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Two recent Employment Court decisions we are pondering on. Watch this space.

To ensure we remain aware of changes in our profession, particularly case law, we receive updates from a range of content providers. When an article or update sticks out and provokes interest, we often discuss and review it as a team. Over time we have developed quite a library of reference material. 

Here are two cases that we’ve been interested in earlier this month I would like to share with you that may provoke your interest. These may get Directors, Executives, and HR practitioners across the Waikato and NZ thinking. Specifically, these cases may influence your assumptions of employee consultation, what inclusive employment practices involve, and how you consider restructuring and change in your workplace. 

This is the strategic thinking we like to do and why we will review these cases and consider what they mean for how we work as a team. 

By the way, I am sharing these to not scare or overwhelm you with fear. I don’t operate that way. Instead, let’s have a conversation. I am keen to hear your thoughts on these cases and how these may influence your work practices in the future.

Send Catherine your thoughts

Customs Service recently was on the unsuccessful side of an Employment Court decision.

GF v Comptroller of the New Zealand Customs Service [2023] NZEmpC 101, [judgment], via Employment Court website

A person (GF) whose employment was terminated by the New Zealand Customs Service following their refusal to be vaccinated against COVID-19 has been successful in their challenge to an Employment Relations Authority determination holding their dismissal was justified. The Employment Court considered that Customs had failed to act as a fair and reasonable employer, and those failures had led to GF being unjustifiably disadvantaged and dismissed. 

The Court found that even when the core fair and reasonable standards of s 103A of the Employment Relations Act 2000 were considered, Customs had failed. Their failures included reaching a predetermined view of the outcome, not appropriately engaging with GF, and failing to carry out an adequate and individualized health and safety assessment for GF’s role in circumstances where it was under an obligation to do so. Further to these failings, there were two other factors that the Court considered: 

  • the heightened good employer requirements imposed on State employers under the Public Service Act, and
  • the obligations on Customs flowing from Tikanga/Tikanga values which Customs had incorporated into its employment relations framework with its staff.

The Court stated that Customs had not met either of these obligations and that these were relevant to its failure to meet the statutory obligation of good faith in s 4 of the Employment Relations Act.

What has piqued our interest is the tikanga aspect of the case. Customs had voluntarily integrated this into how it intends to maintain employment relationships with its employees. The Chief Judge asked and answered the question of how tikanga related to the fair and reasonable employer definition in the case before her:

[16] … While the Employment Relations Act does not expressly incorporate Tikanga/Tikanga values, I agree with Te Hunga Rōia Māori that the statutory framework for employment relationships does not preclude their incorporation. Indeed the Tikanga/Tikanga values identified in this case seem to me to sit entirely comfortably with an area of law that is relationship-centric, based on mutual obligations of good faith, and focussed (where possible) on maintaining and restoring productive employment relationships. 

[17] As the Supreme Court recently observed:[19] The Court is unanimous that Tikanga has been and will continue to be recognised in developing the common law of Aotearoa/New Zealand in cases where it is relevant. It also forms part of New Zealand law due to being incorporated into statutes and regulations. It may be an appropriate consideration in the exercise of discretion, and it is incorporated into the policies and processes of public bodies. 

[18] Tikanga/Tikanga values are relevant in this case in the sense referred to by the Supreme Court, particularly given that Customs incorporated tikanga/Tikanga values into its employment relationship with its employees.

[19] Although it does not need to be decided, I also consider it seriously arguable that s 73 of the Public Service Act 2020 reinforces the relevance of Tikanga/tikanga values in this case …… 

[32] The obligations imposed under the Public Service Act cannot sensibly be read as simply requiring public service employers to tweak job advertisements and existing recruitment policies to encourage Māori to apply and then to create a Māori-friendly working environment. Rather it is seriously arguable that the obligations imposed are broader, extending to requiring public service organisations to understand and act consistently with Tikanga/Tikanga values relevant to their role as a good (public service) employer.

GF, the employee, was not Māori. 

Nonetheless, the Chief Judge then went on to make it clear that the commitment to Tikanga Customs had taken on extended to all its employees. Expert evidence showed that the maintenance of relationships was central to tikanga, which also encompassed mana-enhancing (not diminishing) conduct. The Judge explored what Tikanga represents in this context, and we are most interested in understanding and reflecting on how this influences our employment practices. It has been highlighted that to observe Tikanga was an ‘obligation,’ not a guideline, and these had to be met regardless of whether GF requested that Customs abide by them. What has provoked further discussion is that the Chief Judge considered Customs’ excuse that it was “on a journey” to understand the tikanga principles that it had imposed upon itself inadequate.

