| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 324/06 |
| Hearing date | 16 May 2006 |
| Determination date | 20 October 2006 |
| Member | L Robinson |
| Representation | J O'Connell ; C Patterson |
| Location | Auckland |
| Parties | Ayers v Advertising Works Ogilvy Ltd |
| Summary | UNJUSTIFIED DISMISSAL – Respondent purchased another advertising agency and managing director (“MD”) told applicant he “would be a casualty” – MD said applicant not losing his job but presented him with three options; leave, renegotiate employment package without current title, or become Creative Director of Direct Marketing, although staying on same salary package could make him “vulnerable” – Applicant felt only option was to leave - Applicant’s legal advisers raised personal grievance and set out exit package - MD unhappy with communication and publicly berated applicant about it – Applicant took leave and subsequently cleared desk and did not return to work – Immediately prior to mediation, respondent responded to letter raising personal grievance and stated applicant’s job not at risk – Immediately after unsuccessful mediation MD emailed respondent’s staff stating applicant had resigned – Applicant maintained he had not resigned and that email constituted a dismissal – Claimed respondent’s rejection of proposed settlement left employment relationship problem unresolved but continued employment unaffected - Letter raising personal grievance problematic on first reading – Reasonable for respondent to interpret it as resignation – However, Authority concluded statement must be construed in context of what was ultimately communicated – In Authority’s view, it would have been clear applicant essentially communicating a proposal – Resignation conditional upon respondent’s acceptance of proposed settlement – Difficulty arose because correspondence was essentially “without prejudice” advice, but was not noted as such – Applicant had not conducted himself as though he had resigned – Authority did not consider respondent honestly considered applicant had resigned, MD had taken steps to assure applicant no basis for resignation – No resignation – After mediation it was for applicant to decide whether to continue employment – However, MD made decision for him by affirming resignation the basis for which he had earlier taken steps to assure applicant was misconceived – MD’s email after mediation premature and precipitous – Authority seriously doubted whether it was option for applicant to retrieve situation by denying or withdrawing incorrect resignation – Applicant right to consider he had been discarded – Declaration applicant would not be returning was improper - Together with preceding bad faith conduct, this plainly evidenced intention by respondent not to continue employment relationship – Reasonable for applicant to regard respondent’s actions as repudiatory conduct and entitled to elect to affirm it – Unjustified dismissal – Remedies – Inevitable applicant would not have remained at respondent – Applicant’s resolution to depart and potential redundancy were contingencies Authority had regard to when assessing true loss – Employment agreement specified consultative process in relation to potential redundancy – Two months regarded as reasonable consultation period and would have had two months notice – Applicant also entitled to four weeks redundancy compensation – Aggravated damages not available - PENALTY - Authority not persuaded circumstances required punitive response - Penalty declined - Length of service six years, one year in current role - Creative Director of Brand and Direct Marketing |
| Result | Application granted (Unjustified dismissal) ; Reimbursement of lost wages ($93,333.33)(4 months) ; Compensation for humiliation etc ($15,000) ; Compensation for lost benefit (Redundancy compensation)($21,538.46) ; Application dismissed (Penalty) ; Costs reserved |
| Statutes | ERA s113;ERA s123(1)(c)(ii) |
| Cases Cited | Ioane v Waitakere City Council (2004) 17 PRNZ 399 ; [2004] 2 ERNZ 552 (SC);Telecom New Zealand Limited v Nutter [2004] 1 ERNZ 315 |
| Number of Pages | 11 |
| PDF File Link: | aa 324_06.pdf [pdf 62 KB] |