“Seasonal” Workers Are Not Automatically Fixed-Term … · 2 QUIGG PARTNERS Newsletter - MAY...

QUIGG PARTNERS Newsletter - MAY 2013 1

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“Seasonal” Workers Are Not Automatically 1Fixed-Term Employees

When is Casual Employment Not Casual at all 2

When is it Fair to Cry “Halt”? 3

Manager Awarded almost $200,000 for 4-5Unjustified Dismissal

Unjustified Dismissal for Employee Whose 6Email Password was “ilovehitler”

Overseas Snippet 7-8

MAY 2013

Claire EnglishDDI: 474 0768

[email protected]

Tim Sissonson Sabbatical

Simon [email protected]

Nicholas LoganDDI: 474 0765

[email protected]

Andrew BellDDI: 474 0752

[email protected]

Michael QuiggPartner

DDI: 474 [email protected]

“Seasonal” Workers Are Not Automatically Fixed-Term EmployeesThe Employment Court in the case of Turner v Talley’s Group Limited has held that a seasonal worker employed by Talley’s was permanently employed and that her employment did not automatically finish at the end of the hoki season. It held there was no fixed-term provision in her employment agreement which complied with the requirements of section 66 of the Employment Relations Act 2000.

FactsMs Turner had been employed by Talley’s for 10 years. She worked at Talley’s Motueka fish-processing plant. Her employment agreement described her as a “seasonal worker” and indicated that she was employed for the hoki season. In practice, Ms Turner’s employment was continuous. She worked 40 hour

weeks on the hoki processing line. When the hoki season ended, she was rotated to work on other lines, and to work in Talley’s second processing plant. Every time Ms Turner was rotated to another line she was provided with a new individual employment agreement.

In June 2011, Ms Turner was told that she would not be offered “re-employment” for the new hoki season. She raised a personal grievance for unjustified dismissal. Talley’s claimed that she was a seasonal worker and that it had no obligation to offer her employment once the relevant “season” had come to an end.

DecisionThe Court had no difficulty finding that an employer might have a genuine reason for employing workers for relatively short periods or seasons as dictated by the availability of produce (or stock) for processing. It found that this type

2 QUIGG PARTNERS Newsletter - MAY 2013

of seasonal employment easily fit within the definition of “a specified project” as a genuine reason for fixed term employment as set out at section 66 of the Employment Relations Act.

The Court stated that in order to create a fixed term agreement that would come to an end at the closure of the specified “season” and which would comply with the requirements of section 66, Talley’s needed to go further than it had. It needed to set out in the employment agreement a fixed term provision which set out in writing:

• When or how the employment will end (e.g. the employment will end at the end of the hoki processing season);

• The reasons for ending the employment in that way (e.g. because at the conclusion of the hoki processing season, insufficient work will be available).

As Talley’s failed to meet these requirements Ms Turner was deemed to be a permanent employee.

The Court was also swayed by Ms Turner’s steady and unbroken employment over the past 10 years. It indicated that this steady pattern of employment which had continued regardless of the yearly ebb and flow of work generated by the hoki seasons, had also given Ms Turner a reasonable expectation that her employment was continuous.

CommentThis decision has received considerable media attention. It has been suggested that this decision will have “significant implications” for others. A closer examination of the facts of this case shows that the Employment Court chose to follow a line of authority well-established in previous meat workers cases, where the Court will assume that employment is for indefinite duration, unless the employment agreement contains a specific provision for employment on a “fixed term” which meets the specific legal criteria to sustain a fixed term employment agreement.

This case demonstrates the importance of drafting with care the reasons and basis for fixed term agreements. Failure to do so, will leave the employer open to challenge when employment ends upon the expiry of the fixed term agreement.

When is Casual Employment Not Casual at All?A recent decision of the Employment Relations Authority in the case of Kate Fisher v Carrie O’Brien demonstrates the danger of failing to formalise an employment arrangement, particularly where the employee is employed on a casual basis.

FactsMs Fisher worked for Ms O’Brien as a nanny. There were no formal arrangements made between the parties and nothing was set out in writing. Ms O’Brien often called Ms Fisher at short notice, but Ms Fisher was able to work flexibly and only turned down work on a few occasions.

Over time, Ms Fisher began to perform more regular work for Ms O’Brien, including cleaning and housework.

On one occasion, the children told their mother that Ms Fisher swore in front of them and had driven fast whilst they were in the car. Ms O’Brien mentioned this to Ms Fisher. There was also a more serious dispute one evening when Ms O’Brien was out for dinner and Ms Fisher was caring for the children. This resulted in one of the children calling Ms O’Brien while she was out to complain about Ms Fisher.

When is Casual Employment Not Casual at All?


