Mckendry v Jansen & Prouting

JurisdictionNew Zealand
JudgeChief Judge G L Colgan,Judge B S Travis,Judge A D Ford
Judgment Date24 September 2010
CourtEmployment Court
Docket NumberCRC 34/10
Date24 September 2010

In The Matter Of a referral of a question of law from the Employment Relations Authority

BETWEEN
Jane Joyce Mckendry
Plaintiff
and
Janine Jansen And Colin Prouting
Defendants

[2010] NZEMPC 128

Court:

Chief Judge G L Colgan

Judge B S Travis

Judge A D Ford

CRC 34/10

IN THE EMPLOYMENT COURT CHRISTCHURCH

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

Appearances:

Robert Gillanders, Advocate for Plaintiff

Jarrod Lovely, Counsel for Defendants

Jane Latimer, Counsel as Amica Curiae

JUDGMENT OF THE FULL COURT
1

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?

2

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.

3

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 Authority's factual findings
4

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.

The legislation
5

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:

Remedies

  • (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.

6

Ms McKendry's claim to compensation for loss of statutory parental leave payment most logically falls under either s 123(1)(b) or s 123(1)(c)(ii) set out above. The statutory payment may either be “other money lost by the employee as a result of the grievance” under s 123(1)(b) or 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 s 123(1)(c)(ii).

7

The statutory remedies for personal grievances have their genesis in, but are not the same as or constrained by, the common law remedies of damages for breach of contract. Hence, an analysis of the relevant rules about damages for breach of contract generally, and of employment agreements in particular, is relevant in determining whether Parliament intended a loss such as that suffered by Ms McKendry was to be compensable under s 123.

Paid parental leave
8

The nature of the payment that Ms McKendry lost is important in determining whether it is encompassed in the class of losses defined in s 123. Section 71A, defining the purpose of Part 7A of the PLEPA, states that it “is to entitle certain employees and self-employed persons to up to 14 weeks of parental leave payments out of public money when they take parental leave.”

9

The Laws of New Zealand 1 states, in its overview of the statute, that “[t]he Act sets out the rights and benefits concerning parental leave that apply as a minimum standard to all employees.”

10

Section 71D of the PLEPA provides that an employee is entitled to a parental leave payment if the employee:

  • (a) has given written notice to his or her employer of his or her wish to take parental leave …; and

  • (b) takes parental leave from his or her employment in respect of a child; and

  • (c) is an eligible employee.

11

An “eligible employee” includes “a female employee who meets the criteria for maternity leave …”. 2 Section 7 provides that, as a general rule, every female employee who becomes pregnant is entitled to parental leave provided that, by the expected date of delivery, she will have been working in the employment of the same employer for the preceding six months for at least an average of 10 hours per week during that period.

12

Section 31 deals with notice requirements and provides that an employee who wishes to take parental leave must give written notice to the employer which states the proposed date the employee wishes to commence leave and the proposed duration of that leave. This notice must be given at least three months before the expected date of delivery and must be accompanied by a certificate confirming that the employee is pregnant and stating the expected date of delivery. Despite these requirements, the PLEPA does provide a second chance for the giving of notice if s 31 is not complied with. 3 In addition, s 68 gives the Employment Relations Authority the power to waive errors in defective notices, to extend times for notification, or to set aside defective notices if it considers it is just to do so.

13

An employee is not entitled to claim both parental leave payments and a parental tax credit. Section 71G(2) provides that receiving both parental leave payments and a parental tax credit will result in the forfeiture of the parental leave payments.

14

Section 71G, which was alluded to by the Authority in its findings of fact, deals with “parental tax credit” and provides:

71G Parental tax credit

  • (1) The purpose of this section is to ensure that an employee or a self- employed person does not receive both a parental leave payment under this Part and a parental tax credit (within the meaning of the Income Tax Act 1994) in respect of the same child.

  • (2) An employee or self-employed person loses his or her entitlement to a parental leave payment under this Part if the employee or self- employed person, or his or her spouse or partner, or both of them, has received any payment of parental tax credit in respect of the child.

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    ...Zealand Ltd [1993] 2 ERNZ 659 (EmpC) at 694. 32 Employment Relations Act, s 123(1)(b). 33 Section 123(1)(c)(ii). 34 McKendry v Jansen [2010] NZEmpC 128, [2010] ERNZ 453 at 35 At [67]–[68]. 36 At [54], citing Telecom South Ltd v Post Office Union (Inc) [1992] 1 NZLR 275 (CA) at 284 per Rich......

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