JurisdictionNew Zealand
CourtEmployment Court
JudgeG L Colgan
Judgment Date29 April 2013
Date29 April 2013
Docket NumberCRC 46/10

[2013] NZEmpC 71


CRC 46/10

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

Derek Wayne Gilbert
Transfield Services (New Zealand) Limited

David Beck and David Goldwater, counsel for plaintiff

Gillian Service and Anna Smith, counsel for defendant

Challenge to determination of Employment Relations Authority that plaintiff had not been unjustifiably dismissed — plaintiff had been employed in business for over 40 years and was active union member — proposed restructuring of respondent which resulted in plaintiff's dismissal (redundancy) was coincident with industrial action — principal allegation was that there had been discrimination against plaintiff as per s104(1)(b) Employment Relations Act 2000 (“ERA”) (discrimination) — whether this was a case of current or prima facie union activity discrimination (taking place no more than 12 months after relevant union activity) with regard to s107 ERA (prohibited grounds of discrimination for purposes of s104) — whether redundancy was a result of the actions of a fair and reasonable employer.

The issues were: whether G had established a case of union activity discrimination (taking place no more than 12 months after relevant union activity) under s107 ERA (prohibited grounds of discrimination for purposes of s104); and whether G's redundancy was a result of the actions of a fair and reasonable employer.

Held: Case law contained some guidance about how to approach claims to unjustified discrimination on the grounds of union membership or union activity (e.g. McAlister v Air New Zealand Ltd). Claims of unlawful discrimination in employment on grounds of union activity were rare and notoriously difficult to establish by direct and persuasive evidence. Experience of employment relations also established that union activities by individual employees could be, and sometimes were, perceived by employers and their senior managers to be irritating, counter-productive, and even destructive. It was a natural human trait to try to avoid the consequences of the union activity by curtailing or even eliminating their sources.

G's recent employment history included a number of the statutory requirements for involvement in the activities of the union within 12 months before the action complained of under s107 ERA, including G's role in ballots, strikes, pickets and an overtime ban. Although G had to establish a case of current or prima facie union activity discrimination taking place no more than 12 months after relevant union activity, earlier relevant events could nevertheless be taken into account in assessing the probabilities of the occurrence of union activity discrimination based on events within that 12 month period. However care had to be taken that these events beyond the 12 month period did not form the basis of substantive findings of unlawful discrimination by the employer.

G then had to establish that his dismissal from, or other disadvantage in, his employment was in circumstances in which other employees of Transfield on work of the same description were not dismissed or subjected to the same detriment. This was a vital consideration in deciding whether the s104(1)(b) ERA constituents existed to engage the statutory (but rebuttable) presumption of unlawful discrimination in s119 ERA (presumption in discrimination cases). The comparator group in this exercise was other employees who had not been involved in union activities as G had, but whose circumstances were otherwise materially the same as, or similar to, his relevant circumstances.

There was no, or at least insufficient, evidence of any other employee having had a comparable type or intensity of involvement in union activities over the previous 12 months in comparison with G, who was or was not made redundant as he was. Although there was uncontroverted evidence from Transfield that more non-union employees were dismissed for reasons of redundancy than were unionised employees, the discrimination test was not one of union membership, though it was so unlikely that an employee who was not a union member could maintain a claim as G made, to make such a proposition discountable in reality. This was both relevant and an element that assisted Transfield to establish that its dismissal of G was not unlawfully discriminatory, that was, it was not motivated by anti-union sentiment.

Also in Transfield's favour was that it consulted with its entire relevant workforce and the EPMU about the process it proposed to undertake and no concern was raised during that process that it would be unfair to union members. It was also in favour of Transfield that at the most significant and subjective stage of the redundancy selection process, G performed better than others and was scored accordingly.

Against those factors was Transfield's adoption for the redundancy process of criteria for selection emphasising cooperation with, and loyalty to, the company and its values and objectives. This was bound, almost inevitably, to come into conflict with the values and objectives of those promoting the benefit to employees collectively of improved terms and conditions of employment.

On balance, G's involvement in union activities was not a material ingredient in his selection for redundancy and consequent dismissal and the s119 ERA rebuttal presumption was not engaged. Transfield's treatment of G was not unlawfully discriminatory and this personal grievance cause of action failed as a result.

The first consideration in all cases of dismissal, and no less when it was on the grounds of redundancy, was the applicable employment agreement. As a matter of interpretation of the collective agreement, although clause 46.6 gave the employer broad rights to select for redundancy using its own assessments (as opposed, for example, to any formula such as last on, first off), the contractual expectation was that the company would do so assessing the “skills and attributes” of the employees from whom it would select those necessary or appropriate for its continuing operations. “Skills and attributes” included, but were not necessarily limited to, technical skills and attributes in the performance of employees’ roles. G therefore had a legitimate expectation of a skills’ and attributes’ assessment by Transfield in a redundancy selection.

G's dismissal came about as a result of some very adverse assessments made about his work performance following an interview by managers who were largely unfamiliar with this, and at least one of whom made general assumptions about employees such as G which, in his case, proved to be erroneous. A fair and reasonable employer would not only, not have adopted generalised and stereotypical assumptions about its employees, but would have raised questions in this case of upskilling with employees such as G. Had a fair and proper assessment been made of this relevant factor, on the evidence G would have received additional points which would, in turn, have carried him over the cut-off line for dismissal.

There was no evidence that the same defects were perpetuated in cases of other employees who were dismissed. It was safe to assume, on the balance of probabilities, that if G's work performance had been scored objectively and reasonably, G would not have lost his job. Transfield had not acted as a fair and reasonable employer ought to have and G was dismissed unjustifiably.

This was not a case of dismissal for performance or misconduct reasons where there might arise a question of trust and confidence in the employee. Reinstatement was a practicable remedy. It was also appropriate in the circumstances that G be compensated fully for his remuneration losses. G was significantly affected by his unwarranted dismissal, given a fair and reasonable expectation by him that he would not be dismissed in these circumstances. The losses were exacerbated by his very lengthy service, his apparently satisfactory performance assessments, and his awareness that his skills and other attributes had been ignored by his employer, together with his genuine (but erroneous) belief he had been targeted for dismissal because of his union activities. For these reasons G was entitled to compensation under s123(1)(c)(i) ERA (remedies) of $15,000.

Finding that G was dismissed unjustifiably, though not discriminated against unlawfully. Order for reinstatement made.

  • A The plaintiff was not discriminated against unlawfully by the defendant in his employment and in his dismissal.

  • B The plaintiff was dismissed unjustifiably by the defendant.

  • C Following any appropriate training and supervision and, if necessary, after the parties have been assisted professionally by a mediator, the plaintiff is to be reinstated to his former position with the defendant or to one no less advantageous to him.

  • D For remuneration purposes, that order for reinstatement is to take effect immediately on the delivery of this judgment and will have retrospective effect to the date of the plaintiff's dismissal.

  • E To give effect to D (above) the plaintiff is entitled to compensation for all remuneration lost by him as a result of his unjustified dismissal but less any remuneration earned by him during the period that he was dismissed.

  • F The plaintiff is entitled to interest on lost wages at the relevant Judicature Act rate calculated from the date of filing of his claims in the Employment Relations Authority to the date of payment of these to him.

  • G The plaintiff is to have compensation under s 123(1)(c)(i) of the Employment Relations Act 2000 in the sum of $15,000.

  • H The plaintiff's application for a penalty is dismissed.

  • I The plaintiff is entitled to costs which, if they cannot be agreed between the parties within the period of two calendar months from the date of this judgment, will be fixed...

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