL ESTATE AGENTS (Real Estate Agents Act 2008, section 51)
SHAREMILKERS (Sharemilking Agreements Act 1937, section 2)
SPIRITUAL WORKERS (Mabon v Conference of the Methodist Church of New Zealand [1998] 3 NZLR 513 (CA))
 These workers have their own category because they are appointed by a religious deity – therefore, they are not
employees
36






JUDICIAL OFFICERS (O’Rourke v Secretary for Justice [1996] 2 ERNZ 169 (EmpC))
 They are office holders, so they are independent contractors NOT EMPLOYEES.
DEBT COLLECTORS (Hamon v Bay Collection Agency Ltd [1992] 2 ERNZ 14 (EmpT))
 Independent contractors because control over their work is minimal
OSETOPATH LOCUMS (Bolton v The Rathbone Clinic Ltd ERA Auckland AA275/07, 7 September 2007)
 Because their role requires them to go between workplaces and filling in temporarily, they are generally independent
contractors
EXOTIC DANCERS AND SEX WORKERS (Hamilton-Redmond and Clifford v Casino Bar Limited [2018] NZERA 128)
 Generally independent contractors because the workers have an ability to say no to work
 But an issue is that these workers can often be vulnerable – the industry is known for exploiting its workers
EMPLOYEES:
 Partners (James & Wells Patent and Trade Mark Attorneys v Snoep [2009] ERNZ 284 (EmpC)).
Either
 DIRECTORS AND SHAREHOLDERS (Smith v Practical Plastics Ltd [1998] 1 ERNZ 323 (EmpC)
o The general rule is that if you have a shareholding, you have an ability to profit from the business and thus are an
independent contractor
 SPORTS PLAYERS (Waikato Rugby Union (Inc) v New Zealand Rugby Football Union (Inc) [2002] 1 ERNZ 752 (EmpC))
o The difficulty with sports players under employee agreements is that they need to be able to switch players in
seconds during a match – you don’t want a personal grievance based on this, so generally sports players are
treated as independent contractors
o There are some occasions where they are treated as employees – netball is a good example of an industry where
they are employees
OTHER CATEGORIES
HOMEWORKERS

Section 6 says that homeworkers (workers who do their job at home) are employees.
Humphreys v Humphreys [2021] NZEmpC 217
HELD
 [66] Homeworkers are largely invisible. They do work (as the name suggests) in the home. That
means that the work they do, and how they do it, is also largely invisible to the outside world. Their
work has historically been undervalued and private. Caring work is often conducted in the home of
those who need care. Caring work is often provided by women. There has previously been a perception
(though not universally held) that such work ought to be delivered for free or at a reduced rate...



Chief Judge Engels finds that they she sets aside essentially the contractual framework, and she says,
actually, at these people, these key workers are fundamentally hard workers within the definition of
section 6, and therefore they should be treated as employees entitled to all the rights of employees,
including minimum wages and so forth.
One of the difficulties with care, which, of course, is that it's a 24/7.
Undertaking so they're often required to get up and be out in the middle of the night and just you'll find out sleeping has
been held to be work. And that means they're entitled to the minimum wage during times that they sleeping, which can
cause some real challenges in terms of how much money these particular key workers are going to be paid.
Fleming v Attorney General [2021] NZEmpC 77
HELD
 [86] While Ms Fleming may not have really intended to be an employee of the Minister, I have
concluded that she became one as a consequence of the homeworker definition, applied to the
particular facts of this case. It will be apparent that I have concluded that Ms Fleming became a
homeworker from at least the point in time that Justin became an adult; the Ministry was aware
that he needed care and that Ms Fleming was providing it to him.
PERSONS INTENDING TO WORK
37


What if I sign an agreement saying I will start work in the future, but then the hirer doesn’t want me anymore and
terminated before my start date?
So best deals with the situation where a person has signed an employment agreement but has not actually physically
started work.

And this is important for raising a personal grievance because if you accept an offer, you resign from your previous position,
then you get all the rights of an employee in respect of a personal grievance at that time.

So if that employee decides that you haven't because you haven't started work, that they're going to revoke the offer of
employment even though you've resigned from your previous job in anticipation of starting work. Then you do have rights
and respect of being a person intending to work.

Now this has implications in terms of trial periods and when the employment relationship starts. So often, employment
relationships will start when they sign the contract, but will the operation of the employment agreement, i.e. the right to be
paid, begins much later.
Harawira v Presbyterian Support Services [1994] 2 ERNZ 281 (EmpC)
FACTS
 Harawira applied for a job, and it was offered to him – he accepted the job when making a counteroffer
that the employer acquiesced
However, the parties did not discuss a starting date
HELD

 When Harawira accepted the job, he was by then a person intending to work – in section 2, this means a

person who has been offered, and accepted, work, so they are an employee
Since they are an employee, they can be unjustifiably dismissed before they even start work
VOLUNTEERS

The same “real nature of the relationship” test applies to volunteers – there often is no written agreement for volunteers
Brook v Macown [2014] NZEmpC 79
o Facts
 Brook was a registrar for the NZDDC – he was entitled to an annual payment and reimbursed for expenses
 He was ultimately dismissed
o Judgment
 “Having considered each of the factors identified above I conclude that Mr Brook was not an employee. It
is beyond dispute that Mr Brook devoted a considerable amount of time and effort to the organisation
and made a valuable contribution to dance and dancesport in New Zealand. However he took on the role
on a voluntary basis and only sought to assert that he was an employee when internal disputes and the
relationship with delegates on the NZDDC soured. While I accept that a person’s status may change over
time I do not consider that it did in this case.”
 Kirby v New Zealand China Friendship Society [2015] NZEmpC 189
o Facts
 Kirby was involved in teaching in China – he was assisted with his travelling costs
o Judgment
 Kirby was an employee?
 Kidd v Beaumont [2016] NZEmpC 158
o Facts
 The worker did work at a camping ground in exchange for living there for free
o Judgment
 The worker was an employee
 Below v The Salvation Army New Zealand Trust [2017] NZEmpC 87
o Facts
 Trainees at the Salvation Army (a religious organisation) claimed they were employees
o Judgment
 Based on an analogy with spiritual workers, these people were volunteers – therefore, there was no
employment relationship
FAMILY ARRANGEMENTS

There are situations in which the parties have no intention to form a legally binding relationship (and thus no
employment relationship) – one of these situations is family businesses
o But this doesn’t mean that there cannot be an employment relationship – but if there is no formal legal
arrangement, there is a presumption against the intention of creating legal relations
38

Dillon v Tullycrine Ltd [2020] NZEmpC 52
o Judgment
 “This case arises in the context of a family arrangement. In such a context, the Courts have recognised
that there is a presumption of fact against an intention of creating legal relations. This presumption
derives from experience of life and human nature which shows that, in such circumstances, men and
women usually do not intend to create legal rights and obligations but intend to rely solely on family
ties of mutual trust and affection.” (at [30])
39
Employers

Figuring out who the employer is can be important from the perspective of a plaintiff – you will want to sue the person
with the deepest pockets
o Often in these situations, there are multiple entities that are controlling or integrating the employee – this
creates an issue as to who the employer to be sued is
General principles


Wilson v Bruce Wilson Painting & Decorating Ltd [2014] NZEmpC 83
o Facts
 The plaintiff worked for his brother Bruce
 Bruce then created a company (BWPD) – the plaintiff was transferred to the company and made to
sign an employment agreement (which said the employer was BWPD)
 The company (BWPD) went into liquidation and Bruce set up a new company
 The plaintiff sued his brother Bruce (as the company was in liquidation), saying Bruce was his personal
employer and thus personally liable
o Judgment
 The principles which apply when considering the identity of a correct employer:
 The onus of proving the identity of the employer rests on the employee (where the
employee is putting that fact in issue)
 The standard of proof is on the balance of probabilities
 The question of who the employer was must be determined at the outset of the employment
 It is necessary to apply an objective observation of the employment relationship at its outset
with knowledge of all relevant communications between the parties; the question to be
asked is who would an independent but knowledgeable observer have said was the
employer
 Failure to notify or make an employee aware of the identity of the employer is not conclusive
– just because the employee doesn’t know who the employer is, this doesn’t mean that the
company cannot be liable
 “Although there was a failure to explain the position accurately to his brother, this is evidence of
sloppy business practice rather than a deliberate intention to mislead. By the time of the dismissal,
sufficient indicators had been given of the correct identity of the employer, including pay slips, IRD,
summaries and timesheets.”
 On this basis, the company and not the brother was the employer, even though when the
relationship began, both parties accepted that the plaintiff was personally employed by
Bruce
Mehta v Elliot (Labour Inspector) [2003] 1 ERNZ 451 (EmpC)
o Facts
 Mehta had permanent residence in New Zealand and operated three businesses – two immigration
consultancy companies in India and New Zealand, and a company which owned and operated
restaurants in Auckland
 As part of getting people to New Zealand, he would often offer people jobs – he was paid 300,000
Indian rupees
 The employee was advised that a valid job offer was a virtual requirement – there was a job offer in
one of the Auckland restaurants
o Issue
 Was Mehta personally liable for employing the employee in the restaurant, or was the company the
employer?
o Judgment
 “The question of who was the employer must be determined at the outset of the employment. If that
changed during the course of the employment, there must be evidence of mutual agreement to that
change. Because Messrs Sheikh and Mehta give different accounts of who they believed employed Mr
Sheikh, it is necessary to apply an objective observation of the employment relationship at its outset
with knowledge of all relevant communications between the parties. Put another way, who would an
independent but knowledgeable observer have said was Mr Sheikh’s employer when he commenced
employment?” (at [22])
 On the evidence, an independent observer would find that the plaintiff was employed by Mehta
personally
 The basis in method of payment (cash taken from the till at regular intervals without tax) was
more consistent with employment by Mehta than a New Zealand limited liability company
40
 Although other employees were engaged by the company and had written individual
employment agreements with it, the plaintiff was personally employed by Mehta – this
relationship did not change over time
o
Note

This case shows the risk with pre-incorporation contracts – if the company is set up during the
employment relationship, and you don’t make it clear to the employee that there is a change in
employer, liability can be imposed personally
 O'Boyle v McCue [2020] NZEmpC 175
o Facts
 The plaintiff was employed by O’Boyle on a personal basis without an employment agreement
 O’Boyle then set up a law firm (OBL) as a sole practitioner
 The company had only been involved when there was a transfer of leave entitlements to the
company – this was done without telling the plaintiff
o Judgment
 “In summary, I find:
a) Ms O’Boyle carries the onus on the issue of employer identity, since she is its proponent.
b) There is no doubt that she was the employer from the outset of the employment relationship.
c) There is no single document showing compliance with s 63A to verify either a variation of the
original agreement as to the identity of the employer, or the offering of a new employment
agreement.
d) Nor was there any agreement that either of these steps would be taken. Ms O’Boyle said she told
Ms McCue the employer would change. She did not say Ms McCue agreed to this occurring. I am not
satisfied from an objective standpoint that Ms O’Boyle has established Ms McCue agreed there could
be a variation or new IEA. The fact that wages were paid by OBL is clearly established. But that does
not mean Ms McCue gave any assent to a change of employer.”
 An employee cannot be assigned between two employers – the employee needs to provide consent
to be transferred to another employer (as you cannot require a person to work for you)
 Fuimaono v Houia [2017] NZEmpC 63
o Facts
 Houia was an early childhood education teacher initially employed by two sisters
 The two sisters then created a company (KFL, which was under the trading name NTTI) at a later point
that managed the ECE centre
 A number of documents referred to the trading name NTTI, but not the company name KFL
o Judgment
 “I am satisfied that Ms Houia was not informed at the time she entered into her individual
employment agreement that Heather Fuimaono and Mahia Fuimaono were agents for a company; or
that KFL was to be her employer; or that the proposed ECES, to be known as NTTI, was to be licensed
under a company name and operated by that company. Not only was it the case that Ms Houia was
not told that the employer would be KFL, but that entity was not referred to in the individual
employment agreement which was presented to Ms Houia. It was signed by Ms Houia and Heather
Fuimaono, with the employer being described as NTTI.” (at [47–48])
 It was open to the plaintiff to conclude that a company known as KFL was the payer of her wages, but
having regard to all the information given to her did not mean that she should have realized and
agreed that KFL was her employer
 The plaintiff did not know that NTTI was KFL
 Therefore, when only NTTI was referred to in the employment agreement, the plaintiff had
no knowledge of a transfer of employment to KFL
 Therefore, the two sisters were the personal employers
UNDISCLOSED PRINCIPAL
 The “undisclosed principal” doctrine provides that where the principal (the supposed employer) is not disclosed, the
employee gets the option of suing the hirer personally or the company that is said to be the employer
o Therefore, if the employee does not know about the new company being the employer, then the presumption
is they can sue either the hirer or the company
o But the employer can rebut the presumption by establishing that the employee knew about the company –
failure to notify or make an employee aware of the identity of the employer is not conclusive (Wilson)
 Cuttance (t/a Olympus Fitness Centres) v Purkis [1994] 2 ERNZ 321 (EmpC)
o Facts
 Purkis was an aerobics instructor – she entered into an employment agreement with Cuttance
personally
 The company was Cuttance’s operation
o Judgment
41

“… the liability of Mr Cuttance was and is legally sustainable upon the more simple basis that Mrs
Purkis entered into a contract of employment with him as her employer and this employment
contract, throughout its sustained term, was with Mr Cuttance and nobody else. Thus he is
answerable, as the employer party, for the outstanding holiday pay owed to Mrs Purkis.” (at 338)
Issues when there are multiple entities relating to the employment of
the employee
Triangular employment relationships


A conventional employment relationship is one between employee and employer
A triangular, labour-hire relationship is between workers, the intermediary and the end user / host
o The relationship:
 The intermediary is the labour-hire company (e.g. a temp agency)
 Workers usually have an employment relationship with the intermediary, but not always
 The end-user / host is where the workers work
o To avoid obligations, companies create an intermediary to pay and have an employment agreement with the
workers, who work for another party
 To avoid liability, companies can liquidate the intermediary if there are problems
 Prasad v LSG Sky Chefs New Zealand Ltd [2017] NZEmpC 150
o Facts
 Tulai signed up with the labour-hire company Solutions in 2009 – she was given a document
purported to be an independent contractor agreement
 She was initially washing cutlery and worked up to 62.75 hours per week at LSG, and worked
continuously during that time – LSG continuously engaged with Tulai for 4 years
 Prasad signed up with Solutions in 2013, and given a document purported to be an independent
contractor agreement – he worked for LSG for 2 years on average 45 hours per week
 The workers were immigrants and English was their second language
 The workers were paid by Solutions, which in turn was paid by LSG for the hours worked – LSG
believed what it was paying was what was required
 An internal memorandum showed that the labour-hire agreement suited LSG as they could get a new
worker immediately after dismissing or rejecting one – they don’t have to go through the procedures
in an employment agreement
 Once dismissed, the question arose as to who their employer was
o Judgment
 “A labour-hire agreement does not represent an impenetrable shield to a claim that the “host” is
engaging the worker under a contract of service. Much will depend on the particular facts of the
individual case and an analysis of the real nature of the relationship, including how it operated in
practice.” (at [98])
 Applying section 6 to the facts, LSG (and not Solutions) was the employer
 The workers were vulnerable
 Given the length of time they worked at LSG, this was an employment relationship between
Tulai and Prasad and LSG
 Although the contract reflects an independent contractor relationship, the court can look
past the document and see how the relationship operated in practice – in practice, LSG was
controlling the workers, integrated into the organization and they were not in business on
their own account as they had no ability to profit
 It seemed that LSG was using Solutions to get workers and avoid employment issues
JOINDER OF A THIRD-PARTY AS DEFENDANT
 McCook v Chief Executive of the Inland Revenue Department [2020] NZEmpC 109
o Facts
 IRD applied for Madison Recruitment to be adjoined as a defendant – the court accepted this
o Judgment
 “At this stage the evidence establishes that the plaintiffs in fact have employment agreements with
Madison, and that it and IR are parties to a commercial agreement under which Madison provides its
employees to IR to carry out work which that organisation needs completed from time to time. The
plaintiffs seek a declaration, however, that the real employment relationship is between them and IR;
and that Madison’s role is limited and as a recruiting agency only.” (at [18])
 “According to affidavit evidence placed before the Court, some information relating to the
employment of the plaintiffs is held by Madison and not IR. The Court is told that Madison has been
directly involved in arranging for the plaintiffs to work at IR. On the evidence filed, it is a party having
a role in the employment of the plaintiffs.” (at [19])
42

“In all these circumstances I am satisfied that, as a matter of jurisdiction, the requirements of HCR
4.56(1)(b)(ii) are made out; Madison’s participation in the proceeding may be necessary to adjudicate
and settle the question which is before the Court.” (at [20])
103B Joining controlling third party to personal grievance
(1)
This section applies if—
(a)
an employee has—
(i)
raised a personal grievance in accordance with section 114; and
(ii)
applied to the Authority to resolve a personal grievance with the employee’s employer; and
(b)
the personal grievance relates to an action that is alleged to have occurred while the employee was working under
the control or direction of a controlling third party.
The employee or the employer, or both, may apply to the Authority or the court to join the controlling third party to the
proceedings to resolve the personal grievance.
The Authority or the court must grant the application to join a controlling third party if the Authority or the court is
satisfied—
(a)
that the requirement to notify the controlling third party in accordance with section 115A has been complied with;
and
(b)
that an arguable case has been made out—
(i)
that the party to be joined to the proceedings is a controlling third party; and
(ii)
that the party’s actions caused or contributed to the personal grievance.
(2)
(3)
5
Interpretation
In this Act, unless the context otherwise requires,—
…
controlling third party means a person—
(a)
who has a contract or other arrangement with an employer under which an employee of the employer performs
work for the benefit of the person; and
(b)
who exercises, or is entitled to exercise, control or direction over the employee that is similar or substantially
similar to the control or direction that an employer exercises, or is entitled to exercise, in relation to the employee

This legislation is designed to deal with situations like Prasad and allows the intermediary to be sued as well even if
they are not found to be the employer
Joint employment


Orakei Group (2007) Ltd v Doherty [2008] ERNZ 345 (EmpC)
o Facts
 A successful claim was made against 54 Cuba Street (2007) Ltd – it was then put into liquidation, so
the employee could not sue the employer
 The employee then applied for joinder of a related company
o Judgment
 A person can have more than one employer
 Other cases establish that joint employment is possible, but what is required is more than
two unrelated employers – there must be a sufficient degree of a relationship between the
two
 In judging that relationship, the court will look for an element of common control
 “Applying the principles relating to joint employment to the evidence, I am satisfied that the plaintiff
company and the Wellington company were acting in concert in their employment of Mr Doherty. At
the outset of his employment he was told and had no reason to doubt that he was being employed by
the Auckland company, that was reinforced by the offering of an employment agreement from the
same company, and throughout his employment there was a merging of both managerial and
operational control over his activities. Over the course of his employment the establishment of the
separate companies saw each assuming responsibility for whatever part of his employment that
suited the circumstances of either company at the time. Throughout, Mr Kidd was the source of
common control over each company at least insofar as it affected Mr Doherty’s employment.” (at
[58])
Muirhead v Debec Management Ltd and Debec Building Solutions Ltd [2017] NZERA Auckland 375
o Facts
 Muirhead entered into two separate agreements with two different but closely relation companies –
an employment agreement for one and an independent contractor agreement for another
o Judgment
 “It is possible to have joint employers. A common feature of such relationships is common control by
the joint employers. The reality is Debec Building Solutions benefited from the services provided by
Mr Muirhead. When he reported to Mr Haggie on issues he could have been reporting to him as a
43
working director of either entity. Both Debec Management and Debec Building Solutions acted in
concert in their employment of Mr Muirhead. The management and control over Mr Muirhead’s
activities were merged.” (at [45])
o
Note

This merging of liability can be seen as piercing the corporate veil of a company – but in employment
law, there is an increasing tendency to look at how the situation operated in practice, with the
contractual documentation being only part of the question
If managerial control is between two companies, then there is the possibility of joint employment

SECONDMENT
 Jardine Risk Consultants Ltd v Beal [2000] 1 ERNZ 405 (CA)
o Facts
 Beal initially worked in New Zealand, but then accepted a secondment to the UK, and was dismissed
there
o Issue
 Who was the employer?
o Judgment
 “… If the claim is in contract, as it seems to have been treated in argument, the identity of the
contracting parties is crucial as, in secondment situations, there may be more than one contract to be
considered. Counsel's acknowledgement effectively excludes any inquiry into whether, for the period
of secondment, there were two employment contracts effective in tandem… perhaps with one
suspended during the period of the other. In this respect it is instructive to consider the "borrowed
employee" doctrine developed in the US in the workers compensation context but seemingly resting
on generally applicable rules.” (at [8])
 If you have a seconded employee (going to work for someone else), the underlying employment
agreement is effectively suspended until the secondment is finished, and then revives
 Therefore, the New Zealand entity was the employer – the underlying employment
agreement was revived when Beal was dismissed in the UK
Piercing the corporate veil – parent and subsidiary companies




Where you have parent and subsidiary companies, who is the employer?
o If the subsidiary goes into liquidation, the employee might want to sue the parent company
New Zealand Seamen's IUOW v Gearbulk Shipping (New Zealand) Ltd [1990] 1 NZILR 688 (LC)
o Judgment
 Factors relevant to making the parent company liable:
 Were the profits treated as those of the parent company?
 Were the persons conducting the business appointed by the parent company?
 Was the parent company the head and brain of the trading venture?
 Did the parent company govern the adventure and decide what should be done and what
capital should be embarked on it?
 Were the profits made by its skill and direction?
 Was the parent company in effectual and constant control?
Hutton v Provencocadmus Ltd (in rec) [2012] NZEmpC 207
o Judgment
 “It is open to those controlling a business to select which company should be the employer, provided
that the selection is consistent with the financial and administrative organisation of the business and
is not otherwise a sham. As I have said, there is no suggestion that PCL was chosen as the employing
entity in order to avoid any obligations to potentially affected employees. At the time the
employment agreements with PCL were entered into, it was not anticipated that PCL would go into
receivership.” (at [85])
Bennett v Michaels [2016] NZEmpC 137
o Judgment
 “It is clear, from the evidence given by the plaintiffs at the formal proof hearing as to Mr Michaels’
dealings with the three plaintiffs and commercial creditors of the companies, that Mr Michaels
deliberately created and used the corporate entities in order to hide behind them and to divert any
income received from the running of the businesses to himself personally while avoiding liability. This
is evidenced by the curious behaviour towards the plaintiffs in establishing their employment and the
way in which he manipulated creditors who supplied furniture and business equipment to the
business, his false representations as to obtaining backing and financial advances from investors, the
way he persistently issued cheques which he must have known had no possibility of being met by the
banks, and also the concerning evidence of him manipulating entries between banks to obtain funds.
Each of the three plaintiffs speaks of their knowledge of his having funds personally available as a
44

result of him diverting income ostensibly received from the trading of the companies into his personal
account.” (at [37])
This is an example of a sham – the employer is deliberately using companies to avoid liability
The public sector
77
Personal grievances and disputes (Public Service Act 2020)
(1)
Despite sections 78, 79, and 81 to 83B,—
(a)
in relation to a personal grievance, the employer is the chief executive of the department or the board of the
interdepartmental venture; and
(b)
in relation to a dispute about the interpretation, application, or operation of a collective agreement, the employer
is the chief executive of the department or the board of the interdepartmental venture acting, if the
Commissioner so requires, together with or in consultation with the Commissioner; and
(c)
in relation to any other employment relationship problem (within the meaning of the Employment Relations Act
2000), the employer is the chief executive of the department or the board of the interdepartmental venture.
Options against third parties (not examinable)


When thinking about bringing proceedings, there are options in employment institutions to deal with third parties
o Section 134(2) of the Employment Relations Act 2000 - Penalty for Inciting, Instigating, Aiding or Abetting
Breach of Employment Agreement - Nicholson v Ford [2018] NZEmpC 132.
o Sections 142W and 142Y of the Employment Relations Act 2000 - Recovery of Money Due to Breach of
Employment Standards Payable by Person Involved in Breach - Southern Taxis Ltd v Labour Inspector [2020]
NZEmpC 63
Allen Chambers Ltd v Pelabon [2019] NZEmpC 45
o Judgment
 “In summary, I reject the plaintiffs’ various assertions that the Authority erred in reaching the
conclusions it did. I am satisfied those parties did, and do, exercise the necessary control over ZRNL. It
was in the interests of justice for the Authority to exercise its discretion under s 137 by ordering that
ACL and Mr Chambers ensure the company make the necessary payments to Mr Pelabon. By 2018, he
was a former employee who was owed sums arising from an employment relationship that occurred
in early 2016. Payment was long overdue.” (at [58])
45
Formation and induction
Formation of employment agreement
Elements of a contract
FORMALITY
 Formation is about how to create an employment agreement
o Under ordinary principles of contract law, you need offer, acceptance, consideration, intention and certainty
to form a valid contract – but these are not the ultimate for an employment agreement
 Weal v Leusen Holdings Ltd t/a Heather-lea Rest Home [2002] 1 ERNZ 655 (EmpC)
o Facts
 Involved a sale of a rest home
 The new owners explained to all staff that they would conduct interviews with existing employees
and then decide who to re-engage
 All existing employees were given application forms, and Weal was told at the interview that the
employment would initially be offered for a six-week period – Weal stated that she wanted to be
employed on a collective employment agreement
 The new owners were reluctant to enter into a CEA, and said Weal’s application was unsuccessful –
she was the only existing staff member not given a job and received a small redundancy payment
o Issue
 Had an employment agreement already been formed?
o Judgment
 “… An employment contract, in common with every other kind of contract, displays certain basic
characteristics. There must be an offer by one party to the other and an acceptance by that other.
Moreover, that acceptance must be communicated to the party making the offer. It may be
communicated by words or by conduct. That conduct may be inferred from silence, if surrounding
circumstances signal acceptance. However, before acceptance is actually communicated, the party
making the offer may withdraw it. Any withdrawal must also be actually communicated and, to be
effective, it must be so communicated before receipt of any acceptance.” (at [30])
 In this case:
 During the interview, the employee had effectively made a counter-offer (that she wants a
CEA)
 There was no employment relationship – by making the counter-offer, which wasn’t
accepted, there was no employment relationship
 There is limited formality required for an employment agreement compared to general contracts
 “It is a feature of certain kinds of contract that they are entered into with a minimum of
formality. Two examples are the contract for the sale of goods and the employment
contract. The fact that all the terms are not spelled out at the time of the transaction does
not defeat the transaction and the consequent application of terms implied by law or by
custom. All that is needed is that the transaction should happen.” (at [31])
 For example, you can start work without knowing your pay rate – this does not void the
employment agreement
OFFER
 Webster v Mount Cook Group Ltd EmpC, Christchurch, CEC 27/97, 25 September 1997
o Facts
 Webster wanted to be an airline hostess – she entered into training with MCG
 Webster said as part of the training, she was promised to be offered a job at the end of it – when she
wasn’t offered a job, she argued that she was an employee and this was an unjustified dismissal
o Judgment
 “… Mount Cook never entered into a contract of employment with the plaintiff and/or any collateral
contract which bound the company to subsequently offer Ms Webster employment by it as a cabin
attendant when a cabin crew vacancy arose. I hold Ms Penno was correct in her contention that
Mount Cook in substance only contracted with the plaintiff to provide her with cabin crew training.”
(at [41])
 There was no employment agreement here
 There was no offer of an employment agreement at this stage
 What actually happened was that there was a contract for training with a possibility that
there would be an offer for an employment agreement
 Baker v Armourguard Security Ltd [1998] 1 ERNZ 424 (EmpC)
o Facts
 Baker was a licensed security officer
46




o
o
o
The previous employer gave notice terminating the employment agreement, and the new employer
made an offer of employment setting out core terms of the agreement
The union got involved and said to the new employer that it wants some other terms in the
agreement, based on a draft collective employment agreement
The new employer did not want the union in the workplace and refused to discuss amendments to
the collective agreement – but they were prepared to discuss amendments to the individual
employment agreements
The new employer provided amended individual agreements and gave the employees a short
timeframe to accept it
Issue
 By not being engaged by the new employer, have these employees been unjustifiably dismissed?
Submissions
 The new employer said the employees had not been unjustifiably dismissed because they were never
employed – there was no employment agreement because the offer was not accepted
 The employees argued that they had been offered jobs which they accepted, and they were just
negotiating variations as to the details of the agreement
Judgment
 “There can be no doubt that the plaintiffs were offered work. Also, it cannot be doubted that, under
ordinary principles of contract law, once they had accepted the offer, if they did, it could no longer be
withdrawn. The offer was sketchy but quite sufficient to be capable of acceptance on the footing that,
while the defendant was to settle the job description, the individual employment contract would
need (by virtue of the Employment Contracts Act 1991) to be negotiated. The point that can be made
at once is that it is clear that, if each plaintiff had, on receipt of the letter of 7 November said “I accept
and look forward to reading the job description and negotiating an employment contract" then each
plaintiff would have been able to claim that he or she had been offered and had accepted work.” (at
431–432)
 There is an important distinction between formation of an employment contract itself and the
formation of its terms
 An employment contract could be formed in an informal way by conduct and words of
agreement – there is no requirement for writing at the formation stage
 There was an offer capable of acceptance – but the parties were still in negotiations
 There were sufficient core terms to form an offer – this was accepted
 The employer confused negotiation of detailed terms with the formation of contract
 The plaintiff’s conduct was more consistent with acceptance of employment and then
negotiation of its terms, rather than the negotiation of whether they were to enter into a
contract
CONDITIONAL OFFER


Conditional offers are common in employment law – the applicant should pass certain checks (e.g. criminal,
immigration) as a condition of being offered employment
o The difficulty is whether there is an employment relationship – sometimes, the condition of the offer is not
satisfied and thus there is no employment
o Usually, if you have started work and then do not satisfy the condition, you have been employed and must go
through a dismissal process
o If you haven’t started work, then there is an ability for the condition not to be satisfied
Edwards v Attorney-General sued in respect of the Department for Courts EmpC Wellington WEC79A/96, 29 November
1996
o Facts
 There was a restructuring process and a question arose as to whether the plaintiff should be
appointed to the position of judicial support analyst
 The plaintiff was sent a job description and information kit, but they failed to include information
about the procedure for checking previous criminal convictions
 The plaintiff went through the interview process, was offered the job, and received a letter that said
the appointment was conditional on a satisfactory security clearance – this was the first time the
applicant was aware of the requirement
 The plaintiff declared to the employer that she had minor criminal convictions and the employer
declined to appoint her because of those convictions
o Issue
 Had there been an offer capable of acceptance (when providing the job description)?
o Judgment
 “I am satisfied that the plaintiff has an arguable case of personal grievance or of breach of contract. It
is arguable that after the establishment of an unconditional oral contract of employment whereby the
47


o

Note

plaintiff was appointed to the position of judicial support analyst with the Department for Courts it
subsequently purported to unilaterally vary that contract and later either unjustifiably disadvantaged
the plaintiff in employment and/or unjustifiably dismissed her.” (at [2])
The plaintiff had an arguable case that she had entered into a contract in the course of her telephone
conversation with the information kit – it was arguable that she was an employee at that stage in light
of the wording of the Act (which allows for people intending to work to be employees)
In the absence of any prior reference to the contract being conditional upon a security clearance, it
was arguable that the employer acted unlawfully by subsequently purporting to unilaterally place
conditions upon the applicant’s employment
Therefore, the plaintiff is an employee, and must be dismissed according to proper procedure
This shows that if you don’t get the process right in making an offer, you will have an employee with
criminal convictions – you need to make the condition clear before making an offer
WITHDRAWAL OF OFFER

Hayden v Wellington Free Ambulance Service [2002] 1 ERNZ 399 (EmpC)
o Facts
 Hayden had a fixed-term contract which had been rolled-over (continued)
 Hayden did not regard himself as a permanent employee at the time – therefore, when there was a
vacancy with the employer, he applied for it
 During the process, it became clear that he did volunteer work for St John Ambulance – this was
considered a conflict of interest if WFAS
 An offer had been made, but there were some clear issues relating to the conflict of interest
 Three weeks after the offer had been made, Hayden was still unwilling to relinquish his volunteer
work for St John
 WFAS then sent an email withdrawing the offer – in the email, they stated that if the plaintiff wanted
to apply again, they would be happy to reconsider his application
o Issue
 Was the plaintiff an employee or was the offer withdrawn?
o Judgment
 On a broad and objective view, the lack of resolution indicated that no concluded agreement had
been reached at the time the offer was withdrawn
 The question of the conflict of interest was not extraneous to the conclusion of the contract,
as the whole contract was dependent on its resolution
 Neither was the offer an attempt to vary the conditions of the employee’s existing
employment under the fixed-term contract
 In this case, the employee could not have had a legitimate expectation that he would be
appointed to the position that he had not accepted
 “Taking a broad view and objectively evaluating the dealings between the parties does not assist the
plaintiff either. While the parties had agreed on important matters such as salary, location, and other
conditions of employment, the fact remains that the issue of Mr Hayden's outside employment was
critical to both parties. WFA was insistent that his activities with St John be curtailed and Mr Hayden
was equally insistent, at least at the time leading up to 21 February, that there was no necessity for
him to alter his position. Even though the point had not been at issue at the beginning of the
negotiations it certainly became the sticking point and was unresolved. This lack of resolution
indicates clearly that the parties had not reached a concluded bargain at the time the offer of
employment was withdrawn.” (at [21])
ACCEPTANCE
 Harawira v Presbyterian Support Services [1994] 2 ERNZ 281 (EmpC)
o Facts
 Harawira applied for a job, and the employer offered it to him and discussed a starting date –
Harawira made a counter proposal to what had been suggested to him, and the employer agreed
 After Harawira accepted the job, the director found that he had been convicted of assault in a similar
institution to this one
 The offer of the position was then withdrawn
o Judgment
 “A job was on offer. Mr Harawira applied for it. The interviewing and selecting committee chose Mr
Harawira for the position and intended to offer it to him. Thereafter a member of the committee did
offer it to him and discussed a starting date. Starting date had not been an ingredient of the contract
negotiations. In that matter Mr Harawira did make a counter proposal to what had been suggested to
him, and in that the employer acquiesced. His doing so made it plain he accepted the job.
Disagreement about starting date would not have affected the contract which had been formed, but
48

it would then have been for Mr Harawira to make some reasonable attempts to perform the contract.
Whether he had actually started the duties of the position or not Mr Harawira was, upon
communication to him of the fact that he had been appointed, and he being still willing, within the
definition of an "employee" in the Employment Contracts Act 1991 at s 2 (section 6). He was by then a
person intending to work which by the s 2 definition means a person who has been offered, and
accepted, work.” (at 287–288)
Harawira had already accepted the offer, and thus the offer cannot be withdrawn – he is already an
employee, so by withdrawing the offer, he has been unjustifiably dismissed
You can be unjustifiably dismissed before starting work because of the wording of section 6

INTENTION
 To have an employment agreement, you need to intend to create one
o You are not intending to create an employment agreement if you are not in business
 MacGillivray v Jones (t/a Tahuna Camp Store) [1992] 2 ERNZ 382 (EmpC)
o Facts
 The plaintiff worked in a shop – at this time, she was engaged to the respondent’s son
 The plaintiff received no wages, but had food board access to trade discounts
o Issue
 Was the plaintiff an employee?
o Judgment
 “It does not follow, however, that simply because Ms MacGillivray worked in the business and was
rewarded, she was thereby a worker or employee entitled to payment of wages and other minimum
conditions under the applicable award. What must be established also is that there was a contract of
employment between the parties. I find that the Adjudicator was correct to determine that the
necessary ingredients of such a contract (including intention to create legal relations and certainty of
terms) were not present in the parties' arrangements.” (at 394)
 There was no intention to create employment relations because this was a family arrangement
 Dillon v Tullycrine Ltd [2020] NZEmpC 52
o Facts
 The parents worked for their son and daughter-in-law in a farm – they were working because they
were in debt
 The father was responsible for the day-to-day running of the farm, and the mother was looking after
the grandchildren
o Issue
 Should the father be paid wages?
o Judgment
 “This case arises in the context of a family arrangement. In such a context, the Courts have recognised
that there is a presumption of fact against an intention of creating legal relations. This presumption
derives from experience of life and human nature which shows that, in such circumstances, men and
women usually do not intend to create legal rights and obligations but intend to rely solely on family
ties of mutual trust and affection.” (at [30])
CONSIDERATION
 Cain v Turners and Growers Fresh Ltd [1998] 3 ERNZ 314 (EmpC)
o Facts
 There was an expression provision for the calculation of redundancy
 The employee wanted to be made redundant in order to claim the compensation – the employer was
agreeable to doing this, but said that the employee needs to agree to a restraint of trade first
 The employee agreed, but the employer said in order to ensure compliance with the RoT, he will pay
the compensation over six months – this is a variation which requires consideration
o Submissions
 The employee argued that there was no consideration for the restraint of trade because he was
entitled to the redundancy compensation already
o Judgment
 “The law concerns itself not with the sufficiency in amount of the consideration, but with
consideration in the sense of a reason or motive for entering into the contract, a benefit furnished to
one party by the other. For the defendant to agree to the plaintiff's proposal to release him on the
footing of making him redundant was a significant expense and cash outflow for the defendant. It said
that it was not prepared to incur that unless it got something in return, and that something was to be
the plaintiff's undertaking not to work in the industry for any competitor of the plaintiff’s.” (at 329)
 Consideration is a mutual exchange of promises – here, the employer didn’t need to pay extra money
in order to have the restraint of trade
49

 The consideration for the restraint of trade was the benefit of the employer agreeing to this
process – the exchange is between redundancy compensation and a restraint of trade
Owen v McAlpine Industries Ltd [1999] 2 ERNZ 819 (EmpC)
o Facts
 There were issues relating to redundancy compensation in a collective agreement
 The plaintiff said he had been guaranteed the compensation as an individual employee (i.e. not on
the collective agreement)
o Judgment
 “Addressing consideration, it is trite that the fact, but not the adequacy, of such has to be established.
The appellants and other office employees were concerned about the possibility of redundancy and
wished to secure their positions as best as they were able. Mr Farmer's offer satisfied them, not that
they would not be made redundant, but rather that in the event that they were, compensation would
cushion the effects of loss of specialist and long-standing employment. As the appellants said in
evidence, they continued to work for McAlpine in return for its guarantee of the payment of
redundancy compensation to them in the event of the termination of their employment for that
reason. That was consideration passing from the appellants and satisfies the law's requirement for
the variation to be effective and enforceable.” (at 839)
 The consideration is between exchanging the guarantee of compensation for continued work
CERTAINTY
 Manson v Wardell [1998] 3 ERNZ 285 (EmpC)
o Facts
 There was sale of a farm
 The farm manager said he was promised a bonus of up to one year’s salary if the station was sold –
the employer said this was conditional on a number of things including a good sale price and the
manager’s continuing work until the sale was effected
o Judgment
 “It is fundamental to the formation of a contract that the parties to it must be ad idem, that is to say
of a common understanding and intent concerning their contractual bargain. Mutual
misunderstanding as to the meaning and intent of a contested contract and its application will
usually, through orthodox contractual principles, cause a contended contractual arrangement to be
held so inherently uncertain as to negate the formation of a contract. This outcome comprises a
matter of fact and degree in any particular case.” (at 292)
 The contract failed for uncertainty of terms – “up to” one year’s salary was not certain
 Fernandez v Rappongi Excursions Ltd, (t/a Denny’s Restaurants) [2019] NZEmpC 99
o Facts
 Fernandez worked at Denny’s and said he was entitled to 10% share of the operating business
o Judgment
 “The final requirement as to certainty of terms is also fulfilled in this case …” (at [56])
 “In other words, the exact value of the 10 per cent shareholding of the operating company in
Rappongi does not necessarily need to be ascertained immediately. It is enough that there are “ …
objective means of sufficient certainty by which [that value] may be determined … ”. In this case, 10
per cent of the operating company is something that can be determined objectively. The actual
valuation will be considered by the Court at a later hearing if the parties are not able to base an
agreement upon the findings of liability in this judgment. The initial letter dated 13 March 2005 helps
to define the meaning by defining the operating company “as the assets and liability of the company
exclusive of the Wairau Park, Christchurch, and Manukau properties”. It also estimated the worth at
the time as being “between $1 to 1.5 million dollar NZ”.” (at [57])
Statutory requirements for employment agreements

Unlike contract law, there is a specific statutory provision which says how you introduce an employment agreement
63A Bargaining for individual employment agreement or individual terms and conditions in employment
agreement
(1)
This section applies when bargaining for terms and conditions of employment in the following situations:
(a)
under section 61(1), in relation to additional terms and conditions to the applicable collective agreement:
(b)
under section 61(2), in relation to—
(i)
additional terms and conditions to the collective agreement on which the individual employment
agreement is based; and
(ii)
variations to the individual employment agreement in subparagraph (i)...
(c)
[Repealed]
(d)
[Repealed]
50
(e)
in relation to terms and conditions of an individual employment agreement, including any variations to that
agreement:
(f)
where a fixed term of employment, or probationary or trial period of employment, is proposed:
(g)
under section 69OJ in relation to employee protection provisions in individual employment agreements:
(h)
under section 69N in relation to redundancy entitlements with a new employer.
The employer must do at least the following things:
(a)
provide to the employee a copy of the intended agreement under discussion; and
(b)
advise the employee that he or she is entitled to seek independent advice about the intended agreement; and
(c)
give the employee a reasonable opportunity to seek that advice; and
(d)
consider any issues that the employee raises and respond to them.
Every employer who fails to comply with this section is liable to a penalty imposed by the Authority.
Failure to comply with this section does not affect the validity of the employment agreement between the employee and
the employer.
The requirements imposed by this section are in addition to any requirements that may be imposed under any provision
in this Act ...
[Repealed]
In this section, employee includes a prospective employee.
(2)
(3)
(4)
(5)
(6)
(7)

This applies not only at the start of the employment relationship when you give the agreement – it also applies to
variations of the agreement
o In order to not breach these unfair bargaining provisions, you need to comply with subsection (2)
o An employer who fails to comply with subsection (2) is liable to a penalty imposed by the Authority, but does
not affect the validity of the employment agreement

Warwick Henderson Gallery Ltd v Weston [2006] 2 NZLR 145 (CA)
o Facts
 Weston worked part-time at the gallery
 The parties then orally agreed an individual employment agreement for full-time work which entitled
Weston to an hourly rate (later increased) and a 10% commission
o Submissions
 The employer argued that since the changes haven’t been made in writing, it is not bound by the
variation
o Judgment
 “… viewed in isolation s 65(1)(a) does not say or suggest that an individual employment agreement
which is not in writing is unenforceable. To require the agreement to be in writing does not make an
oral agreement illegal so as to engage ss 6 and 7 of the Illegal Contracts Act 1970.” (at [16])
 Non-compliance of section 63A via not putting the agreement in writing does not mean that the
agreement is invalid – you still have an oral employment agreement in breach of statute
Williams v Chesterton Group Ltd (in liq) [2010] NZEmpC 150
o Facts
 The employees were just given the employment agreements and told to sign them
o Judgment
 “Section 63A(2)(a) required the defendant to provide Ms Williams with a copy of “the intended
agreement” under discussion. I consider that what it very belatedly provided her with could not be
said to have met that obligation. More significantly, for breach and penalty purposes, I am also
satisfied that the defendant failed to comply with s 63A(2)(d) in that it failed or refused to consider
issues that Ms Williams raised by her submission of a draft alternative employment agreement and
the defendant failed to respond to those issues.” (at [17])
New Zealand Public Service Assoc Te Pukenga Here Tikanga Mahi v Commissioner and Chief Executive Inland Revenue
Department Te Tari Taake [2017] NZEmpC 164
o Judgment
 “For the purposes of “the right to do anything or take any action” in s 236, employees have a right to
bargain, when a variation to their IEA is proposed. For present purposes s 63A of the Act governs the
steps an employer must take for the purposes of that bargaining. The employees here were entitled
to have the minima of s 63A complied with, and in light of the CEA. The right to do anything and take
any action was integrally associated with the way in which the employer was required to deal with its
employees under s 63A. It would be wholly artificial to adopt a literal interpretation of the section,
and then conclude that the submission of a letter that had the potential to significantly affect their
terms and conditions of employment was not to be regarded as falling within s 236.” (at [132])
 Employers cannot bypass the union


51
 If a variation to an individual employment agreement is proposed, employees have a right to
bargain through the union (i.e. be represented by the union)
 By offering individual employees an employment agreement behind the union’s back, the
employer is in breach of section 63A
 Cousens v Star Nelson Holdings Ltd [2021] NZERA 52
o Facts
 Cousens was not paid during the COVID-19 lockdown – the wage subsidy required employers to pass
the money onto the employees
 Cousens did not secure an agreement to temporarily alter his wage structure
o Judgment
 “I find that not paying Mr Cousens during the lockdown period and not securing an agreement to
temporarily alter his wage structure was a unilateral breach of contractual obligations owed to him by
Star Nelson Holdings. Section 63(2) of the Act only provides for a variation of an employee's terms
and conditions by “mutual agreement” and none was present here. The wages owed fall due. I also
find that the inactions of Star Nelson Holdings caused Mr Cousens distress and he has made out an
unjustified disadvantage claim.” (at [43])
o Note
 Section 63A was also not complied with – there was no proposed varied employment agreement and
a reasonable opportunity to raise issues
 During the lockdown, employers were wondering how they were going to pay their employees – so
they cut wages
 In order to do this legally, you need to comply with section 63A and go through a bargaining
process
 Employees often did agree to the variations – but if they cannot agree, they will have to
resort to dispute resolution
COLLECTIVE AGREEMENT FOR THE FIRST 30 DAYS OF EMPLOYMENT
62
Terms and conditions for first 30 days of employment of new employee who is not member of union
…
For the first 30 days after the new employee commences employment with the employer, the employee’s terms and
conditions of employment comprise—
(a)
the terms and conditions in the collective agreement that would bind the employee if the employee were a
member of the union (other than any bargaining fee payable under Part 6B); and
(b)
any additional terms and conditions mutually agreed to by the employee and employer that are no less favourable
to the employee than the terms and conditions in the collective agreement.
(3)


Section 62(3) means that if there is a union in the workplace, every employee that will sign up to an individual
employment agreement will be covered by the collective agreement for the first 30 days of their employment
o It is a presumption that an employee will be treated like a union employee for the first 30 days, and will be
based on the terms and conditions of the collective agreement on an individual basis, provided that they are
doing work that is covered by the collective agreement (the ‘coverage clause’)
o After the 30 days, the employee is given an active choice form – they can choose whether to:
 Continue with the collective agreement (and be a member of the union) or
 Opt out and negotiate their own individual terms – the employer will usually present an individual
employment agreement with different terms that are relatively consistent with the collective
agreement but may not have particular benefits
o If the employee does not respond to the choice form, their details are given to the union and be contacted by
the union
The general objective of the provision is to increase union membership
63B
Additional employer obligations when bargaining for terms and conditions of employment under section 62
(1)
This section applies to an employer who is bargaining with a prospective employee for terms and conditions of
employment for the first 30 days of an individual employment agreement under section 62(3).
The employer must, in addition to doing the things described in section 63A(2), inform the prospective employee—
(a)
that a collective agreement exists and covers work to be done by the prospective employee; and
(b)
that the prospective employee may join a union that is a party to the collective agreement; and
(c)
how to contact the union; and
(d)
that, if the prospective employee joins the union, the prospective employee will be bound by the collective
agreement; and
(e)
that, if the prospective employee enters into an individual employment agreement with the employer, the
prospective employee’s terms and conditions of employment will, during the first 30 days of the prospective
employee’s employment, comprise—
(2)
52
(i)
the terms and conditions in the collective agreement that would bind the prospective employee if the
prospective employee were a member of the union; and
(ii)
any additional terms and conditions mutually agreed to by the prospective employee and employer that
are no less favourable to the employee than the terms and conditions in the collective agreement.
The employer must also provide to the prospective employee—
(a)
a copy of the collective agreement; and
(b)
any information about the role and functions of the union that the employer is required to provide to prospective
employees in accordance with a request by a union under section 30A.
An employer who fails to comply with this section is liable to a penalty imposed by the Authority.
(3)
(4)


This section provides further obligations for employers with a union in the workplace
New Zealand Resident Doctors Association v Auckland District Health Board (2020) 17 NZELR 592 (EmpC)
o Facts
 There was a rotating system of junior doctors
 There was more than one union in the workplace – the largest union said that its collective
agreement should apply over the union with a lower presence
 The smaller union disputed this because their members were being offered or were on the terms and
conditions of another union
o Submissions
 The smaller union argued that the junior doctors were just being rotated and thus were always an
employee of Auckland District Health Board
o Judgment
 “Any tension with the objective in s 3 of supporting integrity of personal choice arises from the
specific requirements of s 62. That possible tension applies generally to new employees, none of
whom can choose to commence on an individual employment agreement that is inconsistent with an
applicable collective agreement and must have been contemplated by the legislator. While the focus
of s 62 may be on employees who are new to a working environment and perhaps unfamiliar with
that work environment, including RMOs on rotation, it is not in conflict with the purpose of the
section.” (at [41])
 “Second, there is nothing in the language used in s 62, or in the wider Act, that requires a departure
from the otherwise clear meaning of “new employee”. There is no “strong contextual reason” for
concluding that it is appropriate to depart from the defined meaning of the term “employee” in s
6. The word “new” is a commonly understood modifier. The result is that the term “new employee” is
derived from s 6, and aptly describes the status of an RMO as they are engaged by a particular DHB.”
(at [42])
 Rejected the smaller union’s argument – in this situation, each time the junior doctors went to a new
workplace, they were a new employee, and thus the terms of the largest union’s collective agreement
applied
UNFAIR BARGAINING
68
Unfair bargaining for individual employment agreements
(1)
Bargaining for an individual employment agreement is unfair if—
(a)
1 or more of paragraphs (a) to (d) of subsection (2) apply to a party to the agreement (person A); and
(b)
the other party to the agreement (person B) or another person who is acting on person B’s behalf—
(i)
knows of the circumstances described in the paragraph or paragraphs that apply to person A; or
(ii)
ought to know of the circumstances in the paragraph or paragraphs that apply to person A because person
B or the other person is aware of facts or other circumstances from which it can be reasonably inferred that
the paragraph or paragraphs apply to person A.
The circumstances are that person A, at the time of bargaining for or entering into the agreement,—
(a)
is unable to understand adequately the provisions or implications of the agreement by reason of diminished
capacity due (for example) to—
(i)
age; or
(ii)
sickness; or
(iii)
mental or educational disability; or
(iv)
a disability relating to communication; or
(v)
emotional distress; or
(b)
reasonably relies on the skill, care, or advice of person B or a person acting on person B’s behalf; or
(c)
is induced to enter into the agreement by oppressive means, undue influence, or duress; or
(d)
where section 63A applied, did not have the information or the opportunity to seek advice as required by that
section.
In this section, individual employment agreement includes a term or condition of an individual employment agreement.
(2)
(3)
53
(4)
Except as provided in this section, a party to an individual employment agreement must not challenge or question the
agreement on the ground that it is unfair or unconscionable.

Section 68 provides remedies for breaches of section 63 and beyond

Tucker Wool Processors Ltd v Harrison [2000] 1 ERNZ 572 (EmpC)
o Facts
 The employees began to work under a new collective agreement
 However, the employees said that the behaviour of the new employer in procuring the contract was
harsh and oppressive and the terms of the contract were also harsh and oppressive
o Judgment
 In the particular circumstances, in so procuring the contract, the defendant did so by behaviour that
was harsh and oppressive or amounted to undue influence or duress by reason of the following
circumstances: (at [58])
 By requiring the contract to be signed within 3 or 4 days of being produced in its final form
which differed in important respects from what had been under discussion previously ...
 By refusing to negotiate with the plaintiffs' authorised representative.
 By imposing a short time available for negotiation even with the plaintiffs direct - the 3 or 4
days included a weekend.
 By giving the plaintiffs no opportunity to associate for the purpose of furthering their
employment interests - the union was kept out of the picture…
 By taking advantage of the power imbalance and the weak position of the plaintiffs known to
the defendants, financially and in terms of their dependence on the defendant…
 By failing to react in any way to obvious enough expressions of reluctance to sign as
articulated on the day of signing in a letter and, prior to signing, orally and by conduct.
 By proffering terms of contract that were unusual in a variety of respects, among them its
long term and its onerous provisions as to working days and hours and other burdensome
conditions.
 By actively taking steps to prevent the plaintiffs from obtaining independent advice
 The employer was essentially bypassing the union
Cookson v Chemacon Products (1984) Ltd [1999] 2 ERNZ 1019 (EmpC)
o Facts
 Three employees were employed under oral individual employment agreements and had difficulties
with the employer
 The employees tried to negotiate a collective employment agreement to replace the oral individual
agreements
 The company’s owner and managing director did not like the union and fell into a rage of swearing
and personal abuse – when talking to the union, he said he was the boss and would run the business
however he chose to
o Judgment
 The term “harsh and oppressive” was by now reasonably well understood – it is inappropriate to take
a narrow view of what constituted harsh and oppressive conduct
 “In this case I do not doubt for a moment that the defendant behaved towards the plaintiffs in a
harsh and oppressive manner. It treated them harshly and it spoke to them in harsh words.
Unilaterally it decided when to reduce their hours of work and by how much. To the extent that the
reduction was motivated by seasonal conditions, it was continued past the date when those
conditions ceased to operate. At least, a threat so to continue them was made. It treated their
representative in negotiations with condescension and disdain, if not utter contempt. It reduced their
earnings to a point that could not have been above subsistence level. Then it offered them a very
substantial increase of available work in the range of 50 to 100 percent but only in return for their
signing the contract. They had no choice in the matter and they were cut off from advice. A useful test
when one is asking the question whether a contract was signed voluntarily or under irresistible
pressure can be carried out by inquiring into shows of reluctance to sign and how these were
overcome. Here there was the strongest possible evidence of reluctance. The 20 employees had met
together and had unanimously rejected the contracts. Within a few days they had signed them
despite, so far as the day shift is concerned, an initial refusal on the day immediately before the day
of signature.” (at 1033)
 The employer was trying to bypass the union
New Zealand Dairy Workers Union Inc v NZMP Ltd [2002] 1 ERNZ 361 (EmpC)
o Facts
 Related to the deduction of fees from wages of non-union members


54

A bargaining arrangement fee is where non-union members pay a fee to the union because the union
says that the individual employment agreement they are under has benefitted from the terms of the
collective agreement (i.e. non-union members are freeriding on the beneficial effects of the union) –
these fees are illegal
o

Issue
 Was the fee unfairly bargained for?
o Judgment
 “Further, I find that for NZMP to insist upon the bargaining agent fee deduction clause being included
in relevant individual employment agreements on pain of either non-engagement in employment for
new employees or, in the case of existing employees, of refusal to pass on any new and enhanced
terms and conditions of employment will amount to unfair bargaining by NZMP under s 68(2)(c)
Employment Relations Act 2000. More particularly, it would be conduct inducing such employees to
enter into an individual agreement by undue influence and/or economic duress.” (at [62])
 The employer’s insistence that the clause be included in the relevant IEAs amounted to unfair
bargaining in terms of section 68
Warmington v AFFCO New Zealand Ltd [2012] NZEmpC 19
o Facts
 Warmington breached his restraint of trade, but argued that he was not bound by it as it was unfairly
bargained for – he was just told to sign it
o Judgment
 “Two points could reasonably be taken from the discussions that occurred between Mr Ogg and each
of the plaintiffs. First, that Mr Ogg was of the view that restraint of trade provisions are sometimes
held to be unenforceable. Second, that they could be confident that if they sought to breach their
restraint of trade, AFFCO would seek to enforce it.” (at [34])
 “The first point is simply a statement of the obvious. Taken in combination, what was said could not
reasonably have reassured the plaintiffs that the provision was either unenforceable or that AFFCO
would not seek to enforce it. That effectively disposes of the claim of unfair bargaining. There was
none …” (at [35])
Induction – pre-employment trials

Salad Bowl Ltd v Howe-Thornley [2013] NZEmpC 152
o Facts
 The company was a mobile food cart operator and advertised a part-time vacancy
 The applicant sent her CV and was subsequently contacted by the owner who invited her to come
down to its premises for an interview and a 3-hour work trial
 The owner informed the applicant that if her reference checks and work trial proved satisfactory,
there was no reason why she could not be hired for permanent employment
 During her work trial, the owner reconciled the shop’s takings, which led the applicant to believe
there was a shortfall of $50 – a $50 note she had seen earlier in the till that day was no longer there
 The owner came to the conclusion that it could only have been the defendant who was responsible
for the note – but no concerns about the applicant’s conduct was mentioned by the owner at the
work trial, and she was offered a salad at no cost
 A week later, the applicant texted the owner asking for work, and the owner replied stating there was
no job for her on account of the alleged theft
 The applicant raised a personal grievance for unjustified dismissal
o Judgment
 “I conclude both that Ms Howe-Thornley did expect to be rewarded monetarily for the performance
of a three hour work trial and that she did receive a non-monetary “reward” for the work performed
by her, albeit nominally, in the form of a free salad offered to, and accepted by, her at the end of the
trial work period. Applying these facts to the Employment Relations Act’s legal, the defendant was
not a volunteer.” (at [37])
 It was found that all the elements of formation had been satisfied
 There had been an offer of work, acceptance of the work, consideration in the form of a
salad, sufficient certainty in relation to the employment agreement and intention
 Therefore, the applicant fell within the definition of an employee – even if this was for a
short period of 3 hours, it was the plaintiff’s original intention for the employment trial,
which was then followed by a period in which the plaintiff’s assessment of the defendant’s
candidacy would be considered and its decision communicated
 Was she an employee? – the key issue was whether the applicant performed work for the plaintiff
that contributed to its commercial enterprise
 She was making money for the business by working the cart and selling goods
55

o
 In doing so, she was benefitting the business
 Therefore, there was an employee/employer relationship
Furthermore, in essence, the employer attempted to create a fixed-term employment agreement for
three hours – but you cannot use a fixed-term employment agreement for assessing the suitability of
someone to do work
Note

The point is that pre-employment trials are dangerous:
 The employer will want to test the employee’s ability to the job, and the only way to do that
is to do the work
 But on the other hand, an employee should be paid for work they do that contributes to the
employer’s commercial enterprises
 If you want to trial an employee, you resort to section 67A and 67B, which relate to 90-day-trial
periods (but doesn’t have to be 90 days)
 If you are going to use the trial period, it must be in writing in an employment agreement –
but there was no employment agreement in this case
 The employer was adamant that the condition for employment was completing the trial
satisfactorily – but the danger of relying on oral terms is that the court can find that there
was an employment relationship already in existence; so you should get it in writing
 A written term can help a person in a trial period not fall within the definition of employee,
but the real nature of the relationship means that as soon as you are benefitting the
commercial enterprise, you are going to be found to be an employee
 Mawhinney v Sfizio [2019] NZERA 49
o Facts
 The worker undertook a competency assessment, but she worked a whole day
o Judgment
 “The line between having Ms Mawhinney participate in a competency assessment and having her
engage in work was crossed in the circumstances of this case. I have no doubt that, objectively
assessed, her activities at the café on 4 August 2017 are better characterised as work that contributed
to the business and provided it with an economic benefit.” (at [39])
 Therefore, because she started work as such, there had been all the elements required for the
formation of a contract, even though they decided they no longer wanted to engage her – if they
wanted to do so, they should have followed a section 103A process, but this takes a long time
PROBLEM QUESTION
• Dean is interviewed for a job at Luxury Hotel Limited (“LHL”) as a bartender. At the interview, LHL ask Dean to spend a
few hours serving drinks and interacting with customers. He completes the tasks.
• Impressed with his outgoing personality, LHL offer Dean the job. Immediately, Dean tells LHL that he looks forward to
starting on the following Monday. LHL tell him they will get the paperwork sorted including getting an employment
agreement for his signature.
• Unbeknownst to Dean, LHL find out from their current concierge that Dean is an active social media user and has
written under the pseudonym #DodgyStays in which he is unapologetic in his criticism of particular hoteliers in the
industry.
• In light of LHL’s corporate values, LHL now want to withdraw their offer of employment to Dean. Advise LHL (including
in your answer any further information required).