Ms O’Brien texted Ms Fisher and terminated the employment relationship because it was “too hard”.

Ms Fisher raised a personal grievance for unjustified dismissal. Ms O’Brien argued that Ms Fisher was employed on a casual “as required” basis and the employment could be ended by not offering further work.

The Authority found that Ms Fisher had started on a casual basis, with no fixed hours of work, and flexibility to turn down work. However the employment arrangement had changed over time. Ms Fisher’s hours had increased and become more regular, and she had become a part time employee with the associated right not to be dismissed without cause.

DecisionMs Fisher was dismissed by a text message. The Authority made it clear that there are procedural requirements on even a small employer to “put issues in its mind (to the employee), allow an explanation and consider them.” When Ms Fisher was dismissed, “there was no raising of concerns, no discussion and no attempt to ascertain what happened or why when the decision to dismiss was made.” Accordingly, the dismissal was unjustified, and Ms Fisher was awarded $5,800 in lost wages and damages for hurt and humiliation.

CommentThe decision illustrates that it is important for the parties to:

1. Set out their expectations from the outset i.e. whether the employment relationship is casual or of open tenure;

2. Document their intentions accordingly; and

3. Review from time to time whether the documented arrangement (i.e. casual), actually still reflects the reality of the current situation. NB: this could lead to employers meeting with an employee and discussing whether to change the documentation of the arrangement from casual to open tenure if that is the reality of the situation.

When is it Fair to Cry “Halt”? A recent decision of the Employment Relations Authority in the case of Lawrie v Air Liquide New Zealand Limited considered what steps an employer needs to take when an employee can no longer work due to medical incapacity.

Facts Mr Lawrie was employed by Air Liquide New Zealand Limited in March 2011 as a Customer Service Representative. From the beginning of his employment he was often absent.

In September 2011, his manager met with him to discuss his absenteeism. Mr Lawrie indicated that he had been ill, but that this was unconnected with work. It was agreed that his hours would be changed and that counselling would be made available to him.

Unfortunately, Mr Lawrie’s absences continued. In November, a second meeting was held with him, but his absences from work continued.

In January 2012, he disclosed that he was suffering from depression. He was again offered counselling, and it was agreed that certain members of his team would be told, so that they could offer support. Air Liquide’s HR manager also offered support to Mr Lawrie as she herself had suffered with depression.

When is it Fair to Cry “Halt”?


Mr Lawrie left work early on 31 January 2012. He never returned.

On 10 February 2012, Mr Lawrie met with his manager and the HR manager. He provided a medical certificate confirming he suffered from depression. His manager suggested Mr Lawrie take unpaid leave. The HR manager suggested that Mr Lawrie consider temporary work as an alternative. When Mr Lawrie said he was not interested, it was agreed that further counselling sessions would be provided. Mr Lawrie was asked to provide a medical certificate indicating when he would be fit to return to work.

No medical certificate was provided, so Air Liquide wrote to Mr Lawrie. Mr Lawrie eventually provided a medical certificate with no return to work date. Air Liquide wrote to Mr Lawrie twice more, requesting medical information including a proposed “return to work” date and any steps that could be taken to support him to return to full duties. Mr Lawrie raised a personal grievance, and provided a further medical certificate with no return to work date.

Air Liquide terminated Mr Lawrie’s employment. Mr Lawrie raised further grievances for unjustified dismissal, bullying, and breaches of privacy.

DecisionThe Authority rejected all of Mr Lawrie’s claims. The Authority stated that an employer is not bound to hold open a job for an indefinite period. However, before an employer can proceed to terminate an employee’s employment for incapacity an employer is required to carry out a full and fair investigation covering –

This must include seeking up-to-date medical information from the employee. The employee should also be told that the information will be used to decide whether or not their employment will be continued.

Contrary to Mr Lawrie’s claims, the Authority found that Air Liquide’s repeated requests for medical information were not a form of bullying or a breach of privacy. Rather, the employer was required to seek out this information.

In addition, Air Liquide did not need to require that Mr Lawrie attend a company doctor, especially in the face of persistent non-cooperation. When relevant information was not provided, dismissal in the absence of medical information was justifiable.

As a result the Authority found that the termination of Mr Lawrie’s employment was justified in all of the circumstances.

The Authority commented positively on Air Liquide’s repeated offers of confidential counselling, and the repeated enquiries as to how Air Liquide could assist and support Mr Lawrie. The Authority however expressed concern regarding the suggestions that Mr Lawrie take unpaid leave, or that he seek out other employment.

