Margot Elizabeth Gazeley v Oceania Group (Nz) Ltd

• Jurisdiction: New Zealand
• Judge: M E Perkins
• Judgment Date: 11 December 2013
• Court: Employment Court
• Docket Number: CRC 52/12
• Date: 11 December 2013

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

BETWEEN

Margot Elizabeth Gazeley

Plaintiff

and

Oceania Group (NZ) Limited

Defendant

[2013] NZEmpC 234

CRC 52/12

IN THE EMPLOYMENT COURT CHRISTCHURCH

Challenge to Employment Relations Authority determination that plaintiff was not unjustifiably suspended or dismissed — plaintiff was employed by defendant as its Facility Manager at the Woodlands Rest Home and Retirement Village — in 2011 an auditing agency was designated by the District Health Board (DHB) to audit the village and carry out a spot surveillance audit on the facility — audit was critical of plaintiff's management of village — DHB exercised its powers to place village under temporary management — plaintiff was on annual leave when these events occurred and was suspended without notice from her employment when she returned — defendant then commenced a disciplinary process and subsequently terminated plaintiff's employment — investigation had revealed inconsistencies in accounts of incidents on which defendant relied — whether plaintiff's dismissal was justifiable pursuant to s103A Employment Relations Act 2000 (“ERA”) (test of justification) — whether reinstatement was possible.

Appearances:

Ms A Sharma, counsel for plaintiff

Ms K Dunn and Ms A Smith, counsel for defendant

JUDGMENT OF JUDGE M E Perkins

Introduction

1 The plaintiff, Mrs Margot Gazeley, was employed by the defendant, Oceania Group (NZ) Limited (Oceania) as its Facility Manager at the Woodlands Rest Home and Retirement Village (Woodlands) in Motueka.

2 During the course of Mrs Gazeley's fulfilment of the role, she was directed to work in another of Oceania's facilities, the Otumarama Rest Home. She was also seconded to assist with re-opening the Omaio Retirement Village, also a facility owned by Oceania. This was re-commissioned on an emergency basis, to assist with housing aged victims of the Christchurch earthquakes.

3 On 7 July 2011, the auditing agency, Bureau Veritas New Zealand Limited (BVQI) designated by the Nelson Marlborough District Health Board (the DHB) to

audit Woodlands, carried out a spot surveillance audit on the facility. This was critical of Mrs Gazeley's management of Woodlands. The following day, the DHB exercised its powers under art 22.2 of the Age-related Residential Care Services Agreement to place Woodlands under temporary management.

4 Mrs Gazeley was on annual leave when these events occurred. When she returned from leave she was suspended without notice from her employment. Oceania then commenced a disciplinary process and terminated Mrs Gazeley's employment on 30 September 2011.

5 Mrs Gazeley raised personal grievances against both the suspension and the dismissal. These were not resolved, becoming the subject of proceedings in the Employment Relations Authority (the Authority) and there followed a determination that she was not unjustifiably suspended or dismissed. 1 There was a subsequent determination ordering her to pay the sum of $32,954 to Oceania as a contribution towards its costs and disbursements. 2 Execution of that costs determination was later stayed by the Court. 3

6 Mrs Gazeley filed challenges to the determinations. She sought a de novo hearing. She had also previously applied unsuccessfully for interim reinstatement. 4

The pleadings

7 The final form of pleadings consists of an amended statement of claim dated 3 May 2013 and a statement of defence to amended statement of claim dated 31 May 2013. The statement of claim is a substantial document necessitating detailed pleadings in answer from the defendant.

8 There are five causes of action pleaded:

• a) unjustifiable suspension;

• b) unjustifiable dismissal;

• c) breach of a contractual requirement to carry out periodic performance reviews (this was abandoned at the hearing upon concession as to limitation);

• d) breach of Principle 11 of the Privacy Act 1993 by disclosing the plaintiff's personal information to the media; and

• e) breach of the obligation of good faith. (Section 4(A)(b)(iii) of the Employment Relations Act 2000 (the Act) is relied upon as setting the obligation when it should be s 4 (1)(a)).

9 The remedies sought are:

• a) permanent reinstatement;

• b) reimbursement for past earnings, and in the event that reinstatement is not granted, future loss of earnings;

• c) reimbursement of lost benefits;

• d) interest;

• e) compensation for distress, anxiety and humiliation in respect of both the suspension and dismissal;

• f) a penalty payable to the plaintiff for breach of the obligation of good faith; and

• g) costs.

