Mckendry v Jansen & Prouting
 NZEMPC 128
IN THE EMPLOYMENT COURT CHRISTCHURCH
Chief Judge G L Colgan
Judge B S Travis
Judge A D Ford
In The Matter Of a referral of a question of law from the Employment Relations Authority
Robert Gillanders, Advocate for Plaintiff
Jarrod Lovely, Counsel for Defendants
Jane Latimer, Counsel as Amica Curiae
Referral of question of law by the Employment Relations Authority — whether compensation was available under s123(1)(b) (reimbursement of any other money lost) or s123(1)(c)(ii) (compensation for loss of any benefit) Employment Relations Act 2000 for the loss of an entitlement to paid parental leave under the Parental Leave and Employment Protection Act 1987 — plaintiff was dismissed unjustifiably while pregnant — the Employment Relations Authority held she was entitled to compensation for the loss of paid parental leave — plaintiff had claimed a parental tax credit and sought the difference between the tax credit and what she would have received by way of parental leave entitlements
The issues were: whether compensation was available under s123(1)(b) (reimbursement of any other money lost) or s123(1)(c)(ii) (compensation for loss of any benefit) ERA for the loss of an entitlement to paid parental leave under the PLEPA.
Held: M's claim to compensation for loss of statutory parental leave payment most logically fell under either s123(1)(b) or s123(1)(c)(ii) ERA. The nature of the payment M lost was important in determining whether it was encompassed in the class of losses defined in s123 ERA. Section 71 PLEPA stated that the purpose of Part 7A PLEPA was to entitle certain employees to up to 14 weeks of parental leave payments out of public money when parental leave was taken. An employee was not entitled to claim both parental leave payments and a parental tax credit. Section 71G PLEPA (parental tax credit) provided that receiving both parental leave payments and parental tax credit resulted in the forfeiture of the parental leave payments.
The interpretation of Parliament's legislative intention started with s5(1) Interpretation Act 1999 (ascertaining meaning of legislation). The meaning of legislation had to be ascertained from its text and in light of its purpose. The purpose of s123(1)(c) ERA was to place an unjustifiably dismissed employee in a position they would have been had there been no grievance. The legislation had not restricted the types of benefits able to be compensated for; such an approach tended to point away from a narrow interpretation of “benefits” as being contractual benefits.
Section 123(1(c) ERA did not contain any express limitation or restriction on benefits, nor could it be implied from s123(1)(c)(ii) that compensation was limited to any loss arising from a benefit which itself arose from the employment agreement. It followed that lost paid parental leave was within the category of benefits contemplated by Parliament, subject to proof of causation. That meant that if, but for the personal grievance, the employee would reasonably have expected to have obtained a benefit of paid parental leave, then its value was a lost benefit and the Authority or Court could compensate the dismissed employee.
M's loss of paid parental leave was a loss that was a direct and foreseeable consequence of the unjustified dismissal. It was a loss that was difficult to mitigate by an employee in the traditional way of obtaining alternative employment. However, here a degree of mitigation of loss was achieved by the parental tax leave credit.
Section 123(1)(b) and s123(1)(c)(ii) ERA did permit the Authority to order compensation to M for the loss of her entitlement to paid parental leave.
Compensation for loss of a parental leave payment, if necessary mitigated by a parental tax credit received, was “other money lost by the employee as a result of the grievance” under s123(1)(b) ERA and was also, but independently, the “loss of any benefit, whether or not of a monetary kind, which the employee might reasonably have been expected to obtain if the personal grievance had not arisen” under s123(1)(c)(ii) ERA.
The question of law removed by the Employment Relations Authority for decision by this Court to enable a determination of the remedies for Jane McKendry's unjustified dismissal by Janine Jansen and Colin Prouting, is:
Does s.123(1)(c) or s.123(1)(c)(ii) of the Employment Relations Act 2000 permit the Authority to order the respondents to pay compensation to the applicant for the loss of her entitlement to paid parental leave under the Parental Leave and Employment Protection Act 1987?
We assume the reference to s 123(1)(c) should be to s 123(1)(b) of the Employment Relations Act 2000 (the ERA). This is a question of law on which Employment Relations Authority Members disagree in their determinations and which the Authority wishes to have clarified. With respect to them, we have not been assisted greatly by the submissions made on behalf of the parties. They focused on the particular facts of the case and, for the defendants, attacked the Authority's factual findings inviting us to reach different factual conclusions. Our task, however, is to answer a question of law posed by the Authority on facts found by it. If parties are dissatisfied with the Authority's factual findings, then they have rights of challenge but these are exercisable at the conclusion of the case in the Authority.
We are grateful to Ms Latimer for her submissions as amica curiae which, together with research undertaken for us, has allowed us to determine this disputed question of legislative interpretation and application.
The relevant facts stated by the Authority are that Ms McKendry was dismissed unjustifiably on 15 April 2009 while pregnant. Ms McKendry's child was born in August 2009. The Authority concluded that if Ms McKendry had not been dismissed unjustifiably, she would probably have continued to work for the defendants until beginning a period of parental leave in about August 2009, taken in accordance with her rights to do so under the Parental Leave and Employment Protection Act 1987 (the PLEPA). The Authority found that Ms McKendry would probably have applied for, and received, a parental leave payment under Part 7A of that Act. It determined that in these circumstances she would probably not have claimed or received a parental tax credit in respect of her child. The Authority concluded that Ms McKendry's loss of entitlement to paid parental leave resulted from her personal grievance, her unjustified dismissal.
Section 123 of the ERA addresses the remedies that the Authority (or the Court) may provide “in settling” a personal grievance. They may be one or more of the following remedies under subs (1) and we have highlighted the provisions in issue in this case:
(1) Where the Authority or the Court determines that an employee has a personal grievance, it may, in settling the grievance, provide for any 1 or more of the following remedies:
(a) reinstatement of the employee in the employee's former position or the placement of the employee in a position no less advantageous to the employee:
(b) the reimbursement to the employee of a sum equal to the whole or any part of the wages or other money lost by the employee as a result of the grievance:
(c) the payment to the employee of compensation by the employee's employer, including compensation for—
(i) humiliation, loss of dignity, and injury to the feelings of the employee; and
(ii) loss of any benefit, whether or not of a monetary kind, which the employee might reasonably have been expected to obtain if the personal grievance had not arisen:
(ca) if the Authority or the Court finds that any workplace conduct or practices are a significant factor in the personal grievance, recommendations to the employer concerning the action the employer should take to prevent similar employment relationship problems occurring:
(d) if the Authority or the Court finds an employee to have been sexually or racially harassed in his or her employment, recommendations to the employer—
(i) concerning the action the employer should take in respect of the person who made the request or was guilty of the harassing behaviour, which action may include the transfer of that person, the taking of disciplinary action against that person, or the taking of rehabilitative action in respect of that person:
(ii) about any other action that it is necessary for the employer to take to prevent further harassment of the employee concerned or any other employee.
(2) When making an order under subsection (1)(b) or (c), the Authority or the Court may order payment to the employee by instalments, but only if the financial position of the employer requires it.
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