| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 174/09 |
| Hearing date | 26 May 2009 |
| Determination date | 02 June 2009 |
| Member | R Arthur |
| Representation | L Matson (in person) ; A Nimkovsky |
| Location | Auckland |
| Parties | Matson v Fourth Generation Solutions Ltd & Anor |
| Other Parties | Nimkovsky |
| Summary | PRACTICE AND PROCEDURE – Identity of employer – Whether applicant employed by second respondent (“N”) personally or by first respondent company (“FGSL”) - N prepared written employment agreement (“EA”) using Department of Labour’s Employment Agreement Builder – EA stated employer was N as director of FGSL – Authority found N named self as employer in EA - Found Authority could not in equity and good conscience permit N to benefit from limited liability regime where documentation not right – N employer in personal capacity - UNJUSTIFIED DISMISSAL – Redundancy – N sold business while applicant on leave for medical operation – New owner to take over applicant’s position himself – N called applicant and advised business sold, no position for applicant with new owner, and “not much point” in applicant returning to work in meantime – Applicant raised grievance – Authority considered whether EA existed - EA prepared by N but not signed and returned by applicant – Before grievance raised, N stated willing to comply with last copy of EA which considered applicant had verbally agreed upon – Authority found from then, if not sooner, agreement existed with terms as set out in EA – EA contained separate restructuring and redundancy clauses - N argued viewed clauses as alternatives – N believed sale of business was “restructuring” therefore redundancy clause and redundancy compensation did not apply – N argued view confirmed by information officer (“DOL officer”) at Department of Labour contact centre – Authority found N’s view plainly incorrect – Found sale of business was initially restructuring – However, when applicant’s employment not transferred and applicant became surplus to N’s requirements due to sale, applicant instead redundant - Redundancy clause applied – Authority found applicant’s dismissal by telephone was abrupt, unjustified action by N as no proper consultation about redundancy arrangements – Found applicant had personal grievance - PENALTY – Applicant sought penalty for lack of good faith in N’s handling of sale of business - Authority found N narrowly met minimum good faith consultation obligations for sale of business and transfer of employment – Found N’s erroneous interpretation of EA did not amount to lack of good faith warranting penalty because N relied on advice from DOL officer – Authority listened to copy of conversation with DOL officer – Authority found DOL officer told N unequivocally that only restructuring clause applied, not redundancy clause – Found advice wrong and contributed to wrong done to applicant – Found mistaken advice did not excuse N from meeting obligations to applicant - REMEDIES – No contributory conduct - Redundancy clause in EA entitled applicant to three weeks paid notice period and two weeks redundancy compensation - Interest on sum for past twelve months awarded - Applicant off work when made redundant and on sickness benefit at time of determination – No medical evidence to support applicant’s claim that distress over losing job and being wrongfully denied entitlements contributed to ongoing health difficulties – Compensation award modest and limited to distress caused by grievance not other life tribulations – COSTS – Applicant represented self at investigation meeting but incurred actual costs of $1,200 obtaining advice preparing claim – Applicant entitled to reasonable contribution to costs, other than costs relating to mediation - $870 costs and disbursements awarded - Lunch bar manager |
| Result | Application granted (unjustified dismissal) ; Application dismissed (penalty) ; Contractual redundancy compensation and pay in lieu of notice ($4,326.90) ; Interest ($202.50) ; Compensation for humiliation etc ($3,000) ; Costs in favour of applicant ($800) ; Disbursements in favour of applicant ($70)(filing fee) |
| Main Category | Personal Grievance |
| Number of Pages | 8 |
| PDF File Link: | aa 174_09.pdf [pdf 25 KB] |