| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2013] NZERA Auckland 241 |
| Determination date | 10 June 2013 |
| Member | K J Anderson |
| Representation | J Mills, C Hall ; P Chemis |
| Parties | Air New Zealand Ltd v Kerr |
| Summary | PRACTICE AND PROCEDURE – Application for removal to Employment Court (“EC”) – Authority found timeframe for matters to develop not particularly unusual in current matter and respondent had ability to seek declaratory determination without waiting for applicant to commence proceedings – Found respondent’s claim in all circumstances matter should be determined by EC not proven to extent required – Found whether enforced garden leave could be seen as additional restraint added to post-employment restraint of trade and making overall restraint unreasonable important question of law likely to arise – Matter removed to EC – General manager |
| Abstract | Respondent employed by applicant as general manager. Respondent sought removal of matter to Employment Court (“EC”) on grounds important questions of law likely to arise and in all circumstances matter should be determined by EC. Parties disputed whether respondent was, or would be, in breach of restraint of trade clause (“ROT”) in respondent’s employment agreement (“EA”). Respondent accepted position with applicant’s competitor (“J”) and tendered resignation from applicant. Applicant placed respondent on garden leave under EA during respondent’s six month notice period. Respondent claimed part of ROT prohibiting respondent from being involved with applicant’s competitor for six months unenforceable. Respondent claimed fact on garden leave meant would be out of industry for six months when resignation from applicant took effect and further restraint of six months under ROT would have significant and detrimental impact on respondent. Respondent claimed whether period of garden leave involving employee’s complete removal from industry constituted ROT, and extent period of garden leave should be considered when assessing reasonableness of post-employment ROT important questions of law likely to arise. Applicant claimed relevance of garden leave period only one of number of factors to be considered by Authority. Respondent claimed applicant delayed progress of matter and respondent’s commencement of employment with J could be delaying if matter went through Authority and EC. Applicant denied any undue delay in pursuing proceedings and claimed possible to have matter heard by both Authority and EC prior to respondent’s proposed commencement of employment with J.;AUTHORITY FOUND –;PRACTICE AND PROCEDURE: Timeframe for matters to develop not particularly unusual in current matter and respondent had ability to seek declaratory determination without waiting for applicant to commence proceedings. Possible delays in hearing matter not valid reason alone for removing matter to EC and challenge to Authority determination not definite possibility. Respondent’s claim in all circumstances matter should be determined by EC not proven to extent required. Whether enforced garden leave could be seen as additional restraint added to post-employment ROT and making overall restraint period unreasonable important question of law likely to arise. Question likely to have consequences for parties and others given common use of garden leave and post-termination ROTs in EAs. Overseas judgments supported removal of matter. Matter removed to EC. |
| Result | Application granted ; Costs reserved |
| Main Category | Practice & Procedure |
| Statutes | ERA s157;ERA s161;ERA s178;ERA s178(2);ERA s178(2)(a);ERA s178(2)(d) |
| Cases Cited | Credit Suisse Asset Management Ltd v Armstrong [1996] ICR 882;Credit Suisse First Boston (Europe) Ltd v Padiachy [1999] ICR 569;Hanlon v International Educational Foundation (NZ) Inc [1995] 1 ERNZ 1;Lloydd v Diagnostic Medlab Services Ltd [2009] ERNZ 42;NZ Amalgamated Engineering, Printing & Manufacturing Union Inc v Carter Holt Harvey Ltd [2002] 1 ERNZ 74;Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126;Provident Financial Group v Hayward [1989] 3 All ER 298;Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852;Wesoky v Village Cinemas International Pty Ltd [2001] FCA 32;William Hill Organisation Ltd v Tucker [1999] ICR 291 |
| Number of Pages | 12 |
| PDF File Link: | 2013_NZERA_Auckland_241.pdf [pdf 189 KB] |