| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2017] NZERA Auckland 362 |
| Hearing date | 28 Aug 2017 - 29 Aug 17 (2 days) |
| Determination date | 22 November 2017 |
| Member | R Arthur |
| Representation | R Upton ; M O'Neill |
| Location | Hamilton |
| Parties | JCR (2006) Ltd t/a Call Recruitment v McArthur and Anor |
| Other Parties | Mac Recruitment Ltd |
| Summary | BREACH OF CONTRACT – Applicant sought damages against respondent for breaches of Employment Agreement (“EA”) – PENALTY – Applicant sought penalty against respondent for breaches of EA – Recruitment Team Leader and Consultant |
| Abstract | AUTHORITY FOUND –;BREACH OF CONTRACT: First respondent breached non-solicitation clause. Non-solicitation clause in EA was reasonable restriction on first respondent’s post-employment activity. Non-competition clause unreasonably restricted first respondent’s ability to use skills and experience in recruitment. Applicant did not take reasonably prompt steps to mitigate loss incurred by first respondent’s actions. Applicant did not meet the causation and mitigation elements required for damages award. No damages. PENALTY: First respondent deliberately breached EA. Breaches caused business loss to applicant. First respondent profited from breaches. Applicant likely suffered harm by reduced security and continuity in customer relationships. No penalty awarded against second respondent as the actions of first respondent were one and the same. Lack of remorse for breaches. 20 percent of maximum penalty appropriate. 10 percent reduction of maximum warranted where modest level of profit made. Respondent had means to meet penalty. $9,000 penalty appropriate for first respondent. |
| Result | Application granted (penalty) ; Penalty ($9,000) (first respondent)(payable to applicant) ; Application dismissed (damages) ; Costs reserved |
| Main Category | Breach of Contract |
| Statutes | ERA s134(1);ERA s134(2);ERA s135(4);ERA s149;ERA s157(1);ERA s157(2);ERA s157(3);ERA s174E |
| Cases Cited | Airgas Compressor Specialists Ltd v Bryant [1988] 2 ERNZ 42 (EmpC);Aon New Zealand v West (No 2) [2016] NZERA Auckland 74;Boorsboom v Preet [2016] NZEmpC 143;Caffe Coffee (NZ) Ltd v Farrimond [2016] NZEmpC 65;Fuel Espresso Ltd v Hsieh [2007] NZCA 58;Lancom Technology Ltd v Forman [2017] NZERA Auckland 221;Pottinger v Kelly Services (New Zealand) Ltd [2012] NZEmpC 101;Stenhouse (Australia) Ltd v Phillips [1974] AC391, 402 (PC) |
| Number of Pages | 17 |
| PDF File Link: | 2017_NZERA_Auckland_362.pdf [pdf 308 KB] |