Salad Bowl is analogous and applies
There are issues relating to offer and acceptance – LHL wants to withdraw the offer, but it was already accepted when
Dean said he looks forward to starting work on Monday
Therefore, Dean is likely an employee and LHL will have to resort to section 103A to legally dismiss Dean – but the fact
that he is an active social media user may not be sufficient
56
Trial and probationary periods

Formation and induction were about the start of the employment relationship – the consequences of getting those
wrong under trial periods can lead to large claims
Trial periods
Statutory provisions
WHAT IS A TRIAL PROVISION?
67A When employment agreement may contain provision for trial period for 90 days or less
(1)
An employment agreement containing a trial provision may be entered into by a small to-medium-sized employer and an
employee who has not previously been employed by the small-to-medium-sized employer.
(2)
For the purposes of this section and section 67B—
small-to-medium-sized employer means an employer who employs fewer than 20 employees at the beginning of the day
on which the employment agreement is entered into
trial provision means a written provision in an employment agreement that states, or is to the effect, that—
(a)
for a specified period (not exceeding 90 days), starting at the beginning of the employee’s employment, the
employee is to serve a trial period; and
(b)
during that period, the small-to-medium-sized employer may dismiss the employee; and
(c)
if the small-to-medium-sized employer does so, the employee is not entitled to bring a personal grievance or other
legal proceedings in respect of the dismissal.
TERMINATION OF A TRIAL PROVISION
67B Effect of trial provision under section 67A
(1)
(2)
(3)
(4)
(5)
This section applies if a small-to-medium-sized employer terminates an employment agreement containing a trial
provision under section 67A by giving the employee notice of the termination before the end of the trial period, whether
the termination takes effect before, at, or after the end of the trial period.
An employee whose employment agreement is terminated in accordance with subsection (1) may not bring a personal
grievance or legal proceedings in respect of the dismissal.
Neither this section nor a trial provision prevents an employee from bringing a personal grievance or legal proceedings on
any of the grounds specified in section 103(1)(b) to (j). (unjustified disadvantage and other grounds such as
discrimination, adverse conduct in relation to health and safety etc.)
An employee whose employment agreement contains a trial provision is, in all other respects (including access to
mediation services), to be treated no differently from an employee whose employment agreement contains no trial
provision or contains a trial provision that has ceased to have effect.
Subsection (4) applies subject to the following provisions:
(a)
in observing the obligation in section 4 of dealing in good faith with the employee, the small-to-medium-sized
employer is not required to comply with section 4(1A)(c) in making a decision whether to terminate an
employment agreement under this section; and (giving reasons for the termination)
(b)
the small-to-medium-sized employer is not required to comply with a request under section 120 that relates to
terminating an employment agreement under this section. (also giving reasons for the termination)
Case law principles
DEFINITIONS
“E MPLOYEE ” MEANS AN EMPLOYEE WHO HAS NOT BEEN PREVIOUSLY EMPLOYED BY THE EMPLOYER
 Smith v Stokes Valley Pharmacy (2009) Ltd [2010] NZEmpC 111
o Facts
 Smith historically worked in retail and sales for 15 years
 The pharmacy was sold from the Cooks to Ms King and Mr Kearns
 Following an interview for a job at the pharmacy, King informed Smith that she was successful, and an
employment agreement will be mailed to her
 Smith read the agreement but was unaware of the 90-day trial period clause in the agreement
 On 1 October 2009, Ms Smith was employed and started work, but hadn’t signed the agreement
 Smith raised concerns about the trial period with Kearns, as she said she had done the same
work for the Cooks
 Kearns said that this is a standard provision given to all contracts
 Smith believed her job was safe and signed the agreement on 2 October
 Things didn’t go well – on 8 December, Smith was told she would be summarily dismissed
 Kearns said he could do so because he can rely on the trial period
 When Smith asked what she had done wrong, she was told that she was not what the
pharmacy was looking for and that she was inexperienced
o Judgment
57




Sections 67A and 67B remove longstanding employee protections and access to dispute resolution
and justice – therefore, they should be interpreted strictly and not liberally because they are an
exception to the general employee protection provisions
 Legislation that removes previously available access to the courts should be strictly
interpreted and as having the consequent only to the extent that it was intended
 The purpose of the new provisions was to deal with “new employees” who had not been
previously employed
 Read together, the provisions provide a new form of trial period and remove existing
employee entitlements
 The question is whether, when Smith signed the employment agreement on 2 October 2009, she was
an employee in terms of section 67A
 It is clear that she was in general, an employee of the pharmacy before signing the
agreement
 Smith’s signature was a manifestation of her intention to be bound by the
employment agreement, which included the 90-day trial period
 Smith was employed on 1 October and already had worked for a day – even though
at that point there was no written agreement, the pharmacy was her employer
 Therefore, she was an existing employee when employed on the trial period
 This means that she was not an employee for the purposes of section 67A
 She had already been previously employed by the pharmacy, even thought it was
for one day – therefore, she did not fall under the definition of “employee” under
section 67A
 Therefore, section 67A does not apply here and the pharmacy was not entitled to dismiss
Smith within the first 90 days of employment without risk of challenge by personal grievance
 Even if Smith was covered by section 67A and Kearns had terminated her employment under the trial
period, he did not comply with section 67B
 Smith was summarily dismissed – she was not given notice as is required by section 67B(1)
 Furthermore, the exception to section 4(1A)(c) provided for in section 67B(5) is only in
respect of the dismissal
 During the employment relationship, the employer must still comply with section
4(1A)(c) such that they must be open and communicative about any concerns there
are with the employee’s performance so that they have an opportunity to improve
 Therefore, section 67B(5) did not preclude an employee seeking and being entitled
to receive an explanation for the dismissal at the time the notice is given – the
employer is not entitled to refuse to give an explanation for such a significant
decision, nor are they entitled to give an explanation that may tend to mislead or
deceive because this would be inconsistent with good faith
 Therefore, Smith was unjustifiably dismissed
Kumara Hotel Ltd v McSherry [2018] NZEmpC 19
o Facts
 McSherry was given an offer of employment that did not mention a trial period – he accepted
 McSherry was later given an employment agreement (which did have a trial period clause) which he
signed before starting work
o Judgment
 The trial period was invalid because the first agreement did not refer to the trial period, but the
second agreement did
 McSherry became an employee for the purposes of section 67A when he accepted the offer of
employment contained within the first agreement – however, as it did not contain a trial period
provision, it did not entitle the employer to rely on the provision in the second agreement as a shield
against unjustified dismissal
Roach v Nazareth Care Charitable Trust Board [2018] NZEmpC 123
o Facts
 Roach was offered and accepted a job with Nazareth Care (as a business manager) but before he
started work, he was offered and accepted a replacement job (as the general manager)
 The employment agreement for both jobs contained trial provisions
o Judgment
 As both agreements contained a trial period provision, the trial period was valid
 By changing the agreement, the first agreement was terminated – but this does not mean that the
trial provision in the second agreement is invalid
Talbot Agriculture Ltd v Wate [2019] NZEmpC 31
o Facts
58

While Wate was waiting for his visa to be approved, he was undertaking a “familiarisation” process
with the employer in which he tagged along for approximately 5 weeks without pay
 After the visa was approved, he was given an employment agreement with a trial period provision
o Submissions
 The employer argued that Wate was a volunteer and thus not a previous employee because he could
not work due to visa requirements
 The employer argued that Wate was not an employee during the 5-week period because they did not
charge clients for the work he did (therefore, Salad Bowl does not apply)
o Judgment
 Rejected the first argument – a person’s visa status is irrelevant; what matters is whether the worker
was performing tasks such that they are an employee under the Employment Relations Act
 By the time he had been given the employment agreement, he was already an employee
even though he hadn’t been paid for the tasks undertaken – therefore, section 67A does not
apply and the trial period was invalid
 The length of time he was present on the premises, that he undertook tasks for the
company, his regular attendance pattern all pointed towards an arrangement having made
for him to work as an employee
 Rejected the second argument – the fact that the employer might not have charged its customers for
the services performed by Wate was irrelevant
“T RIAL PROVISION ” MEANS A WRITTEN PROVISION IN AN EMPLOYMENT AGREEMENT
 McIvor v Saad [2015] NZEmpC 145
o Judgment
 A trial provision must be written in the employment agreement to be effective – it will be invalid if it
is contained in a policy, or a note that is not part of the employment agreement, or is an oral
provision
WHEN CAN YOU USE A TRIAL PROVISION?
A TRIAL PERIOD IS ONLY AVAILABLE TO SMALL - TO - MEDIUM SIZED EMPLOYERS
 A small-to-medium sized employer means an employer who employs fewer than 20 employees at the beginning of the
day on which the employment agreement is entered into (section 67A(2))
 There has been no litigation on this yet, but there may be a situation where the employer has 20 employees but also
has contractors coming in on labour-hire arrangements – what might happen then?
59
I T IS NOT POSSIBLE TO HAVE A SIMULTANEOUS TRIAL PROVISION AND PROBATIONARY PROVISION
 Lewis v Immigration Guru Ltd [2017] NZEmpC 141
o Facts
 The employer used a template that had both a probationary period and trial period provision
 A probationary period requires more procedure when it comes to dismissal of the employee
o Judgment
 The Court applied the probationary period – it overrides the trial period
 “In this case, Immigration Guru decided to rely upon the trial period clause to terminate Mrs Lewis’
employment in circumstances where it believed it was not required to justify the termination and Mrs
Lewis would be unable to raise a personal grievance for unjustifiable dismissal. In agreeing to be
bound simultaneously by the probationary period and trial period clauses, Immigration Guru placed
itself in a situation where there were unresolvable conflicts. Under the employment agreement,
termination pursuant to the trial period provision could be given with two weeks’ notice, whereas
under the probation period clause, four weeks’ written notice was required. In agreeing to be bound
by the simultaneous probation period clause, Immigration Guru was required to show justifiable
cause for dismissal and undertake fair procedural requirements prior to and in carrying out the
dismissal.” (at [32]]
 It has not yet been decided whether an employer can start with a trial period, and then have a probationary period
after the trial period ends
FORMING A TRIAL PROVISION
A N EMPLOYER MUST BARGAIN WITH AN EMPLOYEE FOR A TRIAL PROVISION
 Blackmore v Honick Properties Ltd [2011] NZEmpC 152
o Facts
 Blackmore resigned from his previous position and started work at Honick Properties
 Blackmore did the milking for the first few hours, then was told to sign the employment agreement
(with a trial period clause) by his boss before continuing the rest of his tasks
o Judgment
 Applied Stokes Valley Pharmacy – Blackmore was previously employed before signing the agreement
as he had done work before signing the agreement
 The Court was particularly critical of the way in which the employment agreement was introduced – it
was put under his nose and told to sign it
 This is a breach of section 63A
 “… an employer’s obligation is to provide the written agreement a sufficiently reasonable
time before the commencement of work if the employee is to have that opportunity. The
opportunity will not exist as the statute requires it to, if there is pressure to sign immediately
after the form of agreement is presented. The opportunity for consideration, advice and
negotiation must be a real opportunity as opposed to a nominal or minimal opportunity as I
am satisfied was the effect of Mr Mathis’s conduct on the morning of 15 November 2010.”
(at [83])
T HE EMPLOYMENT AGREEMENT WITH A TRIAL PROVISION SHOULD BE SIGNED AND A COPY OF IT RETAINED BY THE EMPLOYER
 Simmons v Collins Stainless Steel Fabricators Ltd [2011] NZERA Auckland 330
o Judgment
 Sections 67A and 67B do not require the employment agreements to be signed – rather, they require
that the trial period provision be stated in writing in the employment agreement, and that the parties
intended to be bound by that provision
 Evidence of being intended to be bound can include a signature, or an acceptance of the job,
where there clearly is a trial period provision in the agreement
 It cannot have been the intention of Parliament that the new section would enable an
employee to take advantage of a situation where he evades signing the agreement for
whatever reason – this would create a situation where an employee could dodge their
agreement through a minor technicality
 In this case, the parties intended at all times leading up to and on the commencement of the
employee’s employment, to be bound by the terms set out in the written employment agreement
including the trial period provisions
 Modern Transport Engineers 2002 Limited v Phillips [2016] NZEmpC 68
o Facts
 The employment agreement went missing from the employer’s cabinet of personnel files after the
employee was terminated under the trial period
 Although they couldn’t find a copy of the signed agreement, the employer provided a template
 The employee admitted that he had signed an employment agreement
o Issue
60

Does an employer need to retain a signed copy of the employment agreement with the trial
provision?
o Judgment
 The ultimate issue in this particular case is whether Mr Phillips’ employment agreement contained
the relevant provision, not whether the company retained a copy of it or was able to provide a copy
on request
 Plainly an employer seeking to assert that employment was terminated pursuant to a lawful
90-day trial provision is likely to find it easier to do so if it is able to produce a copy of the
agreement
 However the short point is that the mere fact that a written agreement cannot be produced
is not the start and finish of the inquiry
WHAT THE TRIAL PROVISION MUST HAVE
T HE TRIAL PROVISION MUST BE FOR A SPECIFIED PERIOD ( NOT EXCEEDING 90 DAYS )
 Lumb-Vaipapa v B & Y Trust Co 2015 Ltd [2015] NZERA Christchurch 187
o Facts
 The employment agreement said that the trial period will be “up to” 90 days
o Judgment
 “Up to” does not sufficiently specify the trial period – therefore, the trial period was invalid
 “Applying the strict interpretation and application principle, it is my view that the trial period
provision at clause 3.1 of the individual employment agreement does not satisfy s 67A(2)(a) of the
Act. This is because this statutory provision makes clear that the period of the trial period must be
specified …” (at [31])
 “This means that the actual number of days of the trial period must be named expressly. Clause 3.1 of
the individual employment agreement does not specify the period, but states that the trial period will
apply for a period of up to 90 calendar days employment. In other words, the employee does not
know what the actual period of the trial period is. All she knows is that it will not exceed 90 days.
Therefore, the period of the trial period is not specified; only the maximum length of it is specified.”
(at [32])
T HE TRIAL PROVISION SHOULD STATE WHEN THE TRIAL PERIOD STARTS
 Section 67A provides that the trial period begins at the commencement of the employment – but when is
“commencement of the employment”?
 Watts & Hughes Construction Ltd v de Buyzer [2019] NZEmpC 116
o Facts
 The trial period clause did not state a start date for the 90 days, but did say that the trial period was
“in accordance with section 67A”
o Judgment
 If the trial period is in accordance with section 67A, then it means it starts at the commencement of
the employment – this can be reasonably interpreted to mean “when the employee started work”
o Commentary
 Previous case law states that the trial period clause should state a start date
61
T HE TRIAL PROVISION MUST STATE THAT DURING THE PERIOD THE EMPLOYER MAY DISMISS THE EMPLOYEE
 Mitchell v Calla Bridal Ltd [2011] NZERA Auckland 104
o Facts
 The trial period provision simply said that “A trial period will apply for the first 90 days of employment
to assess and confirm suitability for the position.”
o Judgment
 The provision does not comply with section 67A and thus the trial period is invalid – the clause must
expressly state that during the trial period, the employer may dismiss the employee
T HE TRIAL PROVISION MUST STATE THAT IF TERMINATED , THE EMPLOYEE IS NOT ENTITLED TO BRING A PERSONAL GRIEVANCE OR OTHER
LEGAL PROCEEDINGS IN RESPECT OF THE DISMISSAL

Wilson v Promotional Systems Ltd [2011] NZERA Auckland 166
o Facts
 The trial period provision said that the employee may be dismissed, but did not say that the employee
cannot raise a claim of unjustifiable dismissal and to have it investigated and determined by the
Employment Relations Authority
o Judgment
 The trial period was invalid
 “Perhaps because Promotional Systems allowed itself to become obsessed with the idea that 17
February to 18 May was 90 days and that therefore dismissal occurred during the trial period, it
overlooked a fundamental and fatal flaw in the trial provision at clause 6 of the employment
agreement. Section 67A(2) defines a “trial provision” as one that states, or is to the effect, that if the
employer dismisses the employee during the trial period the employee is not entitled to bring a
personal grievance or other legal proceedings in respect of the dismissal. In the agreement, whether
at clause 6 or anywhere else, there is nothing stated or to this effect about any disentitlement to
bringing a dismissal grievance. Clauses 24 and 26 in particular dealing with employment relationship
problems and their resolution, make no exception to the ability of Ms Wilson to raise a claim of
unjustifiable dismissal and to have it investigated and determined by the Authority.” (at [21])
A TRIAL PROVISION MAY BE INCLUDED AS ADDITIONAL TERMS AND CONDITIONS TO A COLLECTIVE EMPLOYMENT AGREEMENT SO LONG
AS THE TRIAL PROVISION IS NOT INCONSISTENT WITH IT

Jacks Hardware & Timber Ltd v First Union Inc [2019] NZEmpC 20
o Judgment
 The Employment Relations Authority recommended to the parties that the collective agreements
should differentiate between Tier 1 and Tier 2 employees – Tier 1 employees (who were new to the
industry and had no skills) could be dismissed under a trial period while Tier 2 employees (those with
some industry experience and skills) could not
 This essentially allows for trial periods to be included, but in a way that is not inconsistent with the
collective agreement (i.e. by not applying trial periods to union members)
TERMINATION
N OTICE OF TERMINATION MUST BE GIVEN DURING THE TRIAL PERIOD
 Shakeshaft v All Seasons Pet Resort Ltd [2016] NZERA Auckland 10
o Facts
 The employer gave notice of the termination of the employee’s employment after the trial period
o Judgment
 The employer did not comply with section 67B and thus could not rely on the trial period provision –
therefore, the employee was entitled to pursue a personal grievance to test whether the employer
had justifiably dismissed her
I F TERMINATED , THE EMPLOYER MUST GIVE THE EMPLOYEE NOTICE OF THE TERMINATION
 If an employment agreement states that under the trial period, an employee can be paid in lieu of a notice, this will be
sufficient if the employee is terminated and paid in lieu
 Farmer Motor Group Ltd v McKenzie [2017] NZEmpC 98
o Facts
 The notice of termination was required to be given in writing
 The employer gave an oral notice of termination
o Judgment
 If the trial period clause states that the notice is to be given in writing, then oral notice is not
sufficient notice – it is an ineffective notice and the employer must give the notice in writing
 “In the present case it is clear that the parties have established the method of giving notice which
must be in writing. There is nothing in the statute which entitles the parties to abrogate that
requirement. In this case the facts may amount to a position where Mr McKenzie was summarily
dismissed. However, it was accepted by the Authority Member the parties have accepted that the
dismissal was an onnotice dismissal. That finding is not in dispute.” (at [31])
62




Jobbitt v 4 Seasons Indoor Outdoor Living (2014) Ltd [2019] NZEmpC 198
o Facts
 The employer called the employee and stated that notice under the clause was being given
 The employer’s statement included a clear reference to the trial period clause and thus referred to
the one weeks’ notice that was part of it
o Judgment
 An example of a valid oral notice of termination
 The conversation served two functions – telling the employee his employment was to end under the
employment agreement and that it would end in a week
 The employee knew precisely when his employment was to end – therefore, the words used were
enough to satisfy the contractual notice
Ioan v Scott Technology NZ Ltd [2019] NZCA 386
o Judgment
 If the trial period clause does not mention a payment in lieu, then actually making a payment in lieu
gives rise to a risk of not complying with the notice requirement (and thus invalidating the trial
period) because employees are generally entitled to work during their notice period and the
employer is taking this right away
 An employer can make a payment in lieu of a notice if it is provided for in the trial period clause
 “The general law regarding the effect of a payment in lieu of notice is well established. The mere fact
of a payment in lieu of notice does not itself prevent a termination from being a summary dismissal. It
is not an alternative to providing notice as required by the agreement. Nor will the fact of a payment
cure a defective notice, including a notice that is defective because it is ambiguous or not in
accordance with the contract because, for example, the period of notice is too short. If, however, the
payment is simply an alternative to the employer requiring the employee to work out the correct
period of notice which has been conveyed in clear and unambiguous terms, then that is a termination
on notice.” (at [29])
o Commentary
 If the trial period clause does not provide for a payment in lieu of notice, the employer could give the
employee a choice to either work out their notice or take a payment in lieu – but it has not yet been
decided whether an employer can do this
Allied Investments Ltd v Cradock [2019] NZEmpC 159
o Facts
 The trial period provision said that:
 If the employee is terminated during the trial period, notice of termination will be given
before the end of the trial period
 If the employer decides to terminate based on the trial period, any notice period will not
apply and termination will be immediate
o Judgment
 Immediate termination is not consistent with section 67B(1) and the concept of a notice of
termination – a “notice” means advanced notice or a notice period
 Therefore, a trial period clause stating that no notice period applies is invalid
Appleyard v Corelogic New Zealand Ltd [2020] NZCA 572
o Facts
 The employer wrote a letter serving as notice of termination – it said that termination will be
effective today and the employee will be paid in lieu of his 1-week notice period
o Submissions
 The employee argued that he had not been given adequate notice of termination:
 The words “effective today” meant the 1-week notice period was not given – the notice was
immediate, and the employee did not continue employment from that time and there was
no later date stated for his employment to end
o Judgment
 Rejected the employee’s argument – this letter complied with section 67B as the employer was giving
the employee one week’s notice of termination
 The words “effective today” meant that the employee was not required to continue working for the
period of notice and would receive payment in lieu – it was not a payment in lieu of notice but
payment in lieu of his being required to work out the period of notice and earn wages
o Commentary
 This case doesn’t make a lot of sense – the employers shouldn’t have used the words “effective
today”
Avoiding trial periods
When advising an employee, how can you avoid a trial period?
63
P URSUE A DISADVANTAGE CLAIM
 Evans v JNJ Management Ltd [2020] NZEmpC 181
o Facts
 Evans raised a number of concerns in the employment relationship – the employer then terminated
him under the trial period
o Judgment
 Evans was still able to raise claims of disadvantage grievances because he had raised concerns that
were not dealt with adequately – the trial period does not stop a claim for unjustified disadvantage
 [25] The Authority found that Mr Evans’s disadvantage grievance was so intrinsically linked to his
dismissal grievance that it could not succeed because the Authority could not investigate his dismissal
grievance. I do not agree.
 [26] The evidence established that, as at 27 February 2019, JNJ was not intending to terminate Mr
Evans’s employment. The termination of his employment was because of the comments he made
regarding the Privacy Act issues and as his trial period was soon coming to an end.
 [27] While s 67B of the Employment Relations Act 2000 (the Act) prevents Mr Evans from pursuing a
personal grievance in respect of the dismissal, that section does not preclude a personal grievance
being raised in relation to a claimed disadvantage that occurred during the employee’s employment,
unconnected to the dismissal.
B REACH OF GOOD FAITH
 Singh v Ora HQ Ltd [2016] NZERA Auckland 115
o Facts
 The trial period clause stated that there must be review meetings
 The employer did not comply with that
o Judgment
 If the employer is not communicating with the employee and not saying what is going wrong during
the trial period, the employee can claim a breach of good faith if it is serious and sustained, or make a
penalty action for breach of employment agreement under section 134(1)
 “The evidence, taken as whole, compellingly established that Ora breached clause 28.6 of its
employment agreement with Ms Singh by not providing her with advice as early as practicable that, in
the view of her employer, her trial was not going well. It was a breach of good faith because such an
omission was likely to mislead her about the true situation. Ora was liable to a penalty under s 134(1)
of the Act for the breach.” (at [42])
R ESIGN BEFORE GETTING THE TERMINATION NOTICE
 Venekamp v Southern Farms NZ Ltd [2018] NZERA 150
o Judgment
 If an employee under a trial period thinks they will be dismissed during the period, they can resign
and then claim a constructive dismissal before the employer gives notice of termination
o Commentary
 The problem with this is that the employee has the burden to prove that there was a breach of the
employment agreement of sufficient seriousness which would mean that the employee has a
constructive dismissal claim
R AISE A H UMAN R IGHTS A CT COMPLAINT
 McClelland v Schindler Lifts NZ Ltd [2015] NZHRRT 45
o Facts
 The employee was dismissed because of a tremor in his hand
o Judgment
 The prohibition on discrimination in employment applies whether or not the employee is in a trial
period or after
 He was ultimately dismissed because of his tremor, and the employer did not reasonably
accommodate for the tremor – therefore, the trial period did not apply
PROBLEM QUESTION
 Belinda is interviewed for a job at Stylish Hair Salon (“SHS”). At the interview, SHS ask Belinda to undertake a voluntary
“familiarisation” process by observing others cutting client’s hair. Bored, she decides to join in and helps out cutting
one client’s hair. She is offered and accepts a job. (Wate is analogous)
 That evening, Belinda is emailed an individual employment agreement which includes a 90 day trial period. She is told
that if she wants the job that she needs to sign the agreement before her first shift the next day. She signs it the next
morning and starts work that next evening. (Blackmore is analogous)
 Working at SHS does not go well for Belinda. She damages her scissors and is confronted by an irate client. Belinda
raises health and safety concerns about the way the salon is run with her boss and her boss tells her that she is too
young to understand any of the health and safety risks. (Evans is analogous – it might be a disadvantage)
64


After a week, SHS decide to terminate under the 90 day trial period. SHS hand Belinda a letter in front of all of her work
colleagues terminating her employment under the 90 day trial period. It does not give any reasons for terminating her
90 day trial period, terminates her employment “immediately” and pays her in lieu of notice. (Stokes Valley might
require reasons; Appleyard on payment in lieu of notice, but facts don’t state if there is a clause allowing for that)
Advise SHS whether the 90 day trial period was enforceable and any possible personal grievances or other claims that
Belinda could possibly raise.
Probationary periods (not examined)
Statutory provision
67
Probationary arrangements
(1)
Where the parties to an employment agreement agree as part of the agreement that an employee will serve a period of
probation after the commencement of the employment,—
(a)
the fact of the probation period must be specified in writing in the employment agreement; and
(b)
neither the fact that the probation period is specified, nor what is specified in respect of it, affects the application
of the law relating to unjustifiable dismissal to a situation where the employee is dismissed in reliance on that
agreement during or at the end of the probation period.
Failure to comply with subsection (1)(a) does not affect the validity of the employment agreement between the parties.
However, if the employer does not comply with subsection (1)(a), the employer may not rely on any term agreed under
subsection (1) that the employee serve a period of probation if the employee elects, at any time, to treat that term as
ineffective.
(2)
(3)



A probationary period must be written in the employment agreement
o The point is that there is a review process every 2 or 4 weeks – they are a lot more intensive
o They are generally used by employers that have more than 20 employees
Nelson Air Ltd v NZ Airline Pilots Assn [1994] 2 ERNZ 665 (CA)
o Judgment
 “The requirements of that obligation will vary from case to case. Every probationer may be taken to
realise that being on trial he or she will be under close and critical assessment and that permanent
employment will be assured only if the employer's standards are met. The employer for its part may
not be simply a critical observer, but must be ready to point out shortcomings to advise about any
necessary improvement and to warn of the likely consequences if its expectations are not met.
Because the objective is always that the trial will be a success, not a failure, both parties must
contribute to its attainment. If it becomes apparent to the employer, judging fairly and reasonably,
that the trial is not a success, the employee is entitled to fair warning before the end of the
probationary period that the employment will then be coming to an end. The 2 week period
stipulated in Air Nelson's standard form contract would be a minimum, not only for dismissal for good
cause during the probationary period, but also as notice that permanent employment will not be
available when it runs out.” (at 669)
New Zealand Meat Workers & Related Trades Union Inc v AFFCO New Zealand Ltd [2010] NZEmpC 62
o Judgment
 “[A probationary period] is a period that enables the employer to assess an employee’s competence
and suitability for a position at a time when such an assessment is able to be made and after an
appropriate period for training, guidance and, if necessary, modification or improvement by the
employee. It takes account of the reality that in some situations a new employee’s ability to perform
a job and general suitability in that employment cannot be assessed sufficiently before its
commencement. The existence of an agreed probationary arrangement also acknowledges on the
part of both parties that employment may be terminated at the end of the probationary period if,
assessed fairly and reasonably by the employer, the employee is incapable of performing the work or
is otherwise unsuited to the employment. A probationary period is one of some uncertainty as
opposed to a greater level of certainty in employment after its expiry and as opposed to employment
in which there is no probationary period. Termination of the employment at the end of the
probationary period is a possibility upon which the parties agree and acknowledge from the outset.”
(at [12])
Case law principles
EMPLOYER MUST SUPERVISE AND REVIEW EMPLOYEE’S PERFORMANCE
 Menzies v Safari Group NZ Ltd [2013] NZERA Auckland 114
o Judgment
 [27] In that the decision incorporated other performance-related factors, those matters were not put
to her on 8 June or any other time as reasons why her employment might not continue beyond the
end of the probationary period. Further, SGNZL did not advise Mrs Menzies of what she needed to
65
address in order to show any necessary improvement, and did not state that her continuing
employment was in jeopardy if she did not show improvement.
 [28] These failures mean I find SGNZL did not act as a fair and reasonable employer could have in the
circumstances at the time of the dismissal. Mrs Menzies’ dismissal was unjustified.
EMPLOYEE MUST BE GIVEN OPPORTUNITY TO IMPROVE
 Mehta v Bremy Ltd ERA Auckland, AA 145/05, 21 April 2005
o Judgment
 “The final meeting was in my view sufficient to constitute a review meeting. Mr Mehta was advised of
matters that required his attention. He was advised of how to remedy his performance. However, it
was the only performance meeting with him during the three month probationary period. It was not
in my view sufficient to justify the eventual termination of Mr Mehta's employment. On its own, it
was not enough for the employer to discharge its obligations to Mr Mehta. Mr Mehta was entitled to
an opportunity to correct his performance. Nor for that matter am I persuaded that when he was
dismissed on 24 June 2004, his performance had continued to remain unsatisfactory. He was not
given any further review meeting to follow up what was discussed in the meeting held on or about 8
June 2004. He was simply dismissed without more.” (at [10])
66
Employment agreements

There are many employers that will make the employment agreements as complicated as possible in order to confuse
the employee and make them believe it is the law so that they don’t question the clauses – a more appropriate thing to
do is to have plain language, but employers will want clauses that protects them as well
Preliminaries
5
Interpretation
(1)
In this Act, unless the context otherwise requires,—
employment agreement—
(a)
means a contract of service; and
(b)
includes a contract for services between an employer and a homeworker; and
(c)
includes an employee’s terms and conditions of employment in—
(i)
a collective agreement; or
(ii)
a collective agreement together with any additional terms and conditions of employment; or
(iii)
an individual employment agreement


Individual employment agreements
o Permanent – full-time or part-time
o Fixed-term
o Casual
Collective agreements
o MECA (Multi-Employer Collective Agreement) (e.g. a franchisee arrangement)
o SECA (Single-Employer Collective Agreement)
o MUCA (Multi-Union Collective Agreement) (one employer but multiple unions)
64
Employer must retain copy of individual employment agreement or individual terms and conditions of
employment
(1)
When section 63A applies, the employer must retain a signed copy of the employee’s individual employment agreement
or the current terms and conditions of employment that make up the employee’s individual terms and conditions of
employment (as the case may be).
If an employer has provided an employee with an intended agreement under section 63A(2)(a), the employer must retain
a copy of that intended agreement even if the employee has not—
(a)
signed the intended agreement; or
(b)
agreed to any of the terms and conditions specified in the intended agreement.
If requested by the employee, the employer must, as soon as is reasonably practicable, provide the employee with a copy
of the employee’s—
(a)
individual employment agreement or current terms and conditions of employment retained under subsection (1);
or
(b)
intended agreement retained under subsection (2).
An employer who fails to comply with subsection (1), (2), or (3) is liable, in an action brought by a Labour Inspector or the
employee concerned, to a penalty imposed by the Authority.
Before bringing an action under subsection (4), the Labour Inspector must—
(a)
give the employer written notice of the breach of this section; and
(b)
give the employer 7 working days to remedy the breach.
To avoid doubt, an intended agreement must not be treated as the employee’s employment agreement if the employee
has not—
(a)
signed the intended agreement; or
(b)
agreed to any of the terms and conditions specified in the intended agreement.
(2)
(3)
(4)
(5)
(6)
Requirements for employment agreements
65
Form and content of individual employment agreement
(1)
The individual employment agreement of an employee—
(a)
must be in writing; and
(b)
may contain such terms and conditions as the employee and employer think fit.
However, the individual employment agreement—
(a)
must include—
(i)
the names of the employee and employer concerned; and
(ii)
a description of the work to be performed by the employee; and
(iii)
an indication of where the employee is to perform the work; and
(iv)
any agreed hours of work specified in accordance with section 67C or, if no hours of work are agreed, an
indication of the arrangements relating to the times the employee is to work; and
(2)
67
(v)
(vi)
(b)




the wages or salary payable to the employee; and
a plain language explanation of the services available for the resolution of employment relationship
problems, including a reference to the period of 90 days in section 114 within which a personal grievance
must be raised; and
must not contain anything—
(i)
contrary to law; or
(ii)
inconsistent with this Act.
Names of employee and employer – is it a particular person, partnership, company etc.?
Description of work – important for constructive dismissals, ensuring the employee knows what is expected of them
Agreed hours of work – useful for an availability provision, but if no provision, you can use an indication of
arrangements
90-day period of personal grievance – if you don’t have this, the employee can raise a personal grievance at any time
Remuneration clauses

There are different ways to pay employees:
o Wages
o Salary
o Overtime
o Days in Lieu
o Allowances
o Commission
o Bonuses
o Other Benefits
o Expenses
o Employee Share Schemes
o Superannuation (Kiwisaver)
AVAILABILITY PROVISIONS
67D Availability provision
(1)
(2)
(3)
(4)
(5)
(6)
(7)
In this section and section 67E, an availability provision means a provision in an employment agreement under which—
(a)
the employee’s performance of work is conditional on the employer making work available to the employee; and
(b)
the employee is required to be available to accept any work that the employer makes available.
An availability provision may only—
(a)
be included in an employment agreement that specifies agreed hours of work and that includes guaranteed hours
of work among those agreed hours; and
(b)
relate to a period for which an employee is required to be available that is in addition to those guaranteed hours
of work.
An availability provision must not be included in an employment agreement unless—
(a)
the employer has genuine reasons based on reasonable grounds for including the availability provision and the
number of hours of work specified in that provision; and
(b)
the availability provision provides for the payment of reasonable compensation to the employee for making
himself or herself available to perform work under the provision.
An availability provision that is not included in an employment agreement in accordance with subsection (3) is not
enforceable against the employee.
In considering whether there are genuine reasons based on reasonable grounds for including an availability provision, an
employer must have regard to all relevant matters, including the following:
(a)
whether it is practicable for the employer to meet business demands for the work to be performed by the
employee without including an availability provision:
(b)
the number of hours for which the employee would be required to be available:
(c)
the proportion of the hours referred to in paragraph (b) to the agreed hours of work.
Compensation payable under an availability provision must be determined having regard to all relevant matters,
including the following:
(a)
the number of hours for which the employee is required to be available:
(b)
the proportion of the hours referred to in paragraph (a) to the agreed hours of work:
(c)
the nature of any restrictions resulting from the availability provision:
(d)
the rate of payment under the employment agreement for the work for which the employee is available:
(e)
if the employee is remunerated by way of salary, the amount of the salary.
For the purposes of subsection (3)(b), an employer and an employee who is remunerated for agreed hours of work by
way of salary may agree that the employee’s remuneration includes compensation for the employee making himself or
herself available for work under an availability provision.
68


If providing an availability provision, an employer will want to explain that remuneration includes reasonable
compensation for an employee’s availability
If not providing an availability provision, the employer should explicitly say that an employee is not required, but can,
do extra hours
Other requirements
69OJ Collective agreements and individual employment agreements must contain employee protection provision
Every collective agreement and every individual employment agreement must contain an employee protection provision
to the extent that the agreement binds employees to whom this subpart applies.

An employee protection provision means that when you are buying or selling or restructuring the business in a way that
sells assets etc., there must be employee protection provision that complies with the Act, which requires the employer
to have a discussion with employees about what is to happen to their jobs
52
New employment agreements must include provision that complies with section 50 (Holidays Act 2003)
(1)
…
[All] employment agreement[s] must include a provision that confirms the right of the employee to be paid in accordance
with section 50 for working on a public holiday. (1.5x pay)
73
Employer and employee obligations under Act (Holidays Act 2003)
…
At the time an employee enters into an employment agreement with an employer, the employer must inform the
employee—
(a)
about his or her entitlements under this Act; and
(b)
that the employee can obtain further information about his or her entitlements under this Act from—
(i)
the union of which the employee is a member (if applicable):
(ii)
the department. (Ministry of Employment)
(2)
Other clauses






Termination
o Redundancy
o Medical Incapacity
o Abandonment
Suspension
Deductions
Rules / Policies / Procedures
Variation / Amendments
Declaration
Specific issues
Notice of termination



When drafting an employment agreement, it is important to have a notice period for termination
o If you don’t have a notice period, the common law will imply the idea of “reasonable notice”
Ogilvy & Mather (New Zealand) Ltd v Turner [1995] 2 ERNZ 398 (CA)
o Judgment
 Reasonable notice here was 18 months because it was going to be hard for the employee to get a
new job (because he was a senior executive)
 “It was admitted in the pleadings that it was an implied term of the contract of employment that
reasonable notice of termination would be given by the employer. Both counsel accepted that the
implied term required a period of notice which was reasonable at the time it was given, not a period
assessed at the time the contract was made. They recognised that this view appeared to be inherent
in the various Court decisions in which the appropriate period of notice has been considered, and the
Court has taken into account matters subsequent to the date of the contract, such as length of
service. We agree that this is a logical approach, and that the term to be implied requires a period of
notice which is reasonable in the situation as it exists at the time notice of termination is given.” (at
404)
Coca-Cola v Kaczorowski [1998] 1 ERNZ 264 (CA)
o Facts
 An employee decided to resign and gave three months’ notice
 In her employment agreement, resignation had to be one months’ notice
 The employer refused to accept the notice, saying that either she resign on the terms of the
agreement (because they wanted to get rid of her in one month and not three months), or the
company would go through a disciplinary process
69
o

Judgment
 You can dismiss an employee during the notice period – this means you can be dismissed twice (once
upon being given notice and then dismissed during the notice period)
 The employee was dismissed by constructive dismissal during the notice period – this can give rise to
liability if it was unjustified
 “A notice is an intimation by one of the parties to an agreement that it is to terminate at a specified
time. If the employer in this case was dissatisfied with the length of the notice it had its own rights
and remedies to seek an earlier termination and there is no evidence to warrant the conclusion that
Coca-Cola itself purported to terminate the contract on one month's notice in writing.”
Advance International Cleaning Systems (New Zealand) Ltd v Dalauidao (2002) 6 NZELC 96,824 (ERA)
o Judgment
 If the employee genuinely resigns (i.e. it is not a constructive dismissal) without giving a notice period,
there is a possibility that the employer can sue the employee and deduct from their final pay the
notice period
 “As for any employee, for any employer the purpose of the period of notice to be given by a departing
employee is to provide the employer with adequate opportunity to adjust to the changed
circumstances and to seek another employee to perform the work. Ms Dalauidao did not give to
Advance notice of termination of one month but merely gave forewarning of a few hours. Neither did
she pay to Advance, which had not released her from her express obligations, an amount equivalent
to one month’s salary, or $2,917. Although the forfeiture provisions of the agreement could have
been better expressed, it is clear the parties intended that in the absence of actual notice given by Ms
Dalauidao she would become indebted to Advance for this amount, whether she had commenced
work and had earned any pay, or not. Mr Spong conceded that liability.” (at [9])
Express and implied terms
INTERPRETATION OF EXPRESS TERMS
 New Zealand Air Line Pilotsʼ Association Inc v Air New Zealand Ltd [2017] NZSC 111
o Facts
 The employment agreement had a clause which said that particular provisions in other collectives
could be passed onto the particular union
 There was a dispute between the union and employer as to whether they could pick and choose
between particular provisions
o Judgment
 Uses the principles of contractual interpretation from Firm PI 1 Ltd v Zurich Australian Insurance Ltd
[2014] NZSC 147 to interpret express provisions
 “… the proper approach is an objective one, the aim being to ascertain “the meaning which
the document would convey to a reasonable person having all the background knowledge
which would reasonably have been available to the parties in the situation in which they
were at the time of the contract”. This objective meaning is taken to be that which the
parties intended. While there is no conceptual limit on what can be regarded as
“background”, it has to be background that a reasonable person would regard as relevant.
Accordingly, the context provided by the contract as a whole and any relevant background
informs meaning.”
 The court is not limited to what the parties are saying the express terms should be interpreted to
mean
INCORPORATION OF TERMS
 Jensen v Attorney-General [2003] 2 ERNZ 36 (EmpC)
o Judgment
 Clauses that require written consent from the employee (e.g. deductions) do not obtain consent
when they are put in an employer’s policy
 The policy is produced at the whim of the employer and thus the employee is not giving
written consent
 To get written consent, the clause must be in the employment agreement
 None of the employer's policies and procedures contained in manuals and relied on by the plaintiff as
terms and conditions of employment that were breached, was contractual in the sense of being
negotiated and settled between the employer and employees collectively or individually. The most
eloquent confirmation of that non-contractual status comes from the terms of the CEC itself already
set out and by which the parties agreed that it was “Management” that had “the right to plan,
manage, organise and finally decide on the operations and policies…”
 The only terms and conditions of the employment agreement were in the collective
agreement and not contained in the manuals
70
 Therefore, the employer did not breach the employment agreement as they merely
breached the policy
TERMS IMPLIED BY FACT
 South Pacific Meats Ltd v Mohammad [2012] NZEmpC 96
o Facts
 The employee was a halal slaughterman – there is a particular way to kill in order to comply with the
requirements of halal
 The employer employed these people from Fiji on a seasonal basis
 The employee did not know when to come back – when he came back, he was late to work and was
not re-employed
o Issue
 Did the employer breach the terms of the employee agreement?
o Judgment
 Terms can be implied by fact
 The arrangements of the meat industry association’s facilitation implied that the employer would not
refuse to employ that particular employee
 “I accept that there was an implied term of Mr Mohammed’s employment agreement that, with
respect to his return to work under cl 3.6, the plaintiff would facilitate this travel through MIA. This
was a long standing and well accepted practice of which the parties were aware and which had been
the basis of their arrangements in the past. The plaintiff knew that Mr Mohammed was overseas as it
had facilitated his travel to Fiji at the end of the previous season. And when the plaintiff offered Mr
Mohammed employment, it well understood that it had an ensuing obligation to arrange his travel to
New Zealand. In these circumstances, the plaintiff was under an obligation to facilitate the
defendant’s travel to enable him to comply with cl 3.6, in accordance with past practice.”
TERMS IMPLIED BY CUSTOM
 Edminstin v Sanford Ltd [2017] NZEmpC 70
o Facts
 Skipper’s marks are used in fishing to mark the best fishing spots – they belong to the employee
rather than the employer
o Judgment
 Term can be implied by custom
 When returning all their property, the employees did not need to tell the employer where the
skipper’s marks were
 “I conclude, therefore, that the relevant express terms of the parties’ employment agreement did not
contradict, and thereby negate, the established custom and practice of property in marks of Bluff
oyster boat skippers. They were the property of those skippers and not of others including vessel
owners/employers, at least not unless acquired by them by gift, bequest, purchase for value or other
recognised consensual form of transfer of property. Sanford was not entitled to proprietorship in
these marks, whether contractually, by unilateral declaration of its entitlement or otherwise. The
settlement agreement’s words “his marks” meant the plaintiff’s marks that were his exclusive
property. I consider that if the parties had meant the interpretations now contended for by Sanford,
they would have used a phrase such as “a copy of his marks” or “a copy of the parties’ marks”. They
did not: rather they used language consistent with the plaintiff’s exclusive proprietorship of them.”
TERMS IMPLIED BY LAW
 Walden v Barrance [1996] 2 ERNZ 598 (EmpC)
o Judgment
 Term can be implied by law
 “… the respondent's employment contract was subject to an implied term that he was under a duty of
fidelity to his employer to abstain from conduct likely to do damage to the employer's business or
having the potential to undermine the relationship of trust and confidence …”
DUTY TO PROVIDE WORK

Gray v Nelson Methodist Presbyterian Hospital Chaplaincy Committee [1995] 1 ERNZ 672 (EmpC)
o Judgment
 The employment contract is a continuous wage/work bargain, with neither side at liberty to suspend
its operation against the will or without the consent of the other, except as authorised by law or by
the contract itself. This rule has many implications, but it is necessary to mention only some of those
that affect the employer. They include the proposition that its employees have the right to work, and
that that right has an intrinsic value of Its own and may not be taken away or prejudiced against the
employee's will. At any rate, where there is work to be done; it cannot be helped if there are
fluctuations in available work, then it may be enough to pay the employee for being available but
71

otherwise the employee must be allowed the satisfaction of doing his or her work. It is not enough to
pay the wages, withholding the work…
If you suspend an employee, this is inconsistent with the duty to provide work – therefore, an
employer needs to ensure they are justified in taking that action
DUTY TO PAY

Pretorius v Marra Construction (2004) Ltd [2016] NZEmpC 95
o Judgment
 An employer must pay their employees for doing work
 [82] Turning to the essential facts in respect of this claim, there is undisputed evidence to the effect
that Mr Pretorius was assured that at the end of the project he would be reimbursed for extra hours
worked. The assurances were given prior to the inception of the project and were relied on by Mr
Pretorius. Confirmation that such payment would be made at the conclusion of the project was given
in August or September 2008. Mr Pretorius understood that the assurances related not only to
overtime, but also the payment of regular bonuses as paid to Dominion employees, and as invoiced
by Marra.
DUTY TO INDEMNIFY

F v Attorney-General [1994] 2 ERNZ 62 (EmpC)
o Facts
 The employee was sued for defamation by a third party
o Judgment
 An employer must indemnify an employee for duties they undertake during their employment
relationship
 The existence and extent of the plaintiffs right to indemnity depends upon the law of agency, a
relationship of which the employment contract is one of several forms or manifestations…
DUTY OF CARE, SKILL AND DILIGENCE

Rainbow Falls Organic Farm Ltd v Rockell [2014] NZEmpC 136
o Judgment
 If an employee does bad at their job, the employer can sue them for breaching this duty – usually, this
is for fraudulent actions
 [58] The ‘double-whammy’ effect of dismissal plus a damages claim, both arising out of the same poor
performance committed during the course of the employment relationship, sits uncomfortably with
the statutory mechanisms for resolving employment relationship issues and may well have a chilling
effect on employees considering a personal grievance, concerned not to prompt a retaliatory
damages claim in response.
o Commentary
 Employers tend to include a clause in the agreement that, rather than suing the employee, the
employer can go through processes for dismissal or deduct pay
 A breach of this duty requires a high threshold
DUTY TO PROVIDE A SAFE WORKPLACE

Gilbert v Attorney-General [2000] 1 ERNZ 332 (EmpC)
o Facts
 The employee was particularly stressed through work overload because of failure to address excess
workload, fill vacancies and a pattern of rising staff absences through ill health
o Judgment
 I agree that the law now implies a contractual term that an employer shall take all reasonable care
not to cause employees physical or psychological injury or further injury by reason of the volume,
character, nature, or circumstances of the work required to be performed. Such a term meets the
tests for implications of terms and conditions of employment contracts and is not at odds with any
expressed term. It is difficult to envisage an express term that would be contrary to such an implied
term.
o Commentary
 This often leads to a constructive dismissal claim
DUTY TO RESPECT PRIVATE LIFE

Postal Workers Union of Aotearoa Inc v New Zealand Post [2019] NZEmpC 47
o Judgment
 An employer cannot interfere with an employee’s ability to live their private life
 [31] If the requirements of the Act are not met, the result is that the employee can decline to make
themselves available. Such a result may be said to sit comfortably with the underlying objects of the
Act (including to redress the inherent imbalance of bargaining power between employer and
employee), 7 and the evident broader purpose of the suite of amendments, underpinned by the
notion of substantive mutuality in working relationships. It also sits comfortably with the modern
72
trend of valuing an employee’s right to a personal life free from unnecessary incursion by their
employer; and basic contractual principles more generally, including as to the payment of
consideration in exchange for something of worth.
DUTY OF MUTUAL TRUST AND CONFIDENCE

Pemberton v WAS Ltd [1999] 2 ERNZ 436 (EmpC)
o Judgment
 (1) It is an incident of every employment relationship in New Zealand that the employer is under an
obligation of confidence and trust to the employee, as a corollary of the employee's duty of fidelity to
the employer.
 (2) Each of these mutual obligations is a universal incident of the relationship, as opposed to a term
implied from the facts of a particular negotiation; therefore, neither obligation is capable of being
excluded by express terms of the contract.
 (3) The nature of the employer's obligation can best be expressed as one that the employer will not,
without reasonable and proper cause, conduct itself in a manner likely to destroy or seriously damage
the relationship of confidence and trust between employer and employee.
 (4) The precise content of the obligation or the exact conduct that can constitute a breach of it cannot
be defined in advance but can vary with the circumstances; usually the obligation will be discharged
by fair and reasonable treatment but will be breached by any serious departure from that standard
including any evasion or deviousness.
 (5) A conclusion that the exercise of a bare contractual right ("and nothing else relevant") is such a
departure that will not lightly be reached unless the exercise of one right is also independently the
invasion of another.
 (6) Motive is, in this context, irrelevant unless acting with a particular motive is a breach of the
contract or unless (in other words) the contract on a proper construction renders it relevant.
 (7) In construing a contract, the Court will read it as a whole to determine the nature and purpose of
stated contractual rights and to discover whether they are subject to any restriction upon their use.
DUTY TO OBEY REASONABLE AND LAWFUL INSTRUCTIONS

Sky Network Television Ltd v Duncan [1998] 3 ERNZ 917 (CA)
o Judgment
 This is an employee’s duty
 In these circumstances the dispute cried out for an attempt at resolution either by resort to the
disputes procedure referred to in the contract or, if that was considered too long-winded, by a
speedier means. Such an approach to the issue which had arisen between the parties may well have
resolved it without matters reaching a point at which the mutual confidence or trust of the parties,
often said to be an essential of the employment relationship, had been destroyed.
DUTY OF FIDELITY

Schilling v Kidd Garrett Ltd [1977] 1 NZLR 243 (CA)
o Judgment
 This is the duty that the employee does work for their employer and no one else
 There can be no doubt that in the absence of some specific provision the contractual relationship of
master and servant does give rise to an implied duty of fidelity owed by the employee. Of course
most written contracts of service expressly refer to the matter and indeed, where the situation may
seem to require it, there is an additional covenant intended to restrain the employee from
competition for a period after the employment has come to an end. The absence of such a covenant
in the present case (assuming that Schilling had been prepared to enter into one) may well be
responsible for the problems that have arisen. In any event, there certainly was the implied duty of
fidelity as counsel for Schilling readily agreed. And when considering the nature of such an implied
duty the courts have not had much sympathy for the workman who, for his own ends, has made use
of secret information… ; or for those who have supported the business of a competing firm even in
their spare time… ; or for the solicitor-clerk who has abused his trust by attempting, before his active
employment is ended, to win for himself some of his firm's clients… ; or even the milk roundsman
who made the mistake of soliciting customers for himself on the last day of his employment…
DUTY OF CONFIDENTIALITY

Faccenda Chicken Ltd v Fowler [1987] 1 Ch 117 (CA)
o Judgment
 … It is clear that the obligation not to use or disclose information may cover secret processes of
manufacture such as chemical formulae… , or designs or special methods of construction… , and other
information which is of a sufficiently high degree of confidentiality as to amount to a trade secret. The
obligation does not extend, however, to cover all information which is given to or acquired by the
employee while in his employment, and in particular may not cover information which is only
73
“confidential” in the sense that an unauthorised disclosure of such information to a third party while
the employment subsisted would be a clear breach of the duty of good faith.
P ROTECTED D ISCLOSURES A CT 2000
 Bracewell v Richmond Services Ltd [2014] ERNZ 434 (EmpC)
o Judgment
 [107] The disclosure to the media is not protected by the PD Act.
Variations

Nisha v LSG Sky Chefs NZ Ltd [2016] NZCA 21
o Facts
 Part 6A of the ERA provides for vulnerable employees to be transferred from one employer to
another where there is a sale and purchase or contracting in/out of the company
 The transfer had to take place on the same terms and conditions of the pre-existing employment
agreements
 The old employer increased everyone’s wages without telling the employees, and then transferred to
the new employer – the new employer refused to pay, and the employees complained
o Judgment
 The employee must provide written agreement to variations
 There was no variation here – in order to be a valid variation, there needed to be mutual consent
 “… [T]he transaction here was a sham. It is not enough to simply focus on implementation of the
financial aspects of the transaction. We are here dealing with a contractual transaction; an alleged
variation to a contract of employment. The efficacy of this purported variation is more than simply a
question of payment. The variation (and entitlement to the new wage rate) was ostensibly for the
performance of new duties which neither existed nor were performed by Ms Nisha. Pacific did not
intend Ms Nisha to perform the role of a supervisor, because it needed no such supervisor. Ms Nisha
did not intend to perform the role of supervisor, because she did not know that she had been
promoted to it and there was no such work for her to do. Ms Nisha might have been paid as if she
was a supervisor, but a supervisor she was not and no agreement existed making her one …”
PROBLEM QUESTION
[16] The dismissal letter purports to end the applicants’ employment by invoking clause 25 of the employment agreements.
Clause 25 is a type of frustration clause which may be invoked to end employment in the event of circumstances outside the
control of the parties which prevent the business continuing. Two questions arise – did circumstances exist at the relevant time
to invoke clause 25 of the parties’ employment agreement and, if so, in invoking clause 25 did BFFL comply with the obligations
contained therein?
De Sousa v Bayside Fine Food Ltd [2021] NZERA 27
Examine the advantages and disadvantages of a business interruption clause in an employment agreement
 An employer still has good faith obligations, so they must consult with employees on what to do even if relying on a
business interruption clause
74
Fixed term and casual employment

Fixed term and casual employment agreements are basically employment that is not permanent – they are short-term
employment that either expires at the end of the fixed term (for a fixed term employment), or at the time of the end of
the engagement (for a casual employment)
Fixed term employment
Requirements for a fixed term employment
66
Fixed term employment
(1)
An employee and an employer may agree that the employment of the employee will end—
(a)
at the close of a specified date or period; or
(b)
on the occurrence of a specified event; or
(c)
at the conclusion of a specified project.
Before an employee and employer agree that the employment of the employee will end in a way specified in subsection
(1), the employer must—
(a)
have genuine reasons based on reasonable grounds for specifying that the employment of the employee is to end
in that way; and (but the longer the fixed term is, the more unlikely the employer has genuine reasons and thus
the fixed term is invalid)
(b)
advise the employee of when or how his or her employment will end and the reasons for his or her employment
ending in that way.
The following reasons are not genuine reasons for the purposes of subsection (2)(a):
(a)
to exclude or limit the rights of the employee under this Act:
(b)
to establish the suitability of the employee for permanent employment: (this is what trial periods are for)
(c)
to exclude or limit the rights of an employee under the Holidays Act 2003.
If an employee and an employer agree that the employment of the employee will end in a way specified in subsection (1),
the employee’s employment agreement must state in writing—
(a)
the way in which the employment will end; and
(b)
the reasons for ending the employment in that way.
Failure to comply with subsection (4), including failure to comply because the reasons for ending the employment are not
genuine reasons based on reasonable grounds, does not affect the validity of the employment agreement between the
employee and the employer.
However, if the employer does not comply with subsection (4), the employer may not rely on any term agreed under
subsection (1)—
(a)
to end the employee’s employment if the employee elects, at any time, to treat that term as ineffective; or
(b)
as having been effective to end the employee’s employment, if the former employee elects to treat that term as
ineffective. (i.e. if the employer gets the fixed term wrong, it has a permanent employee)
(2)
(3)
(4)
(5)
(6)

Section 66 allows for an employee to be dismissed after the end of the term without going through the usual processes
of termination – therefore, there are strict rules on when a fixed term agreement can be used
Case law principles
LEGITIMATE EXPECTATION THAT EMPLOYMENT WILL CONTINUE AFTER FIXED TERM
 Vice-Chancellor University of Canterbury v Purchas [1998] 3 ERNZ 925 (CA)
o Facts
 Purchas was a lecturer – he was employed on a number of revolving fixed terms (2-year temporary
positions)
 He tried to obtain permanent employment status, but was not provided with that
 The Head of Department was constantly recommending Purchas for permanent employment – he
also promised that Purchas would be appointed to a permanent position once he obtained his
Masters’ degree
 A new HOD was appointed and did not renew Purchas’ fixed term agreement
o Judgment
 If the employee has a legitimate expectation that their employment will continue, there will be no
fixed term employment – the employee becomes a permanent employee
 “… Mr Purchas' acceptance that there was no binding guarantee or promise of an appointment if he
satisfied certain conditions must be seen in the wider context of a series of short-term appointments
given in the expectation that he would in certain circumstances be appointed permanently.”
 Purchas had a legitimate expectation of permanent employment on the basis of what had
been said by the former HOD – the failure to fulfil this expectation constituted a breach of
the mutual duties of trust and confidence and Purchas was unjustifiably disadvantaged in his
roles
75

