JurisdictionNew Zealand
CourtEmployment Court
JudgeC Inglis
Judgment Date02 March 2012
Docket NumberARC 30/11
Date02 March 2012

[2012] NZEmpC 38


ARC 30/11

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

Wayne Desmond Munro
Ns Security Limited, Formerly Known as Hibiscus Coast Security Limited

Barry Hayes, counsel for plaintiff

No appearance for the defendant (Bharat Bhanabhai, withdrawn as counsel at hearing)

Challenge to an Employment Relations Authority decision which found the plaintiff had suffered an unjustified disadvantage but he had not been constructively dismissed — plaintiff placed on immediate suspension after argument with supervisor-physical scuffle with supervisor after being advised of suspension lead to assault charge on which he was acquitted-no provision in employment agreement for suspension-no disciplinary investigation carried out-plaintiff resigned 16 months after suspension — whether plaintiff unjustifiably disadvantaged or constructively dismissed-whether plaintiff contributed to suspension-whether plaintiff failed to mitigate his loss — whether reduction of any remedies appropriate under s124 Employment Relations Act 2000 (contributing behaviour by employee).

The issues were: whether NS Security had been entitled to suspend M; whether M had been constructively dismissed; whether M was entitled to lost remuneration under s128(2) Employment Relations Act 2000 (“ERA”) (reimbursement) or compensation under s123(1)(c) ERA (remedies - humiliation, loss of dignity, and injury to the feelings of the employee); and, whether M had contributed to the situation under s124 ERA (remedy reduced if contributing behaviour by employee)

Held: The general rule was that there was no legal right to suspend an employee in the absence of a statutory or express contractual right to do so. In unusual cases it could be justifiable if the employer had good reason to believe that the employee's continued presence in the workplace could give rise to some other significant issue. M's return to work pending the outcome of an investigative process would have been problematic given that M and his supervisor had had an altercation and criminal charges were pending. However there was no evidence that M's presence would have given rise to a significant issue or that it could not have been managed.

M's suspension had been without pay and he had not been given an opportunity to comment on it prior to it being imposed. There was a general entitlement to be heard prior to any suspension in accordance with the usual rules of natural justice. While M and D had been involved in a scuffle, it had taken place after M was advised of his suspension. At that time there was no imminent danger or any other circumstance that would have justified summary suspension. The procedure that had been followed had been flawed.

The fact that M was acquitted did not mean that D's complaint of assault was false and D had not breached his obligations by making such a complaint. M had not taken any action to query his suspension or raise any concerns about it. NS Security could not be criticised for not immediately progressing a disciplinary investigation in the circumstances. It was not unusual for such investigations to be deferred in the context of parallel police inquiries until the outcome of related criminal proceedings.

NS Security had communicated with M at an early stage of the process it had intended to follow. M did not raise any concerns about that process. However there was no evidence it had carried out an investigation after M's acquittal and it should have. Although NS Security had adopted an unsatisfactory process, the breach was not of a sufficiently serious nature to warrant the termination action taken by M. M was not constructively dismissed, but his suspension without pay was unjustifiable and he was disadvantaged as a result.

Under s128(2) ERA, lost remuneration as a result of a personal grievance had to be the lesser of either a sum equal to the lost remuneration or three months ordinary remuneration. Regard had to be had to individual circumstances of the case. M had lost at least three months remuneration. There was limited evidence of the steps M had taken to find alternative employment and to mitigate his loss. M had contributed to the situation, he had refused to engage constructively with D, and M had a degree of responsibility for how the incident had unfolded. A reduction of 20% of any award was appropriate in accordance with s124 ERA.

M was entitled to three months ordinary time remuneration less 20% and $4,000 as compensation for humiliation, loss of dignity and injury to feelings less 20%.



