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RECENT RULINGS FROM THE COURTS
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As 2016 draws to a close, the Employment team look at the recent rulings from the courts in their end of year round-up.

EMPLOYMENT INVESTIGATIONS

The last few years have seen the law on employment investigations become increasingly onerous on employers. The words “full and fair” appeared in a number of cases from the Employment Court which created a high standard for the employer who was tasked with investigating employees’ potential misconduct. Many cautious employers have responded by outsourcing the investigation process to third party investigators in order to meet this standard.

The Court of Appeal has recently had an opportunity to review this line of authority in the case of A Ltd v H [2016] NZCA 419, and has taken a different approach to the Employment Court. The Employment Court found that an investigation into sexual misconduct was flawed due to procedural defects which included minor changes in accounts of events, and failing to record interviews with witnesses. The Court of Appeal found that these minor defects did not mean the investigation was insufficient, and that the employer did take reasonable steps.

This reinforces that the standard of investigation does not have to be “akin to a judicial inquiry”, so employers can breathe a sigh of relief.

SEASONAL WORKERS

The Court of Appeal in AFFCO NZ Limited v NZ Meat Workers [2016] NZCA 482 recently made an important ruling that seasonal workers are within the definition of ‘employee’. Previously it was settled that a seasonal worker’s employment terminated at the end of the season. There was never any expectation of an on-going employment relationship or subsisting employment rights. However, the Court of Appeal took a different approach and said that while the employment relationship terminated, the workers fell within the definition of ‘employee’ as they were ‘intending to work’ and therefore had ongoing-employment rights. One of these rights included the right not to be ‘locked out of work’ under s 82 of the Employment Relations Act 2000.  AFFCO could not give seasonal workers an ultimatum - to sign new employment agreements or not be offered employment - as this breached the lockout provisions. There will no doubt be other litigation arising from this decision and the broadening of the definition of employees.

TRIAL PERIODS

In a recent decision, the Employment Relations Authority ruled on the validity of a trial period in an individual employment agreement. The Authority found the trial period clause was defective because it did not specify the trial period start date as required under section 67A of the Employment Relations Act 2000.

In Clark v Lighthouse ECE Ltd [2016] NZERA Auckland 281, the Authority held that although a start date for employment was set out in the employment agreement, the trial period clause did not expressly refer to that start date. As a result, the trial period clause was held to be invalid and Lighthouse ECE Ltd was unable to rely on it to prevent Ms Clark pursuing a claim for a personal grievance in relation to her dismissal during that trial period.

This case demonstrates that the Authority and Court will interpret the requirements for trial period provisions in employment agreements strictly and not liberally.  It reinforces the need for employers to check trial period clauses in employment agreements and ensure they provide: 

  • The specified period of the trial (which cannot exceed 90 days), starting on a specified date;
  • An acknowledgment that at any time during that period, the employer may dismiss the employee; and
  • If the employer terminates employment during the trial period, the employee is not entitled to bring a personal grievance or other legal proceedings in respect of the dismissal (in accordance with section 67B of the Employment Relations Act 2000).


It is also important to remember that trial periods are only available in respect of new employees and not existing or previous employees.
 

SECRET RECORDINGS

In another recent decision, the Employment Relations Authority ruled that 'secret' recordings made by employees may be used against employers in Authority proceedings, even where the recording captures conversations between other staff members, to which the employee was not a party.

In Firman v Insyn Limited [2016] NZERA Christchurch 156,  the Authority found that Ms Firman made a secret recording of a meeting with her manager (by using her mobile phone), where she was notified of a disciplinary process and possible suspension. The Authority considered that what occurred at the meeting was relevant to the claim that Ms Firman had brought against her employer. Although the meeting had been recorded without the permission or knowledge of the manager, the Authority found it to be admissible evidence.

Ms Firman also tendered as evidence a secretly recorded conversation between other staff (again by using her mobile phone and leaving it unattended but recording) in the office area in order to establish proof that there was gossiping and bullying toward her by other staff.  While the Authority held that secret recording of others not participating in a conversation is generally not admissible, it permitted the recording to be tendered into evidence as evidence of how Ms Firman had been treated in the workplace.  Finally, the Authority was asked to consider a third recording by Ms Firman, which was an inadvertent recording of a further conversation between her manager and another employee. The Authority found this recording was not admissible.

This case highlights the need for employers, managers and staff to be aware that secret recordings of workplace conversations do occur and could be admissible even though the recordings may have been obtained in a surreptitious or covert manner.   

WORKPLACE BULLYING

In Eaton v Tricare (Country) Pty Ltd [2016] QCA 139 the Court found Tricare was negligent in failing to take reasonable steps to avoid Ms Eaton developing a mental (psychiatric) illness as a result of bullying by her manager. The Court awarded compensation of $435,583.98.

Ms Eaton worked as an Administration Assistant at a nursing centre run by Tricare. Ms Eaton reported to the manager of the nursing centre, that her workload was excessive.

The Court accepted that Ms Eaton’s workload was excessive.It considered Ms Eaton’s duties in her position description and compared them with the duties she actually performed, and found that she was working an additional 10 hours per week. It also considered the difficult circumstances the centre was facing (having failed an accreditation test) and the fact that Ms Eaton had not previously run a nursing centre (although she had 20 years’ experience in the sector).

The Court found that the manager’s behaviour toward Ms Eaton was harsh and aggressive, which amounted to workplace harassment. Importantly for Ms Eaton’s claim, a number of staff members gave evidence of the effect the manager’s conduct had on Ms Eaton, as they had often seen her crying and having tremors in her hands.

Employers owe a duty to employees to avoid unnecessary risks of injury or harm, and this includes the duty to take reasonable steps to avoid an employee developing a mental illness where there are obvious warning signs.

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