Where a fixed term did not reflect the true intention of the parties, sending the employee away on
the expiry of a fixed term could amount to a dismissal
WHERE THE EMPLOYMENT CONTINUES AFTER THE FIXED TERM
 Varney v Tasman Regional Sports Trust EmpC Christchurch CC15/04, 23 July 2004
o Facts
 Varney was a programme manager for the TRST
 The fixed term agreement clause stated that it was subject to continued funding for this programme,
and a review will take place after 40 weeks in the position
 The agreement also contained separate termination and redundancy provisions
 At the end of the 40-week term, Varney’s employment continued as before
 After a few months, the trust purported to extend the term for several more weeks before a
permanent role would be created, and Varney was invited to apply for it
o Judgment
 If the fixed term expires, but the employee continues to work after the expiry, the employee is a
permanent employee
 The provision of a review after 40 weeks appears at least to imply the continuation of the
employment in the event of funding being granted – it was questionable whether they were
reasonable grounds
 In any event, she was clearly a permanent employee because the fixed term had been allowed to
“drift on”
 [44] At the end of the day, it is the employer who asserts that there was here a fixed term
employment and therefore it is for the employer to prove that that was so. Even if the employer has
proved that it was so down to 9 April 2002, it has not proved that it was so beyond that date. In
particular, the employer has not shown that on or before that date it had turned its mind to reasons
for specifying that the continuing portion of the employment was to be for a fixed term and it had not
advised the plaintiff why her employment was going to end in that way given its knowledge that
funding was being continued and it was not likely to be ready on 30 June 2002 to appoint a full time
employee. Most importantly, however, it has not shown that it ever secured the plaintiff's
agreement.
THE FIXED TERM ARRANGEMENT MUST BE IN WRITING
 The Salad Bowl Ltd v Howe-Thornley [2013] NZEmpC 152
o Judgment
 [61] The requirement under s 66 for a fixed term agreement to be in writing relates not to the validity
or lawfulness of the agreement per se but, rather, to the lawfulness of its fixed term nature. So, in the
absence of compliance with the statutory provisions, an employer will not be entitled to end the
employment in reliance on the fixed term and preclude the employee from access to the personal
grievance procedure.
 The three-hour trial was analogous to a fixed term employment in which the parties had agreed that
the employment would end at the end of a specified event (the end of the trial)
 An employer must have genuine reasons based on reasonable grounds for specifying that
the employment of the employee is to end at the end of the event (section 66(2)(a)) – but
assessment of the suitability of the employee for permanent employment is not a genuine
reason (section 66(3)(b))
THERE MUST BE GENUINE REASONS FOR A FIXED TERM
 Turner v Talley’s Group Ltd [2013] NZEmpC 31
o Facts
 Turner worked at TG on a continuous basis for nearly 10 years
 Over the course of each year, the employee was engaged consecutively (because it is seasonal-based
work, so process muscles one season, then process scallops the next, then fish the next etc.)
 With each product change, the employee was presented with a new seasonal employment
agreement that was required to be signed
 In the year before the dismissal, the employee signed three seasonal agreements for each of TG’s
products
 In accordance with its usual practice, the employer invited interested staff to put their names forward
for the next season – the employee did so but was not selected
 The personnel manager said that the employee had been dismissed due to concerns surrounding her
performance
o Judgment
 Although the employment agreements are “seasonal” rather than fixed term, “seasonal” is not a term
of art and is not the subject of express exemption from the presumption of indefinite employment –
seasonal employment agreements can come within the definition of a fixed term agreement
76


o
It was acknowledged that the end of a product-type season is the occurrence of a specified event
[44] The first element requiring compliance is set out in s 66(2). That is, the employer must have a
genuine reason or reasons, based on reasonable grounds, for specifying that the employment of the
employee is to end in the way that it does specify it. Although I accept that fish processing is seasonal
in the sense that the duration of the work depends upon the provision of raw materials which is
seasonal, the history of Mrs Turner’s employment in practice tends to cast doubt, in her case at least,
on whether there were genuine and reasonable grounds for requiring her employment to be for a
series of fixed terms.
 [45] Despite the seasonality of the supply of different fish products to the factory, the evidence
establishes that, for practical purposes, Mrs Turner was able to be employed on those different tasks
but continuously throughout each year over a long period. She was not laid off at the end of each
season and re-engaged, either later or even immediately, to work on another product. As work on
one product wound down, she was reallocated to other work in the factory and then told that
henceforth she would be working on a full-time basis on another seasonal product and this pattern
was repeated over the course of each year of a number of years.
 In these circumstances, the law presumes that the employee’s employment was of indefinite
duration, such that the termination was a dismissal at the employer’s initiative and not at the expiry
of the agreed fixed term
 In fact, the personnel manager had misled the employee about the real reasons behind the
termination of the employment relationship – this was a breach of the obligations of good faith
Commentary
 The employee worked for 10 years on the basis of these season agreements – there wasn’t genuine
reasons for keeping the fixed term due to the nature of the work
 This shows that while it may be reasonable on a short-term basis, having revolving fixed term
agreements may actually be a permanent employment
WHETHER THERE ARE OTHER OPTIONS (APART FROM A FIXED TERM) REASONABLY AVAILABLE



International Labour Organisation 158 provides that fixed terms should only be used where no other option is
reasonably available
Morgan v Tranzit Coachlines Wairarapa Ltd [2019] NZEmpC 66
o Facts
 Morgan was on fixed terms each year for 18 years – he drove school buses
 In those fixed terms, the agreement said the reason for it being a fixed term was because Tranzit
could lose the contract at any year due to its funding agreement with the government in terms of the
provision of the bus services – if it didn’t have the money, it couldn’t employ him
 The fixed terms also included redundancy provisions – it would indicate that employment could end
due to the nature of the funding arrangement changing
o Judgment
 The redundancy provision is fundamentally inconsistent with the nature of the fixed term – it
undermines why you would have the fixed term, and thus was not a genuine reason
 [13] Sincerity and/or improper motive are likely to be helpful markers in assessing the genuineness or
otherwise of the expressed reasons for a fixed-term agreement. There may however be room for a
broader approach. So where the fixed-term agreement mechanism is but one of a range of possible
options available to an employer for addressing an operational need, might it not be that the option
which least encroaches on the principles underlying ILO 158, and the employment rights referred to
in it, is to be preferred? Such an approach may be said to sit comfortably with the safeguards against
termination of employment at the initiative of the employer, reflected in s 66, and the mischief that
provision is clearly designed to address.
 The employer’s reasons were sincerely held and were not for an improper motive – but this is not
determinative
 The reason for the fixed term was the possibility of the funding agreement ending, but this
event happening was speculative, especially considering that it hadn’t happened for 18 years
back-to-back – so why would it end now?
 Therefore, there were no genuine reasons for the fixed term
 The courts should also look at whether the fixed term is necessary
 If there are other options available, the employer should use those mechanisms rather than
using a fixed term agreement – if not, then there may not be genuine reasons for a fixed
term
Kwik Kiwi Cars Ltd t/as Mark Cromie Motor Group v Crossley [2020] NZEmpC 142
o Facts
 The employer justified the fixed term on the basis that there was a merger of two separate car
retailing businesses, at which point there would be a need for redundancies due to role duplications
77
o
Judgment
 This was not a genuine reason for the fixed term
 [67] I accept that the company was sincere when concluding that it may need to effect a
restructuring, and that it believed this constituted a reasonable ground for entering into multiple
fixed-term agreements, including with Ms Crossley.
 [68] However, that does not mean that the reason was genuine, as required under s 66(2)(a). When
effecting a restructuring, MCMG intended to rely on fixed-term agreements to end employment
relationships which were surplus to its requirements. This meant there were no protections for
affected employees. That is to be contrasted with the more appropriate means of effecting a
restructuring via a redundancy process containing protective provisions which would ensure
procedural and substantive fairness.
A FIXED TERM AGREEMENT CANNOT BE USED FOR TRAINING AN EMPLOYEE


See section 66(3)(b)
Canterbury Westland Free Kindergarten Assoc (t/a Kidsfirst Kindergartens) v New Zealand Educational Institute [2004] 1
ERNZ 547 (EmpC)
o Facts
 The employer sought to change the appointment of senior teachers from permanent to fixed term
appointments
 The employer said the reason for the fixed term was the need for these employees to be trained on
hands-on teaching
o Judgment
 This is a breach of section 66(3)(a) because it excludes or limits the personal grievance rights of
particular employees
 The senior teaching provisions were ongoing and the need for them was constant
 There were various ways of achieving the Board’s requirements for recent hands-on teaching
experience without resorting to fixed term employment
 The extreme step of resorting to fixed term employment to deal with what was essentially training or
continuing education could not be justified by reference to any of the grounds that were reasonable
 [58] Having listened to the evidence and the argument upon it, I am satisfied that the plaintiffs
reasons for wishing to employ practice managers on fixed-terms not exceeding 3 or at most 6 years
are genuine in the sense of being the sincerely held real operative and operational reasons for the
policy adopted… However, as stated, I have not been persuaded that the policy logically and
necessarily leads to the employment of practice managers on relatively short fixed-terms. As the case
progressed, that requirement went from all practice managers to some of them and counsel for the
plaintiff even went so far as to suggest that the Court could fix the proportion of practice managers
that could be so employed. This approach shows that the extreme step of resorting to fixed-term
employment to deal with what is essentially a training or continuing education issue cannot be
justified by reference to any grounds that are reasonable.
FIXED TERM AGREEMENTS CANNOT BE USED TO EXCLUDE OR LIMIT RIGHTS


See section 66(3)(a)
Terson Industries Ltd v Loder (2009) 6 NZELR 345 (EmpC)
o Facts
 The fixed term was justified by the reason that the account manager’s role may need to change, and
the company wishes to be able to negotiate its requirements from scratch, including the makeup of
her remuneration, the nature of the role and human resources requirements
o Judgment
 Clearly, the reason for the fixed term agreement was to negotiate a different agreement – this is not a
genuine reason
 [11] It is not a genuine reason under s66(3)(a) if the employer specifies a fixed term agreement to
exclude or limit the rights of an employee under the Act. The stated reason for the fixed term was so
the employer could respond to the type of issues that employers regularly face in the operation of a
business. Such issues are properly dealt with by negotiations between the parties for a variation to an
employment agreement or by the processes of restructuring and redundancy rather than terminating
the employment.
THE GENUINE REASON MUST BE BASED ON REASONABLE GROUNDS

Shortland v Alexander Construction Co Ltd [2010] NZEmpC 41
o Judgment
 [18] Subsection (4)(b) provides that the employment agreement must state in writing the reasons for
it ending in the way specified. In this case it is clear that the actual reason, as explained by Mr
Hamilton, was not fully stated in the agreement which says only that the reason was “the end of the
Elephant Hill project.” On its own, that statement does not provide reasonable grounds for having a
78
fixed term agreement. For the grounds to be reasonable requires the other element, namely that the
company had no other work in prospect, to be included.
 The reason for the fixed term was the end of a specified project – but this alone does not provide
reasonable grounds because just because the project was finishing did not necessarily mean that
work would stop (as there would be other projects)
THE AGREEMENT MUST STATE WHEN OR HOW EMPLOYMENT WILL END
 Norske Skog Tasman Ltd v Clarke [2004] 3 NZLR 323 (CA)
o Facts
 There was a series of revolving fixed terms due to inadequate manning levels – the agreement said it
was to maintain agreed manning levels
 After 10 revolving fixed terms, the employee was not re-employed
o Judgment
 “To maintain agreed manning levels” was not an explanation as to why the employee’s employment
was to end on the date specified – it did not go into sufficient particularity
 Section 66 requires for the agreement to state the reasons for dismissal – the employer cannot just
make up the reasons after; they must be in the employment agreement from the start
 [68] Further, it is unrealistic to ascribe to the Legislature an intention that a failure to comply with s
66(2)(b) should be of no moment. Section 62(a) and (b) are both prefaced by the word "must". As a
matter of ordinary English, it is not possible to construe the language of s 66(2)(b) so as to treat the
requirements to advise the employee of how and when his or her employment will end as
fundamental to the effectiveness of a fixed-term agreement (as they plainly are) but the requirement
to advise the employee of the underlying reasons as being of less or no significance.
IMMIGRATION

“In Immigration New Zealand (INZ)’s view, an employee being on a temporary visa is not by itself reasonable grounds
for a fixed term employment, where the only reason for offering employment of a fixed term nature (as opposed to a
permanent employee) is because the employee needs to retain a visa from INZ to continue performing the work.”
o Employees cannot be put on a fixed term agreement where the reason for the fixed term is because of the
expiry of a visa – this is because a visa is not the EMPLYOER’S reasons for the fixed term (which is what is
required by section 66); it is the EMPLOYEE’s reasons
 To get a work visa, the employer must send the employment agreement to INZ
o If the agreement is a legitimate agreement, then the work visa is granted
o If the agreement is fixed term and the reason for the fixed term is the visa, INZ will reject a work visa and the
employee will not be able to enter the country – therefore, visa issues do not arise often
THERE MUST BE SUFFICIENT SPECIFICITY AS TO WHEN OR HOW THE FIXED TERM WILL END
 Carter Holt Harvey Ltd v McAuley [2012] NZEmpC 48
o Facts
 McAuley was a firefighter at the Kinlieth Pulp and Paper Mill at Tokoroa
 He had accepted a series of fixed term agreements, which were to end on the completion of the
Kinlieth restructure (which was done with the union, so they needed people to cover)
o Issue
 Did the fixed term sufficiently specify the supposed event upon which the fixed term would end?
o Judgment
 Section 66(1) requires a “specified event”, or a “specified project”
 “Specified” means “named or mentioned expressly”
 “Event” is a thing that happens or takes place or is a result or outcome
 “Project” means a plan, scheme or a planned undertaking
 In this case, the agreement was sufficiently specific as to when the fixed term will end
 The ongoing negotiations between the union and the employer which resulted in this fixed
term may or may not have been settled and may or may not have resulted in permanent
positions – therefore, there were genuine reasons
 There was so much uncertainty as to the outcome of the restructure such that a fixed term
was justified
 [37] I have concluded that the Authority misinterpreted s 66 by requiring CHH to meet a test of
sufficient specificity which is not only absent from the section but adds a gloss to it that is contrary to
its scheme. Not only did the Authority apply the wrong legal test to the validity of the agreements,
but when the correct test is applied (whether there was “a specified event” or “a specified project”),
either or both of those tests are satisfied.
 [38] CHH’s restructuring of its fire service was a project at all relevant times albeit, until 2006, a
project within a broader project of mill-wide restructuring. At the times the third and fourth fixed
term agreements were entered into, that “project” existed and the fixed term agreements were
proposed by CHH for the purposes and duration of that project. Likewise, I conclude that the event of
79
the completion of the restructure referred to expressly in the agreements was an event for the
purpose of s 66(1)(b).
Casual employment
Is the employment casual or fixed term?



There is no definition of “casual” employment
o However, section 28 of the Holidays Act, provides that when paying holiday pay, it can be paid when an
employee “works for the employer on a basis that is so intermittent or irregular that it is impracticable for the
employer to provide the employee with 4 weeks’ annual holidays”
o The idea of “intermittent or irregular” seems to be the test as to whether there is a casual employment
relationship
o Difference between casual and fixed term:
 Fixed term may have set hours per week during the fixed term – casual will not have consistent set
hours or days of work (e.g. you might work 10 hours one day, then three days off, then another 10
hours)
 In a true casual arrangement, each engagement ends at the time of the day – the employer offers
work, and the employee is free to take it if they want, and at the end of the day, the worker is no
longer an employee as the engagement has finished
 However, casual agreements may cover a season (e.g. picking fruits during a certain season)
 If employment continues past 6 months, there is a risk that the employee is actually permanent
Muldoon v Nelson Marlborough District Health Board [2011] NZEmpC 103
o Facts
 Muldoon was a registered nurse on a casual basis
 When a permanent employee went on a long-term leave, Muldoon agreed to work full time on a
casual basis
o Issue
 Was this a casual employment agreement or a fixed term agreement?
o Judgment
 Although the agreement was phrased as a casual agreement, it was in fact, under section 66, a fixed
term employment agreement:
 There were genuine reasons based on reasonable grounds because the employer needed a
full time employee to cover for the permanent employee on leave and on the expectation
that the permanent employee might return to work at some point
 However, the final fixed term employment period was not compliant with section 66
because the Board informed the employee that his employment would cease on 6 February
2009, but kept employing him until 1 August 2009 – the fixed term was allowed to drift on
and therefore this was a permanent employee
 The employee ceased to be a casual because he effectively became a full time employee under the
collective agreement – in particular, the non-compliance with section 66 meant that his employment
was not casual and was not fixed term
 In terminating the employment relationship, this amounted to a dismissal
 [37] The difficulty is that both casual and fixed term employment are “temporary” employment in the
sense of being an engagement by the employer of the employee for a specified period at the
conclusion of which that employment will end in a way that is agreed in advance, does not amount to
a dismissal of the employee and does not entitle the employee to unjustified dismissal personal
grievance rights. Given that temporariness is a common feature of both types of employment, their
distinguishing characteristics include both the length of the arrangement but, most importantly, the
absence or presence of predictability and regularity. Casual employment is characterised by
irregularity of engagements and the shortness of their limited durations, in this case being potentially
as short as a shift or a few shifts. That is to be contrasted with fixed term employment which has set
hours and days of work (albeit for a finite period) so that the employee and the employer may predict
and rely upon when the employee will be at work.
Lee v Minor Developments Ltd EmpC Auckland, AC52/08 ARC 16/08, 23 December 2008
o Facts
 Lee worked at an Early Childhood Education centre
o Judgment
 When looking at whether the real nature of the relationship is a casual employment, there are a
number of factors to look at:
 Engagement for short periods of time for specific purposes
 A lack of regular work pattern OR expectation of ongoing employment (i.e. there must be no
legitimate expectation of continuing employment)
80




Employment is dependent on the availability of work demands
No guarantee of work from one week to the next
Employment as and when needed
The lack of an obligation on the employer to offer employment, or on the employee to
accept any other engagement
 Employees are only engaged for the specific term of each period of employment (i.e. you
should not be expecting the employee to turn up every day)
 Whatever the employer’s intentions were, the employee couldn’t be classified any longer as a casual
employee – she became a permanent employee
 She worked part-time hours – although she was available to work for extra hours over those
agreed, the hours she worked were fixed and regularly performed
 The work wasn’t linked to specific projects or events
 There was an expectation of ongoing employment
 There was an expectation that the employee would turn up for work every day – this was not
a casual employment situation where she is occasionally and irregularly called in for some
limited or purely casual purpose
ENGAGEMENT FOR SHORT PERIODS OF TIME FOR SPECIFIC PURPOSES
 Jinkinson v Oceana Gold (New Zealand) Ltd [2009] 6 NZELR 813 (EmpC)
o Facts
 The employee was a grade controlled in respect of mining operations
 The employment agreement said they were casual
 The employment was ongoing over 19 months where the employee worked for an average of 45
hours per week
o Judgment
 The court must look at the obligations assumed byu the parties and then decide the nature of the
relationship
 It must look at the agreement as a whole and consider whether there were ongoing mutual
obligations on the parties, including an obligation to accept work offered and a
corresponding obligation to offer work
 [12] Over the period of 19 months she was employed by Oceana Gold, Ms Jinkinson worked an
average of 45 hours per week inclusive of all days off. A grade controller working the established shift
pattern of 8 days on and 4 days off would have worked an average of 53.66 hours per week exclusive
of days off.
 The employee’s work pattern was consistent and highly predictable
 Through her routine inclusion in the roster, the employee became an integral part of the employer’s
work force – this was reflected in the payment of quarterly bonuses and the fact she was paid by
wages in lieu of notice and redundancy compensation when her employment was terminated
A LACK OF REGULAR WORK PATTERN OR EXPECTATION OF ONGOING EMPLOYMENT
 Rush Security Service Ltd v Samoa [2011] NZEmpC 76
o Facts
 The employee worked for 7 months, and on an average of 50 hours per week
o Judgment
 Relevant indicators include:
 The number of hours worked each week
 Whether the work was allocated in advance by a roster
 Whether there was a regular pattern of work
 Whether there was a mutual expectation of continuity of employment
 Whether the employer required notice before the employee was absent or on leave
 Whether the employee worked to consistent starting and finishing times
 These, when viewed overall, may lead to a conclusion that the parties have agreed to vary the original
agreement from casual employment to permanent employment
 [29] Applying those principles, I agree with the Authority that, although Mr Samoa’s work started out
as casual, by the time of its cessation almost eight months later, it had become employment of
indefinite duration. This occurred over the period of six months until mid-July 2009 during which Mr
Samoa worked on average more than 50 hours per week including most Saturdays and Sundays on 12
hour shifts as a static security guard at FDC. His employment lost its casual nature...
EMPLOYMENT IS DEPENDENT ON THE AVAILABILITY OF WORK DEMANDS
 Savage v Capital & Coast District Health Board [2016] NZEmpC 83
o Judgment
 [97] I accept the submission made for the Board. Having regard to the analysis of hours worked and
days of the week worked as above, any “pattern” was erratic and unpredictable. Whilst there was a
81
reasonable certainty that work would be available for casual staff to the extent that a pool of such
employees was maintained, it was always open to Mr Savage to decline any particular offer, and
when he wished to he did. This was as originally agreed, and this aspect of his employment did not
alter. It was a key point of difference between a casual employee and a permanent one.
 The nature of the shifts at the DHB were such that the casual employment agreement had not
morphed into something more
 The employee was a part of a casual pool of employees who were called up occasionally to
work – in this case, it benefitted the employee
NO GUARANTEE OF WORK FROM ONE WEEK TO THE NEXT
 Bay of Plenty District Health Board v Rahiri [2016] NZEmpC 67
o Judgment
 [18] … There is no guarantee that an HCA will be requested to work on any particular shift for which
he or she may have indicated availability. Equally, there is no guarantee to the DHB that any casual
staff member with the Bureau will be available to work a particular shift offered. Casual employees
may go for significant periods without receiving offers of shift work but likewise, for a variety of
reasons, casual HCAs may receive frequent requests, in accordance with their availability, to
undertake shifts …
 The employee’s work still met the definition of a casual employee
 It did not get to a point where the DHB was using casual employees generally, or that the
employee in particular was used to replace genuine permanent or temporary employee
situations
EMPLOYMENT AS AND WHEN NEEDED
 Barnes v Whangarei Returned Services Association Inc [1997] ERNZ 626 (EmpC)
o Facts
 After 6 months of casual employment, the employee was rostered each week for regular days and
hours
 The employee was in sole charge of the bar for two nights a week
 The employee was then called by the manager and informed she was not required for her roster
duties the next week as her services were no longer required due to a staff restructuring
 Three weeks later, the employee discovered that a new employee had been hired
o Judgment
 The appellant accepted that at the start she was employed as and when required and would usually
be rung up by the bar manager when work was available. She claimed that after a period of time her
employment changed and she was no longer rung up to work but was rostered each week for a
minimum number of days and hours.
 The fact that a new employee was hired clearly shows the employer had a need for bar staff
 As employment continued past 6 months, the employment started to look permanent and not casual
THE LACK OF AN OBLIGATION ON THE EMPLOYER TO OFFER EMPLOYMENT OR ON THE EMPLOYEE TO ACCEPT ANY
OTHER ENGAGEMENT
 Baker v St John Central Regional Trust Board [2013] NZEmpC 34
o Facts
 The employee transported patients between hospitals to homes
 Due to fluctuating demand for those services, casual employees were used in this area – the
employee was well aware of this
o Judgment
 The employee was a casual employee
 While there was a roster, it could change at any time
 Casuals and volunteers could remove themselves from the roster, and even if they didn’t,
they could decline any jobs
 The plaintiff had no restrictions placed on her during the times she had indicated her
availability – she was effectively a free agent and could go out for the night if she wished
 Night-time patient work was ad hoc – it predominantly involves acute cases and emergency works; it
is by its nature unpredictable
 [23] The nature of the obligations owed by each party to one another and, in particular, an absence of
any obligation on the employer to offer employment and, conversely, the employee to accept any
particular engagement, is therefore an important factor in determining whether a person is a
permanent or casual employee.
 [24] Miss Baker was not obliged to accept work, as she accepted in evidence. Indeed from time to
time she declined work even though she had previously indicated her availability…
EMPLOYEES ARE ONLY ENGAGED FOR THE SPECIFIC TERM OF EACH PERIOD OF EMPLOYMENT
 AFFCO New Zealand Ltd v New Zealand Meat Workers and Related Trades Union Inc [2016] NZCA 482
82
o
o
o
Facts
 The employer did not give anyone work during one season
Judgment
 This was a lockout
 [73] In the result, then, we consider that there are continuing obligations in the collective agreement,
and in the individual employment agreements based on it, which survive termination. One of these is
AFFCO’s obligation to offer re-engagement in accordance with seniority at the start of the new
season. Once it is accepted that the obligation to offer re-employment survives, we consider that the
other continuing clauses also remain in effect, including cl 30(b).
Commentary
 A lot of collective employment agreements will have re-employment clauses – employers must be
wary of this because in these situations they have seasonal employees with rights
Inconsistent provisions

123 Casino Ltd t/a 123 Palm Bar & Restaurant & Function Centre v Zuo [2020] NZEmpC 88
o Facts
 There was a casual employment agreement, but it had clauses dealing with annual holidays, sick
leave, redundancy, trial periods, Kiwisaver (which says casuals are exempt from Kiwisaver) and
termination of the employment relationship
o Judgment
 These other clauses were inconsistent with a casual employment relationship
 [23] I consider that, taken as a whole, the employment agreement between Ms Zuo and Palm Bar is
strongly redolent of ongoing employment. Although the relationship was described in places as
casual, those clauses dealing with holidays, sick leave, termination of employment, and redundancy
are more consistent with ongoing employment. There was no reason, for example, to provide for
redundancy if Ms Zuo was employed as and when required. If no work was available Palm Bar could
simply elect not to offer a further period of employment.
Entitlements to holiday pay and leave
28
When annual holiday pay may be paid with employee’s pay (Holidays Act 2003)
(1)
Despite section 27, an employer may regularly pay annual holiday pay with the employee’s pay if—
(a)
the employee—
(i)
is employed in accordance with section 66 of the Employment Relations Act 2000 on a fixed-term
agreement to work for less than 12 months; or
(ii)
works for the employer on a basis that is so intermittent or irregular that it is impracticable for the
employer to provide the employee with 4 weeks’ annual holidays under section 16; and
(b)
the employee agrees in his or her employment agreement; and
(c)
the annual holiday pay is paid as an identifiable component of the employee’s pay; and
(d)
the annual holiday pay is paid at a rate not less than 8% of the employee’s gross earnings.
If an employee to whom subsection (1)(a)(i) applies is employed by the same employer beyond 12 months on a series of
fixed-term agreements of less than 12 months each, the employer and employee may agree that the employee is to be
paid in accordance with subsection (1) regardless of the number of agreements.
If the fixed-term agreement of an employee to whom subsection (1)(a)(i) applies is followed by permanent employment
with the same employer, the employee—
(a)
becomes entitled to paid annual holidays at the end of 12 months’ continuous employment (including the period
of that fixed-term agreement) under section 16; but
(b)
the amount of the holiday pay that the employee is entitled to be paid for the holidays is reduced by the amount
that the employee has already received under subsection (1).
If an employer has incorrectly paid annual holiday pay with an employee’s pay in circumstances where subsection (1)
does not apply and the employee’s employment has continued for 12 months or more, then, despite those payments,
the employee becomes entitled to annual holidays in accordance with section 16 and paid in accordance with this
subpart.
(2)
(3)
(4)



If the employer has been paying 8% holiday pay to the employee on the fixed term or casual employment agreement,
and the employee has been there for more than 12 months, then the employee is entitled to 4 weeks’ annual holidays
(if only 6 months, then they are entitled to 5 days’ sick leave, bereavement leave etc.) under section 6
This means that employers should ensure that it uses casual and fixed term employees for genuine casual and fixed
term arrangements (i.e. less than 12 months) – but if they are going to have a term of more than 12 months, the
employer must ensure it does not pay holiday pay in order to not be liable for the holiday provisions
Watkins v Insite Security and Investigation Services Ltd [2016] NZERA Auckland 167
o Judgment
83

o
[3] For approximately 7 years the respondent employee company, Insite Security and Investigation
Services Limited, paid the applicant Sandra Watkins an additional 8% of her weekly ordinary pay as
holiday pay with her weekly pay.
 [8] The law requires that Ms Watkins be paid again for her 4 weeks annual leave for every year of
employment where an employer is not entitled to pay holiday pay with her pay and it has continued
for longer than 12 months.
 [11] … The respondent stopped paying the applicant holiday pay with her pay in early 2015. A lump
sum of holiday was paid with her final pay of $218.12. This needs to be deducted from the final
amount owed. Therefore the annual leave owed at termination is $16,451.12.
Commentary
 Employers must take care to get this right because of the consequences for unjustified dismissals, but
also because they may be liable to provide the employee with all arrears of entitlements under
section 28 of the Holidays Act
84
PROBLEM
A construction company employs a builder on a fixed term employment agreement. The agreement provides that the builder is
employed on the “Melville School Project”, that the agreement is for a fixed term and terminates on its completion.
The builder works on the “Melville School Project” until the relevant school building is weather tight. Now, the construction
company have told the builder his work will end in a week.
However, the builder says that there is still plenty of work to be done on the building’s interior. The construction company say
that while there is still work to be done, there are permanent staff who are able to complete that work and the builder is no
longer needed.
Advise the builder whether the fixed term employment agreement complies with s 66 of the Employment Relations Act 2000.
 Shortland v Alexander Construction is analogous
85
The minimum code


The minimum code is comprised of a variety of statutes other than the Employment Relations Act
o There will be references to employment standards and breaches of those standards (e.g. because there is no
employment agreement, employees aren’t paid holiday pay correctly, premiums of employment)
There are issues especially in migrant labour
o The Labour Inspector has been more focused on this area as it used to be complaint-drive (employee must
make complaint for LI to investigate), but now they take it on themselves to inspect employment standards
Hours of work
11B 40-hour 5-day week (Minimum Wage Act 1983)
(1)
Subject to subsections (2) and (3), every employment agreement under the Employment Relations Act 2000 must fix at
not more than 40 the maximum number of hours (exclusive of overtime) to be worked in any week by any worker bound
by that employment agreement.
The maximum number of hours (exclusive of overtime) fixed by an employment agreement to be worked by any worker
in any week may be fixed at a number greater than 40 if the parties to the agreement agree.
Where the maximum number of hours (exclusive of overtime) fixed by an employment agreement to be worked by any
worker in any week is not more than 40, the parties to the agreement must endeavour to fix the daily working hours so
that those hours are worked on not more than 5 days of the week.
(2)
(3)


The default rule for maximum hours is 40 hours over 5 days in a week – but the employment agreement can override
this by stating otherwise
The reason for the 40 hour week is because employees get fatigued – if you make employees consistently fatigued by
giving them 70-hour weeks, there is a health risk under the Health and Safety at Work Act 2015
67C
Agreed hours of work (Employment Relations Act)
(1)
Hours of work agreed by an employer and employee must be specified as follows:
(a)
in the case of an employee covered by a collective agreement,—
(i)
in the collective agreement; and
(ii)
if section 61 applies, in the employee’s additional terms and conditions of employment included under that
section; or
(b)
in the case of an employee covered by an individual employment agreement, in the employee’s individual
employment agreement.
In subsection (1), hours of work includes any or all of the following:
(a)
the number of guaranteed hours of work:
(b)
the days of the week on which work is to be performed:
(c)
the start and finish times of work:
(d)
any flexibility in the matters referred to in paragraph (b) or (c).
(2)


Policy
o
In an inquiry, Parliament found zero-hour contracts (where you are an employee with a restraint of trade, but
you are not required to be given any hours of work, so the employer is at a discretion to give you hours)
o As a result, Parliament introduced the availability provisions to prevent these contracts
The employment agreement must set out the hours of work described in section 67C(2)
Availability provisions
67D Availability provision
(8)
(9)
(10)
(11)
In this section and section 67E, an availability provision means a provision in an employment agreement under which—
(a)
the employee’s performance of work is conditional on the employer making work available to the employee; and
(b)
the employee is required to be available to accept any work that the employer makes available.
An availability provision may only—
(a)
be included in an employment agreement that specifies agreed hours of work and that includes guaranteed hours
of work among those agreed hours; and
(b)
relate to a period for which an employee is required to be available that is in addition to those guaranteed hours
of work.
An availability provision must not be included in an employment agreement unless—
(a)
the employer has genuine reasons based on reasonable grounds for including the availability provision and the
number of hours of work specified in that provision; and
(b)
the availability provision provides for the payment of reasonable compensation to the employee for making
himself or herself available to perform work under the provision.
An availability provision that is not included in an employment agreement in accordance with subsection (3) is not
enforceable against the employee.
86
(12)
In considering whether there are genuine reasons based on reasonable grounds for including an availability provision, an
employer must have regard to all relevant matters, including the following:
(a)
whether it is practicable for the employer to meet business demands for the work to be performed by the
employee without including an availability provision:
(b)
the number of hours for which the employee would be required to be available:
(c)
the proportion of the hours referred to in paragraph (b) to the agreed hours of work.
(13) Compensation payable under an availability provision must be determined having regard to all relevant matters,
including the following:
(a)
the number of hours for which the employee is required to be available:
(b)
the proportion of the hours referred to in paragraph (a) to the agreed hours of work:
(c)
the nature of any restrictions resulting from the availability provision:
(d)
the rate of payment under the employment agreement for the work for which the employee is available:
(e)
if the employee is remunerated by way of salary, the amount of the salary.
(14) For the purposes of subsection (3)(b), an employer and an employee who is remunerated for agreed hours of work by
way of salary may agree that the employee’s remuneration includes compensation for the employee making himself or
herself available for work under an availability provision.
 If you require an employee to be available to work (i.e. they are required to turn up), you must pay them reasonable
compensation for that – this works well with salaries
 Wages are more complicated
o Usually, the employment agreement will state that the wage rate includes reasonable compensation for the
employee’s availability
o A question that never has been answered is whether minimum wage amounts to reasonable compensation or
whether reasonable compensation should be added on top – can you require minimum wage employees to be
available?
 Different employment agreements will have different availability requirements
67E
Employee may refuse to perform certain work
An employee is entitled to refuse to perform work in addition to any guaranteed hours specified in the employee’s
employment agreement if the agreement does not contain an availability provision that provides for the payment of
reasonable compensation to the employee for making himself or herself available to perform work under the availability
provision.

If an employment agreement does not comply with the availability provision, the employee may refuse to do the work
and cannot be disciplined for the refusal (section 67F) – if they are disciplined, the employer may be liable to a penalty

Fraser v McDonald’s Restaurants (New Zealand) Ltd [2017] NZEmpC 95
o Facts
 Fraser worked at McDonald’s
 His contract included a clause where he was to write down his availability for shifts – the effect of this
was that although he had some guaranteed hours, there were some additional hours that he could
work
o Issue
 Was this an availability provision?
o Judgment
 “This is not a case where the employer laid down mandatory hours of availability unilaterally, but
rather where it requested potential employees to indicate in advance when they would be available
to accept rostered hours. Within those periods of availability indicated by the employees rather than
mandated by the employer, McDonald’s and the franchisees then establish a roster for the employees
which includes periods of guaranteed hours as required, but also nominates additional hours within
the periods of pre-indicated availability with the employees having the right to reject the additional
hours if they wish. A reasonably lengthy notice period is required if the additional hours are to be
rejected. That is not unreasonable in view of the fact that the employer (if the extra hours are
rejected) needs to arrange employees in substitution to perform the work.” (at [60])
 The employee was not required to work those additional shifts
 The employee’s performance of the work is conditional on the employer making work
available
 However, the employee is not required to be available to accept any work that the employer
makes available – so this is not an availability provision under section 67D(1)(b)
 The employee could work more hours, but was not required to work more hours
 This does not attract the requirements of an availability provision because the employee is
not required to work the additional shifts, so reasonable compensation does not need to be
paid either
87



 As someone was always keen to take the additional shifts, McDonald’s did not need an
availability provision for these additional shifts
Postal Workers Union of Aotearoa Inc v New Zealand Post [2019] NZEmpC 47
o Facts
 The clause said “delivery agents may be required to work reasonable overtime in excess of their
standard hours … provided that work is voluntary on days which are otherwise non-rostered days for
an individual employee”
o Submissions
 NZ Post argued that this is not a zero-hour contract as there are guaranteed hours – this clause is only
in relation to overtime
o Judgment
 Rejected NZ Post’s argument – this is not just about zero-hour contracts
 “The intention appears to be that reasonable compensation is payable to employees who, by
agreement, hold themselves available for the employer’s benefit, thereby making
themselves unavailable to accept other work or engage in personal activities which would
otherwise prevent them from being at the employer’s beck and call.” (at [24])
 The availability provisions are a statutory recognition that an employee’s time is a
commodity which has value – so there must be reasonable compensation for the availability
the employee has committed to providing for the employer’s benefit
 If the Act’s requirements are not met, the employee can decline to make themselves
available
 “If an employer wishes to rely on being able to require an employee to work overtime, as opposed to
it being a voluntary exercise, it must comply with the requirements of the Act, including by providing
reasonable compensation for the availability the employee has committed to providing for the
employer’s benefit. The Act sets out the range of factors which are relevant to an assessment of the
quantum of reasonable compensation for employee availability, including the number of required
hours and the nature of any resulting restrictions.” (at [30])
 If the employer is requiring an employee to work additional hours or overtime (i.e. there will be
disciplinary consequences if the employee does not work these hours), this is an availability provision
and the employer must pay reasonable compensation for that privilege
There are two main ways to avoid disputes on availability provisions:
o Set the hours of work and say the employee is not required to work outside those hours
o Say the employee’s remuneration includes reasonable compensation for their availability
Getting the availability provisions right is important especially if you need employees to work additional hours to do
very important work
Cancellation of shifts
67G Cancellation of shifts
(1)
(2)
(3)
(4)
(5)
(6)
This section applies in relation to an employee who is required under the employee’s employment agreement to
undertake shift work.
The employer must not cancel a shift of the employee unless the employee’s employment agreement specifies—
(a)
a reasonable period of notice that must be given before the cancellation of a shift; and
(b)
reasonable compensation that must be paid to the employee if the employer cancels a shift of the employee
without giving the specified notice.
In cancelling a shift of an employee, the employer must—
(a)
give the employee the notice specified in the employee’s employment agreement under subsection (2)(a); or
(b)
if that notice is not given, pay to the employee the compensation specified in the employee’s employment
agreement under subsection (2)(b).
The period of notice specified under subsection (2)(a) must be determined having regard to all relevant factors,
including—
(a)
the nature of the employer’s business, including the employer’s ability to control or foresee the circumstances
that have given rise to the proposed cancellation; and
(b)
the nature of the employee’s work, including the likely effect of the cancellation on the employee; and
(c)
the nature of the employee’s employment arrangements, including whether there are agreed hours of work in the
employee’s employment agreement and, if so, the number of guaranteed hours of work (if any) included among
those agreed hours.
Compensation specified under subsection (2)(b) must be determined having regard to all relevant matters, including the
following:
(a)
the period of notice specified in the employee’s employment agreement under subsection (2)(a):
(b)
the remuneration that the employee would have received for working the shift:
(c)
whether the nature of the work requires the employee to incur any costs in preparing for the shift.
Without limiting subsection (5), an employee is entitled to what he or she would have earned for working a shift if—
88
(a)
(b)
the shift is cancelled and the employee’s employment agreement does not comply with this section; or
the shift is cancelled, but the employee has not been notified of the cancellation until the commencement of the
shift; or
(c)
the remainder of a shift is cancelled after the shift has begun.
If an employee whose shift is cancelled is entitled, under his or her employment agreement or under subsection (6), to
the remuneration that he or she would have earned for working the shift, that remuneration is a part of the employee’s
ordinary weekly pay and relevant daily pay for the purposes of sections 8 and 9 of the Holidays Act 2003.
To avoid doubt, nothing in this section enables an employer to cancel an employee’s shift if that cancellation would
breach the employee’s employment agreement.
In this section, shift means a period of work performed in a system of work in which periods of work—
(a)
are continuous or effectively continuous; and
(b)
may occur at different times on different days of the week.
(7)
(8)
(9)



A number of fast food companies would change the shifts last minute – the employee would turn up to work, and then
find out they aren’t needed
Section 67G provides that when a shift is cancelled without reasonable notice, the employee is entitled to be paid for
that shift
The companies will now have a comprehensive cancellation of shifts clause to ensure that reasonable notice is given
before cancellation of a shift
67H Secondary employment provisions
(1)
In this section, a secondary employment provision is a provision in an employee’s employment agreement that—
(a)
prohibits or restricts the employee from performing work for another person; or
(b)
prohibits or restricts the employee from performing work for another person without the employer’s consent.
A secondary employment provision must not be included in an employee’s employment agreement unless—
(a)
the employer has genuine reasons based on reasonable grounds for including the provision; and
(b)
the reasons are stated in the employee’s employment agreement.
For the purposes of subsection (2)(a) and without limiting that provision, a genuine reason may relate to—
(a)
protecting an employer’s commercially sensitive information; or
(b)
protecting an employer’s intellectual property rights; or
(c)
protecting an employer’s commercial reputation; or
(d)
preventing a real conflict of interest that cannot be managed without including a secondary employment
provision.
A secondary employment provision in an employee’s employment agreement must not—
(a)
prohibit the employee from performing work for another person unless it is necessary having regard to the
reasons for which the provision is included; or
(b)
restrict the employee from performing work for another person to a greater extent than is necessary having
regard to the reasons for which the provision is included.
This section does not limit or affect the law relating to restraint of trade provisions.
(2)
(3)
(4)
(5)

There must be genuine reasons for any secondary employment prohibition
o You cannot just stop your employee from working for another employer just because you don’t like that
employer
o However, if there are genuine reasons (e.g. to protect confidential information), you can include a prohibition
on secondary employment during the employment relationship

Flexible working arrangements appreciate the idea that 40-hour weeks are a concept invented by men – this does not
reflect the modern working environment where people juggle a lot of different things in their lives
These are statutory rights for employees to make flexible working requests
Part 6AA of the Employment Relations Act
o Section 69AAB – when employee may make request
o Section 69AAC – requirements relating to request
o Section 69AAE – employer must notify decision as soon as possible
o Section 69AAF – grounds for refusal of request by employer
Flexible working arrangements


Employee pay
Minimum Wage
PAYMENT OF MINIMUM WAGE
6
Payment of minimum wages (Minimum Wage Act 1983)
Notwithstanding anything to the contrary in any enactment, award, collective agreement, determination, or contract of
service, but subject to sections 7 to 9 (deductions), every worker who belongs to a class of workers in respect of whom a
89
minimum rate of wages has been prescribed under this Act, shall be entitled to receive from his employer payment for
his work at not less than that minimum rate.



Whether minimum wage is met can be calculated over all the hours and payments made in a fortnight
o You calculate all your hours worked in the fortnight, and must be paid minimum wage on all those hours in
order to comply with section 6
o With a salary, you divide the salary into fortnights – the divided salary must meet the [hours worked multiplied
by the minimum wage]
 If it doesn’t, the employer is in breach of section 6 and must pay extra to meet minimum wage
 Therefore, it is important to make sure the salary and hours worked align
Idea Services Ltd v Dickson [2011] NZCA 14
o Facts
 Dickson worked as a community services worker for supporting disabled people in community homes
 Dickson was required to do “sleepovers” – he stayed at the community home overnight to deal with
the residents’ issues and was paid $34 for each sleepover
o Issue
 Was the sleepover work within the definition of section 6 – was he entitled to minimum wage?
o Submissions
 The employer argued that:
 The employee wasn’t working; he was sleeping – work” meant the application of physical or
mental exertion in the performance of one’s duties
 Even if they were wrong, because the employee was paid above minimum wage for the
other hours he worked, the employer can average this over a fortnight and say he met the
minimum wage
o Judgment
 Rejected the employer’s arguments
 In deciding whether something constitutes work for the purposes of this section, the court found it
helpful to consider three factors:
 the constraints placed on the freedom the employee would otherwise have to do as they
please
 the nature and extent of responsibilities placed on the employee
 the benefit to the employer of having the employee perform the role
 The greater the degree or extent to which each factor applied (i.e. the greater the constraints, the
greater the responsibilities, the greater the benefit to the employer), the more likely it was that the
activity in question ought to be regarded as work
 In this case:
 Dickson was clearly working when engaged in a sleepover
 There were significant restraints placed on him when engaged in a sleepover – he
couldn’t leave the premises and needed to be alert and awake when called upon by
residents
 the important responsibilities placed on him with respect to the home and those in
his care – they are important especially in the healthcare industry
 the substantial benefit the employer derived from Dickson’s role as night caregiver
– it is difficult to see how the home could function as it does without Dickson or a
similar worker being in attendance overnight
 In short, Dickson was at the employer’s disposal throughout the period of the sleepover
South Canterbury District Health Board v Sanderson [2017] NZEmpC 127
o Facts
 Anaesthesia technicians (ATs) were required to put people to sleep before surgery
 Given the nature of emergency medicine, they were not required all the time – but they were subject
to a 24-hour on-call system where they had to arrive at the theatre within 10 minutes (so someone
would be on-duty all the time)
 Some ATs did not live close enough to the hospital to meet the timeframe – the hospital gave them
free accommodation adjacent to the hospital
o Judgment
 Applied the three-factor test:
 The ATs had to live away from their personal homes in shared accommodation where they
were unable to undertake their normal range of activities (because they could be suddenly
called on a very urgent basis) – these constraints were significant
90

o


 They had significant responsibilities because they had to undertake their duties correctly at
the appropriate time – otherwise, the surgery would not go ahead and thus affect a life, so
this is a significant responsibility
 The benefit to the employer of having ATs on-call was significantly sufficient – though there
may be alternatives such as flying patients elsewhere, this was not a choice which the DHB
made
Therefore, ATs ought to be regarded as undertaking work for the purposes of section 6 when being
on-call
Note

This case shows how availability can turn into “work” – if you are placing sufficient constraints, with
significant responsibilities and gaining a benefit, you may have to pay minimum wage for the hours
worked by the employee
Labour Inspector v Smiths City Group Ltd [2018] NZEmpC 43
o Facts
 SCG held morning meetings every morning for about 15 to 30 minutes, before the store opened, to
discuss matters such as sales promotions, figures, highlights of good news and recognition of high
achievers
 The employees were not paid for this time
o Submissions
 The LI argued that this was a breach of section 6 because the employees were working during the
meetings
 The employer argued they were not working because they were free to take phone calls and make
coffee etc., so section 6 did not apply here
 Even if they were this led to an increase in their commission, so this should be taken into
account when looking at minimum wage requirements
o Judgment
 Rejected the employer’s argument – the employees were working
 The meetings were entirely about the defendant’s business and was solely for the purpose to
enable sales staff to earn revenue for the company and to be more effective in doing so
 The informality of the meetings was not material, as was any possible benefit to staff by
enabling them to earn commission or incentive payments
 The meetings were an integral part of each attending employee’s work
 Applied the three-factor test, but also implied a test of whether the activities or tasks were an integral
part of their work
 If the three-factor test only was applied, the employees wouldn’t be working because they
had no active responsibilities to discharge as they just had to sit and listen
 But applying the broader test of “integral part of work”, the employees were working
 The court cannot take into account the commission, because you are entitled to be paid for each hour
of work – if your commission is paid over a month, you are not complying with the requirements of
minimum wage
 “We agree that Idea Services must be applied and that doing so requires undertaking a factual
inquiry. However, Smiths City focussed too narrowly on the three factors used to inform the inquiry in
Idea Services, to the detriment of the fuller consideration of the facts that is the touchstone of that
decision. As the Court of Appeal made clear, determining whether or not an activity amounts to
“work” is case specific. The factors considered helpful in undertaking the assessment in that decision
need not be, and ought not to be, slavishly applied. There will be cases where confining the factual
inquiry to the three factors used in Idea Services would produce an anomalous outcome. In those
cases a more nuanced analysis is required. In the present case we consider it is helpful to undertake
this factual inquiry by assessing if the morning meetings were an integral part of the employee’s
principal activities as sales staff.” (at [57])
Ovation New Zealand Ltd v The New Zealand Meat Workers and Related Trades Union Incorporated [2018] NZEmpC 151
o Facts
 “Donning” and “doffing” is a term in the meat industry where you put on and take off the protective
and hygienic equipment in accordance with specific instructions – each usually takes 5 minutes, and
needs to be done when taking breaks as well, so a considerable amount of time is spent doing this
 Ovation never paid its employees for doing this
o Issue
 Were employees working when “donning and doffing”?
o Submissions
 The employer argued that the workers were merely getting ready for their job and not working
o Judgment
91

The court held that the employees were working and are entitled to be paid for this
 The employees’ responsibilities were extensive – each employee was duty-bound to
discharge these responsibilities properly prior to leaving and entering, and they were
significant for hygiene and health and safety procedures
 The time taken and nature of the activities were not insignificant to either the employees or
the employers
 “The regulatory requirements are mandatory. The plaintiffs accept this. But Mr Smith argued that
care needs to be taken in applying this factor, because its application could lead to absurd results. I
am unconcerned with situations which may apply in other circumstances. In the present case, it is
obvious that the donning and doffing activities are an essential aspect of the plaintiffs’ businesses.
Without proper adherence to hygiene procedures, and proper health and safety practices, the
plaintiffs would be unable to operate their processing operations in accordance with the
requirements of the applicable legislation and of the regulators.” (at [271])
 Gate Gourmet New Zealand Ltd v Sandhu [2020] NZEmpC 237
o Facts
 GG produced flight-catering services (airplane meals)
 When the COVID lockdown happened, these workers were essential, so were able to work – however,
the employer did not require them to work because it was unable to provide the work (as borders
were shut so there were no planes)
 The employment agreement specified that these employees were to be guaranteed 40 hours per
week
o Issue
 Were the employees entitled to be paid for their 40 hours stated in the contract but were not given
as a result of the lockdown?
o Judgment (majority)
 The minimum wage act did not apply in respect of employees who were able to work during the
COVID lockdown
 The Minimum Wage Act is not about a guaranteed minimum income – it is about an exchange for
work, so you need to have work in order for section 6 to apply
o Judgment (minority)
 Looked to a provision in section 7(2) of the Minimum Wage Act (you cannot make deductions for time
lost) – this case fell within the definition of “time lost”, so there couldn’t be a deduction because you
can only make deductions for default or sickness
KIWISAVER
 Terranova Homes and Care Ltd v Faitala [2013] ERNZ 347 (CA)
o Judgment
 An employer cannot deduct KiwiSaver payments from minimum wage – it can only be deducted from
amounts above minimum wage
 “We agree with the Employment Court that the MWA was “designed to impose a floor below which
employers and employees cannot go” and that it is “directed at preventing the exploitation of
workers, [being] a statutory recognition of the diminished bargaining power of those in low paid
employment”. Given its importance, we are satisfied that if Parliament had intended to repeal,
override or limit the effect of s 6 when enacting s 101B it would have done so expressly.” (at [28])
Overtime

Winstanley v New Zealand Rail Ltd [1995] 1 ERNZ 582 (EmpC)
o Judgment
 If mandatory overtime is not provided for in the employment agreement, the employer cannot
require the employee to work overtime and discipline them if they refuse
o Note
 This is now reflected in the availability provision – if you don’t have an availability provision in the
employment agreement, you cannot require employees to work overtime and discipline them if they
refuse
Equal pay

Talley’s Fisheries Ltd v Lewis (2007) 8 HRNZ 413 (HC)
o Facts
 Ms Lewis was employed as a fish trimmer – her partner Edwards was employed as a trainee filleter
 Edwards was paid more than Lewis because he was trainee filleter and she was a fish trimmer
o Judgment
 A fish trimmer and trainee filleter is substantially the same role and thus the pay should be the same
92


 The tasks of the filleter and trimmer are substantially similar as both tasks are staged in
converting a whole fish into sellable fillets by means of a knife
 Both tasks require minimal initial training and aren’t performed more expertly with more
experience
 Variations in each role do not alter the essential similarity
 Therefore, there had been a breach of the Equal Pay Act
Service and Food Workers Union Nga Ringa Tota Inc v Terranova Homes and Care Ltd [2014] NZCA 516
o Facts
 In 2014, there was a rethinking of the application of the Equal Pay Act
 It is focusing on pay equity – the idea that industries dominated by women have had unequal
bargaining power with the employers, so they have been paid less as an industry compared
to male-dominated industries
 For example, the rest home industry is female-dominated – we shouldn’t be comparing that
work with the gardener; we should compare the work with police officers or firefighters with
male-domination and higher income
 Therefore, if we want gender equality, we need to compare female-dominated industries
with male-dominated industries
 Bartlett, a female rest home worker, was paid substantially similar to the gardener
o Judgment
 There were breaches of Pay Equity
o Note
 This resulted in a series of settlements
 Care and Support Workers (Pay Equity) Settlement Act 2017 – deals with rest homes
 The care workers settlement arose because of the care provided – but if it involved mental
health issues (which is often the case with patients with dementia), this was not covered by
the settlement, so mental health workers were paid less than support workers
 Support Workers (Pay Equity) Settlements Amendment Act 2020 – this fixed the above problem
Now, we have the Equal Pay Amendment Act 2020
o This establishes a framework for bargaining for pay equity
 The purpose of this Bill is to improve the process for raising and progressing pay equity claims and
eliminate and prevent discrimination, on the basis of sex, in the remuneration and employment terms
and conditions for work done within female-dominated jobs (e.g. teacher aides, part-time teachers)
 Therefore, to achieve gender equality, we need to raise the levels of income of those
industries
 It aims to provide a simple and accessible process for claimants to progress a pay equity claim. In
doing so, it also aims to promote the enduring settlement of claims relating to sex discrimination on
pay equity grounds
o The Early Childhood Education industry is currently bargaining/settling for pay equity
Wages Protection Act 1983
4
No deductions from wages except in accordance with Act
… an employer shall, when any wages become payable to a worker, pay the entire amount of those wages to that worker
without deduction.