Manager Awarded almost $200,000 for Unjustified DismissalThe Employment Relations Authority awarded some $198,000 to Mr Page in the case of New Zealand Language Centres v Page being a combination of lost remuneration, superannuation, incentive payments, holiday pay, and compensation for hurt and humiliation following his dismissal by the Language Centre. The Language Centre appealed to the Employment Court, which upheld

Manager Awarded almost $200,000 for Unjustified Dismissal

• The employee’s present state of health;

• Their future prognosis; and

• The length of time it is expected the employee will be away from the workplace.


the Authority findings that Mr Page’s dismissal was unjustified, however, the matter of the remedies awarded by the Authority is still outstanding.

FactsMr Page was initially employed as General Manager for the Language Centre, a Japanese business with more than 500 schools worldwide. In 2006, he was appointed as the New Zealand Regional Director, with the New Zealand Principals reporting to him. By the end of 2006, both members of the New Zealand accounts teams had resigned, leaving the accounts unfinished.

Mr Page sought approval to replace these staff but this was rejected. After some delay, an outside firm of accountants was appointed, and by the end of 2008, financial information was again available, indicating that the New Zealand business was not profitable.

At the end of 2008, the Learning Centre’s CEO, Mr Kusunoki, announced that all New Zealand Managers were now to report to another person, and Mr Page’s title was to be changed to “Auckland Language Centre Principal”. Mr Page raised a personal grievance over this change, that he viewed as a demotion. He was subsequently invited to Bali to attend the Language Centre’s “Millionaire’s Club” meeting at which he received an award.

In February 2009, it was suggested by video conference that another person be appointed to run the Auckland Language Centre, which was Mr Page’s role.

Mr Page complained about this. It was agreed that he would have five months to get the Auckland Centre into a profit making situation and that he would prepare a plan showing how this would be achieved. His manager sent him an email, stating that if the Auckland Centre was not back in profit in three months time, Mr Page would be dismissed.

Mr Page challenged the letter in the Authority. He also prepared a six-month cash-flow forecast and made other suggestions for bringing the Auckland Centre back to profit.

Mr Page’s manager wrote to him inviting him to a disciplinary meeting and listing 12 items of concern for discussion. Correspondence between Mr Page’s lawyer and the Language Centre’s lawyer ensued as to the date for such a meeting.

At 5.45pm on Thursday immediately before the Easter break, the Language Centre sent a further letter by email to Mr Page’s lawyer outlining further disciplinary allegations, and requiring Mr Page to meet with his manager immediately after the weekend. Neither Mr Page nor his lawyer received this letter until they returned to work.

Mr Page was dismissed by letter, with his manager finding in his absence that all the disciplinary allegations against him had been proven. Mr Page claimed his dismissal was unjustified. The Authority agreed with him and awarded him some $198,000. The Language Centre then appealed the Authority decision to the Employment Court.

DecisionThe Court accepted that a senior employee can be dismissed for poor performance where that poor performance affects the trust and confidence the employer holds in the employee.

This, however, was a case where an employee was summarily dismissed without any enquiry, or the procedural fairness expected of a fair and reasonable employer and where the majority of the issues relied on were in relation to performance matters which, had Mr Page been advised of the employer’s concerns, he may well have been able to remedy in a timely manner.

If the employer was dissatisfied with Mr Page’s explanations after speaking to him, then it needed to issue clear instructions and timeframes so that he could have a chance to modify his conduct.

The Court was particularly critical of the fact that the Language Centre had not in fact met with Mr Page prior to the decision to dismiss, and pointed out that his manager had no firsthand knowledge of any of the events before deciding to dismiss.

The Court indicated that the agreement that Mr Page be given five months to return the Auckland Centre to profit was perhaps reasonable, however, it was not reasonable for the employer to dismiss Mr Page shortly afterwards, which gave him no time to implement this suggestion.

The matter of remedies to be awarded to Mr Page by the Court is still under consideration.

Manager Awarded almost $200,000 for Unjustified Dismissal


Unjustified Dismissal for Employee Whose Email Password was “ilovehitler” FactsMs Nelson was employed by Haldman LLC to help manage its on-line profile. Her job was to create multiple blogs referring to the company in positive terms or nonsense terms, so as to influence search results for the company which had previously received poor publicity. For this purpose, she created and maintained multiple blogs using various email addresses which could not be traced directly back to the company. One such email address was ”[email protected]” with the password “ilovehitler”.

Her manager, Mr Katavich, was aware of this and emailed her saying she should use “a more work friendly password in future”.

One Friday evening, Ms Nelson and other employees attended a BBQ, organised by a former employee, to which Mr Katavich was not invited. He was upset by this, and removed all personal effects and most of the furniture from her office, told other employees not to talk to her, and demoted her from her role as Manager.

He issued directions to all employees not to waste time talking to each other, to reduce the time they took for tea breaks, and threatened to reduce the hours and pay of anyone with low productivity.

