C v Air Nelson Ltd

JurisdictionNew Zealand
CourtEmployment Court
JudgeM E Perkins
Judgment Date29 March 2011
Docket NumberARC 7/10
Date29 March 2011

[2011] NZEmpC 27


ARC 7/10

IN THE MATTER OF a challenge to a determination of the Employment Relations Authority

Air Nelson Limited

John Haigh QC and Richard McCabe, counsel for plaintiff

Christopher Toogood QC and Kevin Thompson, counsel for defendant

Application for review of Employment Relations Authority decision — plaintiff employed by as airline pilot but dismissed as a result of inquiry into behaviour while on an unplanned overnight stopover- 19 year old flight attendant made a complaint to police about plaintiff's behaviour — the defendant conducted a separate inquiry into allegations of serious misconduct — plaintiff raised a personal grievance following dismissal and made unsuccessful application for interim reinstatement — plaintiff sought remedies of reinstatement, reimbursement of lost wages, compensation for humiliation, indignity and injury to feelings, compensation for loss of benefits and costs — whether the defendant was justified in dismissing the plaintiff.

At issue was whether Air Nelson had proved that H had reasonable grounds to believe that there had been misconduct by C of sufficient gravity to warrant dismissal.

Held: The Court had to be satisfied that Air Nelson had adopted a logical chain of reasoning under s103A Employment Relations Act 2000 (“ERA”) (test of justification). Based on the legal principles, the Court could enquire into whether H had clear evidence upon which any reasonable employer could safely rely and/or whether he conducted reasonable inquiries, that on the balance of probabilities gave grounds for believing that he employee was at fault. The Court could then make further inquiry into whether, if there had been a finding of misconduct, the ultimate decision to dismiss (as opposed to other courses of action) was justifiable when the s103A test was applied.

As far as the purchase and consumption of alcohol went, there was technical evidence as to FA's consumption. There were no conclusive findings as to C and FO's alcohol consumption and H should not have readily dismissed the findings of S, which clearly showed that C and FO would have been free of alcohol in the early hours of the morning. There was clear conclusive evidence in front of H that no more than two bottles of wine had been consumed between the three people. It was clear that FA consumed more than either of the other two and there was evidence of others that FA had still been intoxicated at 5am in the morning. H's decision on the alcohol issue was not one a fair and reasonable employer would have reached in all the circumstances at the time of dismissal.

In finding that C sexually harassed FA, H did not have clear evidence on which he could reasonably or safely rely in reaching the decision. H preferred to speculate based on FA's state when she was still clearly under the influence of alcohol, for which state there could be other conclusions than those he reached. The evidence of C, which was corroborated by FO, should have seriously undermined FA's allegation of non-consensual sexual intercourse with C. H should have considered that FA's alleged loss of memory was merely a convenient way to avoid confronting her own behaviour that night. FA's allegations should have stretched H's credulity.

There were no deficiencies by C with regard to his overall responsibility as a captain employed by Air Nelson in the circumstances that on their own could reasonably entitle H to dismiss C. This was particularly so given that different action was taken against FO and FA. The dismissal of C on an objective basis was not what a fair and reasonable employer would have done in all of the circumstances at the time that the dismissal took place.

Reinstatement was the primary remedy and had to be provided if possible (s125 ERA, reinstatement to be primary remedy). The technical difficulties were not insurmountable and there was no evidence independent of company witnesses that elements of public confidence or safety would be compromised by C's reinstatement.

Order that C be reinstated and reimbursed for lost wages. Given C's contributing behaviour, a reduced compensation figure of $10,000, down from $25,000, was appropriate.



The plaintiff (C) was dismissed from his employment with the defendant Air Nelson Limited (ANL) on 25 June 2009. At the time, C was an airline pilot captain employed by the defendant airline. The dismissal followed an inquiry made by ANL into C's behaviour while on an unplanned overnight stopover in Napier on 20 May 2008. During the course of the inquiry, C was originally stood down from flying duties and later suspended. The inquiry and the dismissal were carried out by the then General Manager of ANL, Mr John Hambleton.


