Fonterra Cooperative Group Ltd v Te Stroet Ak

JurisdictionNew Zealand
CourtEmployment Court
JudgeGL Colgan
Judgment Date02 September 2010
Docket NumberCA849/2010
Date02 September 2010

[2010] NZEMPC 115



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

AND IN THE MATTER OF an application for stay of proceedings

Fonterra Cooperative Group Limited
Douglas Te Stroet

John Rooney and Jenna Rennie (on 13 August), Counsel for Plaintiff

Stephanie Van der Wel (on 31 August), Counsel for Plaintiff

Helen White, Counsel for Defendant

Application for stay of an order for reinstatement where the employee had been dismissed due to performance issues with laboratory test results brought on by an anxiety disorder — Employment Relations Authority found that the employee had been unjustifiably dismissed by Fonterra and directed his reinstatement and a wage reimbursement — Fonterra challenged the decision and applied for the reinstatement order to be stayed — whether medical evidence of the defendant's health was such to stay the order for reinstatement; whether the Authority should have had regard to medical evidence not available at the time of dismissal when determining whether to order reinstatement.

The ERA concluded that Fonterra failed to make sufficient inquiries into the explanations for T's work performance failures in a way that a fair and reasonable employer would have done and that these failures led to a conclusion by Fonterra of deliberate falsification. It concluded that Fonterra failed to explore fairly and eliminate a plausible medical explanation for T's acts and omissions. The ERA found that Fonterra was entitled to find serious misconduct when, on the following day, T omitted to alert his supervisors when he had real doubts about whether he had carried out his duties satisfactorily. In this respect the Authority found T to have been negligent. The ERA concluded that Fonterra should have carried out further investigation into the reasons behind T's actions on the day and in particular the T's medical condition. The ERA decided that T had been unjustifiably dismissed and directed his reinstatement and a wage reimbursement.

Fonterra challenged the decision and in the meantime applied for the reinstatement order to be stayed for the main reason of an unacceptable risk for product safety because it involved testing infant foods, an area in which accuracy of test results was critical, it would be highly onerous to provide the requisite supervision of T and T had already found alternative employment which if T were reinstated and then ultimately found to have been dismissed justifiably, would see T without any employment — whether reinstated should be stayed.

Held: The most important consideration affecting reinstatement but which was not dealt with as well as it might have been in the ERA was an evaluation of T's current health status, the prognosis and how it should be managed in light of reinstatement. It would be very important to T's reinstatement that the medical condition that appeared likely to have brought about his lapses and negligence, was identified, treated and monitored. The medical evidence was highly relevant to the important question of reinstatement and should have been fully considered by the ERA; it was irrelevant that an employer might not have had it before dismissal. It was not sufficient for the ERA to reject any consideration of that evidence on the basis that it could not have affected the employer's decision to dismiss so ought not to have been considered by the ERA in its examination of the justification for this. Detailed assessments of T's condition and prognosis were put before the Court. There was general consensus between the doctors on either side as to effect of T's anxiety disorder. There was no disagreement that T could return to work, only the speed at which that should be achieved. The order for T's reinstatement was altered so that a gradual and graduated process could be implemented taking account of the need to minimise risk to all concerned and making sure that T's health was monitored appropriately.

The ERA's orders for reinstatement were stayed until a hearing of Fonterra's challenge or further order of the Court but Fonterra was ordered to continue paying T and to place T into the first available position which was suitable.



This judgment decides whether the Employment Relations Authority's order for reinstatement of Douglas Te Stroet should be stayed and, if so, on conditions pending hearing of Fonterra's challenge which will be in March 2011, about seven months hence with a decision to follow.


