| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Christchurch |
| Reference No | [2012] NZERA Christchurch 186 |
| Hearing date | 29 Nov 2011 |
| Determination date | 30 August 2012 |
| Member | H Doyle |
| Representation | M Henderson ; E Coats |
| Location | Christchurch |
| Parties | Cook v Magnummac Ltd |
| Summary | UNJUSTIFIED DISADVANTAGE – UNJUSTIFIED DISMISSAL – Constructive Dismissal – Applicant claimed unjustifiably disadvantaged by respondent’s failure to pay increased remuneration and failure to act in good faith – Applicant claimed unjustifiably dismissed by respondent – Authority found applicant’s manager (“F”) and F’s manager (“S”) had apparent authority to bind respondent to variation of applicant’s employment agreement (“EA”) – Found offer and acceptance of variation to applicant’s EA – Found essential terms of parties’ agreement sufficiently certain – Found applicant commenced new role – Found unfair if variation to applicant’s EA unenforceable because of failure to comply strictly with requirement for written variation – Found parties’ agreement binding – Applicant unjustifiably disadvantaged by respondent’s failure to pay increased remuneration – Applicant unjustifiably disadvantaged by respondent’s failure to investigate situation fully or be responsive and communicative when applicant continued to raise issues – Found applicant’s resignation caused by respondent’s failure to pay increased remuneration and failure to act in good faith towards applicant when advised increased remuneration not being paid – Found applicant’s resignation reasonably foreseeable – Found applicant constructively dismissed – Dismissal unjustified – REMEDIES – No contributory conduct – Respondent to pay applicant $9,230 reimbursement of lost wages – $10,000 compensation appropriate – ARREARS OF WAGES AND HOLIDAY PAY – Applicant sought arrears of wages and holiday pay – Respondent to pay applicant $27,020 arrears of wages – Interest payable – Respondent to pay applicant $2,161 arrears of holiday pay – PENALTY – Applicant sought penalty for respondent’s failure to comply with good faith obligations – Found respondent’s breach of good faith obligations serious but not sustained – No penalty – Tertiary account manager |
| Abstract | Applicant employed by respondent as tertiary account manager. Applicant claimed unjustifiably disadvantaged by respondent’s failure to pay increased remuneration and failure to act in good faith. Applicant claimed unjustifiably dismissed by respondent. Applicant sought arrears of wages and holiday pay and penalty for respondent’s failure to comply with good faith obligations. Applicant’s manager (“F”) asked if applicant willing to undertake tertiary account manager role. Following various discussions, F’s manager (“S”) told applicant remuneration package requested by applicant acceptable and applicant agreed to restraint of trade clause (“ROT”). Subsequently F told applicant S agreeable to applicant’s requested remuneration package and F and applicant shook hands. Respondent claimed increase in remuneration required approval of human resource manager (“M”) and chief financial officer (“R”). Respondent claimed F and S had no actual or apparent authority to bind respondent to variation of applicant’s employment agreement (“EA”). Respondent claimed no offer of variation made to applicant. Respondent claimed any offer insufficiently certain as extent of ROT unclear and no definition of new position. Respondent claimed EA required any variation to be in writing. After applicant not paid increased remuneration, F e-mailed M and R setting out remuneration package agreed by S. R considered no approval given for increased remuneration but no discussion of view with applicant, F or S. Subsequent e-mails from applicant failed to resolve issue. After F’s resignation, applicant’s new manager (“R”) claimed raised applicant’s concerns about not receiving increased remuneration with M but M ambivalent. During meeting applicant and R claimed respondent’s chief executive (“W”) told applicant would resolve issue and W called M. M called applicant and advised to effect that M would resolve issue. After applicant did not hear further, applicant contacted M and told that F and S had no authority to offer applicant new remuneration package. After R’s resignation, applicant’s new manager (“O”) agreed to investigate applicant’s issues. O concluded no written evidence supporting applicant’s claim offered new role and increased remuneration. O proposed offering applicant new role with increased remuneration backdated to point two and a half months after applicant claimed commenced new role. Applicant resigned. Applicant claimed constructively dismissed.;AUTHORITY FOUND –;UNJUSTIFIED DISADVANTAGE – UNJUSTIFIED DISMISSAL: Leave reserved for applicant to apply to Authority to amend name of employer in event respondent not applicant’s employer after specified date. Applicant did not rely on argument F or S had actual authority to offer new remuneration package. S member of respondent’s executive management team and reported directly to W. Respondent placed S in position generally regarded in outside world as carrying authority to reach agreement about change in employee’s role. Applicant unaware S had no authority to bind respondent to variation of applicant’s EA and reasonable for applicant to believe S had such authority or could confer such authority on F. Applicant’s EA signed by person holding same position as F and, to extent F advised applicant had to obtain agreement from S, reasonable for applicant to conclude authorisation obtained. S and F had apparent authority to bind respondent to variation of applicant’s EA. Applicant accepted offer made by S involving new role, remuneration package and ROT. Offer confirmed by F and immediate start date in new role agreed. No evidence offer conditional on approval from M or R. Duration of ROT essential element of clause and applicant aware could not work elsewhere in same sort of role for three months. Requirements of new role capable of being assessed and monitored. Essential terms of parties’ agreement sufficiently certain. Applicant commenced new role. Unfair if agreement unenforceable because of failure to comply strictly with requirement for written variation. Parties’ agreement binding. Applicant unjustifiably disadvantaged by respondent’s failure to pay increased remuneration. Applicant unjustifiably disadvantaged by respondent’s failure to investigate situation fully or be responsive and communicative when applicant continued to raise issues. Applicant’s resignation caused by respondent’s failure to pay increased remuneration and failure to act in good faith towards applicant when advised increased remuneration not being paid. Applicant’s resignation reasonably foreseeable. Applicant constructively dismissed. Dismissal unjustified. REMEDIES: No contributory conduct. Respondent to pay applicant $9,230 reimbursement of lost wages. $10,000 compensation appropriate.;ARREARS OF WAGES AND HOLIDAY PAY: Respondent to pay applicant $27,020 arrears of wages. Interest payable. Respondent to pay applicant $2,161 arrears of holiday pay.;PENALTY: Respondent’s breach of good faith obligations serious as deliberate decision not to talk to F and/or S about whether agreement reached with applicant. Breach not sustained. No penalty. |
| Result | Applications granted (unjustified disadvantage)(unjustified dismissal)(arrears of wages and holiday pay); Reimbursement of lost wages $9,230.77; Compensation for humiliation etc ($10,000); Arrears of wages ($27,020.23); Interest (5%); Arrears of holiday pay ($2,161.18); Application dismissed (penalty); Costs reserved |
| Main Category | Personal Grievance |
| Statutes | ERA s4A;ERA s103A;ERA Second Schedule cl11;Judicature Act 1908 s87(3) |
| Cases Cited | Clark v Nelson Marlborough District Health Board [2002] 2 ERNZ 483;Fletcher Challenge Energy Ltd v Electricity Corp of New Zealand Ltd [2002] 2 NZLR 433;Harris v CentrePort Ltd unreported, G Wood, 14 January 2005, WA7/05;Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549;Webb v P D L Holdings Ltd unreported, H Doyle, 17 January 2003, CA2/03 |
| Number of Pages | 33 |
| PDF File Link: | 2012_NZERA_Christchurch_186.pdf [pdf 389 KB] |