Following the dismissal, C raised a personal grievance. This was unresolved between the parties. In August 2009, C made an unsuccessful application to the Employment Relations Authority for interim reinstatement.


As a result of the personal grievance being unresolved C, made an application to the Authority claiming that his dismissal was unjustifiable and that he had been unjustifiably disadvantaged by his suspension from flying duties during the course of ANL's investigation.


The grievance in respect of the suspension was not pursued at the investigation by the Authority as a separate grievance. The plaintiff sought the primary remedy of reinstatement for the dismissal. The Authority held that there was no sustainable personal grievance arising from the dismissal. For the sake of clarity it made a similar finding in respect of the grievance lodged for the suspension contained in the statement of problem but not actually pursued at the investigation.


The determination was issued on 13 January 2010. 1 On 3 February 2010, C filed a challenge to the determination seeking a hearing de novo. He elected to challenge the whole of the determination. The claim before the Court now pursues a grievance only in respect of the dismissal and seeks remedies of reinstatement, reimbursement of lost wages, compensation for humiliation, indignity and injury to feelings, compensation for loss of benefits and costs.

Uncontested factual background

The plaintiff was captain on the defendant's aircraft due to fly out of Napier on the evening of 20 May 2008. The crew of the aircraft consisted of C, a male first officer (FO) and a female flight attendant (FA), who was aged 19 years at the time. While the aircraft was on the runway, the airport became enshrouded in mist and the flight could not commence. The aircraft then taxied back to the terminal and repositioned for the night. The passengers disembarked and the crew made arrangements for an overnight stay at a local hotel. They had consumed an amount of food prior to the aborted departure.


On their taxi journey to the hotel, C and FO asked the driver to stop at a local supermarket. The three crew members went into the supermarket and purchased four bottles of wine and six 330 millilitre bottles of beer. C and FO shared the cost

of the purchase of the alcohol equally. FA did not have any money with her and was not called upon to contribute. Prior to entering the supermarket from the taxi the pilots left their hats in the vehicle and covered their uniforms with their overcoats. FA took off her identification tag and her name badge. They were careful to ensure that their uniforms could not be identified by anyone in the supermarket.

Once the wine and beer were purchased, the trio proceeded to the hotel and checked in. As they were without overnight clothes, C arranged for the hotel to deliver robes to the three rooms they occupied. It was agreed that the three, once they had changed into the robes, would then meet in C's room for a drink and nibbles. The three rooms were adjacent to each other. There was a connecting door between the room occupied by C and the room occupied by FO. The three met in C's room wearing the robes over their underwear. What transpired that evening and in the early hours of the next morning became the subject of a police inquiry into complaints made by FA and a separate inquiry by ANL into allegations of serious misconduct.

The company inquiry

There is substantial evidence by way of a document trail establishing the steps taken by the employer to investigate the matter. The initial attempts by ANL to interview C and FO were delayed by the fact that a police inquiry was being undertaken into the complaints to the police. Once the pilots' union deflected the company's inquiries by invoking the right to silence, matters settled down. The periodic correspondence from the Human Resources Manager of ANL attempting to call meetings for interviews, while premature, indicated the initial emphasis of the company on allegations of inappropriate purchase and consumption of alcohol. As matters progressed, ANL raised further heads of issues as subjects of inquiry and they were notified to the pilots. FA, who was also subject to investigation for her behaviour on the night in question, was notified of the issues involving her.


Once the police inquiry was completed, and it was decided that no charges would be laid against either C or FO, statements were prepared by them to be provided to ANL. FA had also provided statements but it is unclear exactly how ANL's inquiry into FA's conduct proceeded. However, the inquiry into C's and FO's conduct involved the presentation of their statements at a meeting convened for that purpose. What Mr Hambleton, therefore, had before him in conducting the inquiry were the statements from C, FO and FA. Those statements contained the evidence from the participants upon which Mr Hambleton needed to make his decision as to whether there had been serious misconduct and, if so, what disciplinary...

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