Pacific Blue Employment & Crewing Ltd v B Chch

JurisdictionNew Zealand
CourtEmployment Court
JudgeA A Couch
Judgment Date20 August 2010
Docket NumberCRC 35/10
Date20 August 2010

[2010] NZEMPC 112


CRC 35/10

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

Pacific Blue Employment & Crewing Ltd

John Rooney, counsel for plaintiff

Tim McGinn, counsel for defendant

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.

The issue on appeal was whether reinstatement was an appropriate remedy given B's passenger transport licence had been suspended and he was unable to perform his job.

Held: The principles relevant to interim reinstatement were: was there an arguable case; was there an alternative remedy available; where did the balance of convenience lie and what did the overall justice of the case require.

B's passenger transport licence was suspended pending the outcome of an investigation by the Director of Civil Aviation and was likely to continue until at least 6 October 2010. The ERA had scheduled its investigation meeting of the substantive claim to take place on 18–20 October 2010. The result of those factors was that there was no realistic prospect that B would be lawfully able to fly again before the ERA's investigation. The sole consequence for B if he did not have interim reinstatement was that he would not receive his salary.

The only substantial factor advanced by B in relation to the balance of convenience was his financial position. B argued that he could not meet his outgoings without the ongoing payment of his salary; however any financial difficulties B had were due to his own financial imprudence, not the actions of P Ltd. Following his dismissal he was paid holiday pay and 3 months salary. Thus since his dismissal B had received payment of money sufficient to maintain his previous level of income until the second week of September. He could not argue that he was financially disadvantaged to date and that the cessation of salary now gave rise to financial hardship that was due to his own choices about spending.

The unusual and significant feature of the case was B's suspended air passenger transport licence. The effect being that B was unable to fly commercial aircraft and therefore unable to perform his side of the employment bargain. His inability to fly also meant that B was unable to enjoy the non-monetary benefits which might otherwise flow from reinstatement such as accumulation of flying hours, increased experience and advancement in seniority. The effect of interim reinstatement was solely to provide B with money at the expense of P Ltd.

Successful reimposition of the employment relationship required the parties to be able to fully discharge their responsibilities. The only significant factor favouring interim reinstatement was B's financial situation. In terms of overall justice he was largely responsible for that situation. The overall justice of the matter did not favour interim reinstatement.

It was for the ERA to determine whether the prejudicial allegations against B were proved. Therefore it was wrong to pre-empt the ERA's power to control publication of material which was unduly prejudicial by identifying B now. The decision not to grant interim reinstatement negated P Ltd's argument that it would damage its reputation to be seen to continue to employ a person against whom serious allegations had been made.

Appeal allowed. Interim reinstatement refused. Order prohibiting publication of any information likely to identify B which was to remain in effect until further order of the Court of the ERA.



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.


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.

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.


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.


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

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.


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.


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.


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 Hotel2 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:


That case was decided in 1994, and while it may have accurately reflected the state of the law then,...

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