Sai Systems Ltd v Graeme Bird NZEmpC Wellington

• Jurisdiction: New Zealand
• Judge: Judge A D Ford
• Judgment Date: 22 September 2014
• Court: Employment Court
• Docket Number: WRC 12/14
• Date: 22 September 2014

In the Matter of a challenge to a determination of the Employment Relations Authority

Between

Sai Systems Limited

Plaintiff

and

Graeme Bird

Defendant

[2014] NZEmpC 177

WRC 12/14

IN THE EMPLOYMENT COURT WELLINGTON

Challenge to the Employment Relations Authority determination declining the plaintiff's joinder application — defendant was cleaner employed by defendant which had a cleaning contract with a school — defendant claimed that his employment had been transferred to plaintiff under Part 6A Employment Relations Act 2000 (ERA) (Continuity of employment if employees' work affected by restructuring) as it had taken over the cleaning contract from his previous employer — claimed plaintiff had refused or failed to honour the terms and conditions of employment that he had enjoyed immediately before it took over the cleaning contract — defendant sought joinder of previous employer on the basis it was entitled to be indemnified by previous employer — whether joinder was a procedural issue of the Authority so that the Court was barred from hearing the application under s179(5) ERA — whether joinder should be refused as the Authority lacked jurisdiction to order indemnity relief — whether there was an employment relationship between the two employers so that joinder should be ordered under s189(1) ERA (equity and good conscience).

Counsel:

B Buckett, counsel for the plaintiff

T Kennedy, counsel for the defendant

JUDGMENT OF Judge A D Ford

Introduction

1 The plaintiff has challenged by way of a de novo hearing an oral determination of the Employment Relations Authority (the Authority) dated 24 March 2014 in which the Authority declined an application by the plaintiff to join another party as a respondent to the proceedings. 1 Both parties agreed that the challenge could be dealt with on the papers.

Background

2 The Authority's determination was commendably brief. It did not deal with the facts of the substantive matter before it, but from the pleadings filed in this Court, the background that is not in dispute can probably best be summarised as follows.

3 Mr Bird was employed as a cleaner and cleaning supervisor by Seyclean Schools Ltd (Seyclean) which had a cleaning contract with Heretaunga College, Wellington. Seyclean's cleaning contract ceased on 19 April 2013 and Mr Bird claims that his employment was then transferred under Part 6A of the Employment Relations Act 2000 (the Act) to Sai Systems Ltd which took over the cleaning contract on 20 April 2013.

4 Most of the other facts pleaded in the statement of claim filed in this Court are disputed. It appears, however, that Mr Bird issued proceedings in the Authority in July 2013 against the defendant, Sai Systems Ltd (Sai), claiming that Sai had refused or failed to honour the terms and conditions of employment that he had enjoyed immediately before it took over the cleaning contract from Seyclean. Mr Bird filed an affidavit in support of his challenge in which he claimed that he is owed over $15,000 (gross) by Sai in wage arrears. He deposed that he does not have any issue with Seyclean.

5 Part 6A of the Act deals with the continuity of employment if an employee's work is affected by restructuring. Its stated object is to provide protection to specified categories of employees known colloquially as “vulnerable workers” if, as a result of a proposed restructuring, their work is to be performed by another person. The categories of workers include employees providing cleaning services for schools. Relevantly and in essence, it gives employees affected by their employer's loss of a cleaning contract the right to elect to transfer to the new contractor on the same terms and conditions of employment.

6 In her submissions, Ms Buckett, counsel for Sai, alleges that Mr Bird's employment was not transferred to Sai pursuant to Part 6A of the Act because Sai was never made aware of any election to transfer. Ms Buckett alleges that Mr Bird was employed as a result of a separate employment agreement reached between Mr Bird and Sai. In counsel's words: “Therefore, it would be substantially inequitable and unfair for Sai to be held liable for Seyclean's default.”

7 The issues raised by counsel for the respective parties regarding the application of Part 6A of the Act to the facts of this case will, of course, be central to the Authority's part-heard substantive investigation.

The Authority's determination

8 In its determination, the Authority records that a one-day investigation meeting into Mr Bird's claims against Seyclean was held on 6 March 2014. It went on to state:

[2] … The meeting was adjourned shortly after 5 p.m. when it became clear there was insufficient time to hear evidence from all witnesses and commitments of counsel prevented its continuation into the evening. Arrangements were then made to reconvene the investigation meeting on 24 March 2014. Following this an application for the joinder of Seyclean was made on 14 March 2014.”

9 The Authority accepted that it had jurisdiction under's 221(a) of the Act to direct parties to be joined at any stage of the proceedings, either of its own volition or on the application of any of the parties. It noted that its discretion to make any such order is for the purpose of enabling the matter to be more effectually disposed of according to the substantial merits and equities of the case.

10 In concluding that Seyclean should not be joined as a party, the Authority stated:

[6] The reasons for not joining Seyclean are as follows:

• i. The general rule is “ that it is for the plaintiff to decide who he or she will sue …”. Mr Bird has not requested, and nor has he agreed to, his former employer, Seyclean, being joined to the...