The outcome was that GF was awarded $25,000 in damages and three months of lost wages. The Chief Judge did not think that the fact that GF was on a fixed-term agreement and that the Vaccination Order might have meant the inevitable discontinuance of his employment was decisive. Had Customs’ behaviour not meant that GF lost trust in it, it might have explored redeployment options or special leave.

As an outcome of this case, the Court made three formal recommendations that Customs:

  • Engage pūkenga (Tikanga experts) to ensure that it has the capacity and capability to meet its obligations regarding Tikanga values.
  • Receive advice and training on the nature and scope of its heightened good employer obligations under the Public Service Act 2020, and
  • Review its communications strategy to “enable it to adequately and appropriately engage with the full range of employees in circumstances such as arose in this case.”

Even from this excerpt, you may now appreciate that there is much to unpack and consider from this case, especially for public sector organisations and any organisation that has or is considering integrating Tikanga into their employment practices. 

At Stapleton Consulting, the employment relationship is treated holistically. For the past 2-3 years, we have been slowly exploring and observing how Tikanga can be used appropriately to strengthen our employment relations practices and enhance employee retention. It is not an area of strength we have, but we are interested and keen to learn. If your organisation is interested in learning alongside us, or if you would like to have a thought-provoking chat about this case, let’s do it. 

To thoroughly read this case, you can download a copy of the decision paper released here – Download decision paper.

Redeployment or Redundancy. What comes first?

New Zealand Steel Ltd v Haddad [2023] NZEmpC 57

The Employment Court heard this case in May of this year. The issues raised were whether: 

  • the employer unjustifiably dismissed the employee when he was dismissed on the grounds of redundancy
  • the employee should be reinstated to his position.

Haddad was a manager and has been employed for 7.5 years. His department was being restructured, and his position was disestablished. The employee was consulted at the end of the restructuring process. Haddad made it clear when consulted that he wanted redeployment rather than redundancy. 

His employment agreement stipulated that for redundancy, the “first option is to consider redeployment” [46]. While his role was disestablished, three new managerial positions were created. The employee believed the employer had predetermined that he would not be redeployed. Mr. Haddad, therefore, refused to attend interviews for the new positions. This was a risky approach to take by the employee. 

After the selection process, the employer offered the employee a position paid less than his current role. Mr. Haddad refused the offer, and the employer made his role redundant.

Even though the Employment Court (the Court) found that employers did not have an absolute duty to redeploy employees when restructuring [73], in this case, however, the consultation with the employee was flawed and failed to meet the good faith requirements in section 4[CS2] of the Employment Relations Act 2000 [39] [144]. Therefore, the employer had predetermined the outcome of disestablishing the employee’s role [38].

The Court considered Mr. Haddad’s approach a “high-risk strategy.” In the alternative, it suggested that employees could note their concerns and attend interviews without prejudice, thereby putting the employer to the test [145].

The outcome was: 

  • The employee would be reinstated to a position with the employer [152]. 
  • The Court ordered the employer to pay the employee all the wages Mr. Haddad had lost since his dismissal [159] minus any ACC payments the employee may have received. 
  • The Court also ordered the employer to pay the employee $25,000 in compensation [177]. 
  • In return, the employee was ordered to repay the employer the redundancy payment he had received, as the redundancy had been reversed [168].

To have a full read of this case, you can download a copy of the decision paper released here – New Zealand Steel Ltd v Haddad [2023] NZEmpC 57 [PDF 443KB] employment court.govt.nz

Again, this prompts us to consider how to identify and prioritise redeployment when disestablishing roles. 

Redeployment is often an afterthought once the decision of the proposed new structure is made. However, this case gives us reason to consider how potential redeployment opportunities are socialised from the outset of the proposed changes. However, sometimes this can do more harm than good when considering well-being and psychological safety in this context. 

Have a read and ponder on this one. 

Is it causing you to rethink how you will restructure and change roles? Then let me know your thoughts. 

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Our disclaimer

I’d like to remind you that while this article provides commentary on an employment law topic, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer or a suitably qualified employment relations specialist for any questions about your workplace.