Laura Jane George v Auckland Regional Council

 
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[2010] NZEMPC 138

IN THE EMPLOYMENT COURT AUCKLAND

Court:

B S Travis

ARC 91/10

In The Matter Of an application for special leave to remove proceedings from the Employment Relations Authority

Between
Laura Jane George
Plaintiff
and
Auckland Regional Council
Defendant
Appearances:

Melissa Perkin, counsel for the plaintiff

Tim Clarke, counsel for the defendant

Application to the Employment Court pursuant to s178(2)(a) Employment Relations Act 2000 (“the Act”) for special leave to remove a claim to the Court on the ground that an important question of law was likely to arise in the matter other than incidentally — applicant was dismissed for serious misconduct. The reasons given for the dismissal related to both the alleged recruitment of a casual employee in breach of recruitment policy and to concerns about the veracity of explanations given in response to that allegation — whether any of the four questions of law raised, justified the matter being removed to the Employment Court from the Employment Relations Authority.

Held: In relation to question 1, the case law provided no definitive answer as to whether an employer may add an allegation of serious misconduct during an investigation process based on the way that the employee responded to the employer's original allegations. This was an important question of law that would provide certainty to an issue which was likely to arise other than incidentally and would add to the body of employment law generally.

On question 2, the English Court of Appeal in Salford Royal NHS Foundation Trust v Roland had decided that it was particularly important that employers take seriously their responsibilities to conduct a fair investigation where the employee's reputation or ability to work in his or her chosen field of employment was potentially apposite. Although courts in this country were not bound by decisions of English courts, decisions of the English Court of Appeal were highly persuasive in this jurisdiction. The Roland decision may well affect the standard to be applied to a disciplinary investigation in New Zealand when an employee's reputation and ability to work in a chosen field were at risk.

On question 3, English authority had held that an employee who suffered damage as a result of findings of misconduct, leading to dismissal and loss of professional status, that were made against the employee in disciplinary proceedings conducted in breach of a contractual disciplinary procedure, may recover damages for the employer's failure to carry out proper disciplinary proceedings. G was seeking damages for injury to her reputation in her breach of contract claim under common law in addition to other remedies which may be awarded to her for the unjustified dismissal in the context of her personal grievance claim. The availability of reputational damages was an important question of law that was likely to arise other than incidentally.

In relation to question 4, this was no different from any other situation whereby an employee brought a personal grievance claim for unjustified dismissal against an employer which was restructuring its business. No important question of law arose in relation to remedies.

The criteria set out in s178(2)(a) had been met in relation to the first, second and third questions and there being no reason why the residual discretion should not be exercised in favour of G, special leave to remove G's proceedings from the Authority to the Court was granted.

JUDGMENT OF JUDGE B S TRAVIS
1

Ms George has applied to this Court, on 11 August 2010, for special leave to remove to the Court a claim brought by her in the Employment Relations Authority (the Authority) against the defendant, the Auckland Regional Council (the ARC). Ms George had applied to the Authority to have the employment relationship problem removed in its entirety to the Court. The application for removal was made pursuant to s 178(2)(a) of the Employment Relations Act 2000 (the Act), that is, on the ground that an important question of law is likely to arise in the matter other than incidentally.

2

The Authority, in its determination issued on 22 July 2010, 1 declined the removal application. When the Authority declines to remove any matter, special leave may be sought from the Court which must apply the following criteria set out in paragraphs (a) to (c) of sub-section (2) of s 178:

  • a) an important question of law is likely to arise in the matter other than incidentally; or

  • b) the case is of such a nature and of such urgency that it is in the public interest that it may be removed immediately to the Court; or

  • c) the court already has before it proceedings which are between the same parties and which involve the same or similar or related issues; or

Factual Background
3

Ms George is a qualified chartered accountant who commenced permanent employment with the ARC on 4 May 2006 in the role of Group Manager Accounting Services, transferring to the role of Team Leader Transactional Services in October 2009. On 4 February 2010, Ms George was dismissed for serious misconduct. The reasons given for the dismissal related to both the alleged recruitment of a casual employee in breach of the ARC's recruitment policy and to concerns about the veracity of explanations Ms George gave in response to that allegation.

4

Ms George's employment relationship problem (as set out in her affidavit in support of her application for special leave sworn on 11 August 2010) includes claims of unjustified dismissal, unjustified action causing disadvantage, breaches of contract and breaches of the Act. In addition to claiming the usual remedies for her personal grievances, Ms George claims special damages and damages for injury to reputation in relation to alleged breaches of her employment agreement and penalties in respect of the alleged breaches of her contract and of the Act.

Issues
5

The sole ground relied on for special leave by Ms George is that contained in s 178(2)(a). Ms George says that there are four important questions of law that are likely to arise in the matter other than incidentally. These four questions are set out in the application for special leave and I will deal with each in turn.

First question

Where the employer concludes during a disciplinary process that the employee has committed an act of misconduct, for which the employee could not have been dismissed, it is justifiable for the employer under s.103A Employment Relations Act 2000:

  • a) To add, before concluding the disciplinary process, an allegation of serious misconduct based on how the employee had responded to the original allegation?

  • b) To dismiss the employee for serious misconduct based on how the employee responded to the original allegation?

Determining the issues
First question
6

In addressing the first question, Ms Perkin, for the plaintiff, noted that the defendant admits that a new allegation of serious misconduct about the truthfulness of the plaintiff's explanation in relation to the initial allegation was added during the disciplinary process. She submitted that whether the defendant was justified in adding that additional allegation and then dismissing the plaintiff for that reason is an important question of law that will arise and have to be determined.

7

Mr Clarke, for the defendant, argued that whether the defendant was justified in adding the additional allegation does not raise an important question of law. He submitted that it is settled law that an employer may add an allegation of serious misconduct during an investigation process based on the way that the employee responded to the employer's original allegations. He further submitted that there are decided cases establishing that an employee's dishonesty, during an investigation into lesser allegations, can itself amount to serious misconduct that can be used as grounds to justify a dismissal, citing Honda NZ Ltd (with exceptions) Shipwrights etc Union, 2New Zealand Sugar Company Limited v Connelly3 and Blaker v B & D Doors. 4

8

Ms Perkin cited two cases, Port Nelson Ltd v Macadam (No. 1)5 and Iakopo v Waikato Electricity Limited6 to support her position that the law is not settled in this area. Chief Judge Goddard in Macadam stated that: 7

As a general rule, an employee who is called to answer to an allegation that he has been guilty of conduct of a particular kind cannot be dismissed if suspicion emerges during the course of an inquiry into that allegation that the employee may have been guilty of conduct of a different kind, including lying to the employer … [t]hat needs to be the subject of a separate set of disciplinary proceedings…

Judge Finnigan in Iakopo stated that: 8

… I cannot accept that...

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