Bishop and Bishop Trading as Debtor Communications v Bennet
 NZEmpC 127
IN THE EMPLOYMENT COURT CHRISTCHURCH
In the Matter of a challenge to a determination of the Employment Relations Authority
R E Bishop in person and as advocate for ME Bishop
Marieke van den Bergh, counsel for defendantt
Challenge to a determination of Employment Relations Authority that defendant was unjustifiably dismissed — allegations of dishonesty made by employer a year prior to dismissal and no investigation or advice that employee was facing disciplinary action — allegations later found to be unsubstantiated — whether dismissal of defendant was justified — assessment of remedies.
Held: In assessing whether the dismissal was justifiable, the test in s103A Employment Relations Act 2000 (“ERA”) (“test of justification”) as it was at the time of the dismissal was applicable (“what a fair and reasonable employer would have done in the circumstances at the time”). It was a fundamental aspect of fairness that no adverse conclusions were drawn without a proper investigation, which must include an informed opportunity for the employee to respond to the employer's concerns. Ron raised concerns of dishonesty on Bennett's part in August 2007. However, it was not suggested that any disciplinary action was being contemplated. Bennett did not reply and there was never a proper investigation. By the time Bennett was dismissed in August 2008, the issues were a year old. It was both unfair and unreasonable for Ron to rely on them again in deciding to dismiss Bennett. It was even more unfair for Ron to rely on those concerns without telling Bennett explicitly what they were and that her employment was at risk as a result.
The allegation of physical and verbal abuse by Bennett referred only to the incident in which Bennett swept items of stationery off the desk. The ultimate responsibility of the incident lay with Bennett but Ron had contributed to the situation by his insensitive behaviour. It did not warrant a final warning with a threat of dismissal. Further with respect to claims that Bennett's attitude was non-communicative in the last week, the correct response would have been to work on restoring the former good relationship with the aid of mediation and researching or taking advice on the rights and obligations of parties to an employment relationship.
There was no foundation for the claims of dishonesty and no good reason to dismiss Bennett. The process by which the dismissal decision was reached wasseriously flawed and did not support any valid decision. While the Bishops may have genuinely held the views they expressed, their conduct fell well short of what a fair and reasonably employer would have done in all the circumstances.
The claim for reimbursement of lost wages made under s123(1)(b) ERA provided for 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. Bennett's grievance was that she had been unjustifiably dismissed and as a result of that dismissal, she lost the wages she had been earning until her further employment. Bennett was entitled to the whole amount of wages she would have earned during the period in question had she not been dismissed.
There was no basis for subtracting a sum relating to money earned by Bennett from a sideline business that she had been conducting both prior to and subsequent to her dismissal. There was no evidence that she devoted greater time to this following her dismissal or that she derived any greater income from it post dismissal.
Bennett claimed compensation for humiliation, loss of dignity and injury to her feelings suffered as a result of her dismissal. On the basis of evidence given by Bennett in that regard, it was established that Bennett suffered significant distress during the week leading up to her dismissal and that the immediate effects of the dismissal were also equally distressing. In particular, she was distressed by the repeated challenges to her honesty and integrity. Further, Ron attempted to place responsibility on Bennett for a debt he knew was properly that of his business and in this regard also, Bennett suffered distress. Bennett therefore was entitled to a substantial award of compensation for distress. However the amount would be reduced by $1000 to allow for Bennett's contribution by sweeping items off the desk
Although Bennett had been awarded remedies, the effect of the challenge was that the benefit of those remedies to Bennett had been delayed considerably. In the meantime, the Bishops had had the use of the money which would otherwise have had to be paid to Bennett long ago. That could be remedied by awarding interest on the component relating to the lost wages.
Authority's determination confirmed.
JUDGMENT OF JUDGE A A Couch
The plaintiffs, Ron and Margaret Bishop are a married couple who live in Timaru. They had a business partnership which operated a debt collection business called Debtor Communications. The defendant, Ms Bennet, was employed to work in that business until she was summarily dismissed on 8 August 2008.
Ms Bennet believed her dismissal was unjustified. She raised a personal grievance with Mr and Mrs Bishop and lodged that grievance with the Employment Relations Authority. In its determination dated 21 December 2009, 1 the Authority concluded that Ms Bennet had been unjustifiably dismissed and awarded her remedies totalling $12,240. Mr and Mrs Bishop were also ordered to pay Ms Bennet$684.14 in unpaid wages and holiday pay. Mr and Mrs Bishop challenged the whole of that determination and the matter proceeded before me in a hearing de novo.
A considerable amount of evidence was given. A good deal of that was peripheral or provided background to the critical events. On the key issues, the evidence in chief of Mr Bishop and Ms Bennet differed considerably but, after cross examination and questions from the Court, few conflicts remained. To the extent that there were outstanding issues, I have had regard to all of the evidence of both witnesses and what is set out below reflects my considered findings of fact.
The business known as Debtor Communications was founded in about 1993. The proprietor of the business was the partnership comprising Mr and Mrs Bishop but, during the period involved in this case, Mr Bishop was responsible for day to day management.
Ms Bennet began employment with Debtor Communications on 13 November 2006. She worked 6 hours per day, Monday to Friday and was paid $15 per hour. Her principal duties were those of an office administrator. She reported to Mr Bishop as the manager of the business. There was no written employment agreement.
In July 2007, Ms Bennet went on holiday. When she returned, she received a letter from Mr Bishop dated 1 August 2007 recording what he believed were numerous instances of dishonesty and other misconduct by Ms Bennet in the course of her work. Those allegations were the subject of a great deal of evidence. I refrain from setting out that evidence or the details of the allegations as to do so would greatly extend this judgment for no real purpose. Those allegations related to events more than a year prior to Ms Bennet's dismissal and have little or no relevance to the principal issue which is whether the dismissal in August 2008 was justifiable. I say only that the evidence left me satisfied that Ms Bennet had not behaved dishonestly.
On 23 July 2008, Ms Bennet began a week's annual holiday. She and her partner, Harry Travaille, went on an ocean cruise. The ship encountered very bad weather which caused great distress to the passengers and delayed the ship's return to port. Ms Bennet arrived back in Timaru late on Saturday 2 August 2008.
Ms Bennet went back to work on Monday 4 August 2008. In her absence, Mr Bishop had again formed the view that Ms Bennet had been dishonest in the course of her employment. One of his concerns was that Ms Bennet had purchased unnecessary stationery and items for herself on the business account at Warehouse Stationery. He had gathered up a number of items from Ms Bennet's workstation and placed them on the desk in his office. When Ms Bennet arrived, she noticed that things were missing and went to see Mr Bishop. He accused her of unnecessarily buying the stationery on his desk. He then said that very little new work had come in, that the business was in financial difficulty and that he objected to paying her while she was on a holiday which he could not afford. Ms Bennet became distressed. She swept the stationery off the desk onto the floor and left the premises in tears.
That afternoon, Ms Bennet returned to work where there was a letter from Mr Bishop waiting for her. The text of that letter was:
The first thing we want you to know is that we are not dissatisfied with the quality of your work however as your employer we have right to question the expenses of the business.
Every time I sit you down and express my concern about the expenses you fly off the handle and start throwing things around the room. You also giveme verbal abuse because of your inability to control your emotions.
The cost of a few bits of stationery is no longer our cause for concern. Our concern is for your health. You defiantly need some counselling so that you can learn how to discuss business...
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