Mr Katavich then asked Ms Nelson to attend a disciplinary meeting to discuss allegations that she had been spending time with other employees contrary to his instructions. He wrote to her a second time, noting that since she had told other employees she had been invited to a disciplinary meeting, he would raise other issues with her, namely that she had “neo-Nazi views” and that she had falsified her resume.

A disciplinary meeting occurred, and Ms Nelson was dismissed without notice. She received no final pay, and Mr Katavich asked her to repay some $3,700 to the company in respect of a bonus payment which the relevant employment agreement provided could be “clawed back” in the event of termination.

Ms Nelson raised a personal grievance for unjustified dismissal. Mr Katavich then sent an unsolicited email to her new employer urging it not to employ her. He also sent a man to her home who threatened legal proceedings against Ms Nelson, her partner, and her partner’s company if Ms Nelson did not withdraw her personal grievance claim. When she did not do so, Mr Katavich raised various legal claims against them.

Unjustified Dismissal for Employee Whose Email Password was “ilovehitler”


Decision The Employment Relations Authority agreed that Ms Nelson had been unjustifiably dismissed, and awarded her some $36,000.

The Authority found, in relation to the [email protected] email, that it was not reasonable to discipline an employee for conduct that the employer was aware of for some two months prior to taking disciplinary action, and where the employer had indicated no action would be taken. The Authority stated that the delay was too long, and the subsequent action was inconsistent with the employer’s prior response.

The Authority also stated that provisions (such as the claw-back provision) which only come into effect in the event of termination, cannot be relied upon by the employer where the termination is unlawful and where there has been a repudiatory breach by the employer. Mr Katavich’s actions after the termination of Ms Nelson’s employment could be taken into account and justified an award of $17,000 compensation for hurt and humiliation and injury to feelings on top of awards for unpaid wages and holiday pay, and lost wages.

OVERSEAS SNIPPETSUK: Employment Will Continue until the Employer Communicates that a Payment in Lieu of Notice has been madeThe UK Supreme Court has ruled, in the case of Geys v Societe Genthera that it is not enough for an employer to rely on a “payment in lieu of notice” clause when terminating employment. The employee must be clearly notified that their contract is being brought to an end, and how and when this will occur.

In this case, Mr Geys was verbally advised that his employment would be brought to an end. Some three weeks later, before Christmas, his employer made a payment to his account without telling him what this was for. In early January, his employer wrote to him confirming the termination of his employment and advising that the December payment was in lieu of notice.

The Supreme Court held that the employment was not terminated until the employee had received the letter of notification. Any payment made in lieu of notice must be clearly notified with reference to the relevant contractual term.

The Court noted that an employee should not need to check his or her bank account to work out if they were still employed.

UK: Is a Lapdancer an Employee? The UK Court of Appeal has ruled that a lapdancer working for Stringfellow Restaurants Limited was not an employee, and could not pursue her claim for unjustified dismissal. Ms Quashie worked at a Stringfellows Club. She was obliged to personally provide her services on certain nights, and the Club was required to provide her with work. She had to abide by Club rules and could be fined if she breached them.

Although it was initially held that she was an employee, the Court of Appeal overturned this decision and found that she was in fact a contractor. This was because, despite the control the Club had over Ms Quashie’s work, it did not pay her.

She negotiated her own fees direct with clients, and assumed the ultimate economic risk of being out of pocket on any particular night she worked.

Elias LJ stated that “It would, I think, be an unusual case where a contract of service is found to exist when the worker takes the economic risk and is paid exclusively by third parties.”

Overseas Snippets


Overseas Snippets

US: Freedom of Speech vs Social Media UseThe Labor Relations Board in the US has ruled that employees have a right to freedom of speech that extends to discussing working conditions freely online, and employer policies which attempt to place a blanket ban on employee’s online activities are likely to be struck down as being in breach of this right. Employers cannot realistically claim that all information relating to the workplace is “confidential”, and it seems that they will need to accept a certain amount of on-line commentary.

We note that in New Zealand, case-law currently indicates that employers can raise on-line comments with employees in a disciplinary context, but care must be taken to ensure a full and fair process is always followed.

Australia: Record Penalty for Sham Contracting The Federal Court in Australia in the case of FWO v Maclean Bay Pty Ltd (No 2) recently imposed a penalty of A$280,500 (over NZ$300,000) on a tourist resort company. The tourist resort company decided to convert its casual pool of employees into independent contractors.

It was held the dominant purpose of terminating the employment arrangements and re-engaging the individuals as contractors was to avoid award payments, superannuation and payroll tax obligations. The high penalty was due to:

• the abhorrent nature of the conduct;

• giving misleading evidence; and

• the lack of care shown to loyal hardworking employees.

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