By a determination delivered on 11 June 2010 1 the Employment Relations Authority found Mr Te Stroet to have been dismissed unjustifiably and directed his

reinstatement under s 123(1)(a) of the Employment Relations Act 2000 (the Act) to his former position or one no less advantageous to him on the following conditions:
  • (i) he is reinstated to the pay roll from the first day after the date of this determination; and

  • (ii) Fonterra is to discuss with Mr Te Stroet, through his union representative, arrangements for his return to work on a day nominated by the company within 14 days of the date of this determination, but no later than 14 days; and

  • (iii) Mr Te Stroet is to participate, in good faith and at Fonterra's discretion and direction, in any training or ‘refresher’ programme required in preparation for his return to work; and

  • (iv) Fonterra may require Mr Te Stroet to work in any position for which he is trained and adequately experienced if he cannot immediately be placed in his former position and until such a position becomes available; and

  • (v) Leave is reserved for either party to apply for further directions regarding these conditions (provided that the parties have first attended mediation on any points on which they cannot reach agreement).


In addition, the Authority directed Fonterra to reimburse Mr Te Stroet for lost wages, superannuation and medical benefits for the period from his dismissal to the date of his reinstatement. The award of wage reimbursement was, however, to be reduced by one-third to reflect Mr Te Stroet's culpable contribution to his dismissal.


On 5 August 2010 Fonterra applied for an urgent hearing of its application for stay of the reinstatement order. Since the application for stay was adjourned 2 on 13 August 2010, the Court now has better evidence, especially prognostic medical expert evidence, upon which to determine that issue. Unsurprisingly, some of the expert medical evidence is conflicting and will really only be able to be resolved at the substantive hearing of the challenge at which it will also be relevant to the question of reinstatement. Even in its current partly conflicted state, however, the evidence is helpful and I am grateful to the parties, their counsel, and the expert medical witnesses for its provision at short notice.


Mr Te Stroet was a dairy factory laboratory technician at Waitoa. Fonterra concluded that he “wilfully and deliberately” submitted falsified results of laboratory tests he had conducted on 22 November 2009 and failed to report subsequently that he knew the results he had passed on to production staff were incorrect. Following investigation in December 2009 and January 2010 Fonterra determined that Mr Te Stroet's actions were serious misconduct and he was dismissed.


After more than 27 years of uneventful employment with Fonterra and its predecessors, a very stressful series of events occurred on 22 November 2009 which led to Mr Te Stroet's dismissal. Although he was one of a number of laboratory technicians scheduled to work together on that day and as he had done habitually, two and then subsequently three of his colleagues were unexpectedly absent from work due to illness. This event, combined with the unfortunate, but not malicious, way in which this news was conveyed to Mr Te Stroet, triggered an acute episode of the anxiety disorder from which he had long suffered causing him to act irrationally and, in some significant respects, unconsciously, in attempt to perform the laboratory's time critical analyses.


Although Mr Te Stroet admitted that he had submitted incorrect test results and had also failed to follow procedures in such circumstances, he denied deliberately falsifying the results. Mr Te Stroet identified to his employer a longstanding anxiety and stress disorder which he said made it difficult for him to recall what he had done on 22 November 2009 and made it difficult for him to report his subsequent doubts about the test results.


Amongst the evidence considered by the Authority at its investigation meeting was a statement from Mr Te Stroet's general medical practitioner, the contents of which were accepted by the Authority. It declined, however, to accept in evidence the opinion of a medical practitioner tendered by the company. This report of Dr Steve Culpan was based on a review of Mr Te Stroet's medical records but in the absence of meeting or examining him. One of the reasons for the Authority's rejection of this medical evidence was that it was lodged outside an agreed timetable for such material to be submitted to its investigation, and also because it was not available to Fonterra at the time it dismissed Mr Te Stroet. The Authority considered that the collective agreement covering Mr Te Stroet's employment allowed for medical examination at the employer's direction and it was significant that Fonterra had failed to have any medical practitioner assess Mr Te Stroet before making its decision to dismiss him.


The Authority saw as its task to determine whether Fonterra had established that it had conducted a full and fair investigation that had revealed conduct by Mr Te Stroet which a fair and reasonable employer would have found deeply impaired or destroyed its basic confidence and...

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