| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2014] NZERA Auckland 181 |
| Hearing date | 24 - 27 Feb 2014 |
| Determination date | 09 May 2014 |
| Member | P R Stapp |
| Representation | H Gilbert, N Watson ; S Corlett, B Atkins |
| Location | Auckland |
| Parties | Holmes and Mackay t/a Papakura East Medical Centre v Hull |
| Summary | PRACTICE AND PROCEDURE - Applicants sought extension of limitation period to enable recovery of losses beyond limitation period - BREACH OF CONTRACT - Applicants sought damages for respondent's breach of employment agreement - Discrepancies in financial accounts - Private investigators - Forensic accountants - Live audit - CCTV - PENALTY - Applicants sought penalty for respondent's breach of good faith and breach of employment agreement - COUNTERCLAIM - UNJUSTIFIED DISADVANTAGE - UNJUSTIFIED DISMISSAL - Constructive Dismissal - Respondent claimed unjustifiably disadvantaged by false allegations and unjustifiably dismissed by applicants - Verbal threat against respondent by un-named patient - Practice manager / morning receptionist |
| Abstract | AUTHORITY FOUND -;PRACTICE AND PROCEDURE: Difficult to resolve issues more than six years later. Applicants responsible for inadequate arrangements enabling money to go missing without any checking and monitoring of financial management systems. Application dismissed. Applicants only able to recover losses from previous six years.;BREACH OF CONTRACT: Respondent likely to have used information in banking list to make assessment of money available for banking from cash received. Respondent took advantage of applicants' poor accounting records system and poor cash handling system with inadequate monitoring and controls. Regular afternoon reconciliations undertaken. No evidence other employees or family members took missing money. Respondent knew of difference between money banked and money recorded in banking lists and cash received. Respondent's explanations not supported based on respondent's role, activities, extensive CCTV footage during live audit and contrary evidence. Respondent's evidence questioned seriously under cross-examination. Respondent responsible for managing and banking money despite inadequate controls, checks and written policies. More likely than not respondent responsible for missing money and took money home. Applicants entitled to recover $103,378. Not appropriate to award all special damages claimed by applicants. Applicants entitled to $12,029 special damages for costs of audit and scope investigation. Not appropriate to award damages for mental distress. Respondent to pay applicants $115,407 damages. Interest payable on amount of missing money. Leave reserved for parties to return to Authority for recalculation of quantum of missing money if necessary.;PENALTY: Difficult to prove breaches given passage of time and applicants' failure to put in place own controls. Respondent returned some money. Problem addressed by award of damages. No penalty.;COUNTERCLAIM - UNJUSTIFIED DISADVANTAGE - UNJUSTIFIED DISMISSAL: Applicants had grounds to investigate very serious matter of alleged misappropriation of money and obliged to put allegations to respondent. No unjustified disadvantage. Applicants entitled to conclude patient's threat would not be carried out and patient not ongoing risk. Claim of unsafe work environment unsustainable. No constructive dismissal. |
| Result | Application granted (breach of contract) ; Damages ($115,407.65) ; Interest (5%) ; Applications dismissed (practice and procedure)(penalty)(counterclaim - unjustified disadvantage)(counterclaim - unjustified dismissal) ; Costs reserved |
| Main Category | Breach of Contract |
| Statutes | ERA s134;ERA s135(5);ERA s142;ERA s221;Judicature (Prescribed Rate of Interest) Order 2011 |
| Number of Pages | 15 |
| PDF File Link: | 2014_NZERA_Auckland_181.pdf [pdf 248 KB] |