| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2013] NZERA Auckland 584 |
| Hearing date | 22 Oct 2013 |
| Determination date | 19 December 2013 |
| Member | R Larmer |
| Representation | M Smyth ; S Ryan (in person), J Wilson (in person) |
| Location | Auckland |
| Parties | Bryan v Ultimate Ltd (in liquidation) and Ors |
| Other Parties | Ultimate Temps Ltd, Ryan, Wilson |
| Summary | PRACTICE AND PROCEDURE – Identity of employer – Applicant’s initial employer (“TURCL”) in liquidation – Applicant unaware of TURCL’s liquidation or change of employer – Whether applicant became employed by first respondent – ARREARS OF HOLIDAY PAY – Applicant sought arrears of holiday pay and KiwiSaver contribution – PENALTY – Applicant sought penalty for third and fourth respondents’ failure to provide written employment agreement (“EA”), breach of good faith, breach of Holidays Act 2003 and failure to pay KiwiSaver contributions to Inland Revenue Department (“IRD”) – Applicant sought penalty for third and fourth respondents inciting, instigating, aiding and/or abetting (“inciting”) breaches of applicant’s EA – Applicant sought penalty for second and third respondent obstructing or delaying Authority investigation – Cancellation of agreed mediation on day before mediation due to occur – UNJUSTIFIED DISMISSAL – Constructive Dismissal – Applicant claimed unjustifiably dismissed by respondent – Applicant resigned but subsequently refused to work remainder of notice period when discovered TURCL in liquidation – Senior recruitment consultant |
| Abstract | AUTHORITY FOUND –;PRACTICE AND PROCEDURE: Applicant’s employment with TURCL continued until liquidation. Nothing in way business operated after TURCL’s liquidation to alert employees of changes in ownership. Applicant could not have agreed to enter employment relationship with first respondent when applicant unaware of first respondent’s existence. Fourth respondent continued to run same business after TURCL’s liquidation and actively led applicant to believe nothing changed. Applicant employed by fourth respondent.;ARREARS OF HOLIDAY PAY: Applicant unable to recover annual holiday entitlements owed by TURCL due to TURCL’s liquidation. Commission payments earned by applicant should have been included in calculating holiday pay entitlement and fourth respondent not entitled to accrue rather than pay holiday pay attributable to commission earnings. Holidays taken in advance by applicant to be deducted from amount owed to applicant. Fourth respondent to pay applicant $5,288 arrears of holiday pay and KiwiSaver contribution. Interest payable.;PENALTY: No penalty appropriate for failure to pay holiday pay on termination of applicant’s employment with TURCL or fourth respondent. No penalty appropriate for cancellation of mediation. TURCL breached applicant’s EA by breaching good faith duty, failing to provide applicant with contractual notice upon termination of employment, calculating and paying holiday pay incorrectly, failing to inform liquidator applicant substantial creditor, failing to remit KiwiSaver contributions to IRD, reporting applicant’s gross earnings to IRD incorrectly, failing to pay correct PAYE to IRD and informing IRD incorrectly applicant’s employment terminated. Fourth respondent’s acts and omissions as owner and manager of business directly resulted in TURCL’s breaches of applicant’s EA. Third respondent’s acts and omissions directly caused TURCL to breach financial contractual obligations owed to applicant. Third respondent’s failure to inform TURCL’s liquidator that applicant creditor incited liquidator’s breach of good faith by not giving applicant notice of termination. Third and fourth respondent incited TURCL’s breaches of applicant’s EA. TURCL’s breaches of EA incited by third and fourth respondents deliberate, serious and sustained, benefitted third and fourth respondents personally and deprived applicant of money applicant entitled to. Fourth respondent breached applicant’s EA by failing to provide intended or actual written EA, failing to communicate over critical matters such as identity of applicant’s employer, failing to pay correct holiday pay, failing to remit KiwiSaver contributions to IRD, failing to inform IRD of applicant’s commission payments and informing IRD applicant’s employment terminated. Fourth respondent’s breaches of applicant’s EA either wilfully blind or deliberate. Fourth respondent not active and constructive in establishing and maintaining productive employment relationship in which parties responsive and communicative, directly misled and deceived applicant about identity of applicant’s employer and failed to comply with bargaining obligations. Third respondent incited fourth respondent’s breaches of applicant’s EA by not ensuring fourth respondent met financial contractual obligations towards applicant. $10,000 penalty appropriate for third respondent inciting TURCL’s breaches of applicant’s EA and $10,000 penalty appropriate for third respondent inciting fourth respondent’s breaches of applicant’s EA. $10,000 penalty appropriate for fourth respondent inciting TURCL’s breach of applicant’s EA and $10,000 penalty appropriate for fourth respondent’s breaches of applicant’s EA.;UNJUSTIFIED DISMISSAL: Scale of breaches of applicant’s EA only apparent after applicant took legal advice. Breaches of EA serious, ongoing and fundamental and reasonably foreseeable applicant would not continue working under such circumstances. Applicant constructively dismissed. Dismissal unjustified. REMEDIES: No contributory conduct. Fourth respondent to pay applicant $2,691 reimbursement of lost wages. |
| Result | Applications granted (arrears of holiday pay)(penalty)(unjustified dismissal) ; Arrears of holiday pay and KiwiSaver contribution ($5,288.23) ; Interest (5%) ; Penalty (third respondent)($15,000)(payable to applicant)($5,000)(payable to Crown) ; Penalty (fourth respondent)($15,000)(payable to applicant)($5,000)(payable to Crown) ; Reimbursement of lost wages ($2,691.84) ; Application partially granted (practice and procedure) ; Costs reserved |
| Main Category | Penalty |
| Statutes | ERA s4;ERA s4(1);ERA s4(1)(b);ERA s4(1A)(b);ERA s4A(a);ERA s60;ERA s63;ERA s63A(2);ERA s64;ERA s65(2);ERA s103A;ERA s103A(3);ERA s124;ERA s128(2);ERA s130;ERA s131;ERA s132(2);ERA s134(2);ERA s134A;ERA s135(2);ERA s135(5);ERA s174(b);Holidays Act 2003;Holidays Act 2003 s8;Holidays Act 2003 s9;Holidays Act 2003 s27(1)(b);Judicature Act 1908 s87;Judicature (Prescribed Rate of Interest) Order 2011 r14;Minimum Wage Act 1983 |
| Cases Cited | Cuttance (t/a Olympus Fitness Centres) v Purkis [1994] 2 ERNZ 321;Xu v McIntosh [2004] 2 ERNZ 448 |
| Number of Pages | 30 |
| PDF File Link: | 2013_NZERA_Auckland_584.pdf [pdf 329 KB] |