Air Nelson Ltd v C

• Jurisdiction: New Zealand
• Judge: Harrison J
• Judgment Date: 23 September 2011
• Neutral Citation: [2011] NZCA 488
• Docket Number: CA243/2011
• Court: Court of Appeal
• Date: 23 September 2011

Between

Air Nelson Limited

Applicant

and

C

Respondent

[2011] NZCA 488

Court:

O'Regan, Harrison and Stevens JJ

CA243/2011

IN THE COURT OF APPEAL OF NEW ZEALAND

Application for leave to appeal — pilot dismissed for serious misconduct during an unscheduled overnight stop — Employment Court (“EC”) reversed Employment Relations Authority's decision that dismissal was justified and ordered the pilot be reinstated — whether EC misapplied the justification test under s103A Employment Relations Act 2002 (test of justification) — whether EC correctly applied legal principles relating to sexual harassment — whether in ordering reinstatement, the EC failed to take in to account relevant criteria (employer's statutory duty under Civil Aviation Act 1990 and Civil Aviation Rules).

Counsel:

A H Waalkens QC and K M Thompson for Applicant

J Haigh QC and R McCabe for Respondent

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.

B Air Nelson Limited must pay costs to C on a standard application for leave to appeal basis together with usual disbursements. We certify for one counsel.

REASONS OF THE COURT

(Given by Harrison J)

Introduction

1 In 2008 Air Nelson Ltd (ANL) dismissed one of its pilots, the respondent (C), for serious misconduct. The Employment Relations Authority (the Authority) found that C's dismissal was justified. 1 The Employment Court later reversed that decision

and ordered that C be reinstated. 2 ANL applies for leave to appeal against that decision

2 In order to obtain leave, ANL must identify a question of law that by reason of its general or public importance or for any other reason ought to be submitted to this Court for decision. 3

3 ANL has identified three possible questions of law. Before addressing them, we will summarise the relevant background.

Background

4 ANL is a regional airline which employed C as a pilot on its Dash 8 aircraft. In May 2008 an aeroplane under C's command was forced to spend an unscheduled overnight stop at Napier. C's fellow crew members were a male first officer (FO) and a female flight attendant (FA). She was then aged 19 years. All three were rostered to perform flight duties the next morning.

5 The crew arranged overnight hotel accommodation. They stopped at a supermarket on the way. Before entering, they took deliberate steps to conceal their uniform insignia which would identify them as ANL employees. They purchased four bottles of wine and six 330 ml bottles of beer. After arriving at the hotel, the crew members changed from their uniforms into robes supplied by the hotel. By pre-arrangement they met later in C's room for drinks.

6 What followed in C's room is the subject of controversy. It is undisputed that all three consumed a significant amount of the alcohol. In statements later made to the police, C and FO allege that at one stage all three lay together on C's bed, dressed only in their underwear and robes, while they drank; that all three spoke coarsely about sex; that FA volunteered that she did not care whether she had sexual intercourse with a married man (C was married); that she exposed her breasts and belly to display her body piercing; and that the alcohol consumption stopped at

around 11.30 pm as required to ensure an eight hour alcohol free break before the pilots recommenced duties at 7.30 am the next day

7 At about midnight FO decided to go to his room, leaving C and FA in C's bed lying under the bed covers. By that time, the three had consumed the six bottles of beer and two bottles of wine. According to C and FO, FO tipped out the contents of the other two bottles of wine the next morning.

8 According to C, he and FA fell asleep in his bed. He awoke at about 4 am when FA, who was by now fully naked, was attempting to arouse him sexually. Sexual intercourse then took place. Afterwards, at about 4.30 am, FA put on her robe and left the room. He did not see her again before reporting for work at 7.30 am.

9 FA is unable to remember anything after about midnight. Her last memory is of sitting in C's room with a half full glass of wine. Her next memory is of standing inside C's room by the entrance door, wearing her bathrobe but nothing else. She went to her room, where she realised she had participated in sexual intercourse with C. This caused her distress. She did not think she would have willingly consented. She rang a friend at about 4.30 am. Her friend's evidence was that when she arrived at the hotel FA was in a very distraught state and still appeared to be under the influence of alcohol.

10 FA made a complaint of sexual assault to the police. After undertaking an inquiry, the police decided not to prosecute C.

11 ANL commenced an internal investigation into C's conduct in June 2008 conducted by John Hambleton, its General Manager. He submitted comprehensive reports on his investigations. He concluded that C was guilty of serious misconduct in relation both to the purchase and subsequent consumption of alcohol and his sexual harassment of FA by unwelcome sexual activity including sexual intercourse. Subsequently, in June 2009, ANL dismissed C from its employment. C then made a personal grievance claim against ANL for unjustifiable dismissal. He sought reinstatement. In a decision delivered on 13 January 2010, the Authority dismissed C's application.

12 C then appealed to the Employment Court. On 29 March 2011, following a four day hearing in July and August 2010, Judge Perkins delivered a reserved decision. He reversed the Authority's decision. He found that ANL's internal investigation was fundamentally flawed. He ordered ANL to reinstate C.

13 We will now consider each of the three questions of law identified by ANL.

(a) Test of justification under s 103A

14 The first question of law identified by ANL is whether the test of justification under s 103A of the Employment Relations Act 2000 (the Act) required the Court to assess the employer's investigation as to whether that investigation revealed conduct capable of being regarded as serious conduct and whether the Court correctly applied this test.

15 Section 103A provides:

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).

(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.

(3) 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...