| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 95/06 |
| Hearing date | 21 Oct 2005 |
| Determination date | 29 March 2006 |
| Member | R A Monaghan |
| Representation | JG Turrall ; N Bush |
| Location | Auckland |
| Parties | Ranburn Rest Home Ltd t/a Ranburn Home & Hospital v Senora |
| Summary | BREACH OF CONTRACT - Applicant alleged respondent was employed for minimum term of three years, and she breached agreement by resigning after less than four months - Sought damages for respondent's airfare, board and lodgings and tuition, recruitment fee, expenses in finding replacement, and time spent on matter by applicant's director - Applicant was client of recruitment agency (AIMS"), and AIMS assisted in recruitment of respondent from Philippines - AIMS sent respondent a purported agreement between respondent and an employer (yet to be named) which provided that employer offered to pay certain costs for immigration to New Zealand and that respondent agreed to work for minimum period of time - No suggestion applicant ever became party to this document - Agreement between AIMS and respondent amounted to a "loan" of $5,600 (covering tuition, airfare and board and lodging) which was repayable to AIMS if respondent left employment before end of three years - Applicant paid AIMS for this "loan" and now sought to recover it from respondent - Respondent accepted she owed applicant $5,600 - Applicant approached employment relationship on basis that it could compel respondent to work for entire three year period - Common law prohibition on servile incidents of employment - Nothing in parties' written employment agreement provided for minimum term of three years - Documents showed no clear distinction between possible stand-alone minimum term and bond arrangement - No meeting of minds that there was agreed minimum term of employment - Respondent understood she was expected to work for three years but was also entitled to conclude she could leave earlier but repay "loan" if she did - Authority considered it a stretch to say respondent's obligations concerning repayment of "loan" related to or arose out of employment relationship, but ordered respondent to pay applicant $5,600 - Authority did not accept respondent's alternative submissions that rectification or relief under Contractual Mistakes Act 1977 available - PENALTY - Applicant sought penalty for breach of good faith under s4A Employment Relations Act 2000 - Section 4A did not say whether applications for such penalties were within jurisdiction of Authority or Court - Not enough evidence to persuade Authority that respondent deliberately set out to use her employment with applicant to do no more than obtain work and residence permits - Even if purported resignation for health reasons was spurious, that did not necessarily mean she acted in bad faith in entering into relationship - COUNTERCLAIM - PENALTY - Respondent sought penalty under s63A ERA - Applicant alleged respondent received advice about employment agreement through AIMS - AIMS did not have authority to represent respondent in matters arising out of her rights as an employee - Applicant in breach of s63A ERA but not in interests of justice to order penalty - Costs reserved - Nurse" |
| Result | Application granted (loan" damages) ; Damages ($5,600)(airfare, tuition, board and lodging) ; Application dismissed (other damages, penalties) ; Counterclaim dismissed" |
| Statutes | Contractual Mistakes Act 1977 s6(1);Contractual Mistakes Act 1977 s6(2);Employment Relations Amendment Act (No 2) 2004;ERA s4A;ERA s4A(a);ERA s63A(2);ERA s63A(2)(b);ERA s63A(2)(c);ERA s63A(2)(d);ERA s63A(3);ERA s64;ERA s133;ERA s161(m)(ii);ERA s187(1)(b) |
| Cases Cited | Gibbs and Ors v Crest Commercial Cleaning Ltd [2005] 1 ERNZ 399;Ranburn Rest Home Ltd t/a Ranburn Home & Hospital v Senora unreported, R Monaghan, 28 July 2005, AA 288/05 |
| Number of Pages | 8 |
| PDF File Link: | aa 95_06.pdf [pdf 51 KB] |