Pacific Blue Employment & Crewing Ltd v B Chch

• Jurisdiction: New Zealand
• Judge: A A Couch
• Judgment Date: 20 August 2010
• Court: Employment Court
• Docket Number: CRC 35/10
• Date: 20 August 2010

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

BETWEEN

Pacific Blue Employment & Crewing Ltd

Plaintiff

and

B

Defendant

[2010] NZEMPC 112

CRC 35/10

IN THE EMPLOYMENT COURT CHRISTCHURCH

Appeal against an Employment Relations Authority decision granting the defendant interim reinstatement in the form of “garden leave”— defendant pursing a personal grievance for unjustified dismissal and sought permanent reinstatement — B was a commercial pilot and his passenger transport licence had been suspended by the Director of Civil Aviation on the basis he no longer met the requirement of a fit and proper person — whether interim reinstatement was an appropriate remedy when the defendant could not perform his job — principles for interim reinstatement — whether the suppression order should continue.

Appearances:

John Rooney, counsel for plaintiff

Tim McGinn, counsel for defendant

ORAL JUDGMENT OF JUDGE A A Couch

1 The defendant is a commercial pilot. In August 2008 he was employed to fly passenger aircraft operated by Pacific Blue. On 25 May 2010 he was summarily dismissed for misconduct.

2 The defendant is pursuing a personal grievance that his dismissal was unjustifiable and is seeking permanent reinstatement. That claim is now before the Employment Relations Authority. The defendant also sought interim reinstatement which the Authority granted in a determination dated 26 July 2010. 1 Interim reinstatement was granted in the form of “garden leave” meaning that the plaintiff

was obliged to employ and pay the defendant but was not obliged to offer him work. The plaintiff challenges that determination and the matter has proceeded before me today by way of a hearing de novo

3 Before turning to the merits of the matter it is important to clarify the relationships between those involved. Aircraft flown in New Zealand under the Pacific Blue brand are operated by Pacific Blue Airlines NZ Ltd. Aircrew on those aircraft are employed by Pacific Blue Employment and Crewing Ltd, the plaintiff in this proceeding. The plaintiff is a wholly owned subsidiary of Pacific Blue Airlines NZ Ltd. The evidence suggests that the business of the two companies is intermingled with day to day operation of the plaintiff being carried out by staff of Pacific Blue Airlines NZ Ltd. In particular it appears that the defendant was dismissed by a manager of Pacific Blue Airlines NZ Ltd.

4 The parties have filed comprehensive affidavits accompanied by voluminous exhibits. I have considered all of that material but it is unnecessary to make detailed reference to it in the course of this decision.

5 The principles by which applications for interim reinstatement are to be decided are settled and well known, they may be summarised in four questions:

• a) Is there an arguable case?

• b) Is there an adequate alternative remedy available?

• c) Where does the balance of convenience lie?

• d) What does the overall justice of the case require?

Arguable case

6 The large majority of evidence in the affidavits relates to events leading up to and culminating in the defendant's dismissal. Not unexpectedly, those involved have differing perceptions of many of the events and the parties draw differing conclusions about the meaning and significance of documents. As none of the evidence has been tested by cross-examination, I cannot resolve those differences and do not attempt to do so.

7 What is clear is that since January 2009 there have been a series of events involving the defendant which the plaintiff says have given cause for concern about the defendant's conduct and his fitness to work as a pilot for Pacific Blue. The plaintiff has investigated each of these events to a greater or lesser extent and responded in various ways. In February 2009 the plaintiff took no action. In April 2009 the plaintiff accepted an offer by the defendant to undergo random drug and alcohol testing. In October 2009, the plaintiff issued the defendant with a final warning. The defendant was also suspended continuously from 19 June 2009 until he was dismissed on 25 May 2010.

8 In respect of each of these events, the plaintiff says that its actions were what a fair and reasonable employer would have done and were therefore justifiable. The defendant challenges the propriety of the plaintiff's actions, both in relation to process and outcome of particular investigations and also the totality of the plaintiff's conduct. Having considered all of the material in the affidavits and having regard to the submission of counsel, I am satisfied that the defendant has an arguable case of unjustifiable dismissal.

9 For the defendant, Mr McGinn invites me to go further and conclude that the defendant has a strongly arguable case which is very likely to succeed in a substantive hearing. That submission is based very largely on the proposition that, in deciding to dismiss the defendant in May 2010, the plaintiff relied on previous events which had already been dealt with, either by condoning them or by the final warning issued in October 2009. Mr McGinn relies on the decision in Ashton v Shoreline Hotel 2 and in particular, what Chief Judge Goddard said at p429 of the report:

It is well established that an employer who discovers misconduct committed by its employee, yet overlooks that conduct and continues the employee's employment, must be taken to have affirmed the employment and cannot subsequently dismiss the employee in reliance on that conduct:

…

10 That case was decided in 1994, and while it may have accurately reflected the state of the law then, it may not do so now. Section 103A of the Employment Relations Act 2000 requires the Authority and the Court to assess an employer's conduct “in all the circumstances”. The width of that requirement was emphasised by the full Court decision in Air New Zealand v V. 3 I note also the decisions of Judge Travis in Butcher v OCS Ltd 4 and Judge Shaw in Arthur D Riley & Co v Wood. 5 In both cases the Court had regard to the decision of the United Kingdom Court of Appeal in Airbus UK Ltd v Webb 6 which was to the effect that all past conduct, even that which had been the subject of expired warnings, might properly be taken into account by an employer in making a decision to dismiss. Taking these more recent developments in the law into account, it seems to me that the decision in the Ashton case can no longer be relied upon as definitive. Overall, I conclude that the defendant has a arguable case, but I go no further than that.

Adequacy of damages

11 It is common ground that, on 27 April 2010, the Director of Civil Aviation suspended the defendant's passenger transport licence as a result of concerns that the defendant may no longer meet the statutory requirement for a fit and proper person to hold such a licence. The parties have differing views about the propriety of that action and how it came about but, for the purposes of this hearing, I assume it was proper. The defendant's licence remains suspended pending the outcome of an investigation by the Director and I am informed by counsel for the defendant that the suspension appears likely to continue until at least 6 October 2010. One result of the defendant's suspension is that his type certification to fly the Boeing 737 aircraft operated by Pacific Blue has lapsed and that, if and when the suspension is lifted by the Director of Civil Aviation, the defendant will have to complete a recertification simulator test. This will take time to arrange and complete and will be at a cost which the defendant estimates to be $12,000.

12 I am also informed from the...