7
An employer cannot make deductions without the employee’s consent
Wages to be payable in money
… an employer shall pay the wages of every worker in money only.
12A No premium to be charged for employment
(1)
No employer or person engaged on behalf of the employer shall seek or receive any premium in respect of the
employment of any person, whether the premium is sought or received from the person employed or proposed to be
employed or from any other person.
CONSENT TO DEDUCTIONS
 Amaltal Fishing Co Ltd v Morunga [2002] 1 ERNZ 692 (EmpC)
o Facts
 The employer had a number of employees on a fishing vessel
 While on leave between two fishing trips, four fishermen booked into a hotel and became very
intoxicated
 The following morning, they were seen to be offensive to guests and caused a lot of mess – soon
after, an altercation developed, the police arrived, and they were arrested
 The general manager of the employees paid a large bill to the hotel for the mess – he then deducted
the bill from the employees’ wages, and they were ultimately dismissed
93
o
Judgment
 The employer cannot deduct from the employees’ wages without their authorisation – rather, the
employer would need to issue separate proceedings to get that money back
 This is because employees have earned their wages, which may not be the subject of deduction
merely because the employer still has the money in their possession and thus in a position of power
 The fishermen’s entitlements are not subject to arbitrary diminution at the instance of their employer
 Attorney-General v Sears [1995] 1 ERNZ 627 (CA)
o Facts
 The contractual arrangements were such that the employees were paid a salary, and a
superannuation benefit on top
o Judgment
 Taking away the superannuation does not count as a deduction in the salary – therefore, the Wages
Protection Act did not apply
o Note
 It is not always clear whether reducing an employee’s remuneration will amount to a deduction
PREMIUMS FOR EMPLOYMENT
 Tan v Yang [2014] NZEmpC 65
o Facts
 Yang and Jiang were an elderly Chinese migrant couple who came to New Zealand to be with their
adult son, and wanted their daughter to join them
 They were introduced to the plaintiff, who told them that they would support the residency
application by giving the daughter an offer of employment at one of their restaurants, but only if the
couple pays the plaintiff $14,000 (to be paid in two instalments)
 The couple paid $7000 on the first instalment
o Judgment
 This is a breach of section 12A of the Wages Protection Act – you cannot pay an employer for an offer
of employment
 Labour Inspector of the Ministry of Business, Innovation and Employment v Tech 5 Recruitment Ltd [2016] NZEmpC 167
o Facts
 A lot of rebuilding was required to be done after the Christchurch earthquakes
 Tech 5 got workers from the Philippines
 Because there was no trade industry in the Philippines, the employer needed to know how good
these labourers are, how much work they can do, and what they know by a trade testing process
conducted in the Philippines
 When the workers arrived in New Zealand, the employer charged the employees for the privilege of
doing so – the cost of the testing was to be deducted from their salary
o Judgment
 A premium for employment extends beyond the situation in Tan v Yang (simply paying for a job) – it
also applies to an employer recouping, or attempting to recoup, recruitment-related costs or other
expenses that would ordinarily be borne by an employer
 Given the ingenuity with which agreements can be drafted each case will be fact-specific
 However, the feature that stands out in this case is the lack of any benefit to the employee in meeting
the trade testing costs, other than getting the job. An inference arising strongly from cls 7 and 8 of the
addendum is that obtaining the job was conditional on agreeing to pay these costs.
 Therefore, this was a premium and thus a breach of section 12A
 Holman v CTC Aviation Training (NZ) Ltd [2017] NZEmpC 60
o Facts
 Holman was a trainee pilot and spent $100,000 for the training to become a pilot
o Submissions
 Holman said he undertook the training to get a job with CTC, and because he paid $100,000 to
become a pilot, this is a premium for employment, so he is entitled to be refunded that money
o Judgment
 Rejected Holman’s argument
 There are two requirements for a payment to be a premium for employment:
 The payment is a condition for the obtaining of employment – the employment will not be
obtained without making the prior payment
 The payment does not benefit the employee in any way other than obtaining employment
 Because of the qualification process, Holman had a clear independent benefit which did not satisfy
these requirements
 Kazemi v RightWay Ltd [2019] NZEmpC 73
o Facts
94

Kazemi was an accountant by profession – she decided to join a regional partner programme (similar
to a franchisee arrangement), and paid $125,000 to join that programme
o Judgment
 This was a premium for employment
 “Although RightWay says that the payment made by Ms Kazemi was not a condition of her obtaining
employment, that argument is unsustainable. The employment agreement expressly provided that
employment was subject to prior payment of the buy-in fee, and this requirement was reinforced
when the Recruitment Manager went back to Ms Kazemi by email to confirm to her that the buy-in
fee was payable in full by the end of October 2015 …” (at [76])
 There was no evidence to suggest that Kazemi could become an employee without also
becoming part of the programme
 But to join the programme, Kazemi had to pay the price – therefore, she is essentially paying
for employment
 “The most telling difficulty with the Programme in the current context is that it did not provide any
ongoing benefit to the employee once the employment had ended … Kazemi’s involvement in the
Programme was in parallel with her employment. The interest in the Client Register was part and
parcel of the overarching employment relationship that existed between Ms Kazemi and RightWay.”
 Therefore, this was a breach of section 12A of the Wages Protection Act
o Note
 This case shows that if you are going to have a franchisee agreement, you should keep it as an
independent contractor agreement rather than an employment agreement – as soon as you go into
the employment sector with a buy-in fee, this is going to be a premium
OVERPAYMENTS
 Foai v Air New Zealand Ltd [2012] NZEmpC 57
o Facts
 The employee was overpaid a total of $70,000 over a 16-month period
 The employee originally went to HR and said he has been paid too much – they said they would look
into it
 16 months later, the employee had spent all the money and the employer tried to recover it from him
– however, the employee changed his position on reliance of them not pursuing it
o Judgment
 “I accept on the evidence that Mr Foai spent the overpayment on expenses of the type detailed by Ms
Greally above. In effect, because of the overpayments he lived beyond his real means for a period of
approximately 16 months. He told how he took his annual leave in October 2008 and went on a
holiday to Hawaii. He explained in cross-examination how he decided to become independent of his
parents and he left home and obtained his own accommodation. He said: “I can have parties at my
house now. I can bring people around. Me and my daughter and my partner can have an established
base of our own where we can spend time together.” In colloquial terms, Mr Foai was “living the
dream” before being brought back down to earth rather spectacularly when he was dismissed on
accusations which included the allegation that he had not been pro-active enough in querying the
overpayments. I accept that given his lifestyle he would have been “disenriched” within a short period
of having received the overpayments. The child support debt Ms Greally referred to was confirmed by
a statement of account from Inland Revenue which showed Mr Foai as having an overdue balance as
at 2 September 2011 of $5,580.37. The evidence was that the amount of Mr Foai’s child support
payments had increased as a result of the overpayments.” (at [77])
 If you overpay an employee, you still need consent to deduct that amount overpaid from the
employee’s next pay
 The employee received the money in good faith, raised the issue with the employer and they didn’t
respond until 16 months later, and he spent the money
Employee holidays and leave (Holidays Act 2003)
Preliminaries
3
Purpose
The purpose of this Act is to promote balance between work and other aspects of employees' lives and, to that end, to
provide employees with minimum entitlements to—
(a)
annual holidays to provide the opportunity for rest and recreation:
(b)
public holidays for the observance of days of national, religious, or cultural significance:
(c)
sick leave to assist employees who are unable to attend work because they are sick or injured, or because
someone who depends on the employee for care is sick or injured:
(d)
bereavement leave to assist employees who are unable to attend work because they have suffered a
bereavement:
95
(e)
81
family violence leave to assist employees to deal with the effects on the employees of being people affected
by family violence.
Holiday and leave record
…
An employer must at all times keep a holiday and leave record showing, in the case of each employee employed by the
employer, the following information:
(a)
the name of the employee:
(b)
the date on which the employee’s employment commenced:
(c)
the number of hours worked each day in a pay period and the pay for those hours:
(d)
the employee’s current entitlement to annual holidays:
(e)
the date on which the employee last became entitled to annual holidays:
(f)
the employee’s current entitlement to sick leave:
(g)
the dates on which any annual holiday, sick leave, bereavement leave, or family violence leave has been taken:
(h)
the amount of payment for any annual holiday, sick leave, bereavement leave, or family violence leave that has
been taken:
(ha) the portion of any annual holidays that have been paid out in each entitlement year (if applicable):
(hb) the date and amount of payment, in each entitlement year, for any annual holidays paid out under section 28B (if
applicable):
(i)
the dates of, and payments for, any public holiday on which the employee worked:
(j)
the number of hours that the employee worked on any public holiday:
(ja)
the day or part of any public holiday specified in section 44(1) agreed to be transferred under section
44A or 44B and the calendar day or period of 24 hours to which it has been transferred (if applicable):
(k)
the date on which the employee became entitled to any alternative holiday:
(l)
the details of the dates of, and payments for, any public holiday or alternative holiday on which the employee did
not work, but for which the employee had an entitlement to holiday pay:
(m) the cash value of any board or lodgings, as agreed or determined under section 10:
(n)
the details of any payment to which the employee is entitled under section 61(3) (which relates to payment in
exchange for an alternative holiday):
(o)
the date of the termination of the employee’s employment (if applicable):
(p)
the amount paid to the employee as holiday pay upon the termination of the employee’s employment (if
applicable):
(q)
any other particulars that may be prescribed.
(2)

If an employer does not keep their records, the employee’s records are to be believed
o This can pose a number of issues with employers in rebutting this presumption
HOLIDAYS ACT TASKFORCE
Gordon Anderson and Others Holidays Act Taskforce Final Report (8 October 2019) <https://www.mbie.govt.nz/> at 13
 The taskforce came up with 28 recommendations to changing the Holidays Act
o They wanted for simplification – for one calculation of holiday pay
o The problems with “gross earnings” has now been resolved because all remuneration is included
Annual holidays
ENTITLEMENT
16
Entitlement to annual holidays
(1)
After the end of each completed 12 months of continuous employment, an employee is entitled to not less than [4
weeks'] paid annual holidays.
17
How employee’s entitlement to annual holidays may be met
(1)
An employer and employee may agree on how an employee's entitlement to 4 weeks’ annual holidays is to be met based
on what genuinely constitutes a working week for the employee.
If an employer and employee cannot agree on how an employee's entitlement to 4 weeks’ annual holidays is to be met, a
Labour Inspector may determine the matter for them.
In making a determination, the Labour Inspector may take into account any matters that the Labour Inspector thinks fit,
including the matters specified in section 12(3).
(2)
(3)


Napier Aero Club Inc v Tayler [1998] 1 ERNZ 241 (EmpC)
o Judgment
 These statutory provisions make it clear that the employer has an obligation to fix the times at which
the annual holidays to which the employee becomes entitled from time to time may be taken – if
they don’t take those holidays, then it is the employer’s fault
Burns v Radio Pacific Ltd [1998] 3 ERNZ 559 (EmpC)
o Judgment
96




The Employment Tribunal has said that if an employee has worked for 20 years without taking any
annual holidays, the normal rules of limitation in contracts (6 years) applies – this means, the
employee is entitled to back-pay for their annual holidays up to 6 years
 However, the Employment Court disagreed with this
 When an employee is terminated, all their annual holidays are crystallized at that point –
they become due and payable upon termination, and not when they were obtained 20 years
earlier
 An employee is entitled to receive holiday pay earlier, but it becomes due and payable upon
termination
 “The effect of s 13 already referred to is that where employment is terminated before the employee
has taken the whole of any annual holiday to which the employee has become entitled, the legislation
deems the employer to have allowed to the employee, from the date of termination of the
employment, the balance of holiday entitlements not already taken and requires payment forthwith
to the employee of holiday pay for that balance. Section 13 applies not only to the more usual
situation of holiday entitlements for part of a year worked until termination, but also to the s 12(1A)
position, that is accumulated holiday entitlements from previous years. Because s 12(1A) does not
convert holiday entitlements into monetary equivalents while the employment is ongoing, the
employee's entitlement to money and the employer's obligation to pay such moneys do not
crystallise until termination of employment. To use the words of s 48(2), the money claimed by Mr
Bums only became due and payable at the end of his employment in 1995. He was therefore within
the 6-year limitation period in respect of money for holidays due from the commencement of his
employment in May 1983.”
o Commentary
 If holiday pay becomes due upon termination and not upon taking the holiday, then when
terminating employment without a written employment agreement and without a record of how
many holidays the employee has taken, there is a real risk that the employer will be liable for the
back-pay for all of the previous holidays
Rainbow Falls Organic Farm Ltd v Rockell [2014] ERNZ 275 (EmpC)
o Judgment
 An employer can rebut the presumption – if the employer has bad records but still able to show that
the employee’s records are wrong, then the employer can negate the presumption under section 130
 “I agree with Mr Quarrie that there are some similarities with the present case. However, even if it is
accepted that the realities of the parties’ arrangements did not have the effect of shifting the record
keeping responsibilities, that is not the end of the enquiry. That is because the engagement of s 132
of the Act (which is in similar, though not identical, terms to s 83(4) of the Holidays Act 2003) does
not mean that the Authority or Court must accept as proved statements made by the employee about
the wages actually paid to the employee and about the hours, days, and time worked by the
employee. That is made clear by the reference to “may”, not “must”, in s 132(2). In the present case
there is evidence that tells against the assertions that Mr Rockell makes as to his leave entitlements.”
(at [29])
New Zealand Fire Service Commission v New Zealand Professional Firefighters Union [2007] 2 NZLR 356 (CA)
o Judgment
 “Despite the fact the entitlement is expressed in weeks, it is clear the employee can take the leave in
shorter periods. The number of working days off will turn on “what genuinely constitutes a working
week for the employee”; s 17(1). A Monday to Friday worker will get 15 working days off, while a 6
days-a-week employee will end up getting 18 working days off …” (at [14])
 Firefighters generally have 18 cycles of 8 days of work, followed by 14 days off of work
 What “genuinely constitutes a working week for the employee” takes into account how many days of
work a worker goes on (e.g. if you your working week is 10 days, then you are entitled to 40 days of
annual holidays)
Electrical Union 2001 Ltd v Mighty River Power Ltd [2012] NZERA Auckland 446
o Judgment
 “As has been observed there are difficulties in harmonising the job requirements of an 8-day cycle
with the statutory assumption of a seven-day working week and the difficulty is evident here. On Mr
Yukich's construction, in some circumstances a “week” means more than the assumed seven-day
week. I am not persuaded that the parties went as far as to agree to that for the purpose of agreeing
on what genuinely constitutes a working week, and how an entitlement to 4 weeks' annual leave is to
be met. Most importantly other provisions in the cea which refer to a working week for shift
employees (as well as others) are based on an assumed seven-day week. These include clause 13 and
Appendix 1. Secondly, even if the parties did agree that in some circumstances a “week” means more
than seven days their agreement does not address how this is to be harmonised with the seven-day
97
week applicable when a utility shift is worked, and in turn how these features are to be
accommodated in an overall entitlement to 4 weeks' annual leave.”
CALCULATING PAY FOR ANNUAL HOLIDAYS
 Annual holiday pay must be the greater of either ordinary weekly pay or average weekly earnings
8
Meaning of ordinary weekly pay
(1)
In this Act, unless the context otherwise requires, ordinary weekly pay, for the purposes of calculating annual holiday
pay,—
(a)
means the amount of pay that the employee receives under his or her employment agreement for an ordinary
working week; and
(b)
includes—
(i)
productivity or incentive-based payments (including commission) if those payments are a regular part of
the employee’s pay:
(ii)
payments for overtime if those payments are a regular part of the employee’s pay:
(iii)
the cash value of any board or lodgings provided by the employer to the employee; but
(c)
excludes—
(i)
productivity or incentive-based payments that are not a regular part of the employee’s pay:
(ii)
payments for overtime that are not a regular part of the employee’s pay:
(iii)
any one-off or exceptional payments:
(iv)
any discretionary payments that the employer is not bound, under the terms of the employee’s
employment agreement, to pay the employee:
(v)
any payment of any employer contribution to a superannuation scheme for the benefit of the employee.
If it is not possible to determine an employee’s ordinary weekly pay under subsection (1), the pay must be calculated in
accordance with the following formula:
𝑎−𝑏
𝑐
where—
a
is the employee’s gross earnings for—
(i)
the 4 calendar weeks before the end of the pay period immediately before the calculation is made; or
(ii)
if the employee’s normal pay period is longer than 4 weeks, that pay period immediately before the
calculation is made
b
is the total amount of payments described in subsection (1)(c)(i) to (iii)
c
is 4.
(2)
5
Interpretation
(1)
In this Act, unless the context otherwise requires,—
…
average weekly earnings means 1/52 of an employee’s gross earnings
WHAT IS “GROSS EARNINGS”?


Howell v MSG Investments Limited (formerly known as Zee Tags Limited) [2014] ERNZ 21 (EmpC)
o Facts
 Howell was a senior executive and was made redundant – he was entitled to a growth incentive
payment
 As this payment could not be calculated during his employment, it was made after
o Issue
 Should Howell’s holiday pay also account for the payment? (would result in $256,000 of pay)
o Judgment
 The Holidays Act still applies to payments that have been made after the employment relationship
has ended
 “The wording of s 14 therefore favours the plaintiff’s submission that the period in s 25(2) does not
end when the employment is terminated. Instead, it must include all payments that the employer is
contractually obliged to pay to the employee regardless of whether the calculation of their quantum
must await actual termination of employment and the calculation being made in the period after such
termination.” (at [36])
 “Whether a payment is included in the employee’s gross earnings does not therefore depend on
when the payment was made and received. Instead, it turns on whether the employer was required
to pay it to the employee under the agreement.” (at [37])
Schollum and Hastings v Corporate Consumables Ltd [2017] NZEmpC 115
o Judgment
 The Holidays Act also applies to commission payments – where you have a commission payment, this
is entitled to have holiday pay on top of it
 “There is nothing in the policy of the Holidays Act, its history, the surrounding text to s 14, or the
consequences of using the extended definition of gross earnings that supports not taking into account
98

commissions earned by the plaintiffs. Excluding commission from the definition of gross earnings in
the way Corporate Consumables seeks would not be to conclude the context required the extended
definition to be displaced by the usual or ordinarily understood meaning of those words. It would
require adopting a definition at odds with any commonly understood meaning of gross earnings.
Applying the definition of gross earnings in s 14 to the circumstances here does not produce a result
which is inconsistent with the purpose of the Holidays Act or could be said, in the sense used in Hixon,
to produce an absurd or unjust result. The result is, in fact, consistent with the plaintiffs’ employment
agreements and the Holidays Act.” (at [52])
Metropolitan Glass & Glazing Ltd v Labour Inspector [2020] NZEmpC 39
o Facts
 The employment agreement specifically said that discretionary payments did not attract holiday pay
o Issue
 Does the Holidays Act apply to discretionary payments?
o Judgment
 “The scheme of s 14, particularly when considered with the words and purpose of the amendment to
s 5 in 2011, is to capture all remuneration for an employee’s job. Gross earnings do not capture
reimbursing payments or truly gratuitous payments, for example, where an employer, of its own
initiative, decides to pay a Christmas bonus. But it is apparent from the definition of “discretionary
payments” that payments are not excluded just because the amount of the payment is determined by
the employer, or because they only are payable if certain conditions are met.”
 The employment agreement provision did not prevent the Labour Inspector finding that it should
attract holiday pay
 While the drafting of the statutory provisions is not perfect, the intention was that where
productivity or incentive-based payments were made, they were part of “gross earnings”
 Under the Holidays Act, discretionary payments are to be excluded from the definition of “gross
earnings”
 However, if discretionary payments become regular and are incentive-based (i.e. they are
not mere gratuitous payments made at the employer’s discretion), then it will become part
of gross earnings and thus attract holiday pay
WHAT IS “REGULAR”?

Labour Inspector of the Ministry of Business, Innovation and Employment v Tourism Holdings Ltd [2021] NZCA 1
o Facts
 TH ran a number of tourist activities, and received a commission when someone booked a tourist
activity – but they did not take into account commission when calculating ordinary weekly pay under
section 8(2)
o Submissions
 TH argued that ordinary weekly pay means if the employee does not earn commission on an ordinary
working week, it should not be regular or taken into account in calculating ordinary weekly pay
o Judgment
 Rejected TH’s argument – “regular” should not be confined to section 8 and should be interpreted
more broadly
 “The interpretation the Labour Inspector supports is also consistent with the qualifying word
“regular” in s 8(1)(c)(i). The dictionaries give us a number of meanings for the word regular. As
relevant, the word means both (i) “conforming to a rule or principle; systematic”, or what might be
called substantive regularity; and (ii) “acting or done or recurring uniformly or calculably in time or
manner; habitual, constant, orderly”, or what might be called temporal regularity.” (at [36])
 “In our assessment, both those meanings apply to commission as earnt by the Company’s driver
guides. Commission is provided for as part of the “rule” represented by the individual’s employment
contract for promoting and organising bookings for additional activities as a specific duty of an
employee. The terms for payment of commission, the “rules” for payment of commission, are set in
that employment agreement. Moreover, and on the basis of the pattern of driver guides’
employment — that is the pattern of the “trips” (albeit of varying lengths) they are responsible for —
commission is a regular and habitual part of their pay. While it is not part of the payment of daily rate
compensation for each week of a tour a guide receives during the tour, it does form the part of their
pay in the week after the tour in which it its paid, and regularly — that regularity fitting the pattern of
the tours a driver guide is responsible for over time.” (at [37])
 Therefore, even though commission was not paid every month, they needed to be taken into account
in assessing holiday pay
P AYING OUT ANNUAL HOLIDAYS
 Relevant provisions
o 28A Employee may request portion of annual holidays be paid out
99

o 28B Payment for annual holidays paid out
o 28C Requirement to request payout prohibited
o 28D Requirement to make payout prohibited
o 28E Employer may have policy preventing payout
o 28F Labour Inspector may determine payout
An employer can pay out one week of annual holidays a year (which cannot be accumulated for future years)
o If the employer is paying out more than that, the employer is still liable for the annual holidays at the time the
employee requests them – essentially, any payment more than one week without the employee’s consent will
be a gratuitous payment because the employee hadn’t taken those holidays
Public holidays
49
Payment if employee does not work on public holiday
If an employee does not work on a public holiday and the day would otherwise be a working day for the employee, the
employer must pay the employee not less than the employee’s relevant daily pay or average daily pay for that day.


If the day of the public holiday is supposed to be a working day for the employee:
o If they don’t work, they are entitled to average daily pay or relevant daily pay
o If they do work, they are entitled to 1.5x pay and an alternative holiday
If the day of the public is not supposed to be a working day, then there is no entitlement
o For example, if an employee does not work on Mondays, and the public holiday falls on a Monday, they are
not entitled to holiday pay
9
Meaning of relevant daily pay
(1)
In this Act, unless the context otherwise requires, relevant daily pay, for the purposes of calculating payment for a public
holiday, an alternative holiday, sick leave, or bereavement leave,—
(a)
means the amount of pay that the employee would have received had the employee worked on the day
concerned; and
(b)
includes—
(i)
productivity or incentive-based payments (including commission) if those payments would have otherwise
been received had the employee worked on the day concerned:
(ii)
payments for overtime if those payments would have otherwise been received had the employee worked
on the day concerned:
(iii)
the cash value of any board or lodgings provided by the employer to the employee; but
(c)
excludes any payment of any employer contribution to a superannuation scheme for the benefit of the employee.
However, an employment agreement may specify a special rate of relevant daily pay for the purpose of calculating
payment for a public holiday, an alternative holiday, sick leave, or bereavement leave if the rate is equal to, or greater
than, the rate that would otherwise be calculated under subsection (1).
To avoid doubt, if subsection (1)(a) is to be applied in the case of a public holiday, the amount of pay does not include any
amount that would be added by virtue of section 50(1)(a) (which relates to the requirement to pay time and a half).
(2)
(3)
9A
Average daily pay
(1)
An employer may use an employee’s average daily pay for the purposes of calculating payment for a public holiday, an
alternative holiday, sick leave, or bereavement leave if—
(a)
it is not possible or practicable to determine an employee’s relevant daily pay under section 9(1); or
(b)
the employee’s daily pay varies within the pay period when the holiday or leave falls.
The employee’s average daily pay must be calculated in accordance with the following formula:
𝑎
𝑏
where—
a
is the employee’s gross earnings for the 52 calendar weeks before the end of the pay period immediately before
the calculation is made
b
is the number of whole or part days during which the employee earned those gross earnings, including any day on
which the employee was on a paid holiday or paid leave; but excluding any other day on which the employee did
not actually work.
To avoid doubt, if subsection (2) is to be applied in the case of a public holiday, the amount of pay does not include any
amount that would be added by virtue of section 50(1)(a) (which relates to the requirement to pay time and a half).
(2)
(3)

Tranzit Coachlines Wairarapa Ltd v Morgan [2013] ERNZ 638 (EmpC)
o Judgment
 “For the reasons discussed in this judgment the public holiday on 27 December 2010 in substitution
for Christmas Day would not otherwise have been a working day for the first defendants. It is our
view that this is clear from all of the evidence. However, even applying the factors set out in s 12(3) of
the Holidays Act, it could not be said that this day would otherwise have been a working day for the
first defendants.” (at [40])
100



Postal Workers Union of Aotearoa Inc v New Zealand Post Ltd [2013] 1 NZLR 66 (CA)
o Judgment
 “In summary, interpreted in accordance with the purpose of the Act, s 9 required the employer first
to establish or attempt to establish the amount of unrostered overtime that would otherwise have
been received by the employee under s 9(1)(b)(ii). If that were not possible, then the employer was
obliged to apply the averaging formula under s 9(3). We refrain from expressing any view as to the
application of the statutory provisions applicable with effect from 1 April 2011.” (at [33])
GD (Tauranga) Ltd v Price [2019] ERNZ 304 (EmpC)
o Judgment
 In the present case it is possible for GD Tauranga to calculate RDP even though the employees’ daily
pay varies within the pay period when the other leave falls, but as indicated from the authorities and
materials relied upon, in that situation the employer has a discretion as to whether it applies RDP or
ADP. We can see no impediment to GD Tauranga altering the previous method of payment from ADP
back to RDP. That discretion vests in the employer in this case … (at [35])
Max Pennington Motors Ltd v Labour Inspector [2020] NZEmpC 64
o Facts
 Employees were paid commission upon delivery of the car to the customer – but deliveries cannot be
made on a public holiday
o Judgment
 “The starting point in this case, as it was in the GD (Tauranga) Ltd case is s 49 of the HA. This provides
that if an employee does not work on a public holiday and the day would otherwise be a working day
for the employee, the employer must pay the employee not less than the employee’s RDP or ADP for
that day. Section 9 of the HA then defines RDP as the amount of pay the employee would have
received had the employee worked on the day concerned. That also includes commission if it would
otherwise have been received had the day been worked. The fact that s 49 of the HA contemplates
RDP or ADP, confirms the decision reached in the GD (Tauranga) Ltd case. Applying that in the
present case, MPML has a discretion whether to apply RDP or ADP for a public holiday. In the present
case MPML has elected to pay RDP for public holidays and ADP for the other types of BAPS leave and
is entitled to do so.” (at [27])
Sick leave
65
Sick leave
(1)
An employee may take sick leave if—
(a)
the employee is sick or injured; or
(b)
the employee’s spouse or partner is sick or injured; or
(c)
a person who depends on the employee for care is sick or injured.
An employee is entitled to 5 days’ sick leave for each of the 12-month periods specified in section 63(2).
(2)

Taiapa v Te Runanga o Turanganui a Kiwa Trust [2013] ERNZ 41 (CA)
o Facts
 The employee misused the sick leave entitlement – he went to watch a sports game
o Judgment
 I agree with what Judge AA Couch said in a 2006 judgment of this Court about the nature of sick leave
and the importance of mutual trust and confidence between employers and employees in its use. Sick
leave taken by an employee, whether paid or unpaid, is a benefit for the employee and incurs a loss
for the employer. Employers expect such losses although they are not always predictable and, in most
cases, not attributed to any fault by the employer or by the employee. An epidemic of winter illness,
for example, will often see a significant use of sick leave by both individual employees and across a
workforce and few could quibble with its use in these circumstances.
 Despite modern requirements for employees to substantiate (usually by doctors’ certificates) longterm or excessive sick leave, its taking and granting still depend upon mutual trust and confidence. An
employee’s assurance of the employee’s use of sick leave for proper purposes will usually be
accepted at face value by the employer. Sick leave is a facility to be used when needed and not a
mechanism to augment annual leave.
 It follows that deliberate misuse of sick leave entitlements may constitute serious misconduct in
employment depending on all the relevant circumstances.
Bereavement leave
69
Bereavement leave
(1)
(2)
An employee may take bereavement leave in accordance with sections 63 and 70 if the employee suffers a bereavement.
An employee suffers a bereavement—
101
(a)
on the death of the employee’s—
(i)
spouse or partner:
(ii)
parent:
(iii)
child:
(iv)
brother or sister:
(v)
grandparent:
(vi)
grandchild:
(vii) spouse’s or partner’s parent; or
(b)
on the death of any other person if the employer accepts, having regard to relevant factors such as those set out
in subsection (3), that the employee has suffered a bereavement as a result of the death.
For the purposes of subsection (2)(b), relevant factors include—
(a)
the closeness of the association between the employee and the deceased person:
(b)
whether the employee has to take significant responsibility for all or any of the arrangements for the ceremonies
relating to the death:
(c)
any cultural responsibilities of the employee in relation to the death.
(3)
70
Duration of bereavement leave
(1)
An employer must allow an employee to take—
(a)
3 days’ bereavement leave for each type of bereavement described in section 69(2)(a); and
(b)
1 day’s bereavement leave for a bereavement described in section 69(2)(b).
If an employee suffers more than 1 bereavement at the same time, he or she may take the amount of bereavement leave
specified in subsection (1) in respect of each bereavement.
(2)
Family violence leave
72H Duration of family violence leave
An employee—
(a)
may take up to 10 days’ family violence leave in each of the 12-month periods specified in section 72D(2); and
(b)
cannot carry forward any family violence leave not taken in any of those 12-month periods.
72B Meaning of person affected by family violence
(1)
In this subpart, a person affected by family violence means a person who is 1 or both of the following:
(a)
a person against whom any other person is inflicting, or has inflicted, family violence:
(b)
a person with whom there ordinarily or periodically resides a child against whom any other person is inflicting, or
has inflicted, family violence.
In this section, child has the meaning given to it in section 8 of the Family Violence Act 2018.
(2)
Parental Leave and Employment Protection Act 1987



51
Dismissing an employee on parental leave is complicated
o During the 1980s, employees that were going to have children ended their employment and never went back
to work
o This Act provides a presumption that during the period of parental leave, an employer has a number of strict
obligations to ensure that the employee’s job is available at the end of the leave
This Act deals with:
o Special Leave – appointments etc., issues with morning sickness
o Primary Carer Leave – 26 weeks of paid week
o Partner’s Leave – partner can take some of your Primary Carer Leave and share it
o Extended Leave – the time from the 26 weeks to the 52 weeks you are entitled to under the Act (unpaid)
o Preterm Baby Payments – if the baby is delivered early
o Keeping in Touch Hours – dealing with issues where you are away from the workplace, but you need to
undergo training
There are two ways of terminating an employee’s employment during parental leave:
o Redundancy (section 51(a)(i))
o Employer cannot find temporary replacement because the employee’s role is a key one
Special defences relating to dismissal during parental leave
Where the termination is proved to have taken place during the employee’s absence on parental leave, it shall be a
defence for the employer to prove—
(a)
that,—
(i)
in the case of a period of parental leave to which section 40(1) applies, on the ground of the occurrence of
a redundancy situation that occurred in the employer’s business after the employer gave the employee
notice in terms of section 36(1)(c)(i), the employer was unable to keep the employee’s position open; or
(ii)
in the case of other periods of parental leave, on the ground of circumstances (of the type referred to in
section 41) that occurred in the employer’s business after the employer gave the employee notice in terms
of section 36(1)(c)(i), the employer was unable to keep the employee’s position open; and
102
(b)
(c)




that the employer terminated the employee’s employment on account of a redundancy situation of such nature
that there was no prospect of the employer being able to appoint the employee to a position which was vacant
and which was substantially similar to the position held by the employee at the beginning of the employee’s
parental leave; and
that the employer had not, in the period commencing with the beginning of the employee’s parental leave and
ending with the termination of the employee’s employment, prejudicially affected either the employee’s seniority
or the employee’s superannuation rights.
Dakers v Perry ERA Christchurch CA65/06, 10 May 2006
o Facts
 Perry continued employment with his temp (who was covering for the parental leave) because he
found her more reliable than the employee on parental leave and dismissed the employee
o Judgment
 [84] In essence, as we have seen, Ms Dakers attended at the workplace on 5 October 2004 to talk
about her return to work, Dr Perry rang her on 19 October to tell her that her job had disappeared
and there was a return telephone call from Ms Dakers to Dr Perry on 20 October which confirmed the
thrust of the telephone call the previous day.
 [85] There was absolutely no opportunity provided by Dr Perry for Ms Dakers to engage with him in a
discussion about the alleged redundancy situation. Dr Perry had plainly formed a view about the best
outcome for him and Ms Dakers was not to be consulted at all.
 [86] The difficulty for Dr Perry seems to have been his apparent willingness to prefer the interests of
Ms Vickery at the expense of Ms Dakers, despite Ms Vickery’s obvious understanding that she was
simply relieving in the position until Ms Dakers returned. Dr Perry simply does not seem to have
grasped at any point that, as Ms Dakers’ employer (or as the representative of the employer), he had
a statutory obligation to Ms Dakers which he was duty bound to fulfil subject only to the narrowest of
exemptions.
 The statutory framework is designed to protect the employee’s job – the employee coming in should
have been on a fixed-term agreement that ended when the parent employee wanted to come back to
work because the risk is that the employer now has two employees
McKendry v Jansen [2010] ERNZ 453 (EmpC)
o Facts
 The employee was dismissed and thus not given any payments for Primary Carer Leave (around
$7000)
o Judgment
 If the employer unjustifiably dismisses the employee before going on parental leave, they will be
liable for the payment
 “Section 123(1)(c) does not contain any express limitation or restriction affecting this question, nor
can it be implied from s 123(1)(c)(ii) that compensation is limited to any loss arising from a benefit
which itself arises from the employment agreement. So it follows that lost paid parental leave is
within the category of benefits contemplated by Parliament, subject to proof of causation. That
means that if, but for the personal grievance (of unjustified dismissal), the employee would
reasonably have expected to obtain a benefit of paid parental leave, then its value is a lost benefit for
which the Authority or the Court may compensate the dismissed employee.” (at [68])
Pearce v Attorney General [2005] ERNZ 731 (EmpC)
o Facts
 There were two employers – due to this, the employee could not get paid Primary Carer Leave
o Judgment
 “Eligibility for parental leave payments is not discretionary. There is no flexibility to allow payments
for employees who do not qualify under the Act's strict criteria even though this means some
employees are excluded. To accede to the plaintiff's case would be to extend the definition of
"associated employer[s]" beyond the definition set out by Parliament in clause 6 of the Schedule.” (at
[48])
Air New Zealand Ltd v McQueen [2001] ERNZ 731 (EmpC)
o Facts
 The employee had her first baby, took a long period of extended leave, then had 6 months at work
and then another period of parental leave
o Judgment
 Counsel has candidly acknowledged that "employment" is a word capable of "... different meanings in
different contexts". More particularly, it may refer to the situation of work actually being undertaken
by an employee for his/her employer (the appellant's submission) or it may refer - more generally - as
is the respondent's argument - to the state of being employed. Counsel has stressed that it is
103
significant in his contention that s 23(b) does not simply use the word "employed" but refers to the
particular employee actually being "in" the employment of the employer for the requisite period. It is
counsel's fundamental contention that to construe the words "... in the employment" as has been
urged by the appellant in this case, best achieves the purposes of the PLEP Act. Furthermore, Mr
Towner has strongly submitted that if this Court should consider that there is any ambiguity of
meaning encompassed in s 23(b), then the application - counsel has urged - of the purposive
approach to the construction and application of the provision, "... inevitably leads to a construction of
section 23 which is consistent with the appellant's submissions"
PROBLEM QUESTION
• Chloe is a budding law clerk with Dodgy Law Firm (DLF) working in the property law team. DLF only has male partners
and all of its lower level staff are female.
• Chloe is on a salary of $40,000. When working at DLF, she sometimes undertakes 70 hour weeks. Other times, this goes
down to 25 hour weeks at the whim of the partners. She is often on-call to do urgent secretarial tasks.
• Her IEA is silent on her hours of work. It states that she is to work when required and that her salary is complete
compensation for all her tasks undertaken.
• DLF also deduct from her pay a weekly payment for “professional training” which is based on her active participation in
NZLS CLE activities.
• After a dispute about her hours that she is required to work, Chloe resigns.
• Chloe comes to you for advice. She wants to know:
(a) Is she entitled to the minimum wage for being “available”?;
(b) Would a pay equity claim based on institutional discrimination be successful?
(c) Is DLF entitled to deduct a payment for “professional training” and how does that interact with the requirement to
pay the minimum wage?
(Ignore any personal grievance relating to any possible constructive dismissal)
 You cannot deduct anything below minimum wage
104
Personal grievances

Raising a personal grievance will put the employee’s name on a database – this may affect their future chances of being
employed by different employer
o Therefore, it is important to think carefully about raising a personal grievance in terms of what the employee
wants to achieve from the situation
o Sometimes, the employee might want to just go to mediation, get an apology or just talk to the employer
without wanting compensation
What is a personal grievance?
103
Personal grievance
(1)
For the purposes of this Act, personal grievance means any grievance that an employee may have against the employee’s
employer or former employer because of a claim—
(a)
that the employee has been unjustifiably dismissed; or
(b)
that the employee’s employment, or 1 or more conditions of the employee’s employment (including any condition
that survives termination of the employment), is or are or was (during employment that has since been
terminated) affected to the employee’s disadvantage by some unjustifiable action by the employer; or
(c)
that the employee has been discriminated against in the employee’s employment; or
(d)
that the employee has been sexually harassed in the employee’s employment; or
(da) that the employee has been treated adversely in the employee’s employment on the ground that the employee is,
or is suspected or assumed or believed to be, a person affected by family violence; or
(e)
that the employee has been racially harassed in the employee’s employment; or
(f)
that the employee has been subject to duress in the employee’s employment in relation to membership or nonmembership of a union or employees organisation; or
(g)
that the employee’s employer has failed to comply with a requirement of Part 6A; or (transfer requirements)
(h)
that the employee has been disadvantaged by the employee’s employment agreement not being in accordance
with section 67C, 67D, 67G, or 67H; or (agreed hours of work and availability)
(i)
that the employee’s employer has contravened section 67F or 67G(3). (flexible working arrangements)
(j)
that the employee’s employer has, in relation to the employee,—
(i)
engaged in adverse conduct for a prohibited health and safety reason; or
(ii)
contravened section 92 of the Health and Safety at Work Act 2015 (which prohibits coercion or
inducement).

Discrimination and racial harassment can be pursued under the Human Rights Act – a plaintiff might have better
chances and a more employee-friendly institution if they claim to the Human Rights Review Tribunal
Raising a personal grievance
114
Raising personal grievance
(1)
Every employee who wishes to raise a personal grievance must, subject to subsections (3) and (4), raise the grievance
with his or her employer within the period of 90 days beginning with the date on which the action alleged to amount to a
personal grievance occurred or came to the notice of the employee, whichever is the later, unless the employer consents
to the personal grievance being raised after the expiration of that period.
For the purposes of subsection (1), a grievance is raised with an employer as soon as the employee has made, or has
taken reasonable steps to make, the employer or a representative of the employer aware that the employee alleges a
personal grievance that the employee wants the employer to address.
Where the employer does not consent to the personal grievance being raised after the expiration of the 90-day period,
the employee may apply to the Authority for leave to raise the personal grievance after the expiration of that period.
On an application under subsection (3), the Authority, after giving the employer an opportunity to be heard, may grant
leave accordingly, subject to such conditions (if any) as it thinks fit, if the Authority—
(a)
is satisfied that the delay in raising the personal grievance was occasioned by exceptional circumstances (which
may include any 1 or more of the circumstances set out in section 115); and
(b)
considers it just to do so.
In any case where the Authority grants leave under subsection (4), the Authority must direct the employer and employee
to use mediation to seek to mutually resolve the grievance.
No action may be commenced in the Authority or the court in relation to a personal grievance more than 3 years after
the date on which the personal grievance was raised in accordance with this section.
(2)
(3)
(4)
(5)
(6)
When does raising a complaint become “raising” a personal grievance?

Chief Executive of Manukau Institute of Technology v Zivaljevic [2019] NZEmpC 132
o Facts
 There was a review of MIT’s academic faculties
105


The employer and employee had relatively comprehensive discussions in relation to redeployment (a
part of redundancy law)
 The employee continually raised this issue of redeployment, that they shouldn’t be
advertising to external third parties and that he as an internal applicant should be given
priority
 MIT was of the view that this didn’t comply with their obligations under the State Sector Act
(now the Public Services Act)
The employee said, “I expect your comment on this as this is one of the important points that
contributed to my personal grievance” and asked for a variety of information
The employee did not raise any further issues within the 90-day period set by section 114(1)

Issue
 Did the employee raise a personal grievance?
o Judgment
 The combination of the issues at play, including the request of information, showed that the
employee wished to pursue a personal grievance even though he didn’t necessarily use a formal
notification of raising one
 [36] The grievance process is designed to be informal and accessible. A personal grievance may be
raised orally or in writing. There is no particular formula of words that must be used. Where there had
been a series of communications, not only would each be examined as to whether it might constitute
raising the grievance, but the totality of those communications might also constitute raising the
grievance.
 [37] It does not matter what an employee intended his or her complaint to be, or his or her preferred
process for dealing with it in the first instance. It also does not matter whether the employer
recognised the complaint as a personal grievance. The issues are whether the nature of the complaint
was a personal grievance within the meaning of s 103 of the Act and, if so, whether the employee’s
communications complied with s 114(2) of the Act by conveying the substance of the complaint to the
employer.
 [38] It is insufficient for an employee simply to advise an employer that the employee considers that
he or she has a personal grievance, or even specifying the statutory type of personal grievance. The
employer must know what it is responding to; it must be given sufficient information to address the
grievance, that is to respond to it on its merits with a view to resolving it soon and informally, at least
in the first instance.”
o Commentary
 This shows that an employee must make it clear that they are raising a personal grievance – the
substance of the complaint must be raised
Clark v Nelson Marlborough Institute of Technology (2008) 8 NZELC 99,483 (EmpC)
o Facts
 The employee sent a letter to the employer that set out:
 A series of issues regarding mismanagement
 Four outcomes she wanted to remedy it
 “I look forward to a speedy resolution. My preference is that this is resolved informally and
promptly. However, if not, I believe I have very strong grounds for a personal grievance.”
o Issue
 Did the employee raise a personal grievance?
o Judgment
 The words “However, if not, I believe I have very strong grounds for a personal grievance” was
sufficient to raise a personal grievance
 The employee set out all the concerns and said she has strong grounds for a personal
grievance even if the employee did not necessarily intend it to be a personal grievance at
that time
 The employee had alleged that conditions had been effected to her disadvantage – the
nature of her complaint therefore fell squarely within the definition of a personal grievance
 [37] In deciding whether the effect of the plaintiff’s letter of 22 July 2005 was to raise a personal
grievance, it does not matter what she intended her complaint to be or her preferred process for
dealing with it in the first instance. Equally it does not matter whether the defendant, through Mr
Cox, recognised the plaintiff’s complaint as a personal grievance or not. The only issues are whether
the nature of the plaintiff’s complaint was a personal grievance within the meaning of s 103 and, if so,
whether the letter complied with s 114(2) by conveying the substance of the complaint sufficiently to
the defendant. Both tests are amply satisfied in this case.
Premier Events Group Ltd v Beattie (No 3) [2012] NZEmpC 79
o Judgment
o


106

A third party can raise a personal grievance on the employee’s behalf
 An employee can raise a personal grievance by filing a statement of problem in the
Employment Relations Authority – the Authority then notifies the employer of the personal
grievance and this officially becomes raising a personal grievance
 [10] … I consider that the case law supports a finding that an employee may raise a personal
grievance if a third party brings that grievance to the attention of the employer within the 90-day
period. An employee who submitted an application to the Authority could be confident (because that
is the normal procedure) that the Authority would serve that application to the named employer soon
after its submission. While this method of raising a personal grievance runs the risk that service may
occur outside the 90-day window, in this case a count back from the date of service includes some
part of Mr Regan’s employment.
o Commentary
 You can give a personal grievance letter to someone other than the employer – a classic example is
raising a complaint with the labour hire agency, who can also count as an employer (i.e. as long as you
raise it to either the agency or the end-user employer, this is sufficient)
TOTALITY OF COMMUNICATIONS
 Where there are multiple exchanges of correspondence, then the court must look at the totality of the communications
to see whether a personal grievance has been raised
 Phillips v Net Tel Communications [2002] 2 ERNZ 340 (EmpC)
o Judgment
 [28] In determining whether a grievance has been submitted by an employee, for the purposes of
s 33(2) of the Act in a case where there has been a series of communications, each individual item can
be examined to see whether, in itself, it constituted a submission, but the totality of the
communications must also be examined. The issue is whether the communications, or any of them
would, to an objective and disinterested observer, have presented to the employer for
consideration or decision any grievance the employee may have had against his or her employer or
former employer, because of one or more of the claims that are defined in s 27 of the Act …
SPECIFICITY
 A personal grievance must be reasonably specific as to the substance of the complaint
 Creedy v Commissioner of Police [2006] ERNZ 517 (EmpC)
o Facts
 Creedy was a sergeant in the police force
 His letter just said, “This letter serves notice that the employee commences a personal grievance with
the employer” but did not provide details
o Judgment
 This letter did not meet the requirements of section 114 – it did not raise a personal grievance
 [36] It is the notion of the employee wanting the employer to address the grievance that means that
it should be specified sufficiently to enable the employer to address it. So it is insufficient, and
therefore not a raising of the grievance, for an employee to advise an employer that the employee
simply considers that he or she has a personal grievance or even by specifying the statutory type of
the personal grievance as, for example, unjustified disadvantage in employment … As the Court
determined in cases under the previous legislation, for an employer to be able to address a grievance
as the legislation contemplates, the employer must know what to address. I do not consider that this
obligation was lessened in 2000. That is not to find, however, that the raising cannot be oral or that
any particular formula of words needs to be used. What is important is that the employer is made
aware sufficiently of the grievance to be able to respond as the legislative scheme mandates.
 Disabilities Resources Centre Trust v Maxwell [2021] NZEmpC 14
o Facts
 The personal grievance letter only said that the decision to dismiss the employee was unfair and was
unjustifiable and that the employee wants remedies in accordance with the Employment Relations
Act, and asked the employer how it wished to proceed with resolving the employee’s concerns
o Judgment
 This was sufficiently specified because the employee said their dismissal was unfair and unjustifiable –
but this was probably a close call
 [20] For this reason, as there was no other communication between the dismissal and the letter, the
question of whether Ms Maxwell raised a personal grievance within 90 days rests entirely on the
letter of 17 May 2018.
 [21] That letter was certainly sparse. I recognise comments the Court has previously made about the
need for an employee to provide the grounds on which the dismissal was claimed to be unjustifiable,
so that an employer can respond on its merits. Ms Maxwell’s claim of the dismissal being “unfair”
certainly was not ideal in that regard.
107

o
[22] Nevertheless, when comparing the letter Ms Maxwell sent against the requirements of the Act, it
is clear that she made Disabilities Resources aware that she had a personal grievance for unjustifiable
dismissal that she wanted it to address, which is what s 114(2) requires. The letter was not equivocal.
She invited Disabilities Resources to respond. Through this letter, Ms Maxwell raised her personal
grievance within the prescribed 90-day period.
Commentary
 This case seems to show that the courts are relaxing the standard for raising a personal grievance
ORAL PROTESTS
 Emmerson v Northland District Health Board [2019] NZEmpC 34
o Facts
 The employee was a doctor who prescribed drugs to her partner – she was fired for doing so
o Judgment
 A personal grievance can be raised orally – the employee must state so, and say the reasons for
raising the personal grievance
 [118] … I am satisfied that the concerns were raised with sufficient particularity in the conversation Dr
Emmerson had with Dr N on 18 March 2015. I find that the question of one-to-one supervision was
referred to by Dr Emmerson. She understandably wanted the matter addressed by NDHB, because it
was an essential pre-requisite of the College requirements. It is evident Dr N recognised the
importance of the issue, first because she recorded it in her handwritten note, and second because
she immediately raised the matter with Dr M.
 [119] There is no particular form of words for raising a complaint or concern that constitutes the
raising of a personal grievance. What is important is that the employer is made sufficiently aware of
the problem as to be able to respond as the legislative rule requires.
 [120] Here, Dr N obviously knew an important concern had been alluded to which had to be sorted
out for the employee. As just noted, that is what she did. I find NDHB was made sufficiently aware of
a problem as to lead to the conclusion that a grievance was being raised which Dr Emmerson wanted
her employer to address.
 However, the issue with an oral protest is that there is little evidence to use in court and the other party can deny that
the oral protest ever happened
o The employee should make sure they have a written record of the oral protest (e.g. a follow-up email to
supplement what was said orally)
NO REMEDY NEEDS TO BE SPECIFIED
 Idea Services Ltd (in stat man) v Barker [2012] NZEmpC 112
o Judgment
 An employee does not need to specify what remedies they want in order to raise a personal grievance
 [40] … While particularisation of the remedies sought may assist an employer in understanding what
the employee wants addressed, and may accordingly bolster an argument that the threshold
requirements of s 114(2) have been met, it will not always be necessary. And the informal, nontechnical, nature of the personal grievance procedures relating to raising a grievance tells against an
interpretation that requires an employee to specify the precise nature of the remedy or remedies
they seek. The raising of a grievance is distinct from the more formal requirements attaching to the
filing of a statement of problem, or a statement of claim. Both necessitate particularisation of the
relief sought. That is not a requirement imposed under s 114(2).
Timing and knowledge issues – when a personal grievance can be raised
PERSONAL GRIEVANCE IN RELATION TO AN ANTICIPATED EVENT
 Creedy v Commissioner of Police [2006] ERNZ 517 (EmpC)
o Judgment
 An employee cannot raise a personal grievance to something that hasn’t happened yet (e.g. they
cannot raise a personal grievance for unjustified dismissal if they haven’t been dismissed yet)
 [29] Under the previous legislation, it was held that a grievance was not “submitted” in relation to an
allegedly unjustified dismissal after notification of an intention to dismiss had taken place but before
the expiry of the notice period. As Ms Inglis contended, if the plaintiff’s argument in this regard was
correct, any employee could, at the outset of his or her employment, give an employer notice of
raising a personal grievance for any possible future grievance that might subsequently arise. That
logical implication of the plaintiff’s argument indicates its absurdity. The relevant words and phrases
of the legislation are in the past and present tenses so that the raising of a grievance is clearly
contemplated as a grievance about an event that has occurred or is occurring. The statutory scheme
does not allow for a known or even anticipated future event, let alone a speculative future event as
Mr Creedy’s dismissal (actual or constructive) must have been in April 2001.
THE EMPLOYEE MUST HAVE ACTUAL KNOWLEDGE OF THE DISADVANTAGE OR DISMISSAL
 Drayton v Foodstuffs (South Island) Ltd [1995] 2 ERNZ 523 (EmpC)
108
o
Facts



A variety of union members were not given a bonus
A union advocate wrote the employer on the employees’ behalf asking for reasons why
After a series or letters and meetings over the subject of the bonus, they lodged a personal grievance
some time later
o Judgment
 However, the use of the words "came to the notice" import the requirement that the employee has
actual knowledge of the action which allegedly gave rise to the grievance. In this case that actual
knowledge would include the circumstances which suggested the presence of improper motives.
 The affected employees only became aware of the grounds of discrimination as a result of their
inquiries – at the time others received the bonus, they didn’t know why they hadn’t
 But once they inquired about the reasons why, this was when the personal grievance was
raised
TIMING OF DISMISSAL
 Underhill v Coca-Cola Amatil (NZ) Ltd [2017] NZEmpC 117
o Facts
 The independent contractor agreement could only be terminated by written notice
 Emails were given in mid-June which indicated that there would be a termination
 On 30 June, the letters were titled “Termination of your contract for services”
o Judgment
 When an employee is dismissed on notice, the personal grievance cannot be raised until the end of
the notice period
 [60] Dismissal was therefore perfected and occurred on 30 June 2016, as this is when written notice
was provided. The period between 30 June and 1 September 2016 (when the Statements of Problem
were filed) is 63 days, which is well within the 90-day limitation period. Even if the emails of 14 June
2016 were regarded as written notice, the Underhills would still be in time if the dismissal was held to
have occurred on 14 June 2016. There are 79 days between 14 June and 1 September 2016. The
dismissal could not have occurred any earlier than that, as there was no other written
correspondence from Coca-Cola to the Underhills in evidence.
 [61] In case this argument raises “floodgate” concerns the implications of this case would not be farreaching. There are already decisions of the Court that indicate dismissal only occurs at the end of the
notice period. It is a fair principle, especially when one party is itself essentially relying on the other
party’s lack of legal representation and a strict construction of s 114 of the Act. It is not usual for
employment contracts to have such express termination clauses as occurs in this case. The only
reason there was such an explicit clause here is that this was intended to be a commercial contract
for services.
 If there is a payment in lieu of notice, there will be no notice period – therefore, termination will be effective from the
date the payment is made
CONNECTION TO PREVIOUS EVENTS
 In some situations, there may be an ongoing disadvantage or breaches of contract
o For example, bullying can take place over a long period of time and get worse over time and eventually lead to
the employee making a complaint
o An employee can use previous events (that may fall outside the 90-day period and thus cannot be used to
raise a personal grievance) that formed part of the continuing disadvantage to support the personal grievance
claim in respect of that continuing disadvantage – if it is continuing, the employee can raise the personal
grievance at a later date and it can cover the whole period
 Meyer v Ports of Auckland Ltd EmpC Auckland AC41/04, 28 July 2004
o Judgment
 [27] Mr Meyer's personal grievance concerning his constructive dismissal has been brought within
time. The Employment Relations Authority has jurisdiction to investigate that. While the Employment
Relations Authority does not have jurisdiction to investigate the 23 July grievance because it was
brought out of time, the matters raised in it will inevitably form part of the constructive dismissal
grievance.
 Emmerson v Northland District Health Board [2019] NZEmpC 34
o Judgment
 [116] … the grievance is based not on an assertion that there was an outright refusal to provide
formal supervision, as notified on a particular date, but that there was an ongoing failure to do so. It is
apparent from the contemporaneous evidence that Dr Emmerson’s concerns as to supervision
centred not on the fact that Dr M had made a particular statement that there was no need to conduct
formal supervision, but on the fact that formal supervision was not being provided on an ongoing
109

basis; this was the substance of her discussion with Dr Reynolds and the other registrars, on 23
February 2015.
[117] Accordingly, the elements of the cause of action are plainly based on a continuous course of
conduct.
110
Extending the 90-day period
CONSENT
 It is possible for an employer to impliedly consent to raising a personal grievance past the 90-day period
 Vulcan Steel Ltd v Wonnocott [2013] NZEmpC 15
o Facts
 There was a series of correspondence between the parties
o Judgment
 If an employer continually engages in discussions with the employee raising a complaint without
expressly saying they do not consent to the raising of a personal grievance after 90 days, there is a
risk that they have impliedly consented to the personal grievance being raised out of time
 The employer had impliedly consented by its conduct – they acquiesced in the fact that there was a
dispute and therefore had consented
 [47] Vulcan must be taken to have been aware both of the fact and date of the raising of the
grievance by Mr Wonnocott. It was professionally advised in relation to that grievance. Had it not
consented to the late raising of the grievance, it would have so advised Mr Wonnocott’s solicitors but
did not do so before engaging in the grievance process. Vulcan did more than acquiesce in Mr
Wonnocott’s delay: its actions evidence implicit consent to the marginally late raising of the
grievance.
 [48] In all of the particular circumstances of the case outlined, I conclude, and agree with the
Employment Relations Authority, that Vulcan consented impliedly to the late raising by Mr
Wonnocott of his disadvantage personal grievance relating to his first formal warning.
EXCEPTIONAL CIRCUMSTANCES
115
Further provision regarding exceptional circumstances under section 114
For the purposes of section 114(4)(a), exceptional circumstances include—
(a)
where the employee has been so affected or traumatised by the matter giving rise to the grievance that he or she
was unable to properly consider raising the grievance within the period specified in section 114(1); or
(b)
where the employee made reasonable arrangements to have the grievance raised on his or her behalf by an agent
of the employee, and the agent unreasonably failed to ensure that the grievance was raised within the required
time; or
(c)
where the employee’s employment agreement does not contain the explanation concerning the resolution of
employment relationship problems that is required by section 54 or section 65, as the case may be; or (i.e. a
provision which says the employee has 90 days to raise a personal grievance)
(d)
where the employer has failed to comply with the obligation under section 120(1) to provide a statement of
reasons for dismissal.
“SO AFFECTED OR TRAUMATISED”

Telecom New Zealand Ltd v Morgan [2004] 2 ERNZ 9 (EmpC)
o Facts
 Morgan had clinical symptoms of depression, had difficulties in sleeping and concentration, was
prescribed with meds that had side effects of drowsiness and confusion
o Issue
 Was Morgan so affected or traumatised that he couldn’t raise a personal grievance
o Judgment
 Morgan was not so affected or traumatised that he couldn’t consider raising the personal grievance
 [23] Deconstructing the subsection, the following elements appear necessary to meet the exemplar
"exceptional circumstances" test under s 115(a). First, the consequences of the dismissal or other
matter giving rise to a grievance must be severe. That is illustrated by the use of the phrase "has been
so affected or traumatised ...". Although being "affected" may encompass a range of effects from
relatively minor to very serious, the accompanying use of the derivative of "trauma" connotes very
substantial injury. In a physical sense, this means shock following a physical wound or injury
characterised by a drop in body temperature and mental confusion. In the more psychological sense,
it connotes emotional shock following a stressful event, sometimes leading to long-term neurosis.
 [24] Next, s 115(a) requires that these effects of the dismissal or other matter giving rise to the
grievance caused the employee to be unable to properly consider raising the grievance. It is not an
inability to raise the grievance that Parliament has said may contribute to an exceptional
circumstance. It is the inability to "properly consider" raising the grievance that is required to be
established by an applicant for leave relying on s 115(a). Finally, that incapacity appears to be
required to exist for the whole of the 90 day period and not for only a part of it by use of the phrase
"within the period specified ...".
 [25] So interpreted, the statutory test for this exceptional circumstance requires a high standard of
proof to be met by an applicant. Although it is not impossible to conceive of cases where the
consequences of employment events giving rise to a grievance will be so serious and the resulting
111
incapacity to properly consider raising the grievance will last for more than 3 months, most cases are
unlikely to meet that test. For the following reasons I am satisfied that this case has not.
“REASONABLE ARRANGEMENTS TO HAVE THE GRIEVANCE RAISED ON HIS OR HER BEHALF”


If the employee engages a lawyer, it is expected the lawyer will know what the time limits are and raise it within that
limit
Davies v Dove Hawkes Bay Inc [2013] ERNZ 191 (EmpC)
o Judgment
 [29] If a dismissed employee engages a qualified, knowledgeable, and experienced agent to advise on
and protect the grievant’s interests following a dismissal with which the former employee is
dissatisfied, it is reasonable to expect such an agent to do so. The grievant’s steps to have the agent
raise the grievance must be reasonable but that reasonableness must be judged in light of the
grievant’s inexperience with such matters, the agent’s corresponding expertise, and the sufficiency of
the information provided to the agent to enable the agent to take those protective steps.
“EMPLOYMENT AGREEMENT DOES NOT CONTAIN THE EXPLANATION CONCERNING THE RESOLUTION OF EMPLOYMENT
RELATIONSHIP PROBLEMS”


If the employment agreement does not have a provision that says they have 90 days to raise a personal grievance, the
employee can rely on this to argue that this was an exceptional circumstance
Bryson v Three Foot Six Ltd [2006] ERNZ 781 (EmpC)
o Judgment
 [53] Three Foot Six Ltd was in breach of its obligation to provide an explanation of employment
relationship problem resolution given that it was actually employing Mr Bryson as an employee. In
addition, apart from the lack of the explanation, the facts of Mr Bryson’s case are particularly unusual.
Given that it took four judicial hearings to determine his precise employment status, it is hardly
surprising that he would have been uncertain as to his rights and obligations in raising a personal
grievance.
 [54] While there has been considerable delay since Mr Bryson was dismissed and there may have
been inevitable changes in the entity that employed him, that delay has not been caused by Mr
Bryson apart from the initial time it took to file a grievance. Having come so far in his attempt to bring
a personal grievance, it would not be just for him to be cut off at the pass.
 [55] I find that the exceptional circumstance in this case was the absence of a s 65 explanation in his
employment agreement, that this occasioned the delay and that it is just to grant leave for the
grievance to be brought out of time.
FAILULRE TO PROVIDE A “STATEMENT OF REASONS FOR DISMISSAL”

If the employee does not know why they have been dismissed, there is the ability to apply under section 120 to request
a statement of reasons for dismissal – if the employer does not comply with that, then this is a ground for exceptional
circumstances
 Roy v Board of Trustees of Tamaki College [2014] NZEmpC 153
o Judgment
 [35] Employees are entitled to require employers to so commit themselves in writing pursuant to s
120 of the Act and are not only entitled, but are often well advised, to hold off formulating a personal
grievance to be raised until that information is received. Statutory acknowledgement of that
commonsense tactic is contained in s 115(d) of the Act. This specifies that an employer’s failure to
comply with its obligation under s 120(1) to provide a statement of reasons for dismissal is an
exceptional circumstance. If this occasions delay in raising a personal grievance within the 90 day time
limit, it may allow for leave to be granted under s 114 if the Authority or the Court considers it just to
do so.
 [36] Although Mr Roy’s circumstances do not fall within s 115(d) because he did not formally request
reasons under s 120, in the circumstances of this case they are akin to a s 115(d) situation. Whilst an
employment law practitioner might have made a request under s 120, I think it would be
unreasonable to hold Mr Roy, as a lay person who was at that time without any professional or
industrial advice or assistance, to the same expectation.
3-YEAR LIMITATION
 Blue Water Hotel Ltd v VBS [2018] NZEmpC 128
o Judgment
 [56] Drawing these threads together, we are satisfied that s 114 is intended to provide a
complementary set of provisions as to how a personal grievance is raised; and within that context s
114(6) is intended to describe the period within which commencement of any action can occur. This is
to provide an end point for commencement of proceedings, and thus certainty for a potentially liable
employer; it means that personal grievances have to be the subject of an action in the Authority
within the defined period of three years.
 The absolute time limit for raising a personal grievance is three years
112
Without prejudice rule

If the employee writes a letter, and it says, “without prejudice”, even though the substance of the complaint is
contained in the letter, the parts relating to remedy/offer will be without prejudice, but the raising of the personal
grievance is not and thus admissible in evidence
 Jordan v K Pasgaard & Co Ltd [2011] NZERA Auckland 231
o Judgment
 [12] I begin by recording that the letter of 8 November opened communications between the parties
and contains no reference to anything of potential prejudice to the respondent. It sets out the
allegations giving rise to the grievance (to which no privilege attaches) and a settlement offer by the
applicant, in respect of which the applicant has waived privilege for the purposes of determination of
the preliminary issue.
 [13] I accept that no privilege attaches to those parts of the letter (or subsequent letters) which relate
to the question whether the grievance was raised. Relevant sections of this material have therefore
been taken into consideration here, and reproduced, where necessary, without disclosure of
privileged material.
PROBLEM
Mark has had difficulty with his employer Big Builders Ltd.
Over the past year, Mark has been subjected to a number of instances of bullying. He has been belittled, ridiculed, humiliated,
intimidated and subject scapegoated. Each time, he commented to his Manager that he found that the culture of the workplace
needed to change. He told him if things did not change that he would be raising a personal grievance against Big Builders
Limited.
Last week, exhausted Mark told his Manager to stick his job and walked out. His manager decides to pay him six weeks in lieu of
notice. Mark says he needs to clear his head and goes on holiday.
Four months have past and Mark has found it difficult to find another job and wants to pursue a personal grievance for
unjustified disadvantages and constructive dismissal against Big Builders Ltd.
Advise Mark whether he has raised a personal grievance within 90 days. In doing so, consider what further information that you
would require in order to advise Mark on this question.
 Ongoing breaches – does raising these amount to raising a personal grievance?
 Issues on when the notice expires – is it at the date at which the six weeks is paid? Need further information
Justifying a dismissal

When assessing a personal grievance, the onus is on the employer to prove that what they did was justifiable – the test
for justification is in section 103A
103A Test of justification
(1)
For the purposes of section 103(1)(a) and (b), the question of whether a dismissal or an action was justifiable must be
determined, on an objective basis, by applying the test in subsection (2).
The test is whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer
could have done in all the circumstances at the time the dismissal or action occurred.
In applying the test in subsection (2), the Authority or the court must consider—
(a)
whether, having regard to the resources available to the employer, the employer sufficiently investigated the
allegations against the employee before dismissing or taking action against the employee; and
(b)
whether the employer raised the concerns that the employer had with the employee before dismissing or taking
action against the employee; and
(c)
whether the employer gave the employee a reasonable opportunity to respond to the employer’s concerns before
dismissing or taking action against the employee; and
(d)
whether the employer genuinely considered the employee’s explanation (if any) in relation to the allegations
against the employee before dismissing or taking action against the employee.
In addition to the factors described in subsection (3), the Authority or the court may consider any other factors it thinks
appropriate.
The Authority or the court must not determine a dismissal or an action to be unjustifiable under this section solely
because of defects in the process followed by the employer if the defects were—
(a)
minor; and
(b)
did not result in the employee being treated unfairly.
(2)
(3)
(4)
(5)

What the employer did and how they did it is important because they need to have both substance and procedural
justification:
o Substantive justification means the employer has good reasons for dismissal (e.g. the employee committed
theft, or was grossly negligent in carrying out their duties)
o Procedural justification is the process by which the employer undertook in dismissing the employee – did they
comply with section 103A(3)?
113

 However, minor errors in procedure that did not result in unfair treatment is okay (section 103A(5))
Nelson Air Ltd v New Zealand Airline Pilots Association [1994] 2 ERNZ 665 (CA)
o Judgment
 In considering such a question it is often convenient to distinguish between procedural and
substantive unfairness. But there is no sharp dichotomy. In the end the overall question is whether
the employee has been treated fairly in all the circumstances. In this case, the two aspects of that
overall question were dealt with separately, and we will approach them in the same way
 Sometimes, substantive and procedural justification will be separate – but other times, the procedure
may be so unfair that it affects substantive fairness (e.g. the employer does not have a good reason
for dismissal because they didn’t follow any procedure)
Onus of proof

Gazeley v Oceania Group (NZ) Ltd [2013] ERNZ 727 (EmpC)
o Judgment
 If the employee proves that they have been dismissed (i.e. there has been a dismissal and not a
resignation), the employer has the onus of justifying that the dismissal was fair and reasonable
 [48] A heavy onus rests upon an employer before a dismissal can be validly effected. The reasons for
this are obvious. The right to be in employment and earn the means to support oneself and one’s
dependents is a substantial right requiring protection. There is a strong societal imperative behind
this, supported by the economic need for full employment as founding a strong overall economy. A
position of employment is a valuable asset. Employees are the most valuable asset of any business
hoping to thrive. If the employment is to be terminated it is essential that it be justifiable and fair.

