John Matsuoka v Lsg Sky Chefs New Zealand Ltd

• Jurisdiction: New Zealand
• Judge: B S TRAVIS
• Judgment Date: 21 December 2012
• Court: Employment Court
• Docket Number: ARC 19/11
• Date: 21 December 2012

In the matter of proceedings removed from the Employment Relations Authority

Between

John Matsuoka

Plaintiff

and

Lsg Sky Chefs New Zealand Limited

Defendant

[2012] NZEmpC 220

judge/s

Judge Travis

ARC 19/11

IN THE EMPLOYMENT COURT AUCKLAND

Decision on remedies — plaintiff had obtained a declaration that he was entitled to transfer his employment to the defendant, on an equivalent position he had occupied with his previous employer, under Part 6A Employment Relations Act 2000 (“ERA”) (continuity of employment if employees' work affected by restructuring) — defendant refused to accept transfer of plaintiff's employment to it — defendant had been awarded an airline catering contract held by the plaintiff's previous employer — plaintiff was a shareholder of that company — defendant then accepted plaintiff as an employee for six months but disputed accuracy of figures supplied by plaintiff quantifying his entitlements and previous salary for the purposes of his claim for $10,000 compensation under s123(1)(c)(i) ERA (remedies — distress, humiliation and injury to feeling) and his claim for penalties of $20,000.

Counsel:

Rob Towner, counsel for plaintiff

Garry Pollak, counsel for defendant

Timothy Oldfield, counsel for Service and Food Workers Union Nga

Ringa Tota Inc as intervener

JUDGMENT OF JUDGE B S TRAVIS

B S TRAVIS

1 At the conclusion of my substantive judgment issued on 18 May 2011 1 which answered the seven questions posed by the parties that arose out of Part 6A of the Employment Relations Act 2000 (the Act), I recorded that remedies and grounds of defence were reserved for further consideration, which might include evidence and submissions. The plaintiff, Mr Matsuoka, had sought declarations as to his employment status, compliance orders, penalties, a disadvantage grievance, compensation, damages and arrears of wages and benefits.

2 Following the issue of the judgment, the parties provided an agreed timetable for the filing of legal submissions. The plaintiff filed his legal submissions on 1 August 2011, the defendant company responded on 5 August 2011, and the plaintiff replied on 18 August 2011. There the matter rested because of parallel proceedings

in the High Court between the defendant company (LSG) and Pacific Flight Catering Limited (PFC) and PRI Flight Catering Limited (PRI), jointly described in this judgment and the High Court judgment as Pacific. 2

3 The plaintiff had been previously employed by PRI before his transfer to LSG. The matter was further complicated by the dismissal of Mr Matsuoka by LSG on 11 July 2011. Mr Matsuoka filed personal grievance proceedings in the Employment Relations Authority (the Authority) in relation to his dismissal and those proceedings were later removed to the Court. 3 Those removed proceedings under ARC 23/12 were initially consolidated by the Court with the outstanding remedies in the present matter. These procedural issues are summarised in an interlocutory judgment setting out the reasons why I dismissed an application by LSG for declarations that the plaintiff's solicitors should not continue to act for him and for Pacific. 4

4 LSG also made allegations that the figures supplied to it on the transfer of Mr Matsuoka, quantifying his entitlements and previous salary, were incorrect and should not form the basis of his claim for remedies. These issues also arose in the High Court proceedings as my interlocutory judgment sets out. I note that the grounds of defence raised by LSG for further consideration, which involved these issues and claims of misrepresentation, were not expressly referred to in the subsequent legal submissions. No doubt they will be dealt with if remedies are revisited in ARC 23/12.

5 It was agreed by counsel on behalf of the parties that the only two matters outstanding in ARC 19/11, which could be resolved without the necessity of further evidence or hearings as to the accuracy of the figures supplied to LSG concerning Mr Matsuoka, were:

• … his claim for compensation under s 123(1)(c)(i) of the Act for the distress, humiliation and injury to feelings he alleges he suffered as a

  result of the disadvantage in not being transferred to the defendant's employment under Part 6A of the Act; and

• … his claim for penalties, which I granted him leave to increase from $10,000 to $20,000.