10 The pleadings also claimed a penalty in respect of the alleged breach of contractual obligations and also sought special damages arising from pre-litigation

costs. Those remedies have now been abandoned as has any remedy in respect of the alleged breach of the Privacy Act.

11 In respect of the challenge to the Authority's determination on costs, Mrs Gazeley seeks to have that determination reversed or modified.

Quantification

12 Whether or not reinstatement is granted, Mrs Gazeley seeks reimbursement of these financial claims. The submission was made that this is an appropriate case for the Court to exercise its discretion to award greater than the three months' ordinary time remuneration as provided for in s 128(3) of the Act. As lost income will not crystallise until judgment by the Court has been issued, the final quantification has not been presented in respect of lost income, and presumably the parties will be able to calculate the sum if awarded. In addition, Mrs Gazeley is claiming loss of benefits relating to a petrol allowance of $5,000 per annum and lost KiwiSaver contributions. The penalty sought for breach of the obligation of good faith is $20,000. As compensation, Mrs Gazeley seeks $15,000 in respect of the suspension and $45,000 in respect of the dismissal.

Factual outline

13 Mrs Gazeley was first employed by Oceania under an employment agreement and letter of offer dated 20 July 2009. Her position was to be Facility Manager at Woodlands. Mrs Gazeley had substantial experience in the industry prior to taking up this appointment, and at that time Oceania regarded her as a valuable acquisition. It was not long into her employment that favourable comments were being received by Oceania about her management of Woodlands. There was also evidence that she was responsible for increasing its bed occupancy rate. As an indication of the esteem in which she was held by Oceania and, in particular, the Chief Executive Officer, Mr Geoff Hipkins, it had asked her, in addition to her duties at Woodlands, to help oversee the rectification of deficiencies which had occurred at Otumarama Rest Home, another of the Oceania facilities. Also, when Oceania set up emergency admissions for earthquake victims at Omaio Retirement Village, another of

Oceania's aged care facilities, Mr Hipkins directed her to assist with its re-commissioning. From what later transpired in this matter, the effect of these diversions of Mrs Gazeley away from Woodlands upon her ability to manage Woodlands with its difficulties may have been significant and later overlooked.

14 It is clear from the evidence and not disputed by Mr Hipkins and other witnesses called for both parties that Woodlands had a particularly difficult staff culture. It was recognised that there were employees who had adopted obstructive and obstinate attitudes to previous managers' attempts to improve proper administration of care for residents at the institution. These matters were discussed with Mrs Gazeley before she commenced employment. It was hoped that she would use her experience and skills to try and resolve these issues. This also may have involved the removal from the employment of those employees with these attitudes.

15 In February 2011 there was a difficult incident with the need to administer medication to one of the residents at Woodlands. This incident involving Mrs C received some mention during the course of the hearing as being related to one of the grounds involving another resident, Mrs H, which was eventually used to dismiss Mrs Gazeley. Apparently, in order to ensure that the medication was administered as directed by the medical adviser, Mrs Gazeley and another employee used minor physical force. There was no suggestion of the resident being restrained but it was alleged that Mrs Gazeley and the other employee had breached Oceania's Code of Resident's Rights and Responsibilities in respect of this resident. An inquiry was held. This resulted in Mrs Gazeley and the other employee receiving a warning for that breach. There was no allegation that Mrs Gazeley or the other employee had breached Oceania's Restraint Minimisation and Safe Practice Handbook & Policies.

16 During the period in which this warning was administered Mrs Gazeley was continuing with her duties at Otumarama and Omaio. She did not return fully to her work at Woodlands until 11 April 2011. On 31 May 2011, she commenced five and a half weeks annual leave. It was while she was away on leave and on 7 July 2011 that the designated auditing agency, BVQI conducted the spot surveillance audit at Woodlands as a follow up of a previous audit. The Exit Interview Non-conformities Report from this spot surveillance audit identified an alleged critical risk situation in

respect of alleged intimidation and abuse by Mrs Gazeley. The following day the DHB exercised its powers to place Woodlands under temporary management. Mrs Gazeley was later contacted at home at the end of her leave. Early on the morning of 11 July 2011, when she returned to work, she was met by Ms Barbara Sangster, Oceania's General Manager of Clinical and Quality. She was suspended by Ms Sangster at that time.

17 On the same day the DHB undertook an assessment of residents at Woodlands to check for...