Northern Distribution Union v BP Oil New Zealand Ltd (1989) ERNZ Sel Cas 512 (CA)
o Judgment
 The question is essentially what it was open to a reasonable and fair employer to do in the
particular circumstances. Thus it is necessarily a question of fact and degree.
BP Oil New Zealand Ltd v Northern Distribution Union [1992] 3 ERNZ 483 (CA)
o Judgment
 … In the context of a personal grievance claim under the Labour Relations Act, questions of
procedural and substantive fairness are also relevant. In the end, the question is essentially whether
the decision to dismiss was one which a reasonable and fair employer would have taken in the
particular circumstances.
W&H Newspapers Ltd v Oram [2001] 3 NZLR 29 (CA)
o Facts
 Oram was a photographer
 He was involved with a story in relation to a liquor licence application and was meant to be taking a
photo of the president of the gang
 He was given a description of the man, and he took a photo – this was put on the front page of the
press in Christchurch
 The photo he took was of the wrong man – it was of a social worker involved with the case
o Issue
 Could Oram be justifiably dismissed?
o Judgment
 [31] While in a breach of contract case an employee alleging wrongful dismissal must establish to the
satisfaction of the Court that the employer has breached the contract, in a personal grievance, once
the employee has established a prima facie case of unjustifiable dismissal, the onus is on the
employer to justify the dismissal. The Court has to be satisfied that the decision to dismiss was one
which a reasonable and fair employer could have taken. Bearing in mind that there may be more than
one correct response open to a fair and reasonable employer, we prefer to express this in terms of
"could" rather than "would", used in the formulation expressed in the second BP Oil case ([1992] 3
ERNZ 483 (CA) at p 487)
 Oram could have been dismissed, but whether he would have been dismissed is a different question
 There will be cases where negligence is of such severity that it could impair the trust and confidence
of the employment relationship
 There doesn’t necessarily need to be wilful misconduct or dishonesty – a single act of
unintentional carelessness could amount to a justification if it is sufficiently serious to impair
the trust and confidence of the employment relationship
Air New Zealand Ltd v Hudson [2006] ERNZ 415 (EmpC)
o Facts
Substantive justification



114
 Parliament introduced section 103A and changed the test back from “could” to “would”
Judgment
 [139] … When judging possible responses to evidence of misconduct, the difference between “could”
and “would” can be described as the difference between whether a person is able to respond in a
certain way or whether a person who is able to respond would actually respond in that way. For
example, if an employee is unequivocally caught red-handed stealing large amounts of money, a fair
and reasonable employer both could and would dismiss with justification. However, if an employee
has made a negligent accounting error, the employer could dismiss but whether a fair and reasonable
employer would dismiss is a matter for evaluation against all the relevant circumstances
 Section 103A requires the Court to consider the actions against what a fair and reasonable would
have done
 Parliament had legislated for the Court to evaluate the choice against a specified objective standard –
what would a fair and reasonable employer have done?
Air New Zealand Ltd v V [2009] ERNZ 185 (EmpC)
o Judgment
 [33] By reverting to the use of the word “would” s 103A imposes on the Authority or Court an
obligation to judge the actions of the employer against the objective standard of a fair and reasonable
employer. It is not the standards that the Authority or the Court might apply had they been in the
employer’s position but rather what these bodies conclude a fair and reasonable employer in the
circumstances of the actual employer would have decided and how those decisions would have been
made.
Angus v Ports of Auckland Ltd [2011] NZEmpC 125
o Facts
 In 2011, Parliament changed section 103A back from “would” to “could”
o Judgment
 [33] As Mr McIlraith submitted, in grammatical terms, both “would” and “could” are modal auxiliary
verbs. When contained in the phrases “would have done” and “could have done” in the former and
new s 103As respectively, “would” is the past tense of “will” and “could” is the past tense of “can”.
They indicate different degrees of likelihood or probability of outcome or result. As such, they have
different meanings. “Could have done” connotes several available possibilities, whereas “would have
done” indicates a single outcome. To use the topical examples provided by Mr McIlraith in argument
illustrates the difference:
(a) If the French had tried a bit harder, they would have won the Rugby World Cup.
(b) If the French had tried a bit harder, they could have won the Rugby World Cup.
 The word “could” implies that there is a reasonable range of responses that a fair and reasonable
employer could have done
 This accounts for the fact that different fair and reasonable employers could come to
different conclusions
 But with “would”, there is only one outcome that a fair and reasonable employer would have
done
 As soon as the employer breaches section 103A(3), this is enough for the whole dismissal to be
procedurally unjustified
 However, section 103A(3) is inclusive rather than exclusive
o


Procedural justification – factors to consider under subsection (3)

Although substantive justification is important, it is likely not made out in some cases – but if the employer also follows
a fair process, they may be justified in the dismissal
Did the employer sufficiently investigate the allegations against the employee?
MUST TAKE INTO ACCOUNT THE RESOURCES OF THE EMPLOYER
 Is the employer a large multinational organisation with lots of resources, or a 1-man operation? – the level of
sufficiency will be different for each
 De Bruin v Canterbury District Health Board [2012] NZEmpC 110
o Facts
 The employee was a psychiatric nurse who had difficulties with a female patient with intellectual
disabilities and a personality disorder
 The employee and two others restrained her by putting her in a blanket and dragging her back to her
room – the nurse apparently slapped the patient after she spit in his face
 The employers received an explanation from the employee (saying that it was not intentional and a
reflexive action) and then interviewed the two others involved
o Judgment
115

The employee’s statement that his actions were reflexive was not properly put to the other two
witnesses – therefore, the employer did not carry out a proper investigation
 [52] In reaching this conclusion, I have had regard to the resources available to the employer, as
required by the statute. CDHB is a very large employer with a substantial in-house human resources
team. Ms Kearny was assisted throughout the investigation process by Mr van Rensburg who said in
evidence that he has over 20 years’ experience in human resources. Such an employer can properly
be expected to conduct an investigation fully and thoroughly. Any significant failure to do so will be
unjustifiable.
“SUFFICIENTLY” INVESTIGATED
 A Ltd v H [2016] NZCA 419
o Facts
 H (who was in his 50s) shared a hotel room with a 19-year-old
 When confronted with the allegation that he had placed his hand on an inappropriate place, H said he
was just moving the blanket
o Judgment (Employment Court)
 The employer did not re-interview the complainant and a variety of other people involved –
therefore, they did not sufficiently investigate the complaint
o Judgment
 The Employment Court had applied an unjustifiably high standard on the employer
 The courts shouldn’t be placing a judicial standard on the employer’s investigative action
much like that of a trial, even for large employers
 There only needs to be a sufficient investigation into the events that occurred
 [46] It is apparent that the effect of the statute is that there may be a variety of ways of achieving a
fair and reasonable result in a particular case. As the Court in Angus observed, the requirement is for
an assessment of substantive fairness and reasonableness rather than “minute and pedantic scrutiny”
to identify any failings. In our view, there has been a departure from that requirement in this case.
 [47] In addition to our earlier observation about the general circumstances, it is relevant that the key
difference between the accounts of Mr H and Ms C was whether the touching was accidental. We
accept there may be cases where the circumstances require the investigator to challenge the
complainant in a more rigorous manner than was the case here in order to meet the requirement in s
103A(3)(d) of genuine consideration of the employee’s explanations. But Mr Pearce directly put to Ms
C whether the touching might have been accidental and in the circumstances there cannot have been
a requirement to further test her on that point.
Did the employer raise the concerns it had with the employee before taking
action?
THE EMPLOYEE MUST HAVE NOTICE OF ALLEGATIONS
 Hoff v The Wood Lifecare Ltd [2015] NZEmpC 58
o Facts
 The employer had people around the rest home to look into the rooms
 The employee hid behind a door because she was in a room she wasn’t meant to be in, and the door
was open, and the gardener took off in another direction
 The employer dismissed her as she was not truthful in her answers, but did not put this allegation to
her
o Judgment
 Although the employer had suspicions that the employee was engaging in misconduct, they could
never confirm that, so they relied on the fact that she had been less than truthful in her answers – but
they did not put this to her in the allegations
 Therefore, during the disciplinary meeting, she could not respond to the allegation of
untruthfulness
 [34] It is axiomatic that an employee accused of serious misconduct, with dismissal as a possible
outcome, is entitled to have the charge and the employer's issues of concern clearly identified. The
employee must be given details of the evidence the employer intends to rely upon in support of the
allegations and a proper opportunity to respond before any final decision is made. Those
requirements are encompassed in the statutory obligations of fairness and good faith. [35] Ms
Sharma submitted that in the present case the defendant failed to comply with its good faith
obligation in this regard to the extent that it failed to properly inform Mrs Hoff of the allegations to
be responded to. [36] The "letter of allegation" as Ms Sharma appropriately referred to it, dated 27
April 2011, (see [20] above) was defective in that it
SPECIFICITY OF THE ALLEGATION
 The employer must specify exactly what is wrong
116
o
Not giving enough specifics gives rise to the risk that the employer won’t have raised the concerns it had with
the employee
o However, a 100-page document covering a smaller issue may also give rise to the same risk
 Batey v Board of Trustees of St Michael's School [1993] 2 ERNZ 851 (EmpC)
o Judgment
 … As Mr Drumm submitted, para (b) [of cl 2.1.1 of the Primary Teachers' Collective Employment
Contract] requires the employee to be advised of the specific nature of the alleged conduct and a
reasonable opportunity must be provided for the employee to respond. Mr Batey was provided with
the document containing a collation of 130 pages covering a 5 year period, together with a notice
from the chairman requiring Mr Batey to address the board on the following issues: the nature and
effect of the matters raised in the document; the effect of these matters on the school, pupils,
parents, and parish; and matters which in his view might rectify the situation.
 I agree with Mr Drumm's submissions that this does not advise the employee of the specific nature of
the alleged conduct, in terms of para (b). In particular, it does not draw specific attention to the
board's concerns about Mr Batey's competence, which formed part of the Tribunal's findings, nor to
the board's concerns as to the untruthfulness of his response to Mr Peacocke's letter.
THE EMPLOYER MUST DISCLOSE RELEVANT INFORMATION TO THE EMPLOYEE
 For example, if the employer has CCTV footage, it must disclose this to the employee before getting them to respond –
anything supporting the allegations must be sent for the allegations to be specific enough
 Smith v McCulloch & Partners [2003] 1 ERNZ 346 (EmpC)
o Facts
 The employee worked in an accountancy office – she did work on the side for a Maori trust
 The employer copied the employee’s drive, and then raised the allegations to her
 The employee then deleted some material from her computer
o Judgment
 The issue is that the employer did not tell the employee that they copied her materials before she
had deleted them – in doing so, they hadn’t disclosed all relevant information
 [40] One of the difficulties for the defendant is that it was not open with the plaintiff. It did not tell
her that it had downloaded all the information she had on her computer terminal. It did not tell her
that it understood that she had had recent communications with the Inland Revenue Department. If it
had disclosed these matters, it is quite plain that the parties would never have come before the
Court. For example, the communication with the Inland Revenue Department was confined to dealing
with its claim that it had not received the returns which the plaintiff had sent in on 14 January 2002.
She provided another set. As a result of the defendant's reticence, the plaintiff, in a state of panic,
deleted the files. It is necessary to analyse the consequence of this action. It is quite plain that
immediately before 9 May 2002, the plaintiff would have been entirely within her rights in deleting
these files. Indeed, it is a little surprising that she did not do so immediately after 20 January 2002,
the last date on which she had told the Inland Revenue Department she would be available to answer
questions.
SECRET WITNESSES
 Often a complainant might come forward in harassment or bullying cases, but they might also come forward
anonymously
o The general rule is that there is no such thing as an anonymous complaint – you must put your name forward
o However, there will be situations where the circumstances require there to be “secret witnesses” – you don’t
put all the allegations to the employee because you have a secret witness
 Example – children witnesses, vulnerable witnesses (e.g. intellectually disabled or old)
 Porter v The Board of Trustees of Westlake Girls’ High School [1998] 1 ERNZ 377 (EmpC)
o Facts
 There were allegations of theft against a cleaning supervisor
o Judgment
 An employer can have secret witnesses, but it is incumbent on the employer acting fairly and
reasonably to have ensured that the process was fair in other respects (e.g. give the employee more
information or more time in dealing with the allegations)
 In general a fair inquiry into serious allegations against an employee will require full and fair
disclosure to the employee of material evidence. Generally also, the identity of the person or persons
making the complaint of serious misconduct will be a very material fact without which an employee
will be at an unfair disadvantage in, first, knowing of the allegation and, second, in having an
opportunity to respond to it. There may, however, be circumstances in which, although unfair to the
employee, an employer is nevertheless justified in then withholding details of identity for good
reason. This case was, on the evidence, I think one falling into that exceptional category. But the
question is not simply one of disclosure or non-disclosure per se. If the identities of the complainants
117
are justifiably to be withheld, it was incumbent on the employer, acting fairly and reasonably as it was
obliged to, to have ensured that the process was fair in other respects. For reasons to be set out later,
I am not satisfied that it did so. In addition to refusing to disclose the names of the student
complainants or other particular details as might have identified them, the defendant unfairly
deprived Ms Porter of the opportunity to know of the allegations against her.
THE EMPLOYEE MUST BE MADE AWARE OF THE NATURE OF THE OUTCOME
 The employer must let the employee know the potential consequences of the investigation (e.g. this could possibly
result in termination)
o However, there is a fine line between this and pre-determination – therefore, the employer must make sure
that termination is only one possible consequence among other things (e.g. counselling, suspension, warning)
 Gaut v BP Oil New Zealand Ltd [2011] NZEmpC 71
o Facts
 The employer had a template letter with boxes
 Prior to the interview, it said that possible outcomes of the interview were (management to tick) [no
action] [letter of concern] [written warning] [termination of employment]
 The employer ticked all boxes – therefore, the employee didn’t know what they were facing
o Judgment
 [39] Further, the form in question gave no indication as to whether the plaintiff’s actions were
regarded by the defendant as “misconduct” or “serious misconduct”. Both boxes were ticked. The
reference to “verbal assault”, which was the alleged action leading to his dismissal, was not a
reference to any of the specific acts of misconduct referred to in the Code of Conduct. There was no
indication given in the body of the form as to the likely outcome of the disciplinary meeting should
the employer’s investigation establish the misconduct alleged. Again, under this paragraph all the
boxes were ticked. In the circumstances of this case, the ticking of every box on the form was
inherently confusing and did not provide the information necessary for the plaintiff to prepare a
satisfactory response or to put him on notice about the severity of the possible outcome of the
investigation. That is not how a fair and reasonable employer would have handled the situation.
THE EMPLOYEE’S RIGHT TO REPRESENTATION
 An employee has a right to be represented
o The more severe the possible outcome, the more important it is for the employer to state in the disciplinary
letter that the employee has a right to take independent advice or bring a support person
o Sometimes, it might even be appropriate for employers to offer to pay for legal fees to ensure this right has
been complied with
 Lewis v Howick College Board of Trustees [2010] NZEmpC 4
o Facts
 Lewis was dismissed following a big personality clash
 He hadn’t obtained representation during the process
o Judgment
 Due to the nature of the employer (being a school), it was important to ensure the representation of
or professional support for the plaintiff
 [97] All these were unusual factors that disadvantaged Mr Lewis significantly. For these reasons I have
concluded that a fair and reasonable employer in all the circumstances would have done more to
have attempted to ensure representation of, or professional support for, the plaintiff. Even if for no
other reason, it would have been in the Board’s own interests to have done so as the sorry saga of
this case for the school shows. Had this been the sole process flaw, it would not alone have caused
Mr Lewis’s dismissal to have been unjustified. After all, the Board fulfilled its contractual and policy
obligations to the letter in this regard. But, combined with the other process failings identified, the
Board’s omission to honour its commitment in spirit as well as to the letter creates an added sense of
unfairness in the events leading to the plaintiff’s dismissal.
Did the employer give the employee a reasonable opportunity to respond?
“REASONABLE OPPORTUNITY TO RESPOND”
 To give the employee a reasonable opportunity to respond, they need to be put on proper notice first
o When suspending an employee, they still need to be consulted and the employer must put to them the
possibility of suspending them and getting their response – the employer cannot just suspend them without
giving an opportunity to respond
 Sefo v Sealord Shellfish Ltd [2008] ERNZ 178 (EmpC)
o Judgment
 [38] So it may be seen that an employer contemplating suspension of an employee against whom
serious misconduct has been alleged which must be investigated but may result in dismissal or other
sanctions, will usually be required to tell the employee of the possibility of suspension, of the
118
employer’s grounds for doing so, and offer the employee an opportunity to persuade the employer
not to suspend. As the judgment in Graham illustrates, that is not an immutable proposition but, as
the Authority itself in this case remarked, cases will be relatively rare where an employer is justified in
deciding unilaterally to suspend without advice to, or input from, the affected employee.
THE EMPLOYER MUST NOT ENGAGE IN ENTRAPMENT
 Aslam v Transportation Auckland Corporation Ltd [2018] NZCA 301
o Facts
 A bus driver went down the wrong route – one of the people on the bus told them about this, and he
kicked them off the bus
 The driver was invited to an investigation meeting and required to give his explanation of events
 The employer then produced CCTV footage that proves that the employee lied about his explanation
of events
o Judgment
 The entrapment contention
[22] The basis of this allegation lay in the fact that, although the video was shown to Mr Froggatt at
the outset, neither the video nor the passenger’s written complaint were shown to Mr Aslam until
after he had provided his initial written response and, more significantly, until after a number of
specific questions were put to him at the initial meeting on 13 July 2016. Mr Aslam’s version of the
sequence of events at the meeting is supported by the notes of the meeting made by two persons in
attendance, Ms Wood (the Transportation Auckland Regional Human Resources Manager) and Mr
Borren (the Regional Human Resources Adviser). Both those records contain reference to a complaint
being made about entrapment. In Mr Borren’s notes, the statement is attributed to Mr Froggatt.
 This is an example of entrapment
 The employer knows something and hasn’t provided this information to the employee when
putting the allegations to the employee
 The employer has made the employee respond, but then refutes the response with
undisclosed evidence – this is not giving a reasonable opportunity to respond; the employer
should have disclosed that evidence from the start to comply with this principle
 However, in this case, the employee was treated fairly, and the entrapment did not make a difference
to the result
THE EMPLOYER MUST AVOID COLLATION OF COMPLAINTS
 Collating years’ worth of complaints and putting them all to the employee at once and expecting them to respond is not
giving them a reasonably opportunity to respond – this is because the employer did not raise those complaints at the
time they were made
 Donaldson and Youngman (t/a Law Courts Hotel) v Dickson [1994] 1 ERNZ 920 (EmpC)
o Facts
 The employee was approached on two separate occasions – he was taken through a two-page list of
concerns, which she didn’t know about and thought everything was going fine
o Judgment
 By collating complaints, the employers created an environment of constructive dismissal – the
employee resigned because of the way in which the employer dealt with the complaints
 I reject the submission that Mr Donaldson was behaving like a reasonable employer. If he had a list
extending to two pages of matters causing dissatisfaction those concerns could not all have arisen at
the same time. He must obviously have had many opportunities to raise these matters singularly or in
pairs, as and when they cropped up. To store them up and then to smite the employee with them, hip
and thigh, in one giant instalment, is about as great a breach of the duty of trust and confidence
inherent in every employment contract as can be imagined.
TIMING
 The employer cannot demand the employee to come to a meeting and give a response immediately – the employer
must give notice to the employee and ensure that the employee has a reasonable time to respond
 Northern Hotel etc IUOW v United Life Care Ltd (t/a Somervale Lodge) [1989] 3 NZILR 53 (LC)
o Judgment
 However, the manner in which the employer dealt with her was by itself clearly disadvantageous. She
was summoned from family duties on a day when she was not rostered to work, and was interviewed
alone and without warning of the purpose of the interview. She was not made aware that her
continued employment might depend upon the way she conducted herself at the interview. At the
interview she was confronted by her immediate superior and another person whom she did not know
who conducted the interview. She was confronted with an allegation that Mr Ruhe had called for
help, which she denied. She was clearly disbelieved and was told she might as well go home. She took
this to mean she had been dismissed. In a letter written the following day and posted to her she was
119
advised that she had been dismissed at that interview. The whole procedure, including its basic
assumptions, the way it was done and the things that were said to the worker, was unfair.
THE PARTIES MUST BE HEARD BY THE DECISION-MAKER
 The employer must ensure that the person that will make the call on whether to dismiss the employee is actually
present at the meetings
o However, some elements of an investigation can be delegated
 Timu v Waitemata District Health Board [2007] ERNZ 419 (EmpC)
o Facts
 The general manager had no contact with anyone who spoke with the witnesses, or the witnesses
themselves – he only had the bare written record of what they said
 The defendant’s disciplinary policy also expressly provided that the decision-maker was to be actively
involves in a disciplinary process
o Judgment
 [91] It is now well-established that delegation of some aspects of an investigation by the decision
maker will not necessarily render it unfair…. In this case, however, I find that the extent to which Mr
Davies was isolated from the primary evidence he needed to evaluate made it unfair for him to be the
decision maker. Put another way, Mr Davies’ role as decision maker required him to have a greater
involvement in the investigation process for it to be fair.
120
THE EMPLOYER CANNOT DELEGATE THE DISCIPLINARY PROCESS TO AN EXTERNAL THIRD PARTY
 The employer can delegate elements of an investigation, but this is different from making the decision to dismiss – the
decision to dismiss cannot be made by an external third party
 Hall v Dionex [2015] NZEmpC 99
o Judgment
 [45] I do not consider that an employer can be divested of the ultimate decision-making process, as
occurred in the present case. Plainly, once TFNZL became Mr Hall’s employer the position would have
been different. It had not, however, advanced to that point, as the defendant admitted in its
pleadings.
 [46] It follows from the foregoing that the decision to dismiss could not have been made by Ms
Cameron because she was neither the employer nor the representative of the employer as those
terms are defined within the Act. In any event there was no valid delegation even if it was otherwise
lawful to delegate the decision-making function outside the employer entity.
THE DECISION-MAKER MUST HAVE AUTHORITY TO MAKE THE DECISION TO DISMISS
 Compass New Zealand Inc v Crothalls Property Services Ltd [1992] 1 ERNZ 461 (EmpC)
o Judgment
 Finally, we find that the company in dismissing Ms Garnett was in clear breach of one of its own
internal rules. Ms Garnett was aware, and Mr Butcher subsequently acknowledged in evidence, that
dismissals of the respondent's employees are not able to be competently undertaken by an
immediate supervisor. Rather, and for no doubt sound managerial reasons, any dismissal can only be
effected by a manager at least two hierarchal rungs above the employee to be dismissed. Ms Garnett
was dismissed by her immediate manager and although Mr Butcher sought to justify in the particular
circumstances this clear breach of well-known company policy, there is nothing in the events of this
case which we think would have excused this procedurally deficient dismissal. For all of the above
reasons we declare Ms Garnett's dismissal to have been unjustified.
RIGHT TO SILENCE AND GOOD FAITH
 An employee’s obligation of good faith under section 4(1A)(b) require them to be responsive and communicative
o But there is an exception where they have criminal proceedings against them (i.e. they have criminal charges)
– they have a right to silence and privilege against self-incrimination because anything they say in the
disciplinary meeting may be used against them
 B v Virgin Australia (NZ) Employment and Crewing Ltd [2013] NZEmpC 40
o Judgment
 [158] No issues of self incrimination or double jeopardy arose because by this time the Police had
confirmed that they were not going to charge the plaintiff. And even where an employee is facing
parallel criminal proceedings there is no immutable rule that s/he is entitled to refuse to respond to
questions arising in a disciplinary context. Performance of the duties of good faith contained within s
4(1A)(b) (to be responsive and communicative) are couched in mandatory, not discretionary, terms.
The plaintiff failed to meet his obligations to his employer.
IF NEED BE, THE EMPLOYER MUST MAKE FURTHER INQUIRIES
 Where the evidence leads to further avenues of investigation, the employer must make further inquiries in pursuit of
that to sufficiently investigate the allegations – but the employer must also give the employee a reasonable opportunity
to respond to further inquiries
 Kirk t/a Country Rest Restaurant v Thomas EmpC Christchurch, CEC50/94, 22 December 1994
o Judgment
 Furthermore, notwithstanding that Mr and Mrs Kirk knew that the Dexter McKenzie explanation
advanced by Mrs Thomas on 11 May did not adequately account for the then commonly agreed view
which Mrs Thomas shared of what had happened during this sale transaction recorded on video tape
at 1.41 pm on 2 April, in my concluded view the appellants should nevertheless have interviewed Mr
McKenzie. He was then readily available at Tapanui for that purpose if Mr and Mrs Kirk had so
proceeded. Such an interview may have reliably confirmed whether or not Mr McKenzie was the
customer who actually dealt with the respondent at 1.41 pm on 2 April and, if this was so established,
whether he could assist in any material way in explaining - if this was the case - why monies he had
paid to Mrs Thomas for the meal of himself and his companions and for which change was given to
him was not paid into the cash register drawer by the respondent. All these "ifs and buts" were left
unresolved because despite Mr McKenzie's immediate availability Mr and Mrs Kirk did not approach
him for any such explanation or insights he may have been able to provide them with.
Did the employer genuinely consider any explanation by the employee?

This is directed towards bias
o The decision-maker should be careful to come with an objective mind, especially if they are a witness to the
events themselves
121
THE EMPLOYER MUST NOT TAKE INTO ACCOUNT IRRELEVANT CONSIDERATIONS
 Allen v Transpacific Industries Group Ltd (t/a "Medismart Ltd") (2009) 6 NZELR 530 (EmpC)
o Facts
 There was a broad overarching allegation of organised employee fraud
o Judgment
 There was no evidence to support the allegation and was actually contrary to the evidence – but the
employer did not make further inquiries and had taken into account irrelevant considerations
 [45] In this case I have been left with an abiding impression that at a superficial level an apparently
fair and reasonable process was undertaken by the employer before determining to dismiss Mr Allen
summarily. However, when that is examined more closely, the company may be seen to have been
simply going through the motions without sufficient regard to a fair consideration and balancing of
the results of its inquiries. Put another way, and indeed as the Employment Relations Authority found
in respect of one inquiry that the company failed to make, it did not wish to make any findings that
pointed away from its suspicion of organised employee fraud and did not do so. In the course of that
inquiry, the employer ignored relevant evidence, made assumptions about Mr Allen’s actions that it
did not check with him or others, applied irrelevant considerations to its conclusion of fraudulent
conduct, and, although confirming its suspicions about organised employee fraud, so concluded
without probative evidence and indeed contrary to evidence that it ignored.
PREDETERMINATION
 Predetermination often occurs when an employer gives the employee a letter before the disciplinary meeting saying
they are dismissed, or showing that the employer is planning for the employee’s dismissal regardless of what happens
at the meeting (e.g. preparing a final payslip)
 Farmers Trading Co Ltd v Deadman (1998) 5 NZELC 98,510 (EmpC)
o Judgment
 In addition, the procedure was unsatisfactory. The decision had been made to dismiss before the final
meeting and the respondent had in advance been replaced by another employee. Nothing at that
meeting made or could have made any difference. The respondent was not represented at the first
meeting or forewarned about its purpose. By being then and there suspended, he was prevented
from getting any aid or advice from fellow employees. He had no adequate opportunity to do so the
following day, not that it would have made any difference.
BIAS
 If the employer is the decision-maker and is a witness to the events forming the employee’s allegations, it must ensure
that the way in which the meetings are conducted are substantially fair (e.g. perhaps make a more senior executive the
decision-maker)
o A fair and reasonable employer in a large organisation who is too close to the events will delegate decisionmaking to others
o In small organisations where there is no choice but for a witness to be a decision-maker, it is important that a
fair and reasonable process has been followed to account for bias
 Bhikoo v Stephen Marr Hair Design Newmarket Ltd [2016] NZEmpC 32
o Facts
 There was an argument between a husband and a director-shareholder
 The only other person in the business who could make a decision was the husband’s wife – she had to
carry out the investigation
o Judgment
 In the circumstances of this case, the decision-making was justified – the wife was shrewd and relied
on evidence other than just her husband’s (e.g. CCTV cameras, evidence of other witnesses) in order
to make a decision
 [32] The test comes back to a consideration under s 103A of the Act. If the employer’s decision-maker
was so involved in the events leading to the grievance that their objectivity was fettered as to render
them completely partial then that person may not be the appropriate person to decide the outcome
of the disciplinary process on the grounds that it would not be what a fair and reasonable employer
could have done in all the circumstances at the time that dismissal or action occurred. Ms Vincent
was not in such a position or of such an attitude. Whether or not a particular person within the
employer’s organisation should appropriately carry out the disciplinary process will be a matter for
the judgement of the employer in each case and will depend upon the circumstances prevailing. For
example in a smaller organisation or where there is only one person in the role of employer there
may be no alternative but for the person who has been involved in the events leading to the
grievance to also make the decision on the outcome.
Any other relevant factors can be considered (section 103A(4))

Angus v Ports of Auckland Ltd [2011] NZEmpC 125
122
o
Judgment
 As soon as the employer breaches section 103A(3), this is enough for the whole dismissal to be
procedurally unjustified
 Section 103A(3) is inclusive rather than exclusive (e.g. disparity of treatment is not referred to in
subsection (3), but could be another factor to consider)
THE EMPLOYMENT AGREEMENT
 The employment agreement or company policies may be a good place to start for other factors to consider:
o The employer should follow any procedures set down in the agreement or policies – this is why it may not be a
good idea to set down disciplinary processes in an agreement as the employer is bound to it
 Butcher v OCS Ltd [2008] ERNZ 367 (EmpC)
o Judgment
 [49] Further, the authorities cited by counsel… make it clear that the policy does not necessarily have
to be followed to the letter. This flexibility in considering the actions of an employer which has failed
to follow its own policy has been enhanced by the introduction of s 103A. The section requires a
consideration of all of the employer’s actions and whether the way the employer acted was what a
fair and reasonable employer would have done in all the circumstances. This makes it clear that the
issue is not whether or not an employer has properly followed every requirement of a promulgated
policy document but whether, in all the circumstances at the time the dismissal occurred, the
employer’s actions were what a fair and reasonable employer would have done. Cases prior to s 103A
must be read in light of that more comprehensive and flexible objective approach.
PROFESSIONAL CONSEQUENCES
 For particular industries (e.g. teaching, health, lawyers, accountants, professionals), if employees are dismissed, they
are automatically reported to the relevant body or tribunal – the difficulty with this is future employability of the
employee in the entire sector
o Therefore, if an employee is to be dismissed, the employer must be very sure it is justified because it will have
an effect on the employee’s career
o Employers in these professions are therefore held to higher standards
 Lewis v Howick College Board of Trustees [2010] NZEmpC 4
o Judgment
 [5] As in the cases of other professional employees whose very livelihoods are affected by a dismissal
from employment, the consequences for a school teacher of dismissal for misconduct or
incompetence and especially, as in this case, a summary dismissal for serious misconduct, affect not
only that employment relationship. Whereas many other dismissed employees have opportunities to
seek alternative employment within their fields of experience and for which they are qualified,
teachers (and others) must also be professionally registered to practise. Dismissals of teachers (and a
range of lesser sanctions in employment) trigger automatically a vocational or professional
registration investigation. As with many other professions there is little, if any, opportunity for
employment in New Zealand without registration. An employer dismissing a teacher is bound by law
to advise the Teacher Registration Council. As in this case, it can be expected that there will be a level
of inquiry into the teacher’s fitness to be registered in light of the circumstances of the dismissal and
other relevant considerations. So the effect of the dismissal of a teacher is especially significant. Put
simply, allegations of misconduct or incompetence place teachers (and other similarly registered
occupations) in double jeopardy of their livelihoods.
CULTURAL FACTORS
 In some workplaces, there are cultural environments
o If holding a disciplinary process for Maori organisations, there are cultural processes (e.g. Karakia, interactive
discussions) – these factors must be taken into account in assessing if the employer was fair and reasonable
 Te Whanau a Takiwira Te Kohango Reo v Tito [1996] 2 ERNZ 565 (EmpC)
o Judgment
 There is nothing whatever to prevent this Court giving recognition to the kaupapa of Te Kohanga Reo,
to the whanau and to the Maori concept wananga. Indeed, the current legislative and judicial climate
encourages that. In the statutory environment of the Employment Contracts Act 1991 Maori customs
may frequently be part of a factual context in a grievance claim, as here. The fact however that
certain actions which are the subject of a grievance claim and challenged for fairness, were
performed validly in a customary context cannot throw up a shield preventing the eyes of the Court
from probing the customary actions to see if they complied with the law's requirement that they be
fair.
STATE SECTOR
 The state sector (under the Public Service Act) has more onerous processes
 Armstrong v Attorney-General [1995] 1 ERNZ 43 (EmpC)
o Judgment
123

This is not a statutory duty to treat employees fairly and reasonably. Such a duty exists independently
of the statute. Rather, the statutory duty is to put in place a personnel policy that will ensure that the
extra statutory but none the less legal duty to treat employees fairly and properly is duly discharged
at all levels and in an aspects of employment. It is a duty to instil an employment culture that is
acceptably exemplary.
PAST RECORD
 An employer cannot bring up everything in the past and put it to the employee
 Ashton v The Shoreline Hotel [1994] 1 ERNZ 421 (EmpC)
o Facts
 A bar manager had his girlfriend’s party at the bar – they became drunk, he had an argument with the
disc jockey
 The alleged conduct was a lack of professionalism – including a past failure to prevent staff from
drinking, damage done by a visiting rugby team while he was on duty manager, and him being
intoxicated at the party
o Judgment
 A point must be reached at which the employee can safely assume that the sword of Damocles is no
longer suspended overhead by a frail thread but has been taken down and returned to its sheath.
 The longer the employer waits to raise issues of misconduct, the less likely they are going to be able
to rely on them for a dismissal – if an employee has 90 days to raise a personal grievance, then an
employer should raise concerns after 90 days, otherwise they risk impliedly acquiescing to the
misconduct and cannot dismiss the employee based on those concerns
DISPARITY OF TREATMENT
 Disparity is often a problem in a large organisation where inconsistencies can arise in decision-making
o The ultimate test is whether someone else would have been treated the same
o If the employees are treated differently, there must be a justification
 Chief Executive of the Department of Inland Revenue v Buchanan [2005] ERNZ 767 (CA)
o Facts
 The IRDs policy was that employees cannot look up their family members on the system – some
employees did do this, and some were dismissed while others were given warnings
o Judgment
 [45] In essence, therefore, the argument for the Department is that the Court must consider three
separate issues, namely:
 (a) Is there disparity of treatment?
 (b) If so, is there an adequate explanation for the disparity?
 (c) If not, is the dismissal justified, notwithstanding the disparity for which there is no
adequate explanation?
ALTERNATIVES TO DISMISSAL
 Secretary for Justice v Dodd [2010] NZEmpC 84
o Facts
 Dodd’s nephew was being prosecuted for assaulting his former partner
 Dodd was a registrar at the courts – she contacted the complainant about her victim impact
statement and accessed some information on the internal systems relating to the case
 Dodd was dismissed
o Judgment
 This is serious misconduct, but it does not justify dismissal
 The employer has an obligation to consider alternatives to the extreme of dismissal
 The employer does not need to exonerate the misbehaving employee, but there are other
options (e.g. issue a final warning, transfer, demotion, suspension) – the employer must
consider the alternatives to dismissal even with serious misconduct
 [118] This is not the first case in which this Court has noted a reluctance and sometimes an inability to
consider alternatives to the extremes of dismissal on the one hand and complete exoneration of a
misbehaving employee on the other. Although in some cases the question of entitlement in law to
tailor such an outcome may cause employers to shy away from its imposition, in this case (and on the
evidence in the case of Ministry of Justice employees generally and probably other public servants),
there is no question of the ability in law to do so. That reluctance or perceived inability by employers
to think laterally about an appropriate sanction for misconduct less than dismissal also ignores the
ability of it to be discussed with an employee and potentially agreed to. This Court sees many cases of
employees who have misconducted themselves accepting that there should be some sanction that
also gives an opportunity for rehabilitation but is short of the ultimate consequence of dismissal. The
evidence suggests that had such an outcome been explored by the plaintiff with Ms Dodd, this
proceeding might have been avoided entirely.
124
125
Grounds for personal grievance
Unjustified disadvantage
103
Personal grievance
(1)
For the purposes of this Act, personal grievance means any grievance that an employee may have against the employee’s
employer or former employer because of a claim—
…
(b)
that the employee’s employment, or 1 or more conditions of the employee’s employment (including any condition
that survives termination of the employment), is or are or was (during employment that has since been
terminated) affected to the employee’s disadvantage by some unjustifiable action by the employer; or


Unjustified disadvantage is a condition of employment, and not termination itself
What constitutes a disadvantage?
o An employee's
o employment, or
o one or more conditions of the employment,
o including any condition that survives termination of the employment,
o is, are or was (during employment that has since terminated) affected
o to the employee's disadvantage, by
o some action, which is
o unjustifiable, and which action is
o by the employer, and
o that action does not derive "solely" from the interpretation or disputed interpretation of an employment
agreement.
TERMS AND CONDITIONS OF EMPLOYMENT
 Alliance Freezing Co (Southland) Ltd v New Zealand Engineering Workers Union (1989) ERNZ Sel Cas 575 (CA)
o Facts
 The employer issued a final written warning for the employee allegedly falsifying a time sheet
o Submissions
 The employer argued that this is not a disadvantage as the employee still has his job, so there is no
material or financial disadvantage
o Judgment
 We see no reason to read down the ordinary meaning of "disadvantage" by introducing a material or
financial qualification. It may be that in some circumstances that is the only kind of disadvantage that
could arise and so its absence would mean that there would be no personal grievance. But where the
effect of a warning is to render the employee liable to dismissal for an infringement that would not
otherwise place him in that jeopardy, we have no doubt that his employment is affected to his
disadvantage. His employment becomes … less secure; he becomes significantly more vulnerable to
dismissal. What would otherwise have been a warning category offence now becomes a dismissable
offence.
 NZ Storeworkers etc IUOW v South Pacific Tyres (NZ) Ltd [1990] 3 NZILR 452 (LC)
o Facts
 The employee drove a company-issued motor vehicle and regarded it as part of his salary package
 The company changed its policies and said the vehicle was a privilege that is revokable at the
company’s discretion and not a right – the employee signed the memo that stated this
 The employee went on holiday leaving his vehicle at his home, and upon return to work, the
employer removed the vehicle for wilfully disobeying the direction to return the vehicle before going
on holiday
o Submissions
 The employer argued that this was a perk and revoke at will – the withdrawal of the vehicle use
caused no disadvantage because it was not a condition of employment
o Judgment
 The use of a vehicle, either as a right or a revocable privilege, was part of the employee’s
remuneration package
 It was implicit that reasonable notice for any revocation would be given
 The vehicle’s use could not be removed other than in accordance with fair and reasonable
treatment
 The employee was substantially disadvantaged from the loss of the vehicle because of the
loss of its private use and the costs of using public transport
126



We cannot understand the argument that the removal of the use of the vehicle did not affect a
condition of the worker’s employment to his disadvantage. Mr Barnes lives at Waiwhetu and the
workplace is at Upper Hutt. Rail fares between these two localities are themselves not insubstantial
and, in addition, there is the loss of the convenience of door to door transport and of the availability
of the vehicle for private use outside working hours. The disadvantage in employment contemplated
by clause 34(1)(a)(ii) includes de facto disadvantage and it does not assist the respondent to argue,
even if it could argue convincingly, that the use of the vehicle was not a term of the worker's
employment Also, the word "condition" is not to be treated as limited to contractual conditions.
What has to be looked at is the total environment of the job status or package how the employment
in practice operates: see Elston v. State Services Commission (No. 3) [1979] 1 NZLR 218, 234.
 “Condition” is defined broadly – it is not just a contractual condition
 Use of the vehicle is tied to the employee’s remuneration package, so he was entitled to
compensation for the revocation of its use
Tranz Rail Ltd v Rail and Maritime Transport Union (Inc) [1999] 1 ERNZ 460 (CA)
o Facts
 There was profit-based incentive plan – companies paid employees who were not involved in a union
strike a higher bonus under that plan
o Submissions
 The union employees said they were unjustifiably disadvantaged as they were not paid as much as
non-union members
o Judgment
 The bonus had contractual force
 The company did not afford the strikers the same terms of employment and fringe benefits
made available to the other employees
 [25] The expression "terms of employment" is not defined in the Employment Contracts Act or in the
human rights legislation. In using that capacious expression in conjunction with the earlier words
"offer or afford", and adopting the approach under the antecedent Race Relations Act and Human
Rights Commission Act, Parliament must be taken to have intended to go beyond the terms and
conditions of the formal collective employment contract or individual employment contract. One
indication of the breadth of purpose is provided by the contrasting reference to the terms and
conditions of the employment contract in s 19(2).
 [26] Broadly speaking, terms of employment are all the rights, benefits and obligations arising out of
the employment relationship. The concept is necessarily wider than the terms of an employment
contract.
ANZ National Bank Ltd v Doidge [2005] ERNZ 518 (EmpC)
o Facts
 Employees were paid for using their own car (called “mileage allowance”)
o Issue
 Is the allowance a term and condition of employment?
o Judgment
 This was not a term and condition of employment
 While the phrase “conditions of the employee’s employment” should be interpreted broadly,
the fact was that the mileage allowance did not conform to elements of the employment
agreement
 The initial payment of a mileage allowance for casual employment was more in the nature of
an ad hoc discretionary payment than one to which the employee was contractually entitled
 The court noted that the employees had been enjoying the use of parking vouchers – these
also weren’t a condition of employment as they weren’t part of the employment agreement
and were ad hoc discretionary payments
 [45] Unjustifiable disadvantage in employment need not be confined to breaches of contract. Section
103(l)(b) refers to "condition[s]" of employment. A personal grievance is a broader notion than a
breach of contract. Payment of the mileage allowance may have been a "condition of employment"
but not a "term of the contract".
 [46] Not everything that an employer provides, or an employee expects to receive, during
employment is either a term or a condition of the employment contract between the two. That said,
not all terms and conditions of employment are expressed in a written form of agreement that must
be entered into in all cases: implied terms are, by their nature, not in writing; nor, usually, are fixed or
minimum statutory requirements of employment relationships.
o Commentary
127

The principle between this case and South Pacific Tyres seems to be that if the employee has an
expectation to be paid some kind of benefit, then it is a condition of employment that they could rely
on and expect
WARNINGS
 Tuapawa v AFFCO New Zealand Ltd [2011] NZEmpC 114
o Facts
 Tuapawa was not able to work overtime over Easter – it was particularly busy during this time
 When told that the company was very busy and needed everyone to work overtime, she told them
her mother was ill and she needed to check on her and couldn’t work the 10-hour days but could
work the 9-hour days
 She was given warning letters
o Judgment
 Tuapawa was disadvantaged
 There were procedural issues with the warning letters – procedures were not followed with
giving a reasonably opportunity to respond
 [40] For the reasons stated, I accept Mr Mitchell’s principal submission that the way in which Mr King
reacted to Ms Tuapawa’s request not to have to work the additional hour on the Tuesday and
Thursday of Easter week was not the way in which a fair and reasonable employer would have
responded. Accordingly, I uphold the plaintiff’s claim and find that she was unjustifiably
disadvantaged by the issuance of the two warning letters. There is no need for me to consider in
detail the further submissions Mr Mitchell made in relation to defects in the procedural aspects of the
investigation resulting in the warning letters. Suffice it to say, however, that I accept counsel’s main
submission under this head that the company supervisors charged with the investigation acted in
haste in reaching their conclusions and failed to properly investigate all the relevant background
circumstances and give appropriate consideration to the mitigating factors. That is not how a fair and
reasonable employer would have handled the investigation.
 Alliance Freezing Co (Southland) Ltd v New Zealand Engineering Workers Union (1989) ERNZ Sel Cas 575 (CA)
o Facts
 The employer issued a final written warning for the employee allegedly falsifying a time sheet
o Submissions
 The employer argued that this is not a disadvantage as the employee still has his job, so there is no
material or financial disadvantage
o Judgment
 We see no reason to read down the ordinary meaning of "disadvantage" by introducing a material or
financial qualification. It may be that in some circumstances that is the only kind of disadvantage that
could arise and so its absence would mean that there would be no personal grievance. But where the
effect of a warning is to render the employee liable to dismissal for an infringement that would not
otherwise place him in that jeopardy, we have no doubt that his employment is affected to his
disadvantage. His employment becomes … less secure; he becomes significantly more vulnerable to
dismissal. What would otherwise have been a warning category offence now becomes a dismissable
offence.
SUSPENSION
 Suspensions are generally paid
o But if you want to make it unpaid, you need to consult with the employee to comply with good faith
obligations
 Munro v NS Security Limited, formerly known as Hibiscus Coast Security Limited [2012] NZEmpC 38
o Facts
 Munro engaged in a fight with his supervisor – the matter was referred to the police
 Munro was suspended immediately at the fight
o Judgment
 [19] The general rule is that there is no legal right to suspend an employee in the absence of a
statutory or express contractual right to do so … However … in unusual cases it can be justifiable for
an employer to suspend an employee, even in the absence of an express contractual clause, but that
the employer must have good reason to believe that the employee’s continued presence in the
workplace may give rise to some other significant issue.
o Commentary
 Rather than immediately suspending, the employer needs to investigate and give reasonable
opportunity to respond – and then consult the employee about not coming in to work for some time
DEMOTION
 Hayward v Tairawhiti Polytechnic EmpC Auckland AC43/05, 3 August 2000
o Judgment
128

[101] I find that the loss of managerial responsibility for an assistant was a change which
disadvantaged the plaintiff and was an issue which she required to have resolved and the defendant
did eventually agree to go to mediation to resolve it. This was not done by the defendant in a timely
fashion. Instead things were allowed by the defendant to deteriorate to a significant degree, without
the intervention of mediation as required by the settlement agreement, to a point where Mrs
Hayward, without any prior notice to her, was put at risk by the defendant's instigation of the
disciplinary process.
TRANSFER
 An employee can be disadvantaged by a requirement to transfer to another department
 Watties Frozen Foods Ltd v United Food and Chemical Workers Union of NZ [1992] 2 ERNZ 1038 (CA)
o Facts
 As a result of a disability, the employee was transferred from factory duties to the employer’s
cafeteria – the employer allowed her to do this job, but when she tried to do the factory duties again,
she was unable to
o Judgment
 She commenced working for Spotless on 11 December 1989, but was not happy with the situation
and at the end of January 1990 told the personnel manager that she had had enough. He immediately
re-employed her, at her wish in the prepack department, and she has remained working there down
to the present time. However the work has clearly been too heavy and repetitive for her in her
present state of health and she has suffered physically from it. The Court was satisfied that she should
not be attempting to continue with it. It seems that she may have had no option but to do so until the
present matter is finally resolved.
UNILATERAL VARIATION OF THE EMPLOYMENT AGREEMENT
 If there is provision for variations, the employer must follow the procedure for a variation – a failure to do so is a
breach of the employment agreement, which is a term and condition of the employment agreement
 Mana Coach Services Ltd v Huxford EmpC Wellington WC 16/99, 31 March 1999
o Judgment
 However that may be, these provisions do not entitle the employer to vary its employees' contracts
or their terms and conditions of employment unilaterally. There is a provision for variation in the
collective employment contract. It is quite clear that both sides must agree – or at least the affected
employees and the employer must agree. There was no agreement by the two employees to the
reduction of their hours, being hours that were worked regularly and not as a result of any transient
fluctuation in demand.
 However, the company's case is that what it did fell well short of varying contracts. It was merely
exercising its prerogative to organise its staff. I do not agree. It varied the two drivers' terms and
conditions of employment with their consent by putting them on to a full time roster, then purported
to vary them again without consent. That was an unjustified action.
RESTRUCTURING
 Where a redundancy is justified, but the employer has failed to properly consult with the employee about the
possibility of redundancy, there may be an unjustified disadvantage
 Simpsons Farms Ltd v Aberhart [2006] ERNZ 825 (EmpC)
o Judgment
 Consultation requires more than mere prior notification
 The employee must be allowed sufficient time
 It is to be a reality and not a charade
 Consultation is never to be treated as a mere formality
 A proposal must not be acted on until after consultation
 Employees must know what is proposed
 Sufficiently precise information must be given to enable the employee to state their view
 Genuine efforts must be made to accommodate the views of employees – while the
employer is entitled to have a working plan already in mind, they must have an open mind
and be ready to start anew
 [70] For reasons earlier set out, consultation with Mr Aberhart was necessary before SFL made its
restructuring decisions. As part of consultation, Ms Green’s reasonable proposal made on behalf of
Mr Aberhart that he be trialed in the proposed new position to gauge his suitability for it, was
rejected immediately, out of hand, and without any consideration by Mr Simpson. That is not to say,
of course, that SFL was bound to have agreed to this proposal. But it was, as I have already found, a
reasonable suggestion warranting consideration in all the circumstances. The principles of
consultation now accepted by SFL’s counsel required open-minded consideration by the employer
and not immediate rejection that indicated a closed mind, if not predetermination. That was the first
129
breach by SFL of its consultation and other good faith dealing obligations under s 4 that constituted
an unjustified disadvantage in employment to Mr Aberhart.
FAILURE TO TRAIN AND SUPERVISE
 Emmerson v Northland District Health Board [2019] NZEmpC 34
o Facts
 Emmerson prescribed drugs to her partner
o Judgment
 There was a failure to train and supervise Emmerson and what she could or couldn’t do
 [151] It was the DHB’s responsibility, through the arrangements as to supervision which were put in
place by NDHB as employer via Dr M, to ensure that the obligations as prescribed by the College for
junior registrars would be respected. As Dr Plunkett confirmed, the direct responsibility for this fell on
Dr M, albeit subject to Dr N’s oversight. Whatever Dr M may have thought as to Dr Emmerson’s
performance in the early stages of her registrar’s training, it was nonetheless her responsibility to
provide educative supervision and support. That did not occur. Dr N did not realise in early 2015 that
the necessary supervision was not being provided. I am satisfied that a fair and reasonable employer
could not have allowed this to occur, and that Dr Emmerson has established this disadvantage
grievance.
130
INADEQUATE INVESTIGATION
 Johnson v Chief of the New Zealand Defence Force [2019] NZEmpC 192
o Facts
 An email was sent to Winston Peters – this was traced back to Johnson
 Johnson said his email account was hacked
 When the employer investigated, they weren’t able to conclude that Johnson himself was the one
who sent it and there may have been hacking involved
 The employer sent a letter to the employee saying that this will be kept on his file
o Submissions
 The employer argued that no term and condition of the employee’s employment was disadvantaged
as there was no disciplinary action taken
o Judgment
 The process of investigation undertaken was so fundamentally flawed that there was a disadvantage
 The nature of having the incident remain on his file was sufficient
 [125] Unsurprisingly, Mr Johnson regarded the letter as being a formal record that members of NIAT
and DDS had both concluded he had very likely sent the email, and that the letter was in essence
warning him not to do this again. He regarded the other statements as being a warning from Group
Captain Woon not to undertake a similar action again. Mr Johnson concluded that she believed he
had sent the email and that she did not trust him. He said he recognised that officially there would be
no formal disciplinary process, but that was significantly outweighed by the real findings in the letter.
 [126] Mr Johnson was justified in reacting to the letter as he did. Given the mixed messages, these
were obvious implications for trust in Mr Johnson’s employment relationship.
 [129] Plainly, Mr Johnson was disadvantaged by the outcome letter. It did not transparently express
the real views held by Group Captain Woon and her superiors, and it was deliberately crafted in a way
that was intended to mitigate a possible financial risk. It was misleading. Further, it rendered Mr
Johnson’s employment less secure by giving warning which was not justified in the circumstances.
INVOLVEMENT OF THE POLICE
 Kumar v Elizabeth Memorial Home Ltd EmpC Wellington WC 67/99, 20 October 1999
o Facts
 The employee allegedly stole carpet from a hospital
 The police were involved but couldn’t prove anything
o Judgment
 Instead of investigation the allegations and giving the employee a reasonable opportunity to respond,
the employer just called the police – this is not what a fair and reasonable employer would do
 Although the respondent argued that the appellant did not suffer disadvantage, the Tribunal made
specific findings about this. It held that the disadvantage to the appellant in her employment was that
she was intimidated by the threat of criminal prosecution which was allowed to hang over her head in
an effort to force her to repay the money.
 This finding is in accord with the evidence of the appellant who told the Tribunal that she was scared
and worried by the allegation that she had committed a crime…
 At work she was nervous of being called to Mr Collins's office again. I also accept that there was
evidence to suggest that a consequence of the affair was that the respondent formed the view that
she was dishonest to the point of criminality. For these reasons the Tribunal was entitled to conclude
that she had suffered disadvantage.
FAILURE TO PROVIDE A SAFE WORKPLACE
 Davis v Portage Licensing Trust [2006] ERNZ 268 (EmpC)
o Facts
 Davis was subject to three armed robberies at a tavern in Hawke’s Bay
 During the course of the robberies, the gun was pushed to the plaintiff’s back, and he was bound
 The employer raised security measures, but the robberies occurred again
 Davis suffered from PTSD as a result and couldn’t work again
o Judgment
 [181] That is not an end of the matter because, as an alternative, Mr Davis alleges that he was
unjustifiably disadvantaged by the actions of the trust in breaching the implied duties. Although the
case was not referred to, the situation was similar in Commissioner of Police v Cartwright [2000] 2
ERNZ 106; [2001] 1 NZLR 265 (CA), where, as a result of a breach of duty on the part of the police
which led to a depressive illness, the grievant was forced, somewhat against his will, to accept
compulsory retirement on medical grounds. This did not prevent him pursuing a claim for
compensation for lost remuneration and distress and humiliation for the way in which he was
treated, notwithstanding that the dismissal itself was not challenged. The Court of Appeal accepted
that this was a course open to the grievant, who was not barred by provisions in the Police Act 1958
131
which prevented challenges to the requirement to leave the police by means other than those
provided in the statute.
 [182] Having found in respect of the breach of contract cause of action that there were breaches of
duty which have led to a situation where the employment came to an end in circumstances where the
trust cannot justify its breaches, I would similarly hold in the present case that Mr Davis has proven a
disadvantage grievance, which has had deleterious consequences for him, for which he is entitled to
be compensated.
REQUIREMENT TO RETURN TO WORK
 If there is a requirement to return to work when the employee is on stress leave, they are disadvantaged
 Wilson v Chief Executive of the Ministry of Social Development EmpC Auckland AC 28/07, 23 May 2007
o Judgment
 [42] It seems to me that in this case the employer has acted to Ms Wilson's disadvantage in two
respects. The first is in seeking her return to work during the period when she was on what was
effectively stress leave. The second is the failure to adequately train her in NVCI and thereby place
her in a position of danger when she was called upon to deal with the altercation, which occurred on
Waitangi Day 2005.
BULLYING
 FGH v RST [2018] NZEmpC 60
o Facts
 The employee with ADD was unable to concentrate for long periods of time and thus could not be
efficient in her work – she also made it clear she had these mental health issues
 The employer implemented a performance management process, but this made her ADD worse as
she was more nervous about losing her job
o Judgment
 [201] An employer’s failure to address bullying in the workplace may give rise to an unjustifiable
disadvantage claim. This can be seen as an aspect of the duty to provide a safe workplace. As
discussed earlier, either or both of these concepts may be relevant to an assessment of justification
under s 103A of the Act where a personal grievance is alleged
 In this case, the employee was not bullied, but there was an unjustified advantage in their failure to
properly address her mental health concerns during the performance management process
DEDUCTIONS FROM LEAVE ENTITLEMENT
 Richardson v The Board of Governors of Wesley College EmpC Auckland AC 25A/99, 24 September 1999
o Facts
 The employee teacher talked about an alleged attempted suicide
 The principal probed her on that issue but she denied making those statements
 The employee’s sick leave entitlements were taken away without her consent
o Judgment
 … The appellant has therefore established her disadvantage grievance and her sick leave entitlements
for the period 18 February 1997 to 28 May 1997 must be restored to her. She may have to give credit
for payments received which would meet the respondent's concerns that there has been unjust
enrichment if the sick leave is not debited. That is a matter that can be dealt with by the Tribunal in
the context of the award of appropriate remedies on the establishment of this disadvantage
grievance.
FAILURE TO APPOINT
 Failing to appoint someone to a role can amount to a disadvantage if there is a scheme in place which allows for the
progression of the person
 Ramkissoon v Commissioner of Police [2017] NZEmpC 85
o Facts
 There is a regimented way in which promotions in the police took place
 Ramkissoon was given the appointed and it was taken away
o Judgment
 [247] ... All the evidence points to Police appointments, and their sometimes necessarily
accompanying promotions in rank, as being contemplated in the employment relationship between
the Commissioner and police officers. Had Mr Ramkissoon been unsuccessful in his application for
appointment on reasonable and lawful grounds, his employment as a senior constable would still
have continued. His allegedly unfair treatment by the Commissioner in failing to abide by the
defendant’s own policies would have disadvantaged the plaintiff in his employment. In this sense, the
plaintiff’s unsuccessful application for appointment to Opotiki may constitute an unjustified dismissal
personal grievance.
FAILURE TO ADJUST REMUNERATION
 Carter Holt Harvey Ltd v Boseley [1999] 2 ERNZ 505 (EmpC)
132
o
Facts
 The employer had pay scales
o Judgment
 The effect of the putting the particular employee on a particular pay scale disadvantaged him in terms
of receiving further salary increases – he could have gotten more regular salary increases over a
longer period of time, which could potentially amount to more than a single raise that he actually got
 The unchallenged evidence given by Mr Boseley's witnesses was that his ability to receive periodic
salary increases was lessened by his movement from the 99th to the 113th percentile within the
range which was as a result, not of any salary increase based upon performance or any other cause,
but rather of the employer's unilateral decision to substantially lower the band mid-point. I accept
that although it was not thereby made impossible for Mr Boseley to achieve periodic salary increases,
it was made more difficult for him to do so, irrespective of his or the company's performance. This
change also had the potential to disadvantage him in his superannuation entitlements because they
are based upon an averaging of earnings achieved over a number oflast years in employment.
VANDALISED CHATTELS
 Maddern v WorldxChange Communications Ltd [2011] NZEmpC 21
o Facts
 Maddern was being bullied in the workplace – he dealt with it by making a pile of origami cranes and
putting them around his office
 His manager got angry, thought he was using office stationery and left an accusatory note saying he
wasn’t allowed to use office stationery and he would be subject to a meeting
 He wasn’t actually using office stationery
 The employer took down and threw away all the paper cranes
o Judgment
 [6] Mr Maddern’s disadvantage grievance centred around alleged bullying in the workplace. He
claimed to be subjected to a prolonged and focused campaign of harassment which took the form of
vandalism of artwork on his office desk. His grievance also includes a specific incident relating to the
artwork involving Mr Philip Moore, the defendant’s operations manager.
 [7] The artwork in question comprised approximately 300 to 400 origami cranes (the bird variety)
made out of coloured memo cube paper. Mr Maddern told the Court that he learned the art of
origami from an internet site in about March 2008 and thereafter he made a few cranes a day “that
slowly grew into an impressive collection”
DENIED RIGHTS TO WORK OUT NOTICE
 When giving notice of resignation or redundancy, the employer often has an option to pay in lieu of notice – sometimes
this is good to do, but other times it will result in a disadvantage
 Harris v Charter Trucks Ltd EmpC Christchurch CC 16/07, 11 September 2007
o Judgment
 [93] Charter Trucks Limited elected to pay Mr Harris in lieu of notice rather than allow him to work
out the period of notice. This was not a situation where there was no work that Mr Harris could do.
While it appears the company was able to cope with Mr Harris's absence, that was achieved to an
extent through other staff doing overtime. I note also the evidence of Mr Naylor that, during the
period leading up to and immediately following Mr Harris's dismissal, the business appeared very
busy. Equally, this was not a case where there was any other good reason to keep Mr Harris out of the
work place. In this regard, I do not accept the suggestion made by Mr Sutherland that having Mr
Harris return to work would have disrupted an otherwise harmonious work environment. I prefer the
evidence of Mr Mead, Mr Chinnery and Mr Naylor that Mr Harris was an excellent worker who was
well liked by his colleagues. The effect of paying Mr Harris in lieu of notice and keeping him out of the
workplace was to deprive him of the dignity of working and of being able to say goodbye to his
colleagues as equals.
Bullying, harassment and discrimination
What is and what is not bullying, sexual or racial harassment, or discrimination?
How can liability for bullying, sexual or racial harassment, or discrimination be sheeted home to the employer?
Workplace bullying

