| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 415/09 |
| Hearing date | 22 Jun 2009 - 24 Jun 2009 (3 days) |
| Determination date | 23 November 2009 |
| Member | R A Monaghan |
| Representation | E Butcher ; D Watson |
| Location | Auckland |
| Parties | McMahon v Imarda New Zealand Ltd |
| Summary | BREACH OF CONTRACT – Applicant claimed entitled to 10 percent equity share in respondent due to oral agreement – Respondent argued no agreement made and discussions exploratory only – Parties discussed possibility of applicant’s employment with respondent – Series of email exchanges between parties regarding employment proposals – Applicant proposed 20 percent equity share and would be chief executive officer of respondent’s North American business – Applicant visited New Zealand and further meetings held discussing salary, equity share and commission rate – No written agreement made and applicant not on respondent’s payroll – Following year, applicant offered written EA – EA provided applicant vice president of respondent’s North American business - EA did not provide for equity share – Applicant sought agreement from respondent for 10 percent equity share – Applicant declined 2.5 percent share offer – Applicant accepted EA – Authority found meetings did not amount to employment offer and no oral agreement entitling applicant to equity share made – Found earlier discussions exploratory – No breach - UNJUSTIFIED DISADVANTAGE – Applicant made series of inaccurate forecasts – Respondent’s email advised applicant performance poor and would be “taking a position on your future employment” – Applicant explained inaccuracy due to changes in information received from customers – Applicant asked respondent to provide performance guidelines – Respondent considered explanation inadequate and gave applicant 30 days to produce new report – Respondent sent further email stating applicant not fulfilling role, should be dismissed for poor performance and needed to improve performance – Applicant advised respondent email messages caused stress and suffering from health conditions – Respondent replied explanation inadequate and assumed applicant’s last email meant applicant gave up current role and would be treated as salesperson - Applicant claimed emails were dismissal threats – Claimed unjustified demotion – Authority found respondent entitled to be concerned about applicant’s inaccurate forecasts as had significant consequences for respondent – Found, however, respondent’s approach to applicant’s performance unjustified – Found emails did not adequately identify performance matters – Found applicant given limited time to respond – Found no discussion to address issues held – Found emails may not have been intended as dismissal threats but amounted to bullying – Unjustified disadvantage – Found despite fact respondent assumed applicant gave up current role, no changes made to applicant’s EA and duties to amount to demotion – No disadvantage – REMEDIES – No contributory conduct – Lost wages award declined as no remuneration lost – Found while disadvantage caused stress, respondent had reason to express anger, therefore $5,000 compensation appropriate - UNJUSTIFIED DISMISSAL – Constructive dismissal – Applicant claimed respondent’s breach of good faith obligations sufficiently serious to make