6 This judgment now deals with those two outstanding matters.

Compensation

7 Mr Towner, in his written submissions, contended that the plaintiff was entitled to compensation of $10,000 under s 123(1)(c)(i) of the Act in relation to his disadvantage grievance. Mr Matsuoka claimed that he was disadvantaged in his employment by the unjustifiable actions of LSG in refusing to accept that he was entitled to transfer to its employment, refusing to employ him, refusing to provide him with work in the role in which he was entitled to transfer, and refusing to remunerate him according to the terms of his employment agreement.

8 Alternatively, Mr Matsuoka claimed damages resulting from what he alleged were the defendant's breaches of contract, including for the distress caused to him by the defendant not employing him in the same role that he had with PRI. Mr Towner cited Whelan v Waitaki Meats Ltd. 5 He accepted that the alternative claim for compensatory damages was for the same reasons and in the same amount as could be recoverable under s 123(1)(c)(i) and (ii) of the Act. He was not seeking a double recovery for Mr Matsuoka.

9 Mr Towner submitted that the context for the plaintiff's claim for compensation was that the defendant acted unlawfully in denying Mr Matsuoka employment from 23 February 2011 and that thereafter he was out of employment until his dismissal by the defendant on 11 July of that year.

10 Mr Towner submitted that the defendant's unlawful actions resulted in the plaintiff experiencing stress, extreme anxiety, second only to when he was sent to war, sleeplessness, physical manifestations and a deterioration of what had

previously been good relationships with his fellow workers. He submitted that these adverse consequences were ongoing and extended over the period of four and a half months during which the plaintiff rightly believed he was entitled to employment with LSG but was denied that opportunity

11 Mr Towner submitted that the claim for $10,000 was justified in light of the following:

• (a) the humiliation which the plaintiff would undoubtedly have experienced as a result of the open manner in which the defendant opposed his right of transfer and involved a number of his previous work colleagues to oppose his claim;

• (b) the loss of dignity which he inevitably would have suffered as a result of having his legal right of transfer denied;

• (c) the injury to his feelings caused by the manner in which the defendant resisted the plaintiff's right of transfer which involved the defendant lining up his previous work colleagues against him (when in fact he had a valid claim against the defendant); and

• (d) generally the injury to his feelings caused by the defendant's unlawful actions.

12 Mr Towner compared the amount claimed to other situations in which compensation awards have been made for approximately $10,000, for example, for inadequate consultation in relation to a genuine redundancy or up to $10,000 for an unjustified warning, citing Van der Sluis v Health Waikato Ltd. 6

13 Mr Pollak's response was that LSG does acknowledge that the plaintiff has a claim for the distress he suffered as a result of not being employed on 23 February 2011 but that the Court should not award compensation as the parties had a genuine and significant disagreement about the application of Part 6A of the Act. He submitted that because the case was something of a test case, even though it was couched as a personal grievance, the judgment was a significant one affecting not just the current parties but other employees and employers generally, and any amount of compensation awarded should be minimal. He submitted that the plaintiff had merely deposed that he was stressed and had produced no corroborative evidence to establish or confirm his assertion.

14 Mr Pollak also submitted that, although the plaintiff gave brief evidence about how upset he was at being declined a position with LSG, Mr Matsuoka must surely accept that, given he was a shareholder of LSG's main competitor and in a special relationship with his fellow directors, his situation was something out of the ordinary. He also submitted it was not appropriate for the plaintiff to have referred in submissions to the ongoing consequences of LSG denying him the opportunity to work. He advised that immediately upon the Court issuing its judgment, LSG regarded the plaintiff as an employee and acknowledged that it was by law obliged to employ him from 23 February 2011 and that Mr Matsuoka would be paid by LSG from that date until 11 July of that year, without having to attend work. The amount payable and his entitlement to benefits, however, are still very much in dispute.

15 Mr Pollak stated that this question of the plaintiff's entitlements is not now before the Employment Court as it is part of the wage arrears and personal grievance being pursued by the plaintiff against the defendant. I presumed that that was a reference to the unjustifiable dismissal grievance being pursued by Mr Matsuoka in the proceedings removed from the Authority to the Court under ARC 23/12.

16 I had noted in my substantive judgment, under the heading “Impediments to the plaintiff's employment by LSG”, 7 that the defendant had raised a number of additional reasons for refusing to accept the transfer of the plaintiff's employment. These included misrepresentation, a potential conflict of interest based on the plaintiff's shareholding and relationship with the managing directors, and his remuneration package. I reserved these for further...