WorkSafe has produced guidelines on what is and what isn’t workplace bullying
133

The official definition of bullying:
o

Bullying can also include harassment and discrimination – therefore, there is an overlap and thus conduct can
be all three at once
What workplace bullying is:
134
135

What workplace bullying is not:
o
The line may be difficult to draw sometimes – constructive feedback to one person might be bullying to
another
o Often bullies will try to minimise their behaviour and say it is a mere personality clash – they will try to get on
this side
ABUSIVE MANAGEMENT
 Edmonds v Attorney General [1998] 1 ERNZ 1 (EmpC)
o Facts
 M came from a military background and had a domineering, blunt and abrupt management style – his
communication methods were often unpleasant and abusive
 Edmonds was described as humble, retiring, devoted to his family, iwi and church
 Edmonds’ performance suffered under M’s management – he was unable to respond in the same
aggressive tone and language as some fellow employees could
 Edmonds was referred to as “you little shit” and began to suffer depression – the doctor diagnosed
him with adjustment disorder and as a result he resigned
o Judgment
 I am bound to say the Court puts no limits upon management style. It is, however, clear that when a
manager addresses an employee in such a manner that the employee is obliged "to sling the same
treatment back at him and use the same aggressive tone or language" … in order to keep the
exchange even, then the manager may be acting outside normal management norms. This may well
be acceptable in one set of circumstances, but in another it may have harmful effects on the
employee. Once that occurs, the manager and the employer may have delivered to the employee
something more, or less, than the rights and obligations between them which exist because of their
employment contract.
 M’s management style contributed substantially to the plaintiff’s mental health state and his decision
to resign – if the plaintiff used similar language and behaviour to a manger, he would have been
justifiably dismissed
 It is important to also bear the context in mind – in some workplaces (e.g. trades), behaviour is more
robustly tolerated than in a professional environment
FAILING TO INVESTIGATE COMPLAINTS
 Clear v Waikato District Health Board [2008] ERNZ 646 (EmpC)
136
o


Facts


Clear was a midwife at Tokoroa Maternity Ward from 1969 until she was dismissed in 2005
She had made four formal written complaints and one verbal complaint against her manager for
bullying
 Each successive complaint was dealt with as a new complaint and historical problems were not
investigated – the difficulty with this is that a holistic approach is not taken of all behaviours over time
and looking at repeating patterns or the cumulative effects of repeated incidents
 Clear was treated for hypertension, suffered severely from stress and took indefinite sick leave – she
was terminated for continued absence from work with little hope that the situation would be
resolved
 The employer failed to intervene on her behalf to resolve her problems, which were aggravated by
the manager
o Judgment
 Clear was unjustifiably dismissed – by failing to properly address the complaints and failure to
communicate the conclusions that were reached, she was seriously affected to her disadvantage
 [125] In conclusion it is an implied condition of all employment relationships that the parties will not
breach the trust and confidence of the other. A fair and reasonable employer faced with Ms Clear’s
repeated complaints should have undertaken a comprehensive investigation at the earliest
opportunity, reached a firm conclusion on the complaints, kept her fully informed of the process,
advised her of the decision and then taken steps to address the dysfunction.
 [128] By failing properly to address Ms Clear’s complaints and by failing to reach conclusions on the
complaints that were properly communicated by her the DHB seriously affected her conditions of
employment to her disadvantage. It also breached its duty to provide her with safe working
conditions. On any account the conditions of work in the Tokoroa Maternity Ward were not safe
either for Ms Clear or Mrs Parata.
Reti v Carter Holt Harvey ERA Auckland, AA479/05, 12 December 2005
o Facts
 Reti was subject to a bullying investigation
 The investigator (Olsen) found in his report that Reti engaged in inconsistent behaviours, mood
swings, aggression towards staff for no reason, singling people out, gave a poor example to others,
had favourites, was not willing to continue under the leadership of others
 Team leaders were aware of these issues
 Olsen, in investigating the bullying behaviour, found that Reti should be dismissed (this is wrong as
the decision-maker should be making the decision to dismiss and not rely wholly on a flawed
investigation report)
 The employer looked at the report – there was a paucity of specifics such that there was little to
which Reti could be asked to respond to in a meaningful way (e.g. saying she was a bully and
describing her rather than describing the behaviour and its effect on others)
 The employer relied on the report completely to dismiss Reti
o Judgment
 [74] The employer has erred in placing so much reliance on Mr Olsen and his report. Ms Crowther
neglected to check Mr Olsen's credentials or methodology and as it transpired, he was neither highly
experienced nor well qualified in conducting an investigation as part of a disciplinary process. This is
demonstrated in the report, which does not adequately document the complaints for the purposes of
a disciplinary process. A paucity of specifics means that there was very little to which Ms Reti could be
asked to respond in a meaningful way.
 [75] In addition, Mr Olsen goes beyond information gathering and proceeds to record a conclusion
that Ms Reti had bullied her team and to make recommendations for future action including
dismissal. Although it is open to an employer to delegate part of its inquiry to a third party (as Mr
Kiely has submitted) that third party must not become the final decision maker, either about whether
there was serious misconduct, or about whether to dismiss. It is correct that Ms Crowther, Mr Barber
and Mr Carlyle made the decision to dismiss however they accepted uncritically Mr Olsen's
assessment that Ms Reti had bullied her team.
Edwards v Board of Trustees of Bay of Islands College [2015] NZEmpC 6
o Facts
 Edwards was allegedly subject to mobbing by investigators – but this was not found on the facts
 In his view, the way in which he had been dealt with by the statutory managers posed an issue – there
was undermining of his position, dubious, groundless or trivial complaints against him etc.
o Judgment
 There was no mobbing, but the way in which Edwards was dealt with (by finding serious misconduct
rather than going through a performance management process) meant they unjustifiably treated him
137

[16] There is another element to this case which I am satisfied requires the Court to scrutinise very
carefully the justification for Mr Edwards’s dismissal. Although not either a legally defined term or
indeed yet a popular one such as its elder cousin “bullying”, Mr Edwards described an important
phenomenon that he perceived to lie behind his dismissal as “mobbing”. In this case, mobbing is said
to have been a concerted resistance by a group of other employees to the implementation of
workplace changes proposed and directed by Mr Edwards as Principal of the School. It was also
claimed to be a more general undermining of his position, including the bringing of dubious,
groundless, or at least trivial complaints against him which contributed to a purported loss of trust
and confidence in him and otherwise led to his dismissal. Later in the judgment I both define mobbing
more generally and determine its presence or absence in this case. One view of some of the evidence
of relevant events might tend to support that analysis of the motivations of staff opposed to Mr
Edwards. This phenomenon also requires careful and thorough scrutiny of the justification for the
dismissal.
MODERN DEFINITION OF WORPLACE BULLYING
 FGH v RST [2018] NZEmpC 60
o Judgment
 [202] Workplace bullying is a very serious and widespread problem. Allegations of bullying are
frequently raised in the Authority; they have been raised in the Court on a number of recent
occasions, but the particular circumstances of those cases did not require the Court to consider the
topic in detail. It is appropriate to do so now.
 [203] Where bullying occurs, the consequences can be far reaching, resulting in a hostile work
environment, decreased worker health and wellbeing, motivation, performance and commitment,
workers having to attend the workplace while sick, or having to take more sick leave, and even
increased worker turnover.
 [204] People often use the word “bullying”, but not always with a clear understanding of the concept.
An important resource to which the Court was referred is “Preventing and Responding to Workplace
Bullying: The Guidelines” (see above). In workplace circumstances where there is no other binding
definition of the term or provisions as to how it should be dealt with, this document may well provide
appropriate guidance; and a yardstick for assessing whether appropriate steps were taken. I will
return to these guidelines shortly.
Harassment

When dealing with harassment, a complainant can either pursue a personal grievance under the Employment Relations
Act 2000 or use the Human Rights Act 1993
o The ERA is often the quickest way to deal with complaints, but the remedies are relatively limited, and the
employee only has 90 days to raise the complaint
o The HRA gives the employee 12 months to bring a claim instead of 90 days, allows for greater compensation
awards, has lay-members on the bench and does not account for contribution – therefore, the employee will
want to use this Act
138
SEXUAL HARASSMENT
108
Sexual harassment
(1)
For the purposes of sections 103(1)(d) and 123(d), an employee is sexually harassed in that employee's employment if
that employee's employer or a representative of that employer—
(a)
directly or indirectly makes a request of that employee for sexual intercourse, sexual contact, or other form of
sexual activity that contains— (a request for sexual activity in exchange for something)
(i)
an implied or overt promise of preferential treatment in that employee's employment; or
(ii)
an implied or overt threat of detrimental treatment in that employee's employment; or
(iii)
an implied or overt threat about the present or future employment status of that employee; or
(b)
by— (creating a sexual harassment environment)
(i)
the use of language (whether written or spoken) of a sexual nature; or
(ii)
the use of visual material of a sexual nature; or (e.g. looking at sexual content, inappropriate posters)
(iii)
physical behaviour of a sexual nature,—
directly or indirectly subjects the employee to behaviour that is unwelcome or offensive to that employee (whether or
not that is conveyed to the employer or representative) and that, either by its nature or through repetition, has a
detrimental effect on that employee's employment, job performance, or job satisfaction.

Section 108(1)(b) includes incidents that don’t involve the complainant (e.g. if you overhear two others having sex, you
are being sexually harassed)
117
Sexual or racial harassment by person other than employer
(1)
This section applies where—
(a)
a request of the kind described in section 108(1)(a) is made to an employee by a person (not being a
representative of the employer) who is in the employ of the employee's employer or who is a customer or client of
the employer; or
(b)
an employee is subjected to behaviour of the kind described in section 108(1)(b) by a person (not being a
representative of the employer) who is in the employ of the employee's employer or who is a customer or client of
the employer; or
(c)
an employee is subjected to behaviour of the kind described in section 109 by a person (not being a representative
of the employer) who is in the employ of the employee's employer or who is a customer or client of the employer.
If this section applies, the employee may make a complaint about that request or behaviour to the employee's employer
or to a representative of the employer.
The employer or representative, on receiving a complaint under subsection (2), must inquire into the facts.
If the employer or representative is satisfied that the request was made or that the behaviour took place, the employer
or representative must take whatever steps are practicable to prevent any repetition of such a request or of such
behaviour.
(2)
(3)
(4)



An employer will be liable if the employee makes a complaint to the employer, but they don’t do anything about it – if
they deal with it appropriate, they will not be liable
o But if the employee does not make a complaint, or makes it anonymously, section 117 does not apply and the
employer cannot do anything
o Often, when first exposed to sexual harassment, victims tend to resign immediately – but this is bad because
the employer doesn’t know anything
Z v Y Ltd and A [1993] 2 ERNZ 469 (EmpC)
o Facts
 The employer was able to summon character witnesses who said he was wonderful – this was used
even though they didn’t witness the events and overturned the Employment Tribunal’s finding that
there was sexual harassment
o Judgment
 ... sexual harassment poisons the atmosphere in the workplace. It is wholly unacceptable and entirely
devoid of any redeeming features. It follows that its occurrence can never be met with matters of
justification, excuse, or mitigation. It is an attack on the basic human right that all persons must be
supposed to have to pursue their economic well-being in conditions of freedom and dignity. Its
victims are almost invariably women. It is insidious and deceptive in character. Its proof is therefore
often elusive…
Y v D [2004] 1 ERNZ 1 (EmpC)
o Facts
 The plaintiff and defendant entered into a consensual sexual relationship
 After the defendant ended the relationship, the plaintiff remained infatuated with him and continued
to make contact for the purposes of pursuing the relationship
o Judgment
 This was sexual harassment, but the employer was not liable as they dealt with it appropriately
139

[5] By this time, the parties had begun a consensual intimate sexual relationship conducted covertly in
hotel rooms and other places after work hours. Subsequently, the defendant attempted to end that
aspect of their relationship but the plaintiff remained infatuated with him and continued to make
contact with the purpose of pursuing intimate sexual relations that the Authority found to have
constituted sexual harassment in employment. Eventually, Mr D abandoned his employment and
brought these proceedings against the employing company (“N”) and Mr Y personally.
o Commentary
 Sometimes, a workplace has “love contracts” – when two employees are in a relationship, they
consent to the idea that there could be sexual harassment in the workplace; this protects both them
and the employer so that everyone knows what behaviour is appropriate and what is not
 Kumar v Icehouse (NZ) Ltd [2006] ERNZ 381 (EmpC)
o Facts
 Kumar pushed up against a woman in the workplace
 There were some witnesses who said this wasn’t a case where the behaviour was unequivocally
sexual in nature
o Judgment
 [53] The present case is one where the alleged actions of the plaintiff on 4 June were not
unequivocally sexual in nature. In such borderline cases, where the sexual nature is not immediately
manifested by the manner of the physical behaviour or the nature of any accompanying words used,
it may be helpful to take into account the context of the behaviour. Here it took place in front of a
witness, Jenny Pinfold, who, according to her diary entry, laughed, and apparently therefore did not
take it seriously. It occurred in an open-plan factory in which some 13 other employees worked. Apart
from an alleged apology for the contact there were no accompanying words or gestures which would
indicate that the plaintiff’s physical actions were sexual in nature. Where there has been an element
of repetition this can lead to a conclusion that words or acts, which individually were equivocal as to
the sexuality of their nature, were indeed sexual. Where equivocal behaviour is not repeated it is not
likely to be objectively viewed as sexual in nature.
 DML v Montgomery and M & T Enterprises Ltd [2014] NZHRRT 6
o Facts
 DML was a sex worker who worked for Montgomery, who was a pimp
o Judgment
 [106] But context is everything. Even in a brothel language with a sexual dimension can be used
inappropriately in suggestive, oppressive, or abusive circumstances. The evidence of the plaintiff
(which we accept) is that on the occasions when Mr Montgomery used the language complained of in
para 18 of the statement of claim, Mr Montgomery had no “business” purpose for asking the
questions or making the particular comment to her. We find that the following language as pleaded in
para 18 of the statement of claim was used by Mr Montgomery and was of a sexual nature:
 [106.1] Asking whether she “shaved” her pubic hair;
 [106.2] Asking whether she performed anal sex;
 [106.3] Asking whether she “swallowed” when performing oral sex;
 [106.4] That weekends were his “play time”;
 [106.5] That he would take other sex workers out the back and have sex with them;
 [106.6] That he “went down on” other sex workers;
 [106.7] That other sex workers gave him “blow jobs”;
 [106.8] That he could do what he liked with the girls;
 [106.9] That most girls would do anything for him;
 [106.10] That he liked to have sex with “young, skinny girls with small perky breasts”;
 [106.11] That the plaintiff needed to work out;
 [106.12] That he wanted to take the plaintiff “out of her comfort zone”.
 The workplace was a brothel – some of these questions would be appropriate in that setting, but
clearly some of them weren’t and crossed the line into sexual harassment
RACIAL HARASSMENT
109
Racial harassment
For the purposes of sections 103(1)(e) and 123(d), an employee is racially harassed in the employee's employment if the
employee's employer or a representative of that employer uses language (whether written or spoken), or visual material,
or physical behaviour that directly or indirectly—
(a)
expresses hostility against, or brings into contempt or ridicule, the employee on the ground of the race, colour, or
ethnic or national origins of the employee; and
(b)
is hurtful or offensive to the employee (whether or not that is conveyed to the employer or representative); and
(c)
has, either by its nature or through repetition, a detrimental effect on the employee's employment, job
performance, or job satisfaction.
140

Satnam Singh v Shane Singh and Scorpion Liquor (2006) Ltd [2016] NZHRRT 38
o Facts
 Singh was working in a liquor store – he was hit with a billboard which made his turban fall off (this
was deliberate)
 He was forced to clean the toilet and a video of this was taken
 The defendant also said “Fucking Indians can’t talk English”, “why do these Indians keep long hair”
and called them dogs
o Judgment
 [86] For the reasons given we find all of the elements of racial harassment prescribed by s 63 of the
HRA have been established. In the course of the plaintiff’s employment, the first defendant; Shane
Singh, used physical behaviour in the form of deliberately tapping Satnam Singh’s turban with a
clipboard, which expressed hostility against the plaintiff or brought the plaintiff into contempt or
ridicule on the grounds of his colour, race, or ethnic or national origins. This conduct was hurtful and
offensive to the plaintiff and was of such a significant nature that it had a detrimental effect on him.
There is no dispute that the second defendant; Scorpion Liquor (2006) Limited, is consequently
vicariously liable under s 68.
 Soares v Fullstop Ltd [2018] NZERA Wellington 62
o Judgment
 [32] Mr Soares' evidence is that he experienced racial harassment from the director of the company
for the latter two thirds of his employment. He gave a number of examples of this, of which I will
refer to only two. The first was that he was frequently referred to by Ms Harrison in front of other
staff and customers in racially demeaning language such as “Injun”.
 [33] The other example was an occasion when Ms Harrison, in front of other employees, ridiculed
how “Indians bobbed their heads in their conversations”. She put on a You Tube video clip that made
fun of Indians doing that. Ms Harrison had no recollection of this incident but Mr Soares' evidence
was confirmed by a former employee of Full Stop who gave evidence, albeit reluctantly, under
summons. That person, whom I do not consider it necessary to identify, had been present when the
You Tube video incident occurred, and had heard Ms Harrison use racist terms at that time.
 This was racial harassment
 Tupuanga v Auckland Meat Processors Ltd [2019] NZERA 471
o Facts
 This case took place after the Christchurch Mosque shooting
 Tupuanga, an employee, copied Muslim prayers – he was dismissed
o Judgment
 [13] Following the second incident, Ms Dennis and three other managers met with Mr Sarik who
advised them Mr Tupuanga had been making racist remarks for a while including:
 The New Zealand Government is letting too many Muslim refugees in and [they’re] taking all
our jobs
 Why are all the Muslims in Christchurch sitting on their arse, they should come to Auckland
and work;
 Telling the Halal team, they were “shitty” because they were not eating (during Ramadan).
 [14] The following day (14 May) Mr Shane Baty, Health and Safety and HR Manager, met with Mr
Imran to get his view of the incident. During that meeting Mr Imran informed Mr Baty that at the time
of the incident Mr Tupuanga had said:
 That his daughter had more muscles than Imran and Imran was weak;
 He was a “fucking Muslim”;
 “you are taking our jobs”;
 “I will get rid of you”; and
 “you’re always fucking praying and taking too long”.
 [15] Mr Imran then confirmed that Mr Tupuanga had bowed down on his knees twice, mocking how
the Halal slaughtermen prayed.
 Tupuanga was justifiably dismissed
DISCRIMINATION
104
Discrimination
(1)
For the purposes of section 103(1)(c), an employee is discriminated against in that employee’s employment if the
employee’s employer or a representative of that employer, by reason directly or indirectly of any of the prohibited
grounds of discrimination specified in section 105, or involvement in the activities of a union in terms of section 107,—
(a)
refuses or omits to offer or afford to that employee the same terms of employment, conditions of work, fringe
benefits, or opportunities for training, promotion, and transfer as are made available for other employees of the
141
same or substantially similar qualifications, experience, or skills employed in the same or substantially similar
circumstances; or
(b)
dismisses that employee or subjects that employee to any detriment, in circumstances in which other employees
employed by that employer on work of that description are not or would not be dismissed or subjected to such
detriment; or
(c)
retires that employee, or requires or causes that employee to retire or resign.
For the purposes of this section, detriment includes anything that has a detrimental effect on the employee’s
employment, job performance, or job satisfaction.
This section is subject to the exceptions set out in section 106.
(2)
(3)


Prohibited grounds of discrimination are contained in the Human Rights Act
o The Employment Relations Act also has another ground of discrimination, which is membership and
involvement in the activities of a union
McAlister v Air New Zealand Ltd [2009] NZSC 78
o Facts
 McAlister was a pilot who was 60
 The age for retirement in New Zealand is 65, but the US imposed a ban on pilots aged over 60
entering its airspace – therefore, McAlister could not fly to the US and Air NZ demoted him to
domestic flights only
o Issue
 Did this amount to discrimination?
o Judgment
 [49] The correct question raised by the phrase “by reason of” is whether the prohibited ground was a
material ingredient in the making of the decision to treat the complainant in the way he or she was
treated. In this case the question is whether Mr McAlister’s age was a material ingredient in Air New
Zealand’s decision to demote him. The policy of the legislation is that a prohibited ground of
discrimination should play no part in the way people are treated unless there is good cause for it to
do so. In the employment context there is good cause for treating a person differently on account of
their age, if age is a genuine occupational qualification.
 The main ground for this treatment was US law – therefore, there was discrimination here, but this
case was an exception due to genuine occupational qualification
GROUNDS OF DISCRIMINATION UNDER THE HUMAN RIGHTS ACT
S EX WHICH INCLUDES PREGNANCY AND CHILDBIRTH
 Equal Pay Act 1972
 Parental Leave and Employment Protection Act 1987
 Trilford v Car Haulaways Ltd [1996] 2 ERNZ 351 (EmpC)
o Facts
 Trilford wanted to be promoted to a transport supervisor
 She was informed she wouldn’t be considered for the position because it was more male-orientated –
in the employer’s view they needed experience driving trucks, which males tended to have
o Judgment
 This was discrimination – by failing to give that promotion, she was discriminated based on sex
M ARITAL STATUS
 An issue is where an employee’s partner works for the competitor
o There can be a conflict of interest arising because of pillow talk
o In some circumstances, this may result in a justified dismissal
o However, the employer must consider alternatives to dismissal
 Charlton v Wood and Partners Consultants Ltd ERA Auckland, AA275A/02, AEA93/02, 22 October 2002
o Facts
 Charlton was married to Osborne, who used to work for Wood and Partners, but decided to work for
the competitor while Charlton remained at WP
 WP called Charlton into a meeting and told her that because of difficulties with the competitor, she
was dismissed
o Judgment
 This was an unjustified dismissal
 There was no evidence that she was colluding with her husband to undermine WP, and hadn’t looked
at all the options in terms of quarantining confidential information
R ELIGIOUS BELIEF
 Felman v Auckland City Council ERA Auckland AA 458/10, 26 October 2010
o Facts
 A parking officer had died
142

o
The employee found out about this and got into a dispute with the manager about not being
informed about this
 In doing so, the employer made a biblical reference that was offensive to Felman’s Jewish beliefs
Judgment
 This was idiomatic and wasn’t intended to be discriminator and it was just a figure of speech and
nothing more
 The comments were subjectively offensive to a person of Jewish religious belief, and will come within
the scope of discrimination for religious belief – but the actual content of the comments lacked any
statement of religious or ethical belief and were just a figure of speech
E THICAL BELIEF
C OLOUR
R ACE
 Easterbrook v Cycle and Carriage (City) Ltd ERA Wellington, WA4/01, WEA3/01, 27 February 2001
o Facts
 Lye was given the job of selling luxury cars
 Easterbrook had not been appointed because “an Asian would better support the role” and she would
not be taken seriously as a woman selling luxury cars
o Judgment
 This was discrimination
E THNIC OR NATIONAL ORIGINS , WHICH INCLUDES NATIONALITY OR CITIZENSHIP
 Corbett v UDP Shopfitters Ltd [2012] NZERA Christchurch 151
o Facts
 Corbett was Irish and referred to as a “thieving/dumb Irish bastard” and “fucking Irish”
o Judgment
 This was discrimination and racial harassment
D ISABILITY
 Connell v Sepclean Ltd [2013] NZERA Christchurch 203
o Facts
 Connell had a prosthetic leg
 Sepclean looks after septic tanks and Connell was a truck driver
 Connell was asked to go to the beach and in the sweater to undertake some services there – but this
would destroy his leg so he said he couldn’t do the job and the employer didn’t give him any further
work
o Judgment
 This was discrimination
A GE
 McAlister v Air New Zealand Ltd [2009] NZSC 78
P OLITICAL OPINION
 Daniels v Maori Television Service (2005) 7 NZELC 98,019 (ERA)
o Facts
 Daniels undertook a protest in regard to the Crown attempting to claim ownership over the foreshore
and seabed – she worked for the Maori Television Service
 MTS was trying to be neutral on the issue, but Daniels insisted on going to the protests – they
dismissed her for partaking in the protests because it was inconsistent with their neutral position
o Judgment
 Daniels was dismissed based on her political opinion and nothing about her performance – she was
entitled to go to the protests and articulate her political opinion
E MPLOYMENT STATUS
F AMILY STATUS
 This is often tied to sex discrimination because usually it involves children – once you have children, you will go into the
family status discrimination category but there is usually an overlap
 Dryfhout v New Zealand Guardian Trust Co Ltd (1996) 5 NZELC 98,417 (EmpC)
o Facts
 The employee worked as a trust manager and went on parental leave
 When she wanted to come back, she asked to be employed part-time, but they would only give her a
full-time position
o Judgment
 This was discrimination based on family status
o Commentary
 Nowadays, there are flexible working arrangements in the Employment Relations Act that allow for
childcare arrangements, so this case wouldn’t come up like this
143
144
S EXUAL ORIENTATION
 L v M Ltd [1994] 1 ERNZ 123 (EmpT)
o Facts
 L was homosexual – he made it clear to the bosses that this was confidential
 The bosses decided that they would identify him in the company magazine as the contact person for
homosexual support
 L resigned because all his colleagues weren’t supportive of his sexual orientation
o Judgment
 This was discrimination
E MPLOYEE ’ S UNION MEMBERSHIP STATUS OR INVOLVEMENT IN UNION ACTIVITIES
 The HRA does not have this as a ground for discrimination, so you can only bring a personal grievance and not a HRA
claim on this ground
 Before 2018, this ground was only “involvement in union activities” – only if the employee undertakes an activity like a
strike then they would be covered by this ground
o But now mere status without partaking in any activities will count under this ground
 Gilbert v Transfield Services (New Zealand) Ltd [2013] NZEmpC 71
o Facts
 When selecting people for redundancy, the employers administered a psychometric test
 Gilbert was involved in a number of strikes
o Judgment
 The psychometric testing shouldn’t be used because it had no value in a redundancy context
 There was no criteria for the test was not transparent, so it was procedurally unfair to use a
psychometric test
 It was incapable of meaningful explanation and thus did not comply with the obligations of
good faith to provide access to information about the psychometric test and thus deprived
them an opportunity to comment on the results of the test upon which the employer relied
on in determining whether an employee was redundant
 The test was of dubious value to the exercise of selection for redundancy
 The employer did not understand or explained the test to employees
 Gilbert’s involvement in the union wasn’t a factor in dismissing him – it was the tests
Constructive dismissals
What is a constructive dismissal?
What are the types of constructive dismissals?
What is an applicant required to prove in order to have a successful personal grievance for a constructive dismissal?
What is a constructive dismissal?


A constructive dismissal is known as “the wolf of dismissal in the sheep’s clothing of resignation”
o It describes a situation where an employer has created such a toxic environment or unilaterally varied the
terms and conditions of work or asked the employee to resign, such that the employee resigns, but this is
actually a dismissal provided it meets the tests for a constructive dismissal
NZ Woollen Workers IUOW v Distinctive Knitwear NZ Ltd (1990) ERNZ Sel Cas 791 (LC)
o Facts
 Distinctive Knitwear took over a business and reemployed Gillian – she was required to carry out new
duties
 She felt she was being unfairly criticized and picked on by the working director – they wrote to her
that her performance was unsatisfactory and did so in a detailed letter
 While on sick leave, she asked the union whether she should return to work, and it said no –
therefore, she resigned
o Judgment
 An integral part of the law of contract generally is that where one party so conducts himself as to
manifest an intention no longer to be bound by the contract, that gives the other or innocent party to
the contract a choice between two courses of action. One is to refuse to accept the repudiation and
insist on performance of the contract by the guilty party and to sue, as damage arises, for the breach
of the contract. The other is to accept the repudiation of the contract, cease to perform it further and
seek remedies for its breach, which may include losses attributable to the guilty party's failure to
perform the contract in the future.
 If the employer creates such an environment, the employee has a choice to either:
 Raise an unjustified disadvantage grievance as they are still employed and haven’t been
dismissed – but the remedies are limited here
145

 Resign and sue the employer for breaches of the contract – in this case, as the employee has
resigned and ended the employment relationship, they have the onus to prove that this was
a constructive dismissal
 It can be very hard for an applicant to prove that the material factor in why they left
the employment was the employer’s conduct – there may be a variety of other
reasons in resigning that makes it hard to prove constructive dismissal
In this case, this was not a constructive dismissal
 There was no evidence that DK intended on treating her otherwise than in accordance with
her employment agreement
Types of constructive dismissals

Auckland Shop Employees Union v Woolworths (NZ) Ltd [1985] 2 NZLR 372 (CA)
o Judgment
 Three types of constructive dismissal:
 An employer gives an employee a choice between resigning or being dismissed
 An employer has followed a course of conduct with the deliberate and dominant purpose of
coercing an employee to resign
 A breach of duty by the employer causes an employee to resign
CHOICE BETWEEN RESIGNING OR BEING DISMISSED
 Sometimes, a conversation in which the employer gives the employee a choice between resigning or being dismissed
will be held on a without prejudice basis
o If the without prejudice cloak isn’t present, there will be a constructive dismissal – therefore, it is important to
make sure these conversations are not held on a without prejudice basis
o There is a constructive dismissal if the choice is put in a way such that the employee doesn’t have a choice but
to resign
 Marshall Cordner & Co v Canterbury Clerical Workers Union [1986] 2 NZLR 431 (CA)
o Facts
 The plaintiff (Cornes) was a legal secretary and worked at the workplace for about 4 years
 It was decided at a meeting of the partners that her work was substandard and not improving and
that she should be asked to look for employment elsewhere
 The accountant and office manager (Bartosh) was instructed to convey this decision to her
 She then resigned
o Judgment
 … The picture clearly emerges that Mrs Cornes reacted sharply to the blunt statement that she should
immediately seek employment elsewhere. She became very upset and was restrained from
immediately leaving Mr Bartosh’s office because he wished to add to what he had already said. Mr
Bartosh in his evidence told us that he then told Mrs Cornes that she could save face by applying for
another position and leaving by the normal manner in tendering her resignation. Further, that he
advised her 'that constant complaints re her standard of work were causing untold problems within
the office'. She retorted that at no time had she been told by anyone within the organisation that her
work was not up to standard. This was admitted by the witnesses called for the respondent and we
find it to be a fact of considerable importance. They had seemingly left it to her to comprehend that
work being returned for correction amounted to criticism.
 This was a constructive dismissal
 NCR (New Zealand) Ltd v Jones [1998] 3 ERNZ 222 (EmpC)
o Facts
 Jones was a general manager and had a customer focus for a major client
 The client was concerned that Jones was not performing adequately and wanted him replaced
 Jones was given a letter that detailed the client’s concerns about his managerial style, ability and
inappropriate social behaviour
 Jones met with the employer for a discussion and told that it was to constitute an official warning and
the possibility of a negotiated exit was raised
 Jones was invited to a further meeting – a senior executive from Sydney shouted and swore at Jones
and was generally extremely aggressive to him
 Jones took the clear message from the meeting that he was to satisfy the company’s concerns within
4 weeks, or he was to resign – in the executive’s words, a miracle was needed to turn things around
 The employer offered him 4 months’ pay but only if he tendered his resignation immediately – if he
didn’t take it, the company would ensure Jones would never obtain work in the industry again
 Jones resigned
o Submissions
146

The employer argued that because this was going to be a performance management process, the
possible dismissal was going to be so far in the future that it didn’t fall within this type of constructive
dismissal
o Judgment
 Rejected the employer’s argument
 It doesn’t matter whether the dismissal is immediate or facing a prospect of a more gradual
process leading almost inevitably in a predetermined way to the same result
 Jones was not given a genuine choice – he was given the option of resigning or being
dismissed
 The company acted in a manner calculated to seriously damage and destroy the relationship
of trust between the parties
 In particular, I reject the argument that some worthwhile distinction can be made between a case in
which an employee is given an option between resigning and being dismissed and a case such as the
present where the option is between resigning and facing a prospect of a more gradual process
leading almost inevitably in a predetermined way to the same result - especially when that is
reinforced by a threat to ensure that the employee will be unemployable in as great a segment of the
industry as the company is able to influence.
BREACH OF DUTY BY EMPLOYER CAUSES EMPLOYEE TO RESIGN
 This is the most common type of constructive dismissal
o The employer has various duties to ensure that an employee is paid, provided with a safe working
environment, fair dealing, trust and confidence is maintained etc. – these are the duties that will be breached
in a constructive dismissal case
 Auckland Electric Power Board v Auckland Provincial District Local Authorities Officers IUOW (Inc) [1994] 1 ERNZ 168
(CA)
o Facts
 The employee was a meter reader who was repeatedly attacked by dogs while performing his duties
 His employment agreement required the employer to provide a safe working environment and
undertake open communication with the employee – however, the employer ignored the employee’s
complaints and failed to follow them up with him
 The employee resigned
o Judgment
 This was a constructive dismissal as the employer breached the employment agreement by failing to
provide a safe working environment
 During those 9 months Mr Healey was bitten by dogs on no less than six occasions while he was
undertaking his duties. He duly reported the incidents but the employing Board's response to these
reports was not extensive. At one stage he was moved to work in a relatively dog-free area. On 15
March 1990 however he was assigned to work in Mangere East and, although he managed to read the
meters on one side of Hokianga St, he was not prepared to face the risk involved in attempting to do
so on the other side; for he says - and this was not in dispute in the tribunals below - that there were
packs of dogs roaming Hokianga St and fighting one another. He returned to base in a somewhat
traumatised state and complained. He was not prepared to return to Hokianga St or the nearby
streets that day. He received a somewhat unsympathetic response from his immediate superior, who
expressed the opinion that he was not suited to dealing with dogs, and there may be some truth in
that. She spoke to the supervisor, Mr Madgwick, by telephone, telling him what had happened
regarding the complaint from Mr Healey, and then Mr Healey had a telephone conversation with Mr
Madgwick – but this was not sufficient
 The test for a constructive dismissal by employer breach of duty:
 In such a case as this we consider that the first relevant question is whether the resignation
has been caused by a breach of duty on the part of the employer. To determine that
question all the circumstances of the resignation have to be examined, not merely of course
the terms of the notice or other communication whereby the employee has tendered the
resignation. If that question of causation is answered in the affirmative, the next question is
whether the breach of duty by the employer was of sufficient seriousness to make it
reasonably foreseeable by the employer that the employee would not be prepared to work
under the conditions prevailing: in other words, whether a substantial risk of resignation was
reasonably foreseeable, having regard to the seriousness of the breach.
 Therefore, the elements to this type of constructive dismissal are:
 Breach of duty
 Causation – the breach of duty caused the resignation (but for the breach, would
the employee have resigned?)
147

Foreseeability – was a substantial risk of resignation reasonably foreseeable having
regard to the seriousness of the breach?
BREACH OF DUTY

Harrod v DMG World Media (NZ) Ltd [2002] 2 ERNZ 410 (EmpC)
o Facts
 Harrod was a sales manager involved in the Big Boys Toys trade exhibition
 The campaign was postponed, and she was concerned she would not have enough time to sell all the
exhibition space
 Concerns arose between her and her supervisor regarding the way in which she was being treated
during this time
 She submitted that the manager created a culture of fear and distrust in the workplace and adopted a
course of conduct designed to harass and humiliate her – she was moved to a small workplace, a
threat was made to her colleague, the treatment by her manager in meetings and the supervisor’s
request to accompany her to interview with major clients
o Judgment
 “Constructive” dismissal means a deemed dismissal
 A resignation is deemed to be a dismissal when the termination of the employment was at
the initiative of the employer however subtle the contact that led to the resignation may be
 But if there is no breach, there is no constructive dismissal
 [55] For the foregoing reasons I hold that the plaintiff has failed to make out a case either that she
was forced or squeezed out or that there were serious enough breaches of duty to entitle her to say
that she could not be expected to go on working for the defendant. Rather, and unfortunately, the
predominant cause of her leaving was the impact on what her counsel called her "big personality" of
being moved even temporarily to an inferior workstation. The impact was as severe as it has turned
out to be because of the plaintiffs then rapidly deteriorating state of mental health, no doubt
contributed to by her having driven herself to work too hard the previous year, resulting in a collapse
of her physical health.
 In this case, the employee’s decision to resign was due to a combined operation of the collapse of her
physical and mental health and the treatment accorded to her in moving her workstation to a small,
poorly lit, inhospitable part of the employer’s premises
 There was no breach despite the consequences of the employer’s actions in temporarily
moving the workstation
 She could have been entitled to resign and advance a claim of constructive dismissal, but
only if the situation that the employer had brought about by its actions could have been said
to alter her contractual conditions of her employment viewed broadly not literally
 It was impossible to accept that the above was so when the employee knew before she
resigned that the situation was temporary, and she also knew or ought to have known that it
could have been discussed further – she should have raised the issues even if there was a
culture of fear
 Where an employee does not communicate with the employer about their problems, then
the employer cannot be in breach because they don’t know about it
E XAMPLES OF BREACHES OF CONTRACT
Unilateral Variation
 Williams v Kimberleys Fashions Ltd EmpC Auckland AC72/06, 12 December 2006
o Facts
 Williams was asked to wear makeup at work
 She had a skin condition that prevented her from applying the makeup that the employer wanted
 She was called in to a meeting, which was to deal with absenteeism and lateness, but the employer
also raised serious issues with facial makeup and personal cleanliness (without the employee being
notified of these concerns) at a time where she was visibly distressed
o Judgment
 This unilateral variation of her employment agreement, by requiring her to wear makeup and having
a meeting with her saying that she wasn’t very clean, resulted in a constructive dismissal
 The employer’s treatment of her showed that the proprietors and managers of the company were out
of touch with the real need to act with humanity and compassion towards the employee – her
medical conditions and aversion to wearing makeup were well known and had been tolerated until
the final weeks of her employment
 It would be disingenuous to allege that it was not reasonably foreseeable that when faced with
requirements to wear makeup that she would not resign
Failure to Provide a Safe Workplace
 IHC Northern Vocational Services v Jordan [2004] 1 ERNZ 421 (EmpC)
148
o
Facts

M was intellectually disabled and known for physical violence against others – he had struck and
verbally abused a bus driver, pulled the hair and scratched with a fork the face of another employee,
and taken to another intellectually disabled patient with a crowbar
 Jordan didn’t want to work with M – she knew his history and said that if he transferred to her unit,
she would resign
 When she asked for a transfer, the employer said they couldn’t make it happen
 When the employer said M was going to her unit and she would have to look after him, she resigned
o Judgment
 The employer failed to provide a safe workplace by transferring M to Jordan’s unit – the employer
didn’t ensure that when he was to be transferred that there would be no violence, and thus Jordan
was entitled to resign and claim a constructive dismissal given the way in which the employer dealt
with M’s violence in the past
 There was no doubt that the placement of M in Jordan’s unit had the potential of being a hazard to
Jordan – M’s history of violence and the manager’s acknowledgement that he could be violent if
angered were sufficient evidence of the fact
 Had an appropriate system been in place at the unit, Jordan may have been employed there –
however, the employer was dismissive and not conciliatory in the approach to finding solutions to the
problem
Failure to Be Fair and Reasonable
 Abdalla v Chief Executive Officer of the Southern Institute of Technology EmpC Christchurch CC4/06, 5 May 2006
CAUSATION

Green v Schering-Plough Animal Health Ltd [1999] 2 ERNZ 733 (EmpC)
o Facts
 Green sold animal healthcare products
 In 1996, the employer reorganized and proposed a new territory for Green that was larger and no
longer involved selling to over-the-counter retailers – now selling only to vets
 It was common ground that this new sales territory would be trialled for 3 months – on that trial,
Green concluded he could not carry out his job properly
 Green became very emotional at a staff meeting and the manager told him that it wasn’t his fault that
he had four children and the changes were difficult for him
 Green resigned the next day
o Judgment
 It will be seen that the first relevant question is one of causation whether the resignation has been
caused by a breach of duty on the part of the employer. That in itself consists of two questions:
 Whether the resignation has been caused by anything that the employer did; and
 Whether what the employer did to cause it was a breach of the employer's duty to the
employee.
 In this case, there had been a constructive dismissal
REASONABLE FORESEEABILITY



It must be reasonably foreseeable that the employer’s breach gives rise to a substantial risk of the employee resigning –
but generally there is no reasonable foreseeability if the employer is not put on notice about any complaints by the
employee (and therefore it is important for the employee to raise any concerns and wait for the employer to respond)
Green v Schering-Plough Animal Health Ltd [1999] 2 ERNZ 733 (EmpC)
o Judgment
 Previous knowledge of the employment relationship can be important in assessing what is reasonably
foreseeable
 The expression "reasonably foreseeable" is one that features in a number of branches of the law and
it is well understood by lawyers. As it consists of two quite ordinary words, it can be taken to have a
uniform meaning whenever it is used by lawyers … reasonable foresight does not have to extend to
exceptional cases or to the small minority of cases … In the present case, the respondent's duty was
to inform itself firstly as to the state of its contractual obligations to the appellant and secondly of the
likely effect on him of an invasion of those rights (if necessary by listening to him) and not just to trust
to luck that he would not complain if his rights were invaded. This was a matter of some delicacy
because there was no written contract between the parties, except as to the terms of transfer on
those rare occasions on which the appellant had previously agreed to transfer, but it would have
taken little imagination to foresee the impact of such far reaching changes on an employee already
concerned about the encroachment of work demands on his personal life. The matter was
foreseeably quite serious for the appellant because his remuneration depended also on volume of
sales.
Downer New Zealand Ltd v Jones [2018] NZEmpC 77
149
o
o
Facts

Downer was dismissed for refusing to do particular duties as there was a dispute as to whether those
were his duties – he resigned in the face of a disciplinary process
Judgment
 This was not a constructive dismissal
 [91] Finally, a brief comment is required about foreseeability. It would not have been foreseeable to
Downer that any of the events which occurred from 8 April 2016 onwards might, either by themselves
or in combination, were likely to lead Mr Jones to resign. That is evident from the events themselves
and how Downer responded to them. From the meeting of 18 May onwards Downer was engaged in
attempting to create a working relationship with Mr Jones, including creating systems to assist him
and, eventually, agreeing to his request over the roster. While Mr Dawson was disturbed over what
happened in the 24 June meeting, he attempted to organise human resources assistance as
requested. Nothing in those steps, or in inviting a discussion about returning to work after being
suspended, suggests Downer could, or should have, foreseen the resignation.
S UFFICIENTLY SERIOUS BREACH
 The breach of duty must be sufficiently serious as to give rise to a reasonably foreseeable risk that the employee would
resign
o A breach of duty like the employer yelling at the employee for being late may not be of sufficient seriousness
to pass this part of the test
o In looking at whether there is a sufficiently serious breach, it is useful to keep in mind that the employment
relationship is built on trust and confidence – if there is no trust and confidence, there may be a sufficiently
serious breach
 Gyenge v Clifford Lamar Ltd [2011] NZEmpC 1
o Judgment
 [75] In terms of the second essential element, namely, whether the breaches were sufficiently serious
to make a substantial risk of resignation reasonably foreseeable, again, I am more than satisfied that
this ground has been established. In Woods [v W M Car Services (Peterborough) Ltd [1981] ICR 666
(EAT)] Browne-Wilkinson J noted that the fact that the employer’s conduct was likely to “damage
seriously the relationship of confidence and trust between the employee and the employers seems to
us to be shown by the actual breakdown in the normal relationship between employers and
employee that in fact occurred.” Likewise, in the present case there was a certain inevitably about the
outcome of the defendant’s intolerable behaviour.
ELECTION IN REPUDIATION

With a repudiation, the employee has the election to accept or refuse the repudiation
o If the employee doesn’t raise the issues, they may be seen to have acquiesced in the behaviour and thus have
accepted it – in such a case, there is no breach
 Pivott v Southern Adult Literacy Inc [2013] NZEmpC 236
o Facts
 There were various issues with the employer’s funding of its business
 The employee agreed to various changes in their position
o Judgment
 None of the incidents or breaches relied on, either individually or collectively, caused the employee to
resign – all matters were historical (they had arisen during the term of the original employment
agreement)
 In signing a subsequent agreement, the plaintiff clearly indicated that whatever concerns she
may have had about how she was treated was now in the past
 She had made her election to accept the behaviour and therefore could not be seen to
complain about it later
 [64] In any event, and this is the second observation I make about Ms Yates' letter, it appears to me
to be a perfectly reasonable and innocuous response on the governance issues that had been raised
by Ms Pivott in her earlier letter. Ms Pivott seemed to read more into the letter than what was
intended and what was actually said. She had done more than affirm an existing contract. She had
entered into a new employment agreement (the August agreement) and nothing in Ms Yates' letter
could alter that. If she did have a genuine concern about some aspect of the letter then it was always
open to her to consult her legal adviser, Mr Ogilvy. On her own evidence, Mr Ogilvy was due to return
to his office on or about the very day that Ms Pivott tendered her resignation.
EMPLOYER ACTS WITH THE DELIBERATE AND DOMINANT PURPOSE OF COERCING EMPLOYEE TO RESIGN
 This will generally involve complete and utter over-micromanagement – that everything the employee does is wrong
o Often, the employer will try to isolate the employee and make the workplace as uninviting as possible such
that all interactions are hostile – the employee then has no choice but to resign
o Most of these cases involve bullying to try and get an employee out of the workplace
150


Roberts v Japan Auto (NZ) Ltd [2003] 1 ERNZ 439 (EmpC)
o Facts
 Roberts was subject to significant ridicule by his manager:
 He made a number of insulting comments about Roberts’ wife’s race
 He was told to handwrite his personal details on blank cards instead of giving him business
cards which everyone else had
 The manager continually commented that he was not needed at work
o Judgment

[39] Together, those behaviours of Mr Cook towards and about Mr Roberts amounted to a clear
course of conduct with the dominant and deliberate purpose of inducing the appellant's resignation
or abandonment of employment. Although I accept that no-one else within the company's
management so intended, or may even have appreciated, the extent of Mr Cook's conduct towards
and about Mr Roberts, by virtue of his managerial position, the company was liable for Mr Cook's
actions. For these reasons, there was very clearly a constructive dismissal of Mr Roberts. Equally
clearly, there could not have been any justification for Mr Cook's conduct towards Mr Roberts in all
the circumstances and, as already noted, Mr Pollak for the company did not seek to establish any
justification, relying, instead, upon his submission that these events either did not occur or were
simply rough but acceptable humour in the business.
 The ongoing and multi-faceted nature of the breaches indicated an intention to continue not to be
bound by the employment agreement – this was a constructive dismissal
Maori Hill and Balmacewen Pharmacy Ltd v O'Sullivan [2013] NZEmpC 28
o Facts
 The employer paid the employees at the training minimum wage rate (which is generally for
apprentices for trades like building, plumbing, electrical work studying a course for qualification)
rather than the adult worker minimum wage rate and didn’t enrol them in the relevant course
 The employees filled out the forms for the national certificate in pharmacy and given them to the
employer – but the employer hadn’t submitted them
 Two former employees had been employed in the same circumstances
o Judgment
 By not dealing with the issues, the employer had adopted an unreasonable approach in dealing with
the pay issues – it was either to accept his erroneous legal position or leave
 The employer also put a lot of pressure on the employee to leave – he advertised her job in
the newspaper at the time when she was told to get back with her response to the issues
 There was a breach of the implied duty of trust and confidence, it was reasonably
foreseeable that she was not prepared to work in circumstances where her pay was
incorrectly paid, and the employer failed to deal with it
 [49] I am satisfied that Mr Vohora’s actions constituted a breach of the implied duty of trust and
confidence. It was reasonably foreseeable to the plaintiff that Ms O’Sullivan would not be prepared to
work under the conditions prevailing, having regard to the seriousness of the company’s breach. I am
also satisfied, having regard to the way in which events unfolded and Mr Vohora conducted himself,
and the pressure applied to Ms O’Sullivan, that he set out on a course of conduct designed to secure
her departure from the pharmacy.
“The final straw” cases


“The final straw” cases are where the employee, in the heat of the moment, decides to resign
o A good employer in such a situation will acknowledge the employee resigning in the heat of the moment and
may want to reconsider their position and ask for a response as to whether they want to stand by the
resignation or wants to return to employment
o The final straw can be particularly important where it is something minor
 There may be a series of events over a period of time, and a final minor event is the final straw
Spotless Facility Services NZ Ltd v Mackay [2016] NZEmpC 153
o Judgment
 (1) The final straw act need not be of the same quality as the previous acts relied on as cumulatively
amounting to a breach of the implied term of trust and confidence, but it must, when taken in
conjunction with the earlier acts, contribute something to that breach and be more than utterly
trivial.
 (2) Where the employee, following a series of acts which amount to a breach of the term, does not
accept the breach but continues in the employment, thus affirming the contract, he cannot
subsequently rely on the earlier acts if the final straw is entirely innocuous.
 (3) The final straw, viewed alone, need not be unreasonable or blameworthy conduct on the part of
the employer. It need not itself amount to a breach of contract. However, it will be an unusual case
151

where the ‘final straw’ consists of conduct which viewed objectively as reasonably and justifiably
satisfies the final straw test.
(4) An entirely innocuous act on the part of the employer cannot be a final straw, even if the
employee genuinely (and subjectively) but mistakenly interprets the employer’s acts as destructive of
the necessary trust and confidence. (e.g. the employee didn’t get a greeting by the manager on one
morning and resigns)
Resignation due to future events

There can be no constructive dismissal for an anticipated future event
o A constructive dismissal must be based on conduct up to the point of resignation
 There must be a breach for constructive dismissal – but there is no breach if something will happen in
the future
o However, if there is a procedural breach (e.g. the employer is clearly not going to deal with the issue properly
such that it breaches the implied duty of trust and confidence), the employee can rely on that to establish
constructive dismissal
 Business Distributors Ltd v Patel [2001] ERNZ 124 (CA)
o Judgment
 [24] Mr Patel also said in his evidence that he had a concern that at the end of the 6-month period of
salaried remuneration he would not be treated fairly when the review occurred; and that a sales
target would then be imposed upon him in an unfair manner. However he was not entitled to treat
himself as constructively dismissed in anticipation of something which may well in the future and may
well never have occurred. He cannot point to the employer's possible future conduct as causative of
the resignation.
PROBLEM
Rupert and Sophie work for the Legless Brewery Company. Rupert took a week off work without permission and without telling
his manager the reasons for his absence (In fact, Rupert’s wife had left him.) He has worked for the firm for 20 years but of late
has shown little interest in his job. The manager told him yesterday that, because of his attitude, he was being taken off his job
as supervisor and put back to working the machinery. Rupert told his manager to ‘stuff’ his job and left saying: ‘See you in court.’
Sophie was employed as a sales representative for ten years. She was employed under an agreement that required her to work
35 hours a week. On 1 August, the company announced that it would require all sales representatives to work up to five hours’
compulsory overtime a week from 1 September. Staff were not consulted about this change. Although most of the sales
representatives have accepted this change, Sophie has refused to do so and has resigned with effect from 30 August. Legless has
introduced the change because of an anticipated increase in competition.
• Advise Rupert and Sophie whether they are likely to be successful in pursuing a personal grievance for unjustified
dismissal.
• Rupert
• The breach is unilateral variation – he was demoted from supervisor to working machinery
• Causation – he said “stuff” his job
• Sufficiently serious – yes
• Final straw? – could be
• Sophie
• The breach is unilateral variation or lack of consultation
• Sophie resigned in relation to a future event – she would have to prove that the process was so flawed in
dealing with the issue of overtime (e.g. lack of consultation) that she was entitled to resign due to an
anticipated event
• If she can prove that the lack of consultation was sufficient to breach trust and confidence, then she can rely
on this breach to establish constructive dismissal
152
Medical incapacity
What is medical incapacity?
What process is required to terminate the employment of a medically incapacitated employee?
Procedure for termination due to medical incapacity

Lal v The Warehouse Ltd [2017] NZEmpC 66
o Facts
 Lal was a shop floor team member at The Warehouse in Newmarket
 She sustained an injury to her ankle while at work – the ankle later developed problems and she was
medically certified as unfit for work as she couldn’t stand for long periods of time
 She was eventually dismissed
o Submissions
 Lal claimed unjustified dismissal as she could have returned to work on a reduced basis, but the
employer did not facilitate her return to work and did not adequately manage her return generally
o Judgment
 The dismissal was justified given the nature of the health issues she was confronting and the
employer went through a thorough process to ensure they looked at all the options before dismissing
 [30] It is well established that an employer is not bound to hold a job open indefinitely for an
employee who is unable to attend work. An employer will be justified in dismissing an employee for
long term absence where it can be shown that the decision was substantively and procedurally
justified.
 [31] Section 103A of the Employment Relations Act 2000 (the Act) provides the test for justification of
any dismissal. The test requires the Court to determine whether the employer’s actions, and how the
employer acted, were what a fair and reasonable employer could have done in all of the
circumstances at the time the dismissal or action occurred.
 [32] Section 103A(3) sets out a number of factors which the Court must consider when assessing the
justifiability threshold. Those factors do not sit altogether comfortably with a no-fault-based
dismissal, such as dismissal for redundancy or medical incapacity. I approach the issue of termination
for medical incapacity within the following broad framework.

Medical incapacity is not sufficient grounds for frustration of contract – therefore, the employer still needs to follow a
process to dismiss the employee for medical incapacity
o A reasonable opportunity tends to be around 3 months and beyond depending on the circumstances
Lal v The Warehouse Ltd [2017] NZEmpC 66
o Judgment
 [33] The employer must give the employee a reasonable opportunity to recover. The terms of the
employment agreement, any relevant policy, the nature of the position held by the employee and the
length of time they have been employed with the employer are factors which are likely to inform an
assessment of what is reasonable in the particular circumstances.
Marshall v Harland & Wolff Ltd [1972] 1 WLR 899 (CA)
o Facts
 Marshall had been absent from work for 18 months due to illness
 He received no wages during this period of time
 The employer decided to close the shipyard and gave him 4 weeks’ notice of dismissal
 The employee wanted redundancy payment, but the employer said he was dismissed for illness
o Judgment
 The employee was dismissed for redundancy because of the closing of the shipyard
 Factors in determining what is a reasonable opportunity to recover:
 (a) The terms of the contract, including the provisions as to sickness pay; (e.g. medical
incapacity clause, sick pay clause)
 (b) How long the employment was likely to last in the absence of sickness; (e.g. was the
employee going to be made redundant anyway?
 (c) The nature of the employment; (if the job requires physical work, it is more likely that it
will be difficult for the employee to come back within a reasonable opportunity)
 (d) The nature of the illness or injury and how long it has already continued and the
prospects of recovery; (is it something that can be managed by medication or something that
is permanent?)
 (e) The period of past employment. (if the employee has been there for 30 years, you can
expect a more sympathetic employer)
Amcor Flexibles (New Zealand) Ltd v Gillan [2018] NZEmpC 147
Reasonable opportunity to recover



153
o
Facts

Gillan was employed in a highly skilled job and operated large, heavy dangerous printing machines for
22 years at Amcor – there were no problems during this time
 Gillan worked on 12-hour shifts
 In 2015, Gillan was found unstable on his feet and speaking incoherently by co-workers – he was sent
home after examined by paramedics in an ambulance
 In a subsequent meeting with Gillan, he disclosed that he had epilepsy, but had advanced warning of
seizures
 Amcor requested further medical information – Gillan agreed to an independent medical assessment
 Gillan made a gradual return to work (e.g. 4 hours the first day, 6 hours the next …)
 During the return to work plan, Gillan suffered another seizure 3 months after the first
 Amcor received medical advice that this seizure was different to the first one
 Gillan was placed on light duties and could only work for 8 hours a day
 Amcor sent a letter mentioning termination of employment on grounds of medical incapacity
 The union asked for more time for Gillan to recover – but Amcor dismissed him
o Judgment
 The test for a reasonable opportunity to recover in these particular circumstances was a reasonable
opportunity to adequately manage Gillan’s epilepsy so that his ability to safely return to his usual
duties could be assessed
 The significant time (over 8 months) and effort taken to investigate the condition, including
preparing returning to work plans, sufficiently satisfied Amcor’s duties in light of his service
and senior position
 He was given a reasonable opportunity to adequately manage his epilepsy, and he wasn’t
able to
 [58] When Amcor made the decision to dismiss Mr Gillan it had given him a reasonable opportunity to
take steps to attempt to manage his epilepsy so he could resume work in a safety critical
environment. By that time about eight months had elapsed, since the seizure in June 2015, during
which there had been a comprehensive review of his medical condition, which had progressively been
identified as being more complex than it was originally thought to be. By March 2016 there was no
clear medical management able to satisfy Amcor’s health and safety concerns, nor was there an end
in sight to these uncertainties. Information about Mr Gillan’s epilepsy was evolving, but what
remained a constant problem was that he was not able to return to safety sensitive work and there
was no medical information available to say that he could do so within a reasonable time.
TERMS OF THE EMPLOYMENT AGREEMENT
 Shu-Bar Partnership v Mason EmpC Auckland AEC44/96, 7 August 1996
o Facts
 Mason was a store manager and worked for the employer for about 4 years
 She was in a motor vehicle collision, admitted to hospital and required surgery
 The newly minted national retail manager met Mason in a hospital and wanted to know when she can
come back to work
 The managers decided she only had 8 weeks from the date of the accident to return to work – this
policy was made up and was not a written clause
 They dismissed her on the basis that she wouldn’t return to work within 8 weeks
 Mason made a better than expected recovery and advised she could return to work within 7 weeks
but only on light duties
 The employers refused to revoke the notice of termination
o Judgment
 Mr Dowthwaite highlighted the evidence (not actually referred to in the Tribunal's decision) that the
appellant had a policy or rule that employees would not be permitted to be absent by reason of
illness, injury or other like incapacity for more than a period of 8 weeks. This was said by managerial
witnesses for the appellant to have been applied rigidly and irrespective of the individual
circumstances of any employee including, in this case, Ms Mason.
 I find that this was not, however, a contractual provision nor even one apparently made known to
staff. If the appellant wished to alter the position at law so far as its employees were concerned, it
was obliged to negotiate and express this in the contract. It had not done so …
 If the employer wants to set what is a reasonable opportunity to return to work, it must express this
in the employment agreement
o Commentary
 Most employers will have a clause relating to medical incapacity setting the period
 Generally, set periods are bad because it depends on the circumstances
ONGOING RESPONSIBILITY
154

If the employer is the cause of the medical incapacity, they need a greater sympathetic approach to the length of time
given to an employee to recover
 A fair and reasonable employer complies with section 103A by meeting other obligations imposed by law (e.g. an
obligation to rehabilitate the employee back to work)
 Jack v Attorney-General [2004] 1 ERNZ 316 (EmpC)
o Facts
 Jack was a typist who started to develop Occupational Overuse Syndrome or Repetitive Strain Injury
as a result of the introduction of computers by the employer without proper safeguards – hands
cramp, which means she is unable to type
 The responsibility for the rehabilitation plan was with the employer – as it was the cause of the
medical incapacity, it had an ongoing responsibility to take reasonable steps to rehabilitate Jack and
bring her back to work
o Judgment
 [125] What happened, therefore, was an institutional breakdown. The question of who was
responsible for her rehabilitation plan in 1996 goes back to what was done in the first place. I find
that the first responsibility was with the employer. If it had not been for the actions of the employer
in introducing computers in the 90s without proper safeguards then Miss Jack would not have
contracted OOS/RSI. It therefore had an ongoing responsibility to take reasonable steps to
rehabilitate her to her position.
APPOINTMENT OF SUCCESSOR
 Paykel Ltd v Morton [1994] 1 ERNZ 875 (EmpC)
o Facts
 Morton was a branch manager and had worked for 14 years
 Morton suffered a serious back injury, and was away for a number of months despite attempts to
work part-time
 Paykel saw this as causing a severe business problem and appointed a replacement without telling
Morton
 Even after the replacement was appointed, Paykel misled Morton to believe a job still awaited him
after he had surgery
 The employer then terminated Morton
o Judgment
 The employer had already taken preparatory steps to appoint a successor when Morton was
recovering – therefore, clearly, they weren’t giving him a reasonable opportunity to recover
 … Mr Morton was an experienced employee of very long standing in whom there is no suggestion the
company did not have trust and confidence. Even if it may have taken Mr Morton some little time
longer to fully resume his duties than that taken up by his replacement, factors such as the
inexperience of his replacement and the uncertainty of that appointment may reasonably have
persuaded the appellant that a relatively short delay might have been an acceptable cost to ensure
certainty and consistency. It may also have been that, following his operation and recovery, Mr
Morton might have returned to full-time managerial duties but ones that allowed for an avoidance of
the heavy lifting expected of him, at least initially.
 It is inescapable that the appellant acted both without any effective communication with Mr Morton
and without recourse to the specialist medical advice which the respondent had specifically invited
the company to obtain. In these circumstances, I conclude, the appellant is unable to say that it acted
fairly and therefore with justification in dismissing Mr Morton as it did.
Fair and reasonable inquiry

Lal v The Warehouse Ltd [2017] NZEmpC 66
o Judgment
 [34] The employer must undertake a fair and reasonable inquiry into the prognosis for a return to
work, engaging appropriately with the employee. This will likely involve seeking and considering
relevant medical information. It will also involve explaining the reasons for the inquiry, the possible
outcome of it, and providing the employee with an opportunity for input and comment.
 In this case:
 The Warehouse had a volume of information upon which to inform its decision
 Lal was not actively engaging in the process that the employer was attempting to progress
 The employer took numerous steps from an early stage and consistently up until the
termination notice was given inquired into the issues relating to the incapacity, the extent
this impacted on the employment and what could reasonably be done to assist a return to
work
o Commentary
155

The Privacy Act requires the employer to obtain information from the employee concerned – it
cannot simply call the doctor without getting the employee’s consent
 A breach of the Privacy Act means not being a fair and reasonable employer under section 103A
OBTAINING RELEVANT MEDICAL INFORMATION
 Wilson v Sleepyhead Manufacturing Co Ltd [1992] 3 ERNZ 614 (EmpT)
o Facts
 Wilson suffered from epilepsy and suffered two seizures in the last 20 years, the last being 13 years
ago – he didn’t mention this in his interview
 While employed, he suffered two seizures within 4 months – the second of those took place
underneath machinery
 The employer summarily dismissed Wilson
o Judgment
 The concern about safety given the nature of the job was justified – however, the employer must
have the medical information upon which to make its decision to dismiss
 The employer, by summarily dismissing the employee, did not allow itself time to become
informed and did not give the employee a chance to give medical evidence
 These were sufficiently serious failures to render the dismissal unjustified
 A particular difficulty is acknowledged for employers who have to consider medical evidence. A
medical practitioner whose patient seeks a report to the employer for the purposes of advising on
future employment is in an awkward position. The patient will not thank the doctor if the medical
report leads to dismissal. The employer will not thank the doctor if the report is so guarded and
opaque that it gives no help in making the decision. The answer may be for the employer to
commission another medical opinion and give the employee's own doctor the opportunity to
comment. If the employee declines to submit to examination, the employee cannot complain of
unfairness.
 That is not the situation here. The employer did not seek further medical advice. It made a quick
decision. Its mindset is indicated to some extent by the fact that it declined the opportunity offered
later by Jocelyn Coburn to learn about epilepsy. The failure in procedural fairness was sufficiently
serious to render the dismissal unjustified.
MUST BE UP-TO-DATE MEDICAL INFORMATION

Lang v Eagle Airways Ltd [1996] 1 ERNZ 574 (CA)
o Facts
 A pilot liked to ride horses
 She had been suffering from serious migraines and was on and off work during this time
 Two years later, she was still dealing with these issues
 The Civil Aviation Authority in the meantime had renewed her pilot’s licence, but had restricted it to
be as a safety pilot
 The migraines continued and she was dismissed
o Judgment
 The employer did obtain up-to-date medical information from the employee, but had made reference
to the earlier medical information from riding the horses (which was 2 or 3 years previous) – there
was a real risk that this confused the various issues including the causes of the headaches
 The employer must act carefully and on up-to-date medical information with regards to the illness
 We pass over the third reason for the moment. The next two reasons relate to Mrs Lang's horseracing interests. What an employee does in his or her spare time is normally of no concern to the
employer, unless it interferes with the performance of the job. There had been three periods of
absences from work due to accidents involving horses, but those in 1989 and 1990 were not seen at
the time as justifying dismissal. That in July 1991 involved an absence of 5 days, and could hardly
justify dismissal in May 1992. Other absences through taking annual leave to attend race meetings by
arrangement with Eagle cannot be a ground for 5 complaint by Eagle. Nor is there evidence that Mrs
Lang misrepresented the extent of her involvement. She disclosed her ownership of one mare and her
part ownership of two horses, and her involvement of about an hour a day working them. It was not
suggested that she had interests in other horses, or that her riding time was longer. Other time spent
watching horses or attending race meetings was 10 not the subject of any representation, and was
not shown to be of relevance to her ability to perform her job.
REQUIREMENT FOR A MEDICAL EXAMINATION
 Radio New Zealand Ltd v Snowdon [2003] 1 ERNZ 12 (EmpC)
o Facts
 Snowdon was a senior manager at Radio New Zealand and took extended sick leave as a result of a
breakdown of the employment relationship and she was dismissed for incompatibility
 She did not provide information about the nature of the illness despite repeated requests from RNZ
156



She refused to see RNZ’s doctor
After about 3 months a medical certificate was supplied by Snowdon saying she was fit to return to
work on a trial basis, but RNZ wanted her to undergo a medical examination before accepting the
return – she refused
A clause in the employment agreement enabled RNZ to ask the employee to undergo a medical
examination by a doctor nominated by the company at its expense for long-term illness
o

Issue
 Could the employer require an employee to undergo a medical examination?
o Judgment
 Conclusions
[87] These can be summarised as follows:
 For as long as the outstanding issue between the parties was Ms Snowdon's sick leave or
long-term illness, Radio New Zealand was entitled under the employment principles to
require her to undergo a medical examination by a doctor of its choice and at its own cost.
 When it came to Ms Snowdon's rehabilitation or return to work, Radio New Zealand was
entitled to consult with her medical practitioner but could not insist on a medical
examination by a doctor of its own choice pursuant to the employment principles unless
consented to by Ms Snowdon.
 Ms Snowdon could not be compelled to be examined by a doctor not of her own choice
without her consent.
 Radio New Zealand was justified in refusing to allow Ms Snowdon back to work on the basis
of insufficient medical information, her lack of promised cooperation in supplying more
detailed reports, and the withholding of important reports.
 Radio New Zealand has acted as a fair and reasonable employer in assessing such medical
evidence as was provided by being guided by its medical adviser.
 Ms Snowdon has suffered a disadvantage by being kept out of work but I am not satisfied
that it was unjustified.
COVID-19 vaccinations
o An employer cannot require an employee to get a vaccination
o The employer can require the employee to show their fitness to attend work – if the nature of their job is such
that their fitness to attend work requires them to be vaccinated then they could be justified in dismissing that
employee for being unable to perform the duties of the job
Fair consideration

Lal v The Warehouse Ltd [2017] NZEmpC 66
o Judgment
 [35] The employer must fairly consider what the employee has to say before terminating their
employment. An employer is entitled to have regard to its business needs in deciding an appropriate
response to the situation and any applicable timeframes. An employer is not obliged to keep a job
open indefinitely, no matter how long an employee has been employed or how large the organisation
is. For their part, an employee is obliged to be responsive and communicative.
GENUINE CONSIDERATION
 Banks v Hockey Manawatu Inc [2016] NZEmpC 23
o Facts
 Banks was an operations manager
 A number of employees had expressed their dissatisfaction with the way in which Banks was
operating the business – some had resigned for this reason
 The employer commenced a disciplinary process and Banks went on indefinite sick leave
 It got to a point where the employer wasn’t going to continue with the disciplinary process and was
going to dismiss Banks for medical incapacity
 The Board held a special confidential meeting where it considered options for dismissing Banks – the
options were restructure, mediation, performance management, IT search to look for inappropriate
computer activity, giving very firm instructions of all reasonable and lawful expectations, termination
on medical grounds, and do nothing
o Judgment
 None of the options were about maintaining the employment relationship – the employers clearly
were not going to give genuine consideration to what Banks said because they were only looking at
the possibility of termination
 [70] Instead, the Board proceeded to hold a special confidential meeting where it considered options
for dismissing Mr Banks. None of the Board members present at that special meeting gave evidence
before me but the minutes of the meeting, recorded in Document 700, disclose what happened. As
157

Ms Buckett colourfully expressed in her closing submissions, "… having left the station and embarked
down the track to ‘termination’, the train was unstoppable."
[71] The Board then sought and obtained advice as to its legal options. The documentation produced
to the Court showed clearly that the emphasis in the options discussed was upon reaching an
outcome that would end Mr Banks' employment. The status quo option, whereby Mr Banks would be
retained on his existing terms and conditions, was effectively dismissed out of hand.
158
BUSINESS CONCERNS
 In giving genuine consideration, the employer is entitled to take into account their business concerns – they must
balance the medical information against what the business can handle
 Wilson v Johnathon’s Catering Co Ltd [2000] 1 ERNZ 660 (EmpC)
o Facts
 The employee was a catering supervisor
 Six years into the employment, he was admitted to hospital for an emergency operation and was
unable to return full-time for about 5 months and required further surgery
 The employer looked at the viability of the business and several options were discussed including
dismissal, possibility of replacing the employee for the remainder of the year, the employee returning
in the new year etc.
 The option of replacing the employee for an 8-week absence was dismissed because of the
impracticality of hiring someone on such a short-term
o Judgment
 Dismissal was justified
 The employer carried out a full inquiry and was entitled to reach the view that the business
required a supervisor for the time the appellant would be absent
 The employer had discharged its obligations by arranging two meetings and put forward
several options
 As a result of a fair inquiry into all the circumstances, the employer had reached the honest
belief that dismissal was inevitable
 [43] The evidence satisfies me that the respondent, particularly in the person of Mrs Dunn, did carry
out a full inquiry into all the options, against the background of a drop in turnover, the need to retender for the college contract and with the knowledge of the difficulties that had been experienced
during the previous absence. The arrangements contemplated to deal with the absence and in
particular those advanced by the appellant, were not practical to cover her absence. I find the
respondent was entitled to reach the view that the dictates of the business required the appointment
of a supervisor for the balance of the college year and, as the Tribunal concluded, that was why Mrs
Dunn was prepared to engage such a person and to have the appellant return in 1999 if the college
contract was renewed.
HEALTH AND SAFETY
 Giving fair consideration also includes health and safety issues
 Hoskin v Coastal Fish Supplies Ltd [1985] ACJ 124 (AC)
o Facts
 Hoskin was employed as a shop manager in a Fish and Chips shop
 Hoskin was diagnosed with a notifiable disease
 The nature of the illness meant that when undertaking work, it would be a public health risk as he
was preparing food
 Therefore, he had to be away from work until he was cleared by a medical officer
o Judgment
 There comes a point in an employment relationship in which the employer can dismiss
 We consider that, looking at the matter as a whole and relying on the nature of Mr Hoskin’s illness, it
was reasonable for the employer to decide at that point that alternative and more permanent
arrangements should be made. It is possible that some temporary alternative might have been
arranged but to obtain a temporary shop manager, even in these days, does not seem an alternative
that an employer in these circumstances should have undertaken. A medical condition involving
public health risks in a food shop coupled with other more normal absences for health reasons must
be a matter of considerable concern to any employer.
o Commentary
 The illness, as it was a notifiable disease, Hoskin couldn’t do the job and the employer didn’t have the
ability to obtain temporary replacements – therefore, he could be justifiably dismissed
Engagement

Lal v The Warehouse Ltd [2017] NZEmpC 66
o Judgment
 [36] In cases of medical incapacity, and a reduced ability to undertake certain tasks, a level of
engagement with attempts to facilitate a return to work may reasonably be expected. Fairness cuts
both ways, consistently with the mutual obligations which exist in employment relationships. This
latter point has particular relevance in the circumstances of this case, having regard to the level of
engagement Ms Lal was prepared to commit to a supported, gradual, return to work.
159

Engagement requires open communication from both the employer and the employee – good faith in section 4
requires each party to be open and communicative
o If the employee is ignoring the employer, there is a real risk that they will have failed to comply with their
good faith obligations and a fair and reasonable employer would be justified in dismissing them
 Dunn v Waitemata District Health Board [2014] NZEmpC 201
o Facts
 Dunn was a mental health nurse
 There was a lengthy period of sick leave – this followed a sustained period of conflict with colleagues
and a team leader resulting in a verbal warning
 Although WDHB attempted to engage with Dunn over the employment issues, he rebuffed its
suggestions, indicating he was interested in a severance package which was rejected
o Judgment
 [43] Employment relationships involve a two-way street. Both parties have an obligation to be
responsive and communicative and to deal with each other in good faith. It ill-behoves an employee
to complain about a failure to adequately progress a rehabilitative process when they themselves fail
to engage in constructive dialogue in a genuine attempt to resolve issues. Mr Dunn said that he was,
to large measure, reliant on his then representative. However, the WDHB was entitled to assume that
his representative was acting under instructions at all material times.
INTERMITTENCY OF ABSENCE
 McKean v The Board of Trustees of Wakaaranga School [2007] ERNZ 1 (EmpC)
o Facts
 McKean suffered from a number of mental health issues
 The school took this into account in looking at whether they should dismiss him for medical incapacity
o Judgment
 [52] The school was becoming increasingly concerned about the prospects for Mr McKean’s return.
Accordingly, on 3 April, its solicitors wrote to his setting out the position that the school faced and
asking for a firm indication of his date of return and an assurance that his medical condition was such
that the school might expect no repetition of his frequent absences as in 2002. Those assurances
were sought preferably in a letter from his medical practitioner and the school stated that if these
advices were not received within about a week, by 11 April 2003, and that Mr McKean would be able
to return to work at the beginning of the following term, it would have to give serious consideration
as to whether, and if so for how long, it was able to continue holding his job open
 A series of absences during the employment relationship will inevitably lead to real questions about
the absences following the return to work – this intermittency can be taken into account
 There can often be reasonable reasons for intermittent absences – but the employee needs to disclose the reasons to
comply with obligations of good faith
OPEN COMMUNICATION – PRIVACY INTERESTS
 Employees may take leave for reasons they don’t want to disclose (e.g. family violence) – but there are ways to be open
and communicative without disclosing all the details
 Knight t/a Kallista Convalescent and Rest Home v Gates (1997) 5 NZELC 98,473 (EmpC)
o Judgment
 Cases of this sort in which justification for dismissal has to be decided in circumstances of prolonged
and possibly indefinite absence of an employee through illness, injury or other incapacity, are difficult
but not infrequent. The reasonable expectations of the parties in such a case have been the subject of
general guidelines in cases issued by this Court and its predecessors. They do not impose impossible
strategies upon employers. Rather, their cumulative effect can be described in one phrase, the need
for open and honest communication between both parties of their positions and intentions. For the
employee this means periodic communication with the employer as to the employee's general state
of capacity and prognosis for return to work, whether by way of a resumption of previous duties or on
duties that might be appropriately modified to suit the employee's ability to perform them. Although,
for reasons of personal and medical privacy, it may not be appropriate for an employee to make
complete disclosure of all information relating to an injury, illness or other disability, experience in a
number of cases has shown that issues of privacy can be accommodated whilst still disclosing to the
employer all necessary information to enable that party to the contractual relationship to assess the
current and future positions.
CONSULTATION
 Consultation means putting a proposal to the employee in dealing with the employment relationship, getting their
feedback and genuinely considering their feedback and then making a decision
 Classique Giftware Ltd v Porter EmpC Christchurch CEC20-95, 9 May 1995
o Facts
160

Porter was dismissed because she could not kneel when she was dusting the two lower selves in the
shop and their contents, and was undertaking the work on a stool
o Judgment
 This was substantively unjustified and procedurally unjustified because the employer could have
looked at the medical report so that the concerns as to the ability to reach the lower shelves could be
considered
 … Ms Hunt's summary dismissal of Ms Porter in the particular circumstances that that dismissal
occurred was substantively unjustifiable and carried out in a procedurally unfair manner. It simply
was not reasonable - and certainly not substantively justifiable - for Ms Hunt to dismiss Ms Porter
because she could not kneel when she was dusting the two lower shelves in the shop and their
contents but was undertaking this particular work while seated upon her stool. In the circumstances
which obtained on 31 May summary dismissal was obviously not a fair process because purposeful
consultation with Ms Henderson, extending if considered necessary to the respondent's medical
specialist, Mr Poplawski, at this assessment stage of the trial return to work, should plainly have been
undertaken upon Ms Hunt's initiative so that her concerns as to Ms Porter's physical capacity to
perform her employment duties then and progressively during the period of trial could appropriately
be discussed before any decision was made concerning the respondent's ongoing employment. I
agree entirely with the Tribunal that this dismissal was obviously precipitate and undertaken by Ms
Hunt without consultation by her with Ms Henderson and the specialist who had thoroughly informed
insights concerning the respondent's then medical situation and her anticipated physical capacity
necessary in her employment situation in both the immediate and longer term.
DISCRIMINATION
 One ground of discrimination is disability, and an exception to disability discrimination is reasonable accommodation
 Idea Services Ltd v Crozier [2017] NZEmpC 77
o Facts
 Crozier was not able to restrain intellectually handicapped patients (who can get violent on occasion)
due to her medical condition
o Judgment
 There was no discrimination
 [232] Indeed, at the hearing, Ms Crozier agreed that all staff needed to be ready, willing and able to
conduct a restraint at any time; that CSWs had to be able to track a client on foot for potentially a
number of kilometres at a steady to fast pace; and that all CSWs were required to undertake physical
activity, which was critical to managing the behaviour of clients.
 [233] Since it is common ground that all CSWs were required to meet these essential requirements, I
must conclude that Ms Crozier was treated no differently by being required to meet those
requirements. It is not established that she was treated differently or discriminated against on the
prohibited ground of disability.
o Commentary
 But she was treated differently by being dismissed
 The question should be whether the employer reasonably accommodated for her disability – the
employer hadn’t in this case
DISPARITY OF TREATMENT
 Lyttelton Port Company Ltd v Arthurs [2018] NZEmpC 9
o Facts
 In 2008, Arthurs witnessed a fatal workplace accident – this had a significant impact on him (PTSD),
and he returned to work on a gradual basis
 Arthurs took a lot of sick leave – management wanted to discuss this with him
 Arthurs argued that he wasn’t treated consistently with another employee (F) who had suffered two
injuries in close succession
o Judgment
 [43] The case that Mr Arthurs points to as most closely aligned to his, and which he says indicates that
he was not treated consistently with other employees, is that of a cargo handler who suffered two
injuries in close succession (Employee F). In total, Employee F was not in his full-time position for a
period of just over 17 months… While LPC’s approach with respect to Employee F’s absence was
generous, it was understandable in the circumstances. In contrast, there was a general lack of positive
and constructive engagement from Mr Arthurs throughout, including in the months immediately
preceding the termination of Mr Arthurs’ employment, after his PTSD had subsided so that it no
longer prevented his return to work.
 [44] I accept that, while there may at first appear to be a disparity in treatment between the two
situations, the difference is adequately explained such that there is no need to attempt the third
enquiry.
161
 The employer was able to differentiate Arthurs’ situation from F’s
PROBLEM
An employer cannot be held to ransom by an incapacitated employee, dictating the terms on which they will return to work and
where. An employee can however expect that their concerns will be genuinely considered and appropriately responded to. The
employer’s actions must be within the range of what a fair and reasonable employer could do in the circumstances.
Lal v The Warehouse Ltd [2017] NZEmpC 66 at [48]
Critically discuss the fair and reasonable process for termination of a medically incapacitated employee.
162
Redundancy
What is redundancy?



There is no established definition of redundancy, but the Labour Relations Act provided a useful definition:
o Redundancy is a situation where “[a] worker's employment is terminated by the employer, the termination
being attributable, wholly or mainly, to the fact that the position filled by that worker is, or will become,
superfluous to the needs of the employer” (section 184(5)(a)(i) of the Labour Relations Act 1987 (no longer in
force))
o This means redundancy is all about the position/role being made redundant and not about the individual
worker being redundant
There are two types of justifications for redundancy – substantive and procedural
o Substantive justification concerns the reason for redundancy
 However, having a fundamentally flawed procedure can also be a failure to provide substantive
justification – if the employer hasn’t gone through the correct procedures, it is unlikely to have a good
reason for redundancy
o Procedural justification concerns how the redundancy process is carried out
An employer must still comply with section 103A in a redundancy situation
Substantive justification


GN Hale & Son Ltd v Wellington etc Caretakers etc IUOW [1991] 1 NZLR 151 (CA)
o Facts
 S had various duties, including cleaning
 The employer decided to dismiss S and replace him with a contract cleaner
o Judgment (Labour Court)
 The employer’s decision to make certain reductions in cost was a management decision which it was
open as an employer to make
 However, the company could have attained the desired savings without dismissing S – it was well
within the capacity of the employer to identify and put in place the savings which were substituted
for removing the transport allowance when its removal could not be achieved; it would then become
apparent that there was no pressing need to dismiss the company’s cleaner
 The dismissal was therefore unjustified
o Judgment
 Overturned the Labour Court’s decision – firmly rejected the approach to looking into the desired
savings
 The court should not challenge the reasons for the redundancy provided that those
reasons were genuine (i.e. weren’t made for ulterior purposes to get rid of a poorly
performing employee etc.)
 … an employer is entitled to make his business more efficient, as for example by automation,
abandonment of unprofitable activities, re-organisation or other cost-saving steps, no matter
whether or not the business would otherwise go to the wall. A worker does not have a right to
continued employment if the business can be run more efficiently without him. The personal
grievance provisions of the Labour Relations Act, and in particular the existence of remedies for
unjustifiable dismissal, should not be treated as derogating from the rights of employers to make
management decisions genuinely on such grounds. Nor could it be right for the Labour Court to
substitute its own opinion as to the wisdom or expediency of the employer’s decision. When a
dismissal is based on redundancy, it is the good faith of that basis and the fairness of the procedure
followed that may fall to be examined on a complaint of unjustifiable dismissal … A reasonable
employer cannot be expected to surrender the right to organise its business.
 An honest assessment of the commercial needs of an employer should not be subject to objective
tests of fairness, reasonableness or necessity
 The only question to be asked in determining substantive justification in a redundancy was whether
the employer made the decision for genuine commercial reasons, and the employer is the best
judge of what was in the business’ commercial interests
Aoraki Corp Ltd v McGavin [1998] 3 NZLR 276 (CA)
o Facts
 McGavin was involved in the development of a new software product, and was made redundant
summarily without any consultation
o Judgment
163



An issue was whether the duty of trust and confidence required redundancy compensation to be paid
to the employee – the court held that there was no implied right to redundancy compensation; it was
a matter of contract between the parties
 Redundancy is a special situation. The employees affected have done no wrong. It is simply that in the
circumstances the employer faces their jobs have disappeared and they are considered surplus to the
needs of the business. Where it is decided as a matter of commercial judgment that there are too
many employees in the particular area or overall, it is for the employer as a matter of business
judgment to decide on the strategy to be adopted in the restructuring exercise and what position or
positions should be dispensed with in the implementation of that strategy and whether an employee
whose job has disappeared should be offered another position elsewhere in the business.
 As a matter of procedure, redundancy decisions need to be implemented in a fair and sensitive way –
this inevitably requires consulting with the employee about the decision to terminate the position
Coutts Cars Ltd v Baguley [2002] 2 NZLR 533 (CA)
o Facts
 During the consulting process for redundancy, the employer refused to give the selection criteria due
to confidentiality concerns
o Judgment
 The new statutory obligation on employers and employees to deal with each other in good faith did
not introduce any significantly heightened obligation than the mutual obligations of trust and
confidence at common law – the court read down section 4 of the ERA (sections 103A and 4(1A)
hadn’t been introduced yet)
 Redundancy was an area of business discretion, and therefore consultation processes must be
assessed realistically
 There was no absolute requirement for consultation
 Given that the employee in this case was at a relatively low level, the complaint of lack of
detailed information was somewhat hollow and what had occurred could hardly be said to
affect the genuineness of the redundancy
 [49] We consider that the actions of the employer fell short of the standard required of a reasonable
employer acting fairly. Mr Baguley was called to a meeting knowing his job could be at stake but
having been told little of why that was the position. The invitation to comment on the restructuring
was not one he could reasonably have been expected to respond to. The meeting became heated
because the employer would not meet a reasonable request from Mr Baguley's solicitor and he was
then asked to present a case for retaining his position without knowing by what criteria he was being
assessed. It is understandable that he and his solicitor were left with the impression that the matter
had been predetermined.
o Judgment (McGrath J in dissent)
 Section 4 changed the procedural requirements for redundancy – it expanded the duty of
consultation on employers when considering a redundancy
o Commentary
 As a reaction to this case, Parliament introduced section 4(1A), which says the duty of good faith is
wider than the obligations of trust and confidence, and requires consultation during redundancy
 This case is about substantive justification because sometimes the procedure might be so bad that
there is no substantive justification
Simpsons Farms Ltd v Aberhart [2006] ERNZ 825 (EmpC)
o Facts
 A company underwent restructuring with the creation of a new more senior managerial position with
responsibility for several properties – the old role of manager was to be made redundant
 During the consultative process, the employee (who had 15 years of service) was told that the
company would advertise for the new senior manager position and that he could apply for it
 The employee decided not to, because he thought he shouldn’t have to apply for his job
 The position was later filled by another person and the employee was terminated for redundancy
o Judgment
 The reasons for the redundancy was genuine
 However, the consultation process did not meet the standards of a fair and reasonable employer
 The meetings that were held with the employee did not seek to elicit any meaningful input
from the employee – this omission by the employer was material and unjustified
 Therefore, this was a procedurally unjustified dismissal

[67] I do not consider that the recent statutory changes were intended to revisit long-standing
principles about substantive justification for redundancy exemplified by judgments such as Hale. The
words and phrases of s 103A echo the statements of Cooke P and Richardson J in Hale as set out in
paras 40 and 41. Although Parliament was prescriptive in 2004 so far as process was concerned, on
164


substance of justification for dismissal it appears to have been satisfied, by enacting s 103A, to return
to the position espoused by the Courts in cases such as and following Hale. So long as an employer
acts genuinely and not out of ulterior motives, a business decision to make positions or employees
redundant is for the employer to make and not for the Authority or the Court, even under s 103A.
 The job of the court is to assess whether a fair and reasonable employer could have
terminated the employment for redundancy
 Remedies
 If an employee can prove that there was no substantive justification, they may get lost wages
for 3 or 12 months
 If the employer has a substantively justified redundancy but not a procedurally justified
redundancy, the employee is not entitled to lost wages – they are only entitled to
compensation for humiliation, loss of dignity and injury to feelings as a result of the way in
which the process of redundancy was carried out
Rittson-Thomas t/a Totara Hills Farm v Davidson [2013] NZEmpC 39
o Facts
 The employer restructured his farming operation and decided to get rid of a unit manager position
held by Davidson
 An alternative position of shepherd was created – this position was not offered to the employee but
he was told he could apply for it
o Judgment

[53] Section 103A does require the Court to inquire into a decision to declare an employee’s position
redundant and to either affect the holder of that position to his or her disadvantage or to dismiss that
employee, if the personal grievance alleges that these acts by the employer were unjustified. The
statutory mandate does not, however, go as far as the Labour Court did in GN Hale, that is to
substitute the Court’s (or the Authority’s) own decision for that of the employer. Rather, the Court (or
the Authority) must determine whether what was done, and how it was done, were what a fair and
reasonable employer would (now could) have done in all the circumstances at the time. So the
standard is not the Court’s (or the Authority’s) own assessment but, rather, its assessment of what a
fair and reasonable employer would/could have done and how. Those are separate and distinct
standards.
 [54] It will be insufficient under s 103A, where an employer is challenged to justify a dismissal or
disadvantage in employment, for the employer simply to say that this was a genuine business
decision and the Court (or the Authority) is not entitled to inquire into the merits of it. The Court (or
the Authority) will need to do so to determine whether the decision, and how it was reached, were
what a fair and reasonable employer would/could have done in all the relevant circumstances.
 The court cannot ignore the statutory refinements to the law of justification and personal
grievances effected with section 103A in 2004 and subsequently with the amendments to
that section made in 2010 (section 103A(3))
 This is essentially overturning Simpsons Farms and Hale where the court said that as long as
the employer had genuine reasons for redundancy, the court is not to interfere – to justify a
redundancy on genuine financial grounds, the employer must explain the numbers that base
those grounds (e.g. it wants to make savings of X and in order to achieve that, it will make
these positions redundant and get the employee’s feedback) rather than merely saying the
genuine reasons (e.g. that the employer is making losses and needs to cut 5 positions)
 In this case, there was no justification
 As a matter of fair process, the employer should have offered the alternative shepherd
position to the employee rather than giving the mere option of applying
 Furthermore, the employer wanted to make a saving of 10% on the annual remuneration bill
which was said to be $100,000
 However, the restructure as proposed would have resulted in a saving of only 6% of
the original savings target ($6000 per annum)
 In any event, there was doubt as to whether $100,000 was the correct total for
annual remuneration
 This threw doubt on the genuineness and therefore the justification of making the
position occupied by the employee redundant – a fair and reasonable employer
would have been able to explain the anomalies identified in the relevant
calculations
Grace Team Accounting Ltd v Brake [2014] NZCA 541
o Facts
 Brake had been headhunted from a large accountancy firm, and she expected her employment to
continue
165

Because of perceived cash flow problems, the employer initiated a redundancy process which
affected Ms Brake
 The timing of the proposal of the redundancy was particularly unfortunate because Brake had just
discovered that she had leukaemia and she told this to her employer – at that moment, the employer
decided to immediately hold a meeting to discuss her possible redundancy
 The employee asked for further information in relation to the proposed redundancy – a week later, a
letter was given to her explaining that expected turnover was down by 100,000
 During this time, another employee had resigned
 The employer carried on with the process and terminated Brake for redundancy with 1 months’ salary
in lieu of notice
 When required to explain the numbers by the court, the redundancy was essentially based on a
mistake of fact by the employer as to its correct financial position – the turnover was not down by
100,000
o Judgment
 If the employer had acted on accurate financial information, there would have been no immediate
need for Brake’s redundancy – the employer did not exercise care in the evaluation of its business
situation
 The redundancy was genuine (as the employer made a genuine decision), but it was
mistaken – it did not meet the threshold for section 103A as to what a fair and reasonable
employer could have done
 It was relying on inaccurate information, and the employee had pointed this out during the
consultation process, but the employer ignored it and carried on with the process

[80] We consider that the appropriate approach to statutory interpretation in this case is the
orthodox approach beginning with the words of the section and considering them in light of the
purpose of the statute. When the words of s 103A are considered in light of the purposes of the
statute set out in s 3 and the overarching duty of good faith provided for in s 4, we do not consider
that the reference in s 103A to a “fair and reasonable employer” can properly be read down to mean
“a genuine employer”, in the sense used in Hale (an employer not using redundancy as a pretext for
dismissing a disliked employee)
 Again, Hale is overturned – an employer needs to be more than genuine; they must be fair
and reasonable
A “SHAM” REDUNDANCY
 An employer cannot substantively justify a redundancy by saying the employee was performing poorly or had
disciplinary issues – they also cannot use redundancy to hide the true reasons for what is effectively a dismissal
REPLACING THE REDUNDANT EMPLOYEE


If the position is truly redundant, the employer wouldn’t need to replace the employee
Barnes (formerly Kissell) v Whangarei Returned Services Assoc (Inc) [1997] ERNZ 626 (EmpC)
o Facts
 Barnes was initially employed on a casual employment arrangement
 After 7 months, she was informed that she was not required to commence her rostered duties in the
forthcoming week as her services were no longer required due to a staff restructuring
 1 week later another casual employee resigned
 About 3 weeks after, Barnes discovered a new employee was hired and was working the hours she
had previously worked
o Judgment
 There is thus no basis for asserting that the appellant's redundancy was inevitable. Indeed to the
contrary there is strong evidence which suggests that her position was not superfluous and that a
new person had to be employed within 3 weeks to fill her role. For all these reasons I am not satisfied
that this was a genuine redundancy properly carried out and the appellant is therefore entitled to a
finding that she was unjustifiably dismissed.
 This was actually a permanent and not casual employment
 This was not a genuine redundancy as three weeks after the employee was dismissed, she was
replaced by another person taking on the same role
PERFORMANCE CONCERNS

Staykov v Cap Gemini Ernst & Young New Zealand Ltd EmpC Auckland AC18/05, 20 April 2005
o Facts
 Staykov was employed as a manager at EY
 EY was later taken over by a French consulting firm, which created Cap Gemini Ernst & Young
 CGEY had a proposal to work for the Ministry of Health – the bid to the work was the best proposal
received, but was lost on the basis of cost criteria (the MoH were undergoing significant financial
constraints and chose a contract that incurred less costs)
166


o
As a result, Staykov had to work with a person called Stewart – disagreements between them arose
In Staykov’s performance reviews, he was downgraded to a 1 rating (the best) to 3 (meets
expectations) which was above what Stewart recommended (needs improvement for sales) – this had
a flow-on effect on Staykov’s bonus
 Staykov believed Stewart had cost the firm the MoH project and that he was now attempting to shift
the blame on Staykov to protect his own position – as a result, Staykov was not allocated any
significant work for a period of time
 Staykov was called into a meeting by the HR manager and told that he could bring a representative –
he tried to postpone but it was refused and that it was only for information
 Staykov couldn’t get a representative given the timeframe of the meeting
 At the meeting, he was told that his role was surplus to requirements, he was to be made redundant
and handed a severance package
 Staykov held a senior sales position and was the only person within his group to be made redundant
 There did not appear to be any reasons why he should not have been consulted on the criteria, its
application, why he wasn’t given time to obtain representation, why he wasn’t given warning in
advance
Judgment
 [35] … The matter was not addressed, as it should have been, as one of performance. Here concerns
were held about Mr Staykov's performance, following Mr Stewart's adverse view in relation to the
Minister of Health proposal. As a result he was excluded from client contact, not used on other
proposals and generally isolated. He was engaged in ongoing work at the time of the redundancy and,
in the absence of any evidence at all from the defendant, it is difficult to see that it could be said that
his position at the time was surplus to requirements.
 His dismissal came about more probable than not to mask the adverse view that Mr Stewart had
formed about him. The matter was not addressed, as it should have been, as one of performance. (i.e.
should have used the performance management mechanisms)
Procedural justification
4
Parties to employment relationship to deal with each other in good faith
(1)
The parties to an employment relationship specified in subsection (2)—
(a)
must deal with each other in good faith; and
(b)
without limiting paragraph (a), must not, whether directly or indirectly, do anything—
(i)
to mislead or deceive each other; or
(ii)
that is likely to mislead or deceive each other.
The duty of good faith in subsection (1)—
(a)
is wider in scope than the implied mutual obligations of trust and confidence; and
(b)
requires the parties to an employment relationship to be active and constructive in establishing and maintaining a
productive employment relationship in which the parties are, among other things, responsive and communicative;
and
(c)
without limiting paragraph (b), requires an employer who is proposing to make a decision that will, or is likely to,
have an adverse effect on the continuation of employment of 1 or more of his or her employees to provide to the
employees affected—
(i)
access to information, relevant to the continuation of the employees’ employment, about the decision; and
(information on why redundancy is happening and how it will happen)
(ii)
an opportunity to comment on the information to their employer before the decision is made.
However, subsection (1A)(c) does not require an employer to provide access to confidential information—
(a)
that is about an identifiable individual other than the affected employee if providing access to that information
would involve the unwarranted disclosure of the affairs of that other individual:
(b)
that is subject to a statutory requirement to maintain confidentiality:
(c)
where it is necessary, for any other good reason, to maintain the confidentiality of the information (for example,
to avoid unreasonable prejudice to the employer’s commercial position).
To avoid doubt,—
(a)
subsection (1B) does not affect an employer’s obligations under—
(i)
the Official Information Act 1982 (despite section 52(3) of that Act); or
(ii)
the Privacy Act 1993 (despite section 7(2) of that Act):
(b)
an employer must not refuse to provide access to information under subsection (1A)(c) merely because the
information is contained in a document that includes confidential information.
For the purposes of subsections (1B) and (1C), confidential information means information that is provided in
circumstances where there is a mutual understanding (whether express or implied) of secrecy.
(1A)
(1B)
(1C)
(1D)
Procedure for redundancy
PROVISION OF INFORMATION
167

An employer must articulate the reasons for making the position redundant – as part of this, it must provide ALL
relevant information
 Vice-Chancellor of Massey University v Wrigley [2011] NZEmpC 37
o Facts
 Wrigley was a senior lecturer
 There was a proposal to establish a number of existing positions and create fewer positions for which
existing staff could apply and be interviewed
 The employees were told of the criteria and composition of the proposed selection panels
 After the employees had their interviews and that the panel did not recommend their employment,
they were shown overall scores without identifying the panel members that rated them and invited
their comment on those scores
o Submissions
 The employees argued that this is an unfair procedure – they don’t know who the ratings have come
from and where they stand relative to other employees and thus cannot respond to comment
o Judgment
 The employer cannot hide behind confidentiality and privacy of others if they are going to terminate
the employee’s employment
 There are ways of getting around issues of confidentiality
 By not providing the information at all, the employer risks not providing sufficient
information upon which the employee can comment on
 The strong emphasis in the statute is on good faith in redundancy decisions
 This would minimise the likelihood of employment relationship problems developing
 In general, good faith is more likely to be achieved by giving timely and ample access to
relevant information
 Affected employees could only influence an employer’s final decision if they had knowledge
and understanding of the relevant issues and a real opportunity to express their thoughts on
those issues
 All panel members were professional academics experienced in expressing their opinions
 The potential adverse effects on privacy of providing access to disputed documents in this
case was not great, and the likelihood and seriousness of other potential adverse
consequences were not such as to constitute good reason for maintaining confidentiality
 The employer ought to have provided the employees with access to all of the disputed
documents, including all comments the panel had made in relation to that employee,
including interview sheets, candidate comparison sheets, notes during interviews
 There should be a wide interpretation and application of the duty imposed by good faith, to provide
access to information relevant to the continuation of the employee’s employment

[134] In summary, our conclusions in principle relating to the particular issues in this case are:
(a) All of the disputed documents contained relevant information for the purposes of s 4(1A)(c)(i).
(b) By its nature, most of the other information sought by the defendants was similarly relevant.
(c) Information in the memorandum dated 14 July 2009 prepared by Mr Ingram was not confidential
information for the purposes of s 4(1B).
(d) All other disputed documents recorded confidential information for the purposes of s 4(1B).
(e) The evidence supports a finding that much of the other information sought by the defendants
would also have been confidential for the purposes of s 4(1B).
(f) For the purposes of s 4(1B), there was not good reason to maintain the confidentiality of any of the
disputed documents.
(g) We reiterate that no final conclusion on the “good reason” issue is possible with regard to the
information in [37] a-f at this stage and without, if necessary, a further hearing.
CONSULTATION
 Wellington International Airport Ltd v Air New Zealand [1993] 1 NZLR 671 (CA)
o Judgment
 If the party having the power to make a decision after consultation holds meetings with the parties it
is required to consult, provides those parties with relevant information and with such further
information as they request, enters the meetings with an open mind, takes due notice of what is said,
and waits until they have had their say before making a decision, then the decision is properly
described as having been made after consultation. It is immaterial that those parties may have had
other concerns which for their own reasons they chose not to put forward.
 Simpsons Farms Ltd v Aberhart [2006] ERNZ 825 (EmpC)
o Judgment
 [62] ... Fundamental elements of consultation that are now strengthened and required by s 4 in
redundancy cases include (as summarised by Mr Menzies for SFL):
168
 Consultation requires more than a mere prior notification and must be allowed sufficient
time. It is to be a reality, not a charade. Consultation is never to be treated perfunctorily or
as a mere formality.
 If consultation must precede change, a proposal must not be acted on until after
consultation. Employees must know what is proposed before they can be expected to give
their view.
 Sufficient precise information must be given to enable the employees to state a view,
together with a reasonable opportunity to do so. This may include an opportunity to state
views in writing or orally.
 Genuine efforts must be made to accommodate the views of the employees. It follows from
consultation that there should be a tendency to at least seek consensus. Consultation
involves the statement of a proposal not yet finally decided on, listening to what others have
to say, considering their responses, and then deciding what will be done.
 The employer, while quite entitled to have a working plan already in mind, must have an
open mind and be ready to change and even start anew (alternatives to the redundancy
process include a pay freeze, hiring freeze, reducing hours, sabbatical, voluntary redundancy,
redundancy compensation, take accrued annual holidays)
 Stormont v Peddle Thorp Aitken Ltd [2017] NZEmpC 71
o Facts
 Stormont was an interior designer – there was a 3-year incentivised scheme for her to do a project
 Stormont was eventually redundant as PTA couldn’t afford her any longer
o Judgment
 The redundancy was not genuine
 A “Gut Feel” approach to redundancy
[59] While no particular degree of formality is necessary, what is required is a fair process and a real,
as opposed to illusory, opportunity for the affected employee to engage before any final decision is
made. The Gut Feel approach (a gut feel that the industry was taking a dive) favoured by the company
undermined Ms Stormont’s entitlements in a fundamental way. That is because the points which the
company considered obvious were plainly less than clear to the very person it was obliged to consult
with, namely the affected employee. The reality is that the proposal came out of the blue and the way
in which it was presented undermined Ms Stormont’s ability to grasp where the company was coming
from and why. This in turn impeded her ability to engage in the consultation process in a meaningful
way.
 The employer was under an obligation to adequately explain the rationale for the proposal and to
provide relevant information and an opportunity to comment on it – the company failed to do so by
referring to a gut feel that the industry was taking a dive
SELECTION
 Large employers often have to come up with selection criteria to select who will be made redundant and who won’t
 McKechnie Metals Ltd v Schreiber [2002] 2 ERNZ 758 (EmpC)
o Facts
 The redundancy clause said that all things being equal, the company will observe the principle of “last
on first off”
o Judgment
 There were a number of other criteria that an employer could use objectively – all things were not
equal, so the “last on first off” principle shouldn’t be used
 [24] The common law obligation of fair dealing in these circumstances implies that, in most situations,
employees will be told by what criteria they are being evaluated and given an opportunity to
comment. The process should be as objective as realistically possible to ensure that the decisionmakers select in accordance with the criteria and do not act capriciously.
 Criteria like attitude, character and creativity have elements of subjectivity – the employer
must steer clear of such selection criteria for it to be objective
 Smartlift Systems Ltd v Armstrong [2021] NZEmpC 66
o Judgment
 The employers did not follow a fair process
 [88] In summary, I am satisfied that each employee was presented with a fait accompli. The finding
made by the Authority, at its para [34(a)], that they were not given a copy of the selection matrix for
discussion before it was used, is correct on the evidence. The finding at para [34(b)], which related to
the failure to discuss the scores or even notify Mr Armstrong and Mr Haika of the scores before
confirming their selection for redundancy is also correct on the evidence. This was a significant
breach, particularly in circumstances where issues of trustworthiness were live. Their reactions were
unsurprising.
169

[89] The third breach, as described at para [34(c)] which related to the possibility of resigning and
working for an external entity, was also not a step which could be expected of a fair and reasonable
employer in the circumstances. It was a process undertaken in an atmosphere of significant distrust,
after the notice of termination had been given. It appears Mr Burrell was attempting to stave off a
perceived claim arising from the redundancies, by having Mr Armstrong and Mr Haika agree to resign
from the company, and to accept work with another entity. The Authority’s conclusion at para [34(c)]
was open to it.
 Gilbert v Transfield Services (New Zealand) Ltd [2013] NZEmpC 71
o Facts
 As part of the redundancy process, the employer used psychometric testing to select who to make
redundant
o Judgment
 The employer’s decision to use psychometric testing that was incapable of meaningful explanation
made it impossible to comply with the requirements of good faith
 It deprived the employees of the opportunity to comment upon the test
 A psychometric test for recruitment purposes is of dubious value to the exercise of selection
for redundancy
 The employer created an additional problem for itself by purchasing and using an
assessment tool which it could not understand or explain to affected employees or to the
court
 [122] I agree with Mr Beck’s assessment that the defendant became increasingly fixated on its “ideal”
person specifications and the plaintiff’s alleged personal shortcomings at the expense of relevant,
required and common-sense criteria. Had Transfield used a balanced approach of objective and
subjective measures to assess all employees’ skills, experience and capabilities, as initially advocated
in August 2009 and as had been employed by the company previously, its favoured subjective factors
would have been balanced or moderated by such objective factors such as assessment of technical
skills and the use of past performance appraisal and productivity measures. The defendant’s case
certainly gives the impression that Transfield embarked on devising and putting in place radically
different and largely subjective criteria and selection processes that were difficult to verify
objectively, although which appeared impressive in the promotion of flexibility and client focus
REDEPLOYMENT
 Redeployment is about seeing whether there is any other job the employee can do with the employer?
 Jinkinson v Oceana Gold (NZ) Ltd (No 2) [2010] NZEmpC 102
o Facts
 Jinkinson was a casual employee (grade controller) who was ultimately terminated for redundancy
 The employer created a new mine technician position, but didn’t appoint Jinkinson
o Judgment
 [38] … In this case, a critical step in deciding to dismiss Ms Jinkinson was the decision that she would
not be appointed to one of the mine technician positions. Put another way, had Ms Jinkinson been
appointed to one of the mine technician positions, she would not have been dismissed. Thus, the
selection process and its outcome must form part of the employer’s conduct to be reviewed in
deciding whether the dismissal was justified.
 The decision to disestablish Jinkinson’s existing position as grade controller and the decision not to
appoint her to a mine technician position were both essential aspects of the employer’s actions
leading to her dismissal – had either decision been made differently, she would not have been
dismissed
 Wang v Hamilton Multicultural Services Trust [2010] NZEmpC 142
o Facts
 Wang was the financial administrator
 As a result of difficulties negotiating a formal job description, the employer restructured the position
 The employer created a new position of finance manager
o Judgment
 If there is the ability to redeploy the employee to a substantially similar position or a position the
employee is capable for performing, that position is theirs – the employee is entitled to that position
and can choose to take it or not
 In this case:
 When Wang was dismissed for redundancy, the employer had fundamentally failed to deal
with the issue of redeployment
 Objectively reviewing all of the employer’s actions up to and including the decision to
terminate Wang’s employment, the critical step was the decision to not appoint him to the
170

position of finance manager, a position which the employer’s own witnesses conceded Wang
was capable of performing
 As part of the process, Wang is entitled to be redeployed to that position
 In this way, the failure to reconsider redeployment in the context of justification under
section 103A led to a conclusion that the employer failed to act in a way that a fair and
reasonable employer would have done in all the circumstances at the time the dismissal
occurred
[40] Where I consider that the defendant Trust has failed in its obligations under the redundancy
process with Mr Wang relates to the issue of redeployment. The obligation was on the Trust to
consider other alternatives to making Mr Wang redundant. In this case, surprisingly, both Ms Fraser
and Ms de Lisle concede that Mr Wang was well able to perform the duties of the new position of
finance manager and indeed encouraged him to apply for the position when it was advertised. With
the attitude of suspicion that Mr Wang held he somewhat misguidedly refused to apply for the
position. In the circumstances which had led to that point, I nevertheless regard his attitude in that
respect understandable even though most unfortunate. In view of what Ms Fraser and Ms de Lisle
have said, he should have been offered the position by way of redeployment rather than having his
previous position terminated and requiring him to apply for the new position when it was advertised.
Ms de Lisle expressed some doubt that Mr Wang could take up the position immediately which
confirmed Ms Fraser’s evidence that some up-skilling would be required. However, neither of them
indicated that that would have posed any difficulty.
Specific issues
TRANSFER OF BUSINESS TO ANOTHER EMPLOYER
TECHNICAL REDUNDANCY



Technical redundancy clauses are in most employment agreements
o The reason for a technical redundancy clause is because the employer doesn’t want its employees to be made
redundant due to the liability to redundancy compensation
o A technical redundancy is a situation where there is a sale of a business and there is a substantially similar
position for the employee to occupy – the employer does not need to pay redundancy compensation to the
employee if the employee continues in the same position on similar terms
The opposite is a change in management clause
o If there is a change in management, the employee is entitled to redundancy compensation
Section 184A of the Labour Relations Act 1987 (no longer in force)
o Where a worker's employment is being terminated by his or her employer by reason only of the sale or
transfer by the employer of the whole or part of the employer's business, nothing in any award or agreement
or any registered redundancy agreement shall require the employer to pay compensation for redundancy to
the worker if [the transferee is prepared to offer employment to the employee on (in effect) the existing
terms].
SALE OF SHARES

Works Infrastructure Ltd v Hedges [2002] 2 ERNZ 44 (EmpC)
o Judgment
 [19] For these reasons the first ground of appeal is allowed. Mr Hedges's employment was not
terminated and he was therefore not made redundant on the sale of Bitumix shares to Works. The
Employment Tribunal erred in finding that the respondent's position with the appellant was
redundant because in terms of cl 9.1 of his contract he had become superfluous to the needs of
Bitumix.
 Where there is a sale of all the shares in one company to another, the company is still the employee’s
employer and there is no redundancy
VULNERABLE EMPLOYEES (NOT EXAMINED)

Lend Lease Infrastructure Services (NZ) Ltd v Recreational Services Ltd [2012] NZEmpC 86
o Facts
 The employees were horticultural labourers, gardeners, mowers, edgers and maintenance labourers
involved in cleaning up playgrounds and structures
o Judgment
 [50] Section 69A provides that the object of subpt 1, pt 6A is to “provide protection to specified
categories of employees”, whose “work” is to be performed for a new employer. The specified
categories of employees are referred to in sch 1A, which relevantly refers to a number of
occupational groupings — those providing orderly, caretaking, laundry, food catering and cleaning
services. Schedule 1A is focussed on the nature or type of service provided by the potentially affected
employee. This suggests a need to consider the overall nature of the employee’s role in the context of
the total work activity, rather than engaging in a minute dissection of individual components of the
171
employee’s work and whether they might be independently described as “cleaning”, “food catering”,
“orderly”, “caretaking” or “laundry” functions.
 In a transfer of business, these particular employees have a right to transfer to the new employer
 Gardeners are not part of this group of vulnerable employees – overall, the nature of that position is
outside; there were elements of the role that involved cleaning but this was not sufficient to fall
within the protection of Part 6A
o Commentary
 Security guards have been added to the list of vulnerable employees
 Catering does not involve chefs
 These vulnerable employees are so because the nature of the industry means they are constantly
contracted in and out and doing different jobs day-to-day
UNILATERAL VARIATION OF AGREEMENT
 When an employee has accrued $150,000 worth of redundancy compensation, employers will try to find ways to make
the employee continue to work and not make them redundant – for example, an employee’s role may change so much
that they are actually made redundant in law but the employer insists they are not
 Carter Holt Harvey Ltd v Wallis [1998] 3 ERNZ 984 (EmpC)
o Facts
 Wallis was a mine worker involved in operating heavy machinery outdoors to excavate and break up
coal into manageable pieces
 When the coal mine was sold, instead of paying him redundancy compensation, the employer made
the employee work at the paper mill – the employee refused to accept that position as he was
personally incompatible with the indoors position which was too noisy, mundane, unchallenging and
generally unsatisfactory and wanted to be made redundant and paid redundancy compensation
o Judgment
 The test to be applied in determining whether two positions were substantially similar (i.e. shouldn’t
be made redundant) was an objective one
 The question is whether a reasonable person would consider there was a sufficient
difference between the two positions to break the continuity of employment having regard
to the characteristics of both the positions and the employee
 It was an acceptable practice to consider the personal characteristics of the employee in
question in assessing whether there was substantial similarity between the two positions
 In this case, there were several major dissimilarities between the mill position and the mine position –
therefore, Wallis was entitled to redundancy compensation
 It was not in issue that there were similarities between the positions but the distinguishing marks
were in the personal characteristics of the respondent who considered, on good grounds, that there
would be a reduction in responsibilities and status between the two jobs; that he would have less
control of his working environment in matters such as the noise levels; and, most importantly, in his
aversion to working indoors. These factors support the Tribunal's conclusion that the new position
was a new type of employment which altered the character of the respondent's previous
employment. The Tribunal correctly concluded that the jobs were not substantially similar and that
the appellant could not require the respondent to move to the new position and thereby claim that
the respondent was not surplus to its requirements. I accept Mr Wilton's submission that, taking into
account the loss of status, responsibility and interest inherent in the new position and significant
changes in the work environment, a reasonable employer would conclude that the differences were,
for a person of the characteristics of the respondent, of sufficient degree to break the essential
continuity of employment and to amount to a new type.
o Commentary
 The general rule is that if the role is changing more than 20%, the employee is entitled to be made
redundant – if a material element of the role is different, then the employee has been made
redundant
 Wills v Goodman Fielder New Zealand Ltd [2014] NZEmpC 233
o Facts
 The bakery where Wills worked was destroyed in the Christchurch earthquakes
 Rather than make him redundant, the employer attempted to redeploy him to a new role
o Judgment
 Wills was made redundant because the old role and the new role that he was being asked to do were
not sufficiently similar
 [121] Accordingly, Mr Wills was constructively dismissed. I am satisfied that the steps taken by the
company were not those which a fair and reasonable employer could have taken in all the
circumstances. I accept the submission made for Goodman Fielder that the circumstances which were
initiated by the February earthquake were particularly unusual. However, there was an adequate
172

opportunity for Mr Wills’ situation to be properly addressed, as occurred in respect of other bakery
staff. The ultimate problem which gave rise to the breaches of duty was not the earthquakes and
aftershocks, but the national restructuring which resulted in inadequate communication between
senior managers and those working at the Essex Street site, and Mr Wills.
Johnston v Fletcher Construction Company Ltd [2019] ERNZ 498 (EmpC)
o Facts
 Johnston resigned in the face of changes to the financial services team – he wanted to be paid his
redundancy compensation
 He was a Financial Controller – the employer wanted to redeploy him to the business performance
manager role
o Judgment
 The two roles were sufficiently similar and indicated ongoing work of the same nature and to the
same extent – therefore, the employee had resigned and wasn’t entitled to redundancy
compensation
 [52] I do not accept that the redundancy clause in the employment agreement for the Financial
Controller job was activated merely because Mr Johnston received notice that JDE would be
operational from early October 2016. What stands out is that Fletcher Construction was attempting
to satisfy its legal duty to consider alternatives to dismissal. At least until late December 2016, Mr
Johnston was prepared to participate in attempting to find an alternative.
 [53] That leaves for consideration whether an analogy can properly be drawn between this case and
what happened to the employees in Sanson and Wills. In those cases there was no doubt that the
jobs the employees undertook had ceased to exist. That is not the situation which confronted Mr
Johnston. It does not automatically follow from a restructuring that staff must be surplus to
requirements or that jobs have ceased to exist.11 I am satisfied that the Financial Controller role had
not ceased to exist in October 2016 or before Mr Johnston resigned.
o Commentary
 This case shows that employees must be careful in deciding whether to resign – if the two roles are
substantially similar, then they are resigning and not entitled to compensation and if they are
different, then they are made redundant, constructively dismissed and entitled to compensation
RELOCATION

Waikato District Health Board v Archibald [2017] ERNZ 791 (EmpC)
o Facts
 Archibald was 67 years old – she was in a fragile physical state
 Archibald used to work at Hamilton Hospital, but she was told that she had to drive to Thames each
day – the employer said this was the exact same role but in Thames
o Judgment
 This was a redundancy
 [40] As the plaintiff submitted, numerous features of the new role remained substantially unchanged,
including as to salary, skill level and responsibility. However, the new role indisputably required
significantly more travel — 202 km per working day. The corollary of this was that Mrs Archibald
would have been required to spend two hours and 45 minutes in a car each day she was working each
week. That would represent approximately one-third of her working day. The particular
circumstances involved Mrs Archibald’s personal capacity to undertake the increased travel which the
new role necessitated. She was concerned, on reasonable grounds, that her health was not
sufficiently robust to deal with it. She made it clear to the WDHB that she had significant issues with
her ability to cope with the travel component of the new role. It was unreasonable for the WDHB to
adopt a “suck it and see” approach. Nor am I drawn to the submission that the WDHB was only
obliged to consult at the time of the proposal, not later, and that Mrs Archibald effectively left her run
too late.
REASONABLE NOTICE
 If there is no notice period in the employment agreement, the court will imply reasonable notice – the risk of this is that
the court will imply a notice period longer than what the employer will want
 Rolls v Wellington Gas Co Ltd [1998] 3 ERNZ 116 (EmpC)
o Judgment
 4 weeks’ notice was not reasonable – the employee had been employed for 12 years; in all the
circumstances a period of 13 weeks’ notice was reasonable
 A decision about what is a reasonable period of notice is a decision about questions of fact and
degree in the light of circumstances that can properly be treated as relevant. The cases show that,
although no comprehensive list of factors can be laid down, these may include such things as:
 The nature of the employment;
 The character of the employment relationship;
173




The seniority of the position;
The length of service of the employee;
The age of the employee;
The availability of other employment for a person of the employee's experience and
qualifications or training; and
 The individual circumstances of the particular employer and employee.
REDUNDANCY COMPENSATION
 Brighouse Ltd v Bilderbeck [1995] 1 NZLR 158 (CA)
o Judgment (dissent)
 Since preparing the substance of this judgment I have had the opportunity of reading the draft
judgments of other members of the Court. A crucial point which divides us is, as Casey J has put it,
whether the implied obligation to preserve the relationship of trust and confidence between
employer and employee can extend to require payment of compensation when none has been
provided for in the employment contract. For the reasons given I consider that any extension of that
kind requires legislative authority; and, indeed, that the Employment Contracts Act contemplates
that, as with other elements of the contractual arrangements between employer and employee, any
redundancy provision on termination of the employment contract is a matter for negotiation and
agreement between the parties. Any Judge will be conscious of the inequality of bargaining power in
the negotiation of contracts in some employment situations; of the vulnerability of loyal employees
faced with redundancy; and, also, of the economic disincentive to expanding employment of
uncertainly high redundancy costs. The social and economic policy implications of possible
redundancy regimes can for careful analysis. The imposition of redundancy obligations, where the
parties have not agreed under their contract for any such provision, and the establishment of
quantification criteria are surely for the Legislature not for the Courts.
 Redundancy compensation is a matter of contract between the parties
 Where it is not provided for in the contract, the employee has no entitlement to redundancy
compensation
OUTPLACEMENT SUPPORT
 Aoraki Corp Ltd v McGavin [1998] 3 NZLR 276 (CA)
o Judgment
 … As well, fair treatment may call for counselling, career and financial advice and retraining and
related financial support. No doubt other considerations will be relevant in particular cases …
o Commentary
 An employer cannot just put the employee out on their own – they must think about and undertake
costless tasks like allowing time off to attend job interviews, providing CV help, providing a reference
letter etc.
 It is in the employer’s best interests to ensure the employee gets a job ASAP because if so, they are
less likely to bring a personal grievance
 If the employer is a large organisation and the employee is a senior position, then may be required to
undertake more costly outplacement support (e.g. interview training)
UNJUSTIFIED DISADVANTAGE OR UNJUSTIFIED DISMISSAL?
 Historically, the courts said a procedurally unjustified redundancy be an unjustified disadvantage – the process (which is
an action) was defective
o If the dismissal is substantively justified, it cannot be an unjustified dismissal
 Innovative Landscapes (2015) Ltd v Popkin [2020] ERNZ 55 (EmpC)
o Judgment
 [15] While I acknowledge that the characterisation issue has been left open by the Court of Appeal,
and I have not heard argument on the point, I am inclined to the view that the company’s actions are
best described as giving rise to an unjustified dismissal. That seems to me to align with the wording of
s 103A, particularly s 103A(5). Section 103A(5) provides that the Court must not determine a dismissal
(or action) to be unjustifiable solely because of defects in the process followed by the employer if the
defects were minor and did not result in the employee being treated unfairly. It follows, by necessary
implication, that defects which are not minor, and which did result in the employee being treated
unfairly, may give rise to a finding of unjustified dismissal. It may be noted that the Court of Appeal’s
observations in Aoraki and this Court’s subsequent discussion of the issue in Simpson Farms Ltd v
Aberhart pre-date the enactment of s 103A(5).
 A procedurally unjustified redundancy (but is substantively justified) should be a procedurally
unjustified dismissal
COVID-19 redundancy decisions

Hedgman v Warner Construction Ltd [2021] NZERA 139
174
o
Facts

When asked why the employee was made redundant, the employer simply said “because I chose you”
PROBLEM
• Express Deliveries Ltd is a freight forwarding firm. At the beginning of the year, it ran into a series of difficulties
throughout its organisation and carried out a reorganisation.
• Adam’s employment agreement stated that he was a credit controller, but that he was obliged to ‘carry out any other
duties that might be assigned to him’. He was unilaterally reassigned to a bookkeeping post. The change occurred
because of a reduction in the need for credit controllers. Adam has resigned and claimed redundancy compensation of
26 weeks under his employment agreement. Express Deliveries says it did not make him redundant so redundancy
compensation is not available.
• Bella is employed by the company as a cashier. Early last month, the company instructed the cashiers that, within six
months, they would be required to use the newly installed computers. Bella has no experience of computers . She says
that she can be trained to use the computers and that she should be redeployed to deal with any computer issues. The
company makes Bella redundant and pays her wages in lieu of notice. They do not consult with her because the
computers are going to be installed in any event.
• Chris is a salesmen. After discussions, Express Deliveries Ltd decides that the selection criteria for redundancy would be
on the basis of an employee’s contribution to the company’s future viability, based on criteria such as management
potential. Chris who is the longest serving salesman but has also had performance concerns from management
regarding the amount of sales that he has been making was today told that he has been selected for redundancy and
given wages in lieu of notice.
• Advise Adam, Bella, and Chris on what grounds they should pursue a personal grievance for unjustified dismissal.
175
Termination due to employee conduct
In what other circumstances can an employee’s conduct justify termination?
What specific issues arise in such cases?
 This topic looks at different forms of misconduct
o A difficulty is that section 103A requires the employer to look at all the circumstances at the time of the
dismissal – in doing so, different forms of misconduct require a different approach in terms of justifying
dismissal
Misrepresentation



If the employee made misrepresentations when they made their CV or in the interview, this can lead to dismissal
o A job applicant is not obliged to disclose all facts that may be thought material to the intended employer’s
assessment of the applicant – but this does not permit them to actively misrepresent the true position
Skywards Catering Ltd v Apthorp-Hall [1995] 2 ERNZ 218 (EmpC)
o Facts
 The employee used a reference from her brother, who had worked at a bar – the CV didn’t make it
clear that he had authority to make a reference
o Submissions
 The employer argued that the employee had misrepresented her qualifications and experience to
such an extent that it was entitled to cancel the employment agreement
o Judgment
 The CV conveyed the impression that the employee had been in paid employment at the bar and that
it would have made some difference if it had been more accurately
 That said, there was no express agreement between the parties that the truth of the
representation was essential – on this basis, the employer was not entitled to cancel the
employment agreement
 However, the court used section 124 (blameworthy conduct) to reduce the remedies – the
employee was guilty of blameworthy conduct in not disclosing that she had work experience
and not paid work at the bar when the CV and reference implied otherwise (she had
contributed to the situation which led to her dismissal)
 A dismissal based upon a misrepresentation… that does not meet the requirements for cancellation
for misrepresentation contained in the Contractual Remedies Act 1979 will be wrongful and therefore
unjustifiable as well. However, a dismissal that does meet the requirements of the Contractual
Remedies Act 1979 and is therefore not wrongful may nevertheless be unjustifiable if it suffers from
defects in procedure or is substantively unfair. (at 225)
ORIX New Zealand Ltd v Gurney [2005] ERNZ 165 (EmpC)
o Facts
 The employer hired a manager for a new equipment hire business
 The employee didn’t require signatures for various documents when hiring out equipment – 8 out of
the 9 items hired on a particular day had not been signed for by the customers and thus left the
employer open to liability
 The employer also found out that the employee had omitted to disclose his most recent employer in
his CV when he applied for the job – in response, the employee said he had not deliberately misled
the employer but had mistakenly used an old version of his CV
 The employer dismissed the employee on these two grounds for serious misconduct
o Judgment
 While a misrepresentation about employment history had been made, there was no evidence that
the particular misrepresentation influenced the employer to employ the employee – it was simply an
inaccuracy that was discovered subsequently and used against the employee; it had no operative
influence or effect and could be disregarded
 The error was innocent and could not support a conclusion of serious misconduct
 When combined with the fact that the employee wasn’t getting the signatures, this was a case, at
worst, regarding poor performance – this was the appropriate avenue rather than serious misconduct
 [34] It seems to me that both the plaintiff and the defendant have some difficult hurdles to cross in
this case… While a misrepresentation was made, there was no evidence that the particular
misrepresentation - that is, that the defendant was currently employed by Landpower Central Ltd and
had been since 2002 - influenced the plaintiff to employ him. That is neither alleged nor was evidence
given suggesting it. It is simply an inaccuracy that was discovered subsequently and used against the
defendant but I find as a fact that it had no operative influence or effect and can be disregarded. It
was certainly carelessness on the part of the defendant to send such a misleading CV to a prospective
employer but at the time there was no employment relationship between the parties and therefore
176
the obligation of good faith and the particular obligation under s 4(1)(b) of the Employment Relations
Act 2000 not to mislead or deceive or do anything that was likely to deceive or mislead had not
arisen.
Dishonesty


Dumulo v Lakes District Health Board [2014] NZEmpC 75
o Facts
 Dumulo was an information systems technician involved in providing self-defence instructions to the
Lakes District Health Board
 He had been given DVDs by LDHB in order to give that instruction
 He decided to take a DVD home, intending to use it for his own personal business providing selfdefence instructions – at this time, the instructions for LDHB had concluded but there was a
possibility that more would be run
 He was dismissed for taking the DVD
o Judgment
 [29] The employer certainly made the point that while the value of the DVD was minimal, being a
dollar or thereabouts, the matter was one of principle. Mr Dumolo of course, in his explanation,
indicated his belief that an item of this value should be equated with stationery items such as pens
and writing paper. He inferred that the employer was unreasonable in elevating the matter in the way
it did. Mr Dumolo maintains that he only took one disc. There was some suggestion in Mr Dixon’s
evidence that Mr Dumolo had more than one disc on the day in question. Mr Dumolo’s evidence,
which was not disputed by the employer, was that he had received a large number of blank DVD discs
to use during the course of his employment.
 The procedure relating to the dismissal was conducted appropriately in the circumstances
 However, the employer was accusing Dumulo of dishonesty
 In making such an accusation, the employer needed to be really sure that what he did was
dishonest
 Dumulo’s action in taking the DVD is very much on the cusp of behaviour for which a
dismissal may or may not be justifiable – on balance, a fair and reasonable employer, while
wanting to set a clear standard, in all the circumstances would have taken disciplinary action
short of dismissal
 Therefore, Dumulo’s dismissal was unjustified
o Commentary
 This case shows that substantive justification should be proportional to dismissal
 An employer shouldn’t dismiss an employee for theft
 The word “theft” implies something criminal – but the requirements for criminal theft
include an intention to permanently deprive possession, but an employee will not usually
have such intentions
 Therefore, it is more appropriate to dismiss for misappropriation/misuse of company
property
 Other times, it is not clear whether the employee was the one who took the property
Lawless v Comvita New Zealand Ltd [2005] ERNZ 861 (EmpC)
o Facts
 There was a series of alleged thefts by employees – one of them resigned as a result
 Lawless had been recorded on CCTV acting suspiciously – the employer claimed he was a party to the
theft of company property by the other employees
 Lawless, on union advice, refused to say anything
 The employer got all the video, cut it, rearranged it and provided it to the employee – in doing so, it
didn’t provide a full copy of the footage but a substantially abridged and sequentially rearranged
version (i.e. what happened at particular times was mixed up)
 The employer only relied on the footage to dismiss the employee – there was no other evidence
supporting those suspicions
o Judgment
 The suspicions that the company had against the employee were of the most serious sort that an
employer could have against an employee
 In these circumstances, the evidence in support of those suspicions and compliance with its
own contractual and common law obligations required it to investigate into such allegations
to a high standard
 The employer was relying on CCTV footage which had been abridged and rearranged, and
hadn’t provided a full copy to the employee or the court – this alone could not be used alone
177


to justify the dismissal because it doesn’t include evidence of state of mind or oral
conversations
 When looking over the footage, there may be a perfectly reasonable explanation for what
was happening
The employer had failed to follow its own contractual processes for investigation
 It had relied on the delay and obfuscation by the employee’s representative
 In that respect, it had failed to establish that the plaintiff had misappropriated company
property
[20] So considerable care needs to be accorded to evidence that consists only of selective, indistinct,
and silent video clips when investigating serious suspicions of employee theft that necessarily include
such considerations that cannot be gleaned from such electronic records including states of mind and
oral conversations. Put simply, secretly filmed brief episodes of the activities at work of any person
may arouse suspicions about what that person may be doing. But it is necessary to have a much more
complete picture even before putting those suspicions or allegations to the subject as part of a fair
inquiry into serious allegations. Such necessarily limited electronic records are but one evidential
element and their importance should not be overstated.
Bullying, harassment, fighting, insubordination




Where there are allegations of bullying, the employer must put the allegations properly to the employee to provide
them a reasonable opportunity to respond – this requires providing specific dates, places, behaviours rather than
general or summarised allegations
Gregory v Chief Executive of the Department of Corrections [2012] NZEmpC 172
o Facts
 The employee Gregory worked at a men’s prison and then was transferred to a women’s prison
 Gregory’s dealing with some of the guards was considered bullying
o Judgment
 [153] I find, on balance, that the defendant has not discharged the onus of showing that a full record
of all the statements made by the staff which formed the basis of the third warning were provided to
Mr Gregory, prior to the Authority investigation, which was far too late. There is a real issue as to
whether sufficient information was therefore provided by the defendant to enable Mr Gregory to
make an adequate response. Certainly what were described as the redacted statements, or the
summaries of them, gave the flavour of the allegations but did not provide details of times or places,
or in many cases, the precise statements alleged to have been made by Mr Gregory or the actions he
allegedly took. Several of the statements were accounts by staff of what they alleged they had been
told by other staff and could not therefore be regarded as totally reliable.
Nel v ASB Bank Ltd [2016] NZERA Auckland 323; Nel v ASB Bank Ltd [2017] NZEmpC 56; Nel v ASB Bank Ltd (No 2) [2017]
NZEmpC 97; Nel v ASB Bank Ltd (No 3) [2018] NZEmpC 59
o Facts
 Nel, a manager working at ASB for 18 years, sent the following messages to an employee he was
managing:
 Hey Sxy, just want to get the elephant out if the room. You are very special to me! I’m head
over heels for you and have been since the first time I saw you. I’m an old fart who loves you
and who just wants the best for you. I know you are going through a massive time in your life
but please stay strong! I am so sorry for you and really hope that things will work out!
 Oh f… this is just crazy but need to get it off of my chest as its been killing me! Sorry for
spilling my guts! I know you don’t care but at least I can move on now. I did what I never ever
thought I would do ever in my LIFE! Don’t worry about work! It’s off my chest now so I
should be okay. I will probably be very ashamed about this tomorrow but I would never
regret it. X
 The employee felt uncomfortable and made a complaint to management, who subsequently did a
complete sweep of all of Nel’s internet activity and found other messages to other employees
 Nel was dismissed
o Judgment
 Nel was unjustifiably dismissed on procedural grounds
 However, he was given limited remedies due to contributing fault
Housham v Juken New Zealand Ltd [2007] 1 ERNZ 183 (EmpC)
o Facts
 Housham was involved in a physical altercation with an employee of a contractor
 The other employee alleged that Housham almost collided with him while operating a fork hoist, they
threw their gloves at each other, and that he punched him
 Both employees engaged in this behavior
178


As part of the disciplinary process, the employer created a re-enactment and the manager stood in
the place of the other employee
 Housham was dismissed
o Judgment
 A fair and reasonable employer would not have dismissed all employees that were engaged in
physical altercations
 While some employees would be culpable, other employees may not be
 An employee is entitled to defend themselves
 [50] A fair and reasonable employer would not have concluded that Mr Housham’s push to Mr
Nathan’s chest, or even his head, in the circumstances of an apprehended assault (i.e .self-defence)
was serious misconduct warranting dismissal. A fair and reasonable employer would not have
accepted Mr Nathan’s claim that he was punched in the head by Mr Housham. Juken representatives
wrongly concluded that any physical altercation in which Mr Housham participated, even to a lawful
and reasonable extent, negated the significance of the particular circumstances in which that
occurred. Juken’s conclusions were neither fair nor reasonable.
Dodd v DE and LM Spence Ltd [2002] ERNZ 572 (EmpC)
o Facts
 Dodd said to a customer “go away” and made hand gestures
 A complaint was made and the manager assumed Dodd was involved and put the allegations to her
 Dodd subsequently swore at the manager and was asked to go to the store manager’s office – a
meeting following in which Dodd was dismissed for using abusive and foul language against the
manager
o Judgment
 The inquiry was not carried out in a fair and reasonable manner
 It was unfair and unreasonable to have continued with the meeting while Dodd was in the
condition she was in
 She had not been given an adequate opportunity to explain the situation
 However, there was substantive justification – swearing at the manager is a good reason (although
swearing at colleagues seems to be okay looking at other cases)
 [22] Turning to whether there was substantive justification, that is to say serious misconduct which
would have justified a summary dismissal, I accept Mr McPhail's submissions that the Authority
should have so concluded. What occurred here was not merely the use of foul language, which
unfortunately is becoming more and more part of the every day speech of some persons, but
insulting, provocative and insubordinate conduct to Ms Dodd's manager, accompanied by language
which shocked Mr Prestland and made the other staff in the delicatessen uncomfortable. Further, Ms
Dodd refused to accept a reasonable order requiring her to go to Mr Fleming's office. On the
Authority's factual findings, which are accepted by the parties, Ms Dodd used the language
complained of on at least two occasions, both times accompanied by a substantial element of
insubordination. This was language addressed to a superior conducting an inquiry in respect of which
Ms Dodd had lied as to her involvement. It was not offensive language used between staff on an
equal footing. In terms of the McAdam case, it amounted to repudiatory conduct on the part of Ms
Dodd. I find the Authority was wrong not to have concluded that the dismissal was substantively
justified for serious misconduct which went to the heart of the contract and undermined the essential
trust and confidence the plaintiff needed to repose in Ms Dodd.
Failure to follow a lawful and reasonable instruction

Sky Network Television Ltd v Duncan [1998] 3 ERNZ 917 (CA)
o Facts
 Duncan was required to work extra hours, but he thought he didn’t have to and said that to the
manager – he was dismissed
o Judgment
 In these circumstances the dispute cried out for an attempt at resolution either by resort to the
disputes procedure referred to in the contract or, if that was considered too long-winded, by a
speedier means. Such an approach to the issue which had arisen between the parties may well have
resolved it without matters reaching a point at which the mutual confidence or trust of the parties,
often said to be an essential of the employment relationship, had been destroyed. If the employer
had suggested to Mr Duncan that an independent person be asked to arbitrate or mediate between
them, and that such a task be undertaken within a week or two, rather than both sides facing a wait
of perhaps months for a solution through the disputes procedure, and if Sky had at the same time
pointed out again the real difficulty it faced over scheduling of the suites to accommodate Mr
Duncan's position pending a resolution, Mr Duncan could hardly with much credibility have insisted
179

that the longer route be taken and still maintained that he was being genuine and reasonable in his
approach. If he had refused to cooperate in the employer's endeavour to resolve in an expeditious
manner a situation which posed difficulties for both parties, his stated belief concerning his
contractual rights might have seemed less than genuine. The obligation to act reasonably and in good
faith in pursuing contractual rights rests upon the employee as well as the employer. The genuineness
of the employee's behaviour, which is central to the character of the act of disobedience, is to be
judged objectively in the light of all the circumstances, including the way in which resolution of the
dispute is approached.
In electing to dismiss without having a mediation over what was lawful and reasonable, the employer
had failed to show that its treatment of the employee was fair
 There was nothing wrong with the employee merely defending a sincerely held position
concerning his contractual rights
 It could not be said that he was being disobedient in all the circumstances – he just believed
that that was the situation
Misuse of email or internet

Cliff v Air New Zealand Ltd [2006] 1 ERNZ 694 (EmpC)
o Facts
 Air New Zealand did an audit of all employees’ internet usage
 It decided that the thirteen highest users of non-work related activities should be dismissed – its
policies on internet usage were not clear and weren’t known to the employees
o Judgment
 [136]... As misuse of the internet can lead to dismissal, Air New Zealand’s responsibility was to ensure
by specified means that its policy was known to those who had access to the internet. It could
reasonably have been expected that at the time any new user is given access to the internet they be
provided with a specific reference to the policy either by a direction to the appropriate place on the
Intranet or in a written document. That was not done for either Mr Cliff or Mr Groom.
 It was also unclear how the non-work related usage had come to be – the employer didn’t do a
sufficient investigation
Breach of fidelity

Compass Union of NZ Inc v Foodstuffs (Auckland) Ltd [1992] 3 ERNZ 16 (EmpC)
o Facts
 The grievant was an accountant for Foodstuffs
 He decided to take some clients in his private capacity
 He was dismissed
o Judgment
 This was substantively justified, but not procedurally justified
 … Mr Pearce should not have acted in a private capacity for a number of ex-RAS clients on a fee
paying basis without having informed the respondent of his intention to do so and without having
obtained its agreement to such a course. Mr Pearce intentionally misled his employer's
representative when, earlier in February, he allowed Mr Hayes to be left with the impression,
following the latter's discussions with Mr Pearce about the particular file, that Mrs Climo trading as
Piriaka Store was still a client of the RAS. This was at a time when she had not been for a number of
months during which period Mr Pearce had acted for her in a private capacity. Those matters might,
had they been established after a fair inquiry and as they were subsequently in Court, have been
properly considered by company representatives to have meant that there was an irredeemable
breaking of the relationship of confidence and trust between Mr Pearce and the company and
therefore that the termination of his employment on these grounds would have been justified…
Breach of work rules

Fuiava v Air New Zealand Ltd (2006) 4 NZELR 103 (EmpC)
o Facts
 Fuiava was asked by his wife to take a bag – he was a cargo handler and sent the bag and declared
there were no aerosols or dangerous goods, but he hadn’t actually packed the bag
 He was dismissed for the fact that there were two aerosol cans in the bag
o Judgment
 Safety considerations in the air industry were of such importance that the employer was entitled to
have zero tolerance for non-compliance with their procedures, especially relating to dangerous goods
– his dismissal was substantively justified
 [72] Mr Sullivan had the responsibility for supervising the operations of the cargo department. The
plaintiff in certifying that no one could have placed something in his parcel without his knowledge
180
and that there were no items that he had not packed himself, breached his duty to his employer and
damaged the trust and confidence he had previously enjoyed. Mr Sullivan reached his decision after
giving due consideration to the circumstances including the personal and family situation of the
plaintiff. The safety considerations which the employees in the cargo handling area had to apply were
of such importance that the defendant was entitled to apply zero tolerance of non-compliance with
the dangerous goods requirements. The defendant was entitled to conclude that it could not run the
risk of any future lapses on the part of one of its key employees such as the plaintiff.
181
Strikes and lockouts / Industrial conflict
Strikes
What is a strike?
81
Meaning of strike
(1)
In this Act, strike means an act that—
(a)
is the act of a number of employees who are or have been in the employment of the same employer or of
different employers—
(i)
in discontinuing that employment, whether wholly or partially, or in reducing the normal performance of it;
or
(ii)
in refusing or failing after any such discontinuance to resume or return to their employment; or
(iii)
in breaking their employment agreements; or
(iv)
in refusing or failing to accept engagement for work in which they are usually employed; or
(v)
in reducing their normal output or their normal rate of work; and
(b)
is due to a combination, agreement, common understanding, or concerted action, whether express or, as the case
requires, implied, made or entered into by the employees.
(2)
In this Act, strike does not include an employees’ meeting authorised—
(a)
by an employer; or
(b)
by an employment agreement; or
(c)
by this Act.
(3)
In this Act, to strike means to become a party to a strike.
MOTIVE – CONCERTED ACTION
 NZ Labourers IUOW v Fletcher Challenge Limited [1989] 3 NZILR 129 (LC) at 175
o Judgment
 The greater the number of workers engaging at the same time in that conduct, the quicker the Court
will be to draw an inference of an agreement or combination or of acting in concert. That is because
of the increasingly inherent improbability, as the number of actors increases, of their similar,
contemporaneous acts being spontaneous in the sense of independent of each other's acts. Where
the number is very small, the inference from conduct is not logically compelling or readily available
and the combination or the acting in concert will have to be proved by evidence not confined to the
acts said to be due to the combination or agreement or to acting in concert.
A NUMBER OF EMPLOYEES
 Griffin v Attorney-General [1995] 1 ERNZ 119 (EmpC)
o Judgment
 It is true that Mr Bannatyne found in the alternative that even if there was no strike and each of the
plaintiffs was acting independently of the other prison officers and therefore spontaneously, the
refusal to work the shift amounted to serious misconduct warranting dismissal. He seemed to think
that a single employee could be on strike. That, of course, is not so. A strike is the result of
combination or acting in concert. There is no such thing as a conspiracy of one. The act of an
employee not turning up to work for a single shift or turning up but refusing to work because of
discontent with some of the conditions prevailing on the shift is a breach of contract entitling the
employer to withhold wages and in addition, at most, to recover pecuniary loss sustained as a result
of such refusal if it was in the contemplation of the parties when they made or last varied the
employment contract that such a breach might occasion loss of the nature that was sustained. Such
an act could hardly ever amount to a repudiatory breach of the contract unless the collective contract
so specified and it was not suggested to me that this was such a case. In any event, Mr Bannatyne
said that he did not believe that the plaintiffs had acted spontaneously, and therefore he could not
rationally base his decision on a state of facts the existence of which he did not accept. However, that
does not invalidate the entirety of his decision and I treat it as being a decision that the plaintiffs were
parties to a strike and were dismissed for that reason alone. As counsel for the department invited
me to, I disregard Mr Bannatyne's alternative findings.
DISCONTINUING EMPLOYMENT OR REDUCING PERFORMANCE
 Refusing to work overtime: Inspector of Awards v Wilsons (NZ) Portland Cement Ltd [1986] ACJ 812 (AC)
 Chanting “womble”: New Zealand Meat Processors' IUOW v Waitaki New Zealand Refrigerating Ltd (1987) 1 NZELC
95,659 (AC)
 Go slow strategy: Port Otago Ltd v Maritime Union of New Zealand Inc EmpC Christchurch CC13/09, 7 October 2009.
REFUSING OR FAILING TO RESUME OR RETURN TO EMPLOYMENT
 NZ Labourers IUOW v Fletcher Challenge Limited [1989] 3 NZILR 129 (LC)
o Judgment
182

The announcement of a ban cannot amount to an act under paragraph (c) of s 231(1). This is because
this paragraph is directed to acts which occur "after any such discontinuance". Refusing to resume or
return to employment imports a request or direction to do so. But failing does not suggest either. A
continuation of the ban for any period of time after it has been announced - and certainly after it has
been implemented - would therefore amount to strike action under this paragraph.
BREAKING EMPLOYMENT AGREEMENTS
 Co-ordinated media campaign: New Zealand Airline Pilots’ Association IUOW v Air New Zealand Ltd [1992] 1 ERNZ 353
(CA)
 Alternative shunting procedures: New Zealand Railways Corp v NZ Locomotive Engineers Association [1989] 3 NZILR
733 (LC)
REFUSING OR FAILING TO ACCEPT ENGAGEMENT FOR USUAL WORK
 Refusing to Crew Vessels for Extra Sailings: NZ Railways Corp v McBrier [1988] NZILR 495 (LC).
 Refusing to Work on Vessel previously worked on by non-union labour: Lyttelton Port Co Ltd v Maritime Union of New
Zealand Inc [2012] NZEmpC 44
REDUCING NORMAL OUTPUT OR RATE OF WORK
 Refusal to accept night shift work: NZ Fire Service Commission v Calveley [1999] 1 ERNZ 1 (EmpC)
o Judgment
 I am satisfied on the evidence that has been advanced that the actions of those of the first
defendants who I have named come within the definition of strike both in the sense that they have
wholly or partially reduced the normal performance of their work, having accepted night shift work
since September 1996, and that on the face of it this may constitute a breach of both the CEC and the
night shift CEC. These acts are also acts which on the evidence appear to have been conducted in
combination, agreement, common understanding or concerted action as is demonstrated by the fact
that 11 of the letters purporting to give notice arrived in the same envelope and the 12th was
delivered on Mr Goodwin's behalf by the union to the plaintiff.
Parties to a strike


Finau v Southward Engineering Co Ltd [2007] ERNZ 522 (EmpC)
o Judgment
 [40] We do not accept those submissions. A refusal by an employee to perform the work of a striking
employee could only constitute a reduction in the normal performance of the employee’s work if the
instruction by the employer to do the work was a lawful and reasonable instruction. As s 97(3)
requires the employee’s agreement to do such work, it follows that an unqualified instruction to do
the work would be inconsistent with the statute and, as such, would be neither lawful nor reasonable.
 [41] Equally, any provision of an employment agreement relied on by an employer to require an
employee to do the work of a striking employee would be inconsistent with s 97(3) and of no effect —
see s 54(3)(b) as to collective agreements and s 65(2)(b) as to individual employment agreements.
 [42] It follows that an employee exercising his or her right under s 97(3) to refuse to do the work of a
striking employee would not fall within the definition of “strike” in s 81(1). As a result, the employee
would not be open to suspension under s 87.
Radius Residential Care Ltd v The New Zealand Nurses Organisation Inc [2016] NZEmpC 112
o Judgment
 [59] I am satisfied, also, that this strike action by some of the third defendants was organised, aided
and abetted by the first and second defendant Unions. There is ample evidence in the
correspondence, discussions between union officials and representatives with Radius managerial
staff, and from the oral and photographic/video depictions of what occurred, which clearly indicate
that the strikes were organised and supported by the two Unions. They were parties to strikes by
some employees. They were therefore, by the application of s 81(3), parties to an unlawful strike or
unlawful strikes.
Partial strikes

Lowe Walker Paeroa Ltd v Auckland & Tomoana Freezing Works etc IUW, EmpC Auckland, AEC 3/94, 23 February 1994
o Judgment
 Nevertheless, the plaintiff fears that the anticipated arrival of the next "consolidation" at the Paeroa
plant tomorrow morning will see a refusal by Mr King to unload these products. Further the plaintiff
fears that Mr Jones, one of the other second defendants, will then be asked to do Mr King's work but
will likewise refuse to do so. Further, the plaintiff fears that the local officials of the union being in
agreement with this intended course, further staff will refuse to handle the product.
Lockouts
What is a lockout?
82
Meaning of lockout
183
(1)
In this Act, lockout means an act that—
(a)
is the act of an employer—
(i)
in closing the employer’s place of business, or suspending or discontinuing the employer’s business or any
branch of that business; or
(ii)
in discontinuing the employment of any employees; or
(iii)
in breaking some or all of the employer’s employment agreements; or
(iv)
in refusing or failing to engage employees for any work for which the employer usually employs employees;
and
(b)
is done with a view to compelling employees, or to aid another employer in compelling employees, to—
(i)
accept terms of employment; or
(ii)
comply with demands made by the employer.
(2)
In this Act, to lock out means to become a party to a lockout.
MOTIVE – ACCEPT TERMS OF EMPLOYMENT
 Service & Food Workers Union Nga Ringa Tota Inc v Rendezvous Hotels (NZ) Ltd (2010) 7 NZELR 569 (EmpC)
o Judgment
 [31] The … statute requires only that the employer’s motive is to persuade acceptance of “terms of
employment”. It is not all terms of employment and so may include some but not others. That is what
the company now says it seeks, acceptance of some, albeit key, terms of employment. If the
employees’ negotiators in bargaining concede these demands, then the plaintiff may assume that any
lawful lockouts will be lifted and bargaining may then proceed to address any outstanding issues
including an EPP that complies with the Act.
MOTIVE – COMPLY WITH DEMANDS MADE
 Spotless Services (NZ) Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2008] ERNZ 609 (CA)
o Judgment
 [38] There is no qualifier to the word “demands” in s 82(1)(b)(ii). We see no reason to read one in.
Unlike Chief Judge Colgan, we do not see any significance in the change from “any demands” in s 62
of the ECA 1991 to “demand” in s 82 of the ERA (see para 25 above). In our view, it is the sections of
the ERA that follow s 82 and not s 82 itself that deal with whether lockouts are lawful or unlawful.
Lawful lockouts are those that come within ss 83 and 84. Unlawful lockouts are defined (nonexclusively) in s 86.
CLOSING THE EMPLOYER’S PLACE OF BUSINESS OR SUSPENDING OR DISCONTINUING THE BUSINESS
 New Zealand Seafarers’ Union v Golden Bay Cement Co Ltd [1991] 1 ERNZ 932 (LC)
o Judgment
 There is some evidence that the defendant has an interest in changing the method of employment of
seafarers from the corner or bureau register system referred to in the Shipping and Seamen Act 1952
to one of permanent direct employment. There is evidence to an arguable case level, based on
inferences which it is open to the Court to draw, that the reason for laying up the vessel at this
particular time may' have been for the purpose of exerting pressure on members of the plaintiff who
are employees of the defendant to agree to some such arrangement even although the dispute of
interest between the plaintiff and defendant has been settled.
DISCONTINUING THE EMPLOYMENT OF ANY EMPLOYEES
 Service Workers Union of Aotearoa (Inc) v Air New Zealand Ltd [1991] 3 ERNZ 503 (EmpC)
o Judgment
 Returning to the essential matters in the application, the first matter I address is whether the
situation which arose on 11 November and which has continued since comes within Part V of the Act
in the sense of constituting a lockout, as defined in s 62 of the Employment Contracts Act 1991. That
section repeats verbatim the same provisions in the Industrial Relations Act 1973 and the Labour
Relations Act 1987…
 I find that the words of subs (1)(b) apply here in that by the imposition of the new rosters and thereby
cutting out shift work amounted to a partial discontinuation of employment. I am not so easily
persuaded in relation to those words in subs (1)(d) however…
BREAKING SOME OR ALL OF THE EMPLOYER’S EMPLOYMENT AGREEMENTS
 New Zealand Amalgamated Engineering Printing and Manufacturing Union Inc v Zeal 320 Ltd [2009] ERNZ 215 (EmpC)
o Judgment
 [21] I accept Mr Little’s submission that if an employer breaches its obligations of good faith, mutual
trust and confidence and reasonableness, or fair dealing in the handling of disciplinary action, this
may constitute breaking an employment agreement. On the material available to date, I find that it is
only barely arguable that Zeal has broken its employment agreements in respect of the eight
employee plaintiffs.
 [27] I accept Mr Caisley’s submissions that there is virtually no evidence to found an arguable case
that the actions complained of are being undertaken with a view to compelling employees to accept
184
demands. For this reason it is only barely arguable at this stage that any actions which might be
classified as breaking the employment agreement were done with the necessary motive.
REFUSING OR FAILING TO ENGAGE EMPLOYEES FOR ANY WORK
 AFFCO New Zealand Ltd v New Zealand Meat Workers and Related Trades Union Inc [2017] NZSC 135
o Judgment
 [67] We have set s 82(1) above. It will be recalled that it requires two elements:
 a specified act by an employer (s 82(1)(a)); and
 which is done for a specified purpose (s 82(1)(b)).
 Two of the acts specified in s 82(1)(a) are “discontinuing the employment of any employees” (s
82(1)(a)(ii)) and “refusing or failing to engage employees for any work for which the employer usually
employs employees” (s 82(1)(a)(iv)). In the first of these, the word “employees” obviously refers to
existing employees. That is not true of the second, however. In the phrase “refusing or failing to
engage employees”, the word “employees” must cover persons who are not employees in fact but
rather are seeking employment, as Mr Jagose acknowledged in his submissions.
Partial lockout

Southern Local Government Officers Union Inc v Christchurch City Council [2007] ERNZ 739 (EmpC)
o Judgment
 [48] The use of technical lockouts, where the loss of production is balanced by loss of remuneration,
appears to still fit within the object of Part 8 (“Strikes and lockouts”) of the Act as expressed in s 80
that certain lawful strikes and lockouts as defined in the Act are not precluded. As the passages in
Hansard when the 1981 amendment was introduced demonstrate, the strike and lockout provisions
try to achieve a rough balance between loss of production by employers in a lockout and loss of
remuneration by employees in a strike.

Conference of the Methodist Church of New Zealand v Gray [1996] 1 ERNZ 48 (CA)
o Judgment
 For these reasons, and in order to provide some certainty on the point, I am prepared to hold that an
employer can lockout a single employee for the purposes of s 62. I do not suggest, however, that
where there has been a lockout of a single employee, a claim for damages for unlawful lockout will
necessarily attract a significant award…
Lockout of one employee
Lawful or unlawful industrial action
Lawful strikes and lockouts
83
Lawful strikes and lockouts related to collective bargaining
Participation in a strike or lockout is lawful if the strike or lockout—
(a)
is not unlawful under section 86; and
(b)
relates to bargaining—
(i)
for a collective agreement that will bind each of the employees concerned; or
(ii)
with regard to an aspect of a collective agreement in respect of which the right to strike or lock out, as the
case may be, is available under a declaration made by the Court under section 192(2)(c).
“RELATES TO BARGAINING”
 SCA Hygiene Australasia Ltd v Pulp and Paper Industry Council of the Manufacturing and Construction Workers Union
Inc [2008] ERNZ 301 (EmpC)
o Judgment
 [39] The Act requires the Court to decide whether the strike or lockout action relates to collective
bargaining or to one of the matters listed in s 86. Where there are two matters to which the action
may relate I conclude that the approaches taken in Hancock and in the NZ PSA case amount to a
workable test that reflects the words of the statute. To establish whether the industrial action relates
to collective bargaining, the question is whether there is a real causal relationship between the action
and the bargaining. Rather than applying an abstract test which does not appear in the sections,
essentially the decision is a matter of fact about what is the motivation for the action.
 Tranz Rail Ltd v Payne EmpC Wellington WC22/02, 22 August 2002
o Judgment
 The Court can make an order only if the strike is arguably unlawful. The action - and I have already
held that it is arguably strike action - does not appear to relate to the negotiation of any collective
agreement, at any rate at this time because that has been negotiated and is out for ratification. If it is
not ratified, a different situation may develop but at the present time the action being taken appears
to relate to Mr Payne's personal grievance or, rather, the defendants' perception of his personal
grievance and it seems to relate also to a number of other grievances which cannot be the subject
ordinarily of lawful strike action, at any rate arguably so.
185

New Zealand Dairy Workers’ Union v Open Country Cheese Co Ltd [2009] ERNZ 275 (EmpC)
o Judgment
 [19] I found the lockout commencing on 24 September was unlawful as it was in breach of the
provisions of s 83. Participation in a lockout is not lawful if it does not relate to bargaining for a
collective agreement that will bind each of the employees concerned. The defendant’s lockout relates
to bargaining for individual employment agreements. It appears from the definition within the
lockout notice, and the evidence, that at no time has the defendant made any offer to employ the
striking workers on the basis of a collective agreement. The evidence established that if members of
the Union sought to end the lockout they would need to enter into individual employment
agreements on the terms offered by the defendant, or remain on their current individual employment
agreements.
 MacLeod and Others v Wellington City Transport Ltd and CityLine (NZ) Ltd [2021] NZEmpC 55
o Judgment
 [41] In summary, it is arguable that the demands made by the employer are ones which it cannot
lawfully make, having regard to the carefully framed provisions which Parliament has seen fit to
include in the Act. Having initiated for two SECAs, it is arguable that the MECA the companies have
offered do not relate to the bargaining the Tramways Union initiated, so the criteria for a lawful
lockout under s 83 are not satisfied.
“FOR A COLLECTIVE AGREEMENT THAT WILL BIND EACH OF THE EMPLOYEES CONCERNED”
 Car Haulaways Ltd v First Union Inc [2017] NZEmpC 158
o Judgment
 [45] He submitted that there was not, in this instance, collective bargaining for a collective agreement
that would bind each of the striking employees; rather, there was collective bargaining for separate
collective agreements that would bind each of the striking employees. He relied on dicta in Air New
Zealand Ltd v Flight Attendants and Related Services (New Zealand) Assoc Ltd [[2002] 2 ERNZ 770
(EmpC)], which I will discuss shortly. He also relied on a press release issued by First Union, which
stated that an issue of pay parity between the employees of the two plaintiff companies had led to
the strike. Mr Oldfield submitted that this clearly implied sympathy by employees of one plaintiff for
employees of the other: there was accordingly a joint purpose.
 [48] An identical argument is strongly arguable in the present case. The evidence establishes that the
two plaintiffs are separate legal entitles, bargaining separately. A composite strike notice gives rise to
the problem of common purpose. I find that it is strongly arguable the notice is unlawful in terms of s
83 of the Act.
HEALTH AND SAFETY GROUNDS
84
Lawful strikes and lockouts on grounds of safety or health
Participation in a strike or lockout is lawful if the employees who strike have, or the employer who locks out has,
reasonable grounds for believing that the strike or lockout is justified on the grounds of safety or health.


Mount Cook Group Ltd v Airline Stewards and Hostesses of New Zealand IUOW [1989] 1 NZILR 718 (LC)
o Judgment
 In my view of all those factors, the balance of convenience favours maintenance of the status quo,
that is delaying the strike, and it appears if s 237 is to apply the maximum effect of that delay could
be only 14 days. The employer says that within that time it would have performed all necessary
modifications and obviously it confidently expects that the union would then have no cause for
concern.
Coal Corp of New Zealand Ltd v Mine Workers Union of New Zealand Inc [1993] 1 ERNZ 308 (EmpC) at 320
o Judgment
 … I now weigh in a balance of convenience context the factors in the present case which support the
grant of an interim injunction sought by the plaintiff and those factors which weigh against such a
grant. The factors which support it are the plaintiffs right to manage its business and those significant
commercial considerations which I have earlier summarised, extending to the arguable economic
national interests, whereas those factors which tell against and significantly so in my considered view
upon the evidence I have heard that is to say the seemingly genuine concerns of the defendants,
founded in safety at work aspects affecting the second defendants who man aerial stations, which
impress me at this point, upon the untested evidence I have heard, as persuasively reasonable.
Certainly I accept that the present case now and at trial concerns manning of the aerial stations, but I
would stress that the manning in issue is the safe manning of aerial stations at the Stockton mine. I
have no hesitation in finding that, for safety reasons in a balance of convenience setting, the interim
injunction sought by the plaintiff must be declined.
Unlawful strikes or lockouts
186
86
Unlawful strikes or lockouts
(1)
Participation in a strike or lockout is unlawful if the strike or lockout—
(aa) in the case of a strike, takes place in contravention of section 82A; or
(a)
occurs while a collective agreement binding the employees participating in the strike or affected by the lockout is
in force, unless subsection (2) applies; or
(b)
occurs during bargaining for a proposed collective agreement that will bind the employees participating in the
strike or affected by the lockout, unless—
(i)
at least 40 days have passed since the bargaining was initiated; and
(ii)
if on the date bargaining was initiated the employees were bound by the same collective agreement, that
collective agreement has expired; and
(iii)
if on that date the employees were bound by different collective agreements, at least 1 of those collective
agreements has expired; or
(ba) occurs in a situation where,—
(i)
in the case of a strike, the employee has failed to comply with the notice requirements in section 86A or 93,
as the case may be:
(ii)
in the case of a lockout, the employer has failed to comply with the notice requirements in section
86B or 94, as the case may be; or
(c)
relates to a personal grievance; or
(d)
relates to a dispute; or
(da) relates to a bargaining fee clause or proposed bargaining fee clause under Part 6B; or
(e)
relates to any matter dealt with in Part 3; or
(f)
is in an essential service and the requirements as to notice that are contained in section 90 or section 91, as the
case may be, have not been complied with; or
(g)
takes place in contravention of an order of the court.
NO SECRET BALLOT
 Lyttelton Port Co Ltd v Rail and Maritime Transport Union Inc [2017] ERNZ 13 (EmpC)
o Judgment
 [59] Although an employer has some interest in a question as to whether a secret ballot has occurred
given the provisions of s 86(1)(aa), I must also take into account the primary purpose of the secret
ballot provisions as to strikes. They are for the protection of members. It is significant that there is no
direct or reliable evidence that the interests of individual members have not been respected in the
course of the secret ballot process undertaken on 7 January 2017.
 [60] Accordingly, I am not persuaded that LPC has established a strongly arguable case with regard to
its assertion that a qualifying secret ballot has not been conducted. Indeed, having regard to the
various factors I have reviewed, I regard LPC’s assertion as to the lack of specificity of the ballot which
the Union conducted as being weakly arguable.
“RELATES TO A DISPUTE”
 Air New Zealand Ltd v Flight Attendants & Related Services (NZ) Association Inc [2002] 2 ERNZ 770 (EmpC)
o Judgment
 [42] … The material the plaintiff has put before the Court does raise a seriously arguable contention
that the issue upon which the strike was proceeding was the dispute over cl 5.1.1. It is common
ground that a strike over a dispute is unlawful. I appreciate that the coincidence of the dispute and
the negotiations creates some complexity, but the timing of the notice directly after the dispute had
been argued before the Court on 11 November and the subsequent indication of the basis for
resolving the strike, establishes a strongly arguable case that its dominant motive was the dispute and
not the negotiations.
NOTICE
 Essential Services – 14 Days Notice (s 90 of the ERA 2000)
 Meat Processing – 3 Days Notice (s 90 of the ERA 2000)
 Schools – 3 Days Notice (s 74AC of the State Services Act 1988)
 Public Transport Services – 24 Hours Notice (s 93 of the ERA 2000)
86A
(2)
Notice of strike
…
The notice required under subsection (1) must—
(a)
be in writing; and
(b)
specify the following information:
(i)
the period of notice given; and
(ii)
the nature of the proposed strike, including whether or not it will be continuous; and
(iii)
the place or places where the proposed strike will occur; and
(iv)
the date and time on which the strike will begin; and
(v)
the date and time on which, or an event on the occurrence of which, the strike will end.
187
86B Notice of lockout
…
The notice required under subsection (1) must—
(a)
be in writing; and
(b)
specify the following information:
(i)
the period of notice given; and
(ii)
the nature of the proposed lockout, including whether or not it will be continuous; and
(iii)
the place or places where the proposed lockout will occur; and
(iv)
the date and time on which the lockout will begin; and
(v)
the date and time on which, or an event on the occurrence of which, the lockout will end; and
(vi)
the names of the employees who will be locked out.
(2)
THE PERIOD OF NOTICE GIVEN

Air Nelson Ltd v New Zealand Airline Pilots Association IUOW Inc [2008] ERNZ 327 (EmpC)
o Judgment
 [38] The plaintiff’s proposition that the only way to comply with the statute is to specify the period of
notice in whole days is too rigid. There is more than one way in which a period of time can be
described or defined. An acceptable way of doing so is to specify the points in time at which the
period of notice is to start and end.
 [39] For example, a strike notice might record that the period of notice will begin when the written
notice is received by the employer and end when the strike action described in the notice is
scheduled to commence. If an employer wishes to know how much time will elapse between those
two points in time, it requires only a simple arithmetic calculation. As counsel accepted in the course
of argument, every employer who receives a strike notice in an essential industry will carry out that
calculation in order to see whether the statutory period of notice has in fact been given. It therefore
imposes no burden on the employer to do the same calculation if it wishes to know the precise period
of notice being given.
THE NATURE OF THE PROPOSED STRIKE
 Healthlink South Ltd v National Union of Public Employees Inc EmpC Christchurch CEC26/95, 14 June 1995 at 5
o Judgment
 Having reflectively considered the affidavit evidence before the Court and the submitted arguments, I
conclude that working to rule in an industrial setting, and more particularly in the setting with which I
am immediately concerned, is too imprecise and inexact to reasonably convey the nature of the strike
action intended. I speak of the nature of the strike action intended having regard to the clear and
positive requirements of section 69(3)(a) of the Employment Contracts Act. In my clear view the strike
notice does not comply in-this fundamental aspect with the requirements of the Act. I consider it
would have complied had it spelled out what was meant by working to rule by specifying clearly and
distinctly what this form of industrial action was to involve. I stress any such particularisation would
need to be sufficiently clear to acquaint Healthlink South with the form of working to rule which the
industrial action intended to take. The strike notice concerned does not do that.
PLACE OR PLACES WHERE THE PROPOSED STRIKE WILL OCCUR
 New Zealand Rail Ltd v New Zealand Combined Union of Railway Employees [1995] 1 ERNZ 84 (CA) at 86
o Judgment
 As to place, the document headed "Essential Service Strike Notice" states that the proposed strike
"will occur at each and every place throughout New Zealand where New Zealand Rail Ltd's business is
carried on". In relation to the extensive operations of the company we consider, as did the
Employment Court JUdge, that this is both clear and sufficient. It has been argued that the notice
should have detailed as regards each individual employee precisely where that employee would be at
the commencing time of the strike - it is to begin on Wednesday 29 March at 0001 hours and to
continue until Thursday 30 March at 0001 hours. The union and the employees could not realistically
be expected to forecast precisely where each employee would be at that particular time. In some
instances it would depend on the precise duties that happened to be allocated by the employer to the
employee (for example, an engme driver) at that time. The company has full and easily accessible
computer records. The only reasonable conclusion is that the notice wassufficient for its purposes.
DATE AND TIME
 Attorney-General v Corrections Association of New Zealand [2001] 1 ERNZ 702 (EmpC)
o Judgment
 [56] That disposes ofthe first leg of the department's complaint. But there still remains the matter of
the threatened reactive strike in the event of suspensions. This is a difficult issue, as both counsel
acknowledged. There is no law on it… What is required, instead, is that the strike notice should
specify the date of commencement of the strike. So far as the strike is a total withdrawal of labour in
reaction to future suspensions, a date is not provided. We generally think of dates as being expressed
188
in the format of day, month, and year, but that is not necessarily so. It may be enough if a date is
ascertainable by the party who needs to know it. A date of commencement is synonymous with the
day of commencement: Cartwright v MacCormack [1963] 1 WLR 18; [1963] 1 All ER 11. A date or day
can be described by reference to an event. It needs to be borne in mind that it is the protection of the
public interest that is behind the requirement to specify the date when a strike will begin. This
ensures that the public will not be inconvenienced or endangered by the employer being caught
unawares by the commencement of an unanticipated strike.
LIGHTNING STRIKES
 Secretary for Justice v New Zealand Public Service Association [2018] NZEmpC 129
o Judgment
 [31] For these reasons, I have reached the conclusion that there is no arguable case that the lightning
strikes by the CSOs are unlawful. Pursuant to the requirement of s 100(3) of the Act, the application
must be dismissed. Even if I were to have held that there was an arguable case, I would nevertheless
have held that the balance of convenience favoured the defendant and its members who are taking
the strike action in this case. If arguable, the plaintiff's case would nevertheless be weak. What
amounts to inconvenience to the plaintiff needs to be weighed against depriving the employees of a
substantial right to strike. The proposal by the plaintiff to require notice of 48 hours would seriously
and unjustifiably affect the relative bargaining positions of the parties at this stage in their
negotiations. To require the defendant and its members to give 48 hours' notice, which is two days,
would negate the effectiveness of the actions it is presently taking and reduce the strike action to
being merely symbolic.
Replacement labour
97
Performance of duties of striking or locked out employees
(1)
(2)
This section applies if there is a lockout or lawful strike.
An employer may employ or engage another person to perform the work of a striking or locked out employee only in
accordance with subsection (3) or subsection (4).
An employer may employ another person to perform the work of a striking or locked out employee if the person—
(a)
is already employed by the employer at the time the strike or lockout commences; and
(b)
is not employed principally for the purpose of performing the work of a striking or locked out employee; and
(c)
agrees to perform the work.
An employer may employ or engage another person to perform the work of a striking or locked out employee if—
(a)
there are reasonable grounds for believing it is necessary for the work to be performed for reasons of safety or
health; and
(b)
the person is employed or engaged to perform the work only to the extent necessary for reasons of safety or
health.
A person who performs the work of a striking or locked out employee in accordance with subsection (3) or subsection (4)
must not perform that work for any longer than the duration of the strike or lockout.
An employer who fails to comply with this section is liable to a penalty imposed by the Authority under this Act in respect
of each person who performs the work concerned.
(3)
(4)
(5)
(6)

New Zealand Dairy Workers' Union Inc v Open Country Cheese Company Ltd [2011] ERNZ 78 (CA)
o Judgment
 [29] The material circumstances are not in dispute. The Cheese Company continued its processing and
manufacturing operations throughout the strike period. The only difference was that the work of the
strikers was performed by another company’s employees or by volunteers. However, in law the work
they performed was the Cheese Company’s work. That was the work which the strikers normally
undertook for and on the company’s behalf; and which enabled the company, as the Judge himself
found, to satisfy its contractual obligations. The Cheese Company made use of the replacement
workers for that specific purpose and with that specific effect. And it secured the consequential
commercial benefits.
Suspension of striking employees
87
Suspension of striking employees
(1)
(2)
(3)
Where there is a strike, the employer may suspend the employment of an employee who is a party to the strike.
Unless sooner revoked by the employer, a suspension under subsection (1) continues until the strike is ended.
The suspension under this section of all or any of the employees who are on strike does not end the strike and those
employees do not, by reason only of their suspension under subsection (1), cease to be parties to the strike.
An employee who is suspended under subsection (1) is not entitled to any remuneration by way of salary, wages,
allowances, or other emoluments in respect of the period of the suspension.
(4)
189
(5)
On the resumption of the employee’s employment, the employee’s service must be treated as continuous, despite the
period of suspension, for the purpose of rights and benefits that are conditional on continuous service.


Bickerstaff v Healthcare Hawkes Bay Ltd [1996] 2 ERNZ 680 (EmpC) at 689-690
o Judgment
 … [I]t emerged clearly from the evidence that the defendant had no basis for thinking that the return
to work was in any sense qualified. It knew or ought to have known and could easily have ascertained
that the junior doctors had come back to return to their full normal duties, whatever these may have
included. Their return to work was qualified in one sense only, and that was that they were asked but
declined to withdraw the strike notices for the day-long strikes set down to commence on 27 August.
At that time that strike or those strikes had to be seen as lawful, a circumstance that distinguishes the
situation from cases in the past where an employer has been held to be entitled to satisfy itself that
the return to work following an unlawful strike was genuine and would not be followed by further
outbreaks of similar unlawful action.
Postal Workers Association v New Zealand Post Ltd (2007) 8 NZELC 98,918 (ERA)
o Judgment
 [30] That scheme requires there must firstly be a strike, then secondly a decision by the employer to
suspend and thirdly, arising from that suspension, a lack of entitlement to wages for "the period of
the suspension". Under s89 the basis of the suspension must be indicated to the worker "at the time
of [his or her] suspension".
 [31] The scheme is inherently linear. That is it contemplates events - strike, notice of suspension, no
entitlement to wages - happening along a time line. It expressly contemplates a time of suspension
and a change in rights (entitlement to wages) occurring at a point in time and then continuing for a
period of time, that is throughout the suspension. The suspension itself can then only end (s87(2)) by
the occurrence of one of two events - earlier revocation by the employer or the end of the strike.
 [32] For that reason I do not accept the Respondent's submission that the statutory provision is open
to the prospect of being imposed retrospectively. If it were, the form of words in the relevant section
- essentially unchanged for more than 30 years would allow for the disentitlement to wages to apply
from the event of the strike occurring rather than - as it does under s87(4) - on the event of
suspension.
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Remedies
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Remedies
(1)
Where the Authority or the court determines that an employee has a personal grievance, it may, in settling the grievance,
provide for any 1 or more of the following remedies:
(a)
reinstatement of the employee in the employee’s former position or the placement of the employee in a position
no less advantageous to the employee:
(b)
the reimbursement to the employee of a sum equal to the whole or any part of the wages or other money lost by
the employee as a result of the grievance:
(c)
the payment to the employee of compensation by the employee’s employer, including compensation for—
(i)
humiliation, loss of dignity, and injury to the feelings of the employee; and
(ii)
loss of any benefit, whether or not of a monetary kind, which the employee might reasonably have been
expected to obtain if the personal grievance had not arisen: (e.g. KiwiSaver, redundancy compensation, use
of vehicle, allowances, parental leave payments, wage subsidy under COVID-19)
(ca) if the Authority or the court finds that any workplace conduct or practices are a significant factor in the personal
grievance, recommendations to the employer concerning the action the employer should take to prevent similar
employment relationship problems occurring:
(d)
if the Authority or the court finds an employee to have been sexually or racially harassed in his or her
employment, recommendations to the employer—
(i)
concerning the action the employer should take in respect of the person who made the request or was
guilty of the harassing behaviour, which action may include the transfer of that person, the taking of
disciplinary action against that person, or the taking of rehabilitative action in respect of that person:
(ii)
about any other action that it is necessary for the employer to take to prevent further harassment of the
employee concerned or any other employee.
When making an order under subsection (1)(b) or (c), the Authority or the court may order payment to the employee by
instalments, but only if the financial position of the employer requires it.
(2)
Reinstatement


This is the primary remedy under the Employment Relations Act
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