Mr Munro's claim is that he was unjustifiably constructively dismissed and disadvantaged by his employer, Hibiscus Coast Security Limited (the company). The claim relates to events dating back to 14 October 2008. On that day, an argument developed between Mr Munro and his supervisor, Mr Dowden. Mr Munro was placed on immediate suspension without pay. He later faced a charge of assault against Mr Dowden, and was subsequently acquitted following a trial by jury. Mr Munro wrote to the defendant company some 16 months later advising that he was resigning from his position and claiming that he had been constructively dismissed.


The Employment Relations Authority found 1 that while Mr Munro had suffered an unjustified disadvantage (because he had been suspended in the absence of a contractual provision and given no opportunity to comment on the proposed suspension), he had not been constructively dismissed. Despite the finding of unjustified disadvantage, no remedies were awarded in his favour. This was on the basis of the Authority's finding that his employment had been terminated on 14 October 2008 (the date of his suspension). Nor did the Authority make any award of compensation for hurt and humiliation, having found no evidence that Mr Munro had been unduly affected by the suspension.


The company chose not to defend the de novo challenge in this Court. Counsel was granted leave to withdraw. The hearing proceeded by way of formal proof. While briefs of intended evidence had been filed on behalf of the company in advance of the hearing, that material was not before the Court by way of evidence. Each of the plaintiff's witnesses gave evidence and it is that evidence, together with the documentation referred to by the witnesses, that I have had regard to in reaching my findings of fact.

The facts

Mr Munro was employed by the defendant company as a security officer in January 2008. On 14 October 2008 he went to his supervisor's house, following completion of his night shift. He transferred some magazines from his company car to the backseat of his private vehicle. Mr Dowden approached Mr Munro and asked him where he had got the magazines from. Mr Munro told him that it was none of his business. By this time, Mr Dowden was holding Mr Munro's car keys and repeated his request. Mr Munro repeated his response. It was at that point that Mr Dowden advised Mr Munro that he was suspended without pay until he got an answer to his question. A scuffle over the car keys ensued.


Mr Munro says that he pushed Mr Dowden away and that Mr Dowden went to hit him. Mr Munro says that he dodged the blow and there was a further scuffle, with Mr Dowden grabbing his shirt and throwing a punch at him.


Mr Munro accepts that he punched Mr Dowden but says it was in self- defence.


Mr Dowden's decision to suspend Mr Munro was confirmed by way of letter dated 14 October 2008 from the General Manager, Mr Preston. Mr Preston advised that he considered that Mr Munro may have committed serious misconduct and that he would be suspended without pay until a complete investigation had been carried out, including any third party investigation. Mr Munro was advised that he would be notified of a meeting to discuss potential outcomes following the investigation. It is clear that the reference to third party investigations was to Police inquiries. The Police “event” number was provided for Mr Munro's reference.


The Police subsequently laid a criminal charge of assault against Mr Munro. Mr Munro was bailed, subject to conditions that he not associate with Mr Dowden or go to Mr Dowden's address.


In November 2008, Mr Munro applied for an unemployment benefit with Work and Income New Zealand, noting on the form that he was unemployed and had been “fired”. He says that he did this on the advice of a WINZ employee. It was confirmed in evidence that an unemployment benefit may be granted to applicants who have been suspended from their employment. It is evident that the company continued to regard Mr Munro as being an employee, given that it wrote to WINZ confirming that Mr Munro had not been fired “in any shape, way or manner” but that he had been suspended without pay.


Mr Munro then took steps to obtain legal advice, but confronted some difficulties in this regard.


The criminal charge was defended and Mr Munro was acquitted following trial by jury on 23 November 2009.


It was not until 22 February 2010 that Mr Munro wrote, through his lawyer, to his employer. He advised that he considered that he had been constructively dismissed. The letter referred to the fact that there was no contractual provision for suspension and that Mr Munro should have been on full pay during the period since the incident. An allegation was advanced that the company had made up a false charge against Mr Munro, failed to investigate the matter or have a meeting with him, and had engaged in abusive and excessive conduct.


In evidence, Mr Munro said that he resigned because the defendant had failed to investigate the incident on 14 October 2008 at all, and because he had been unjustifiably suspended and without pay for 16 months.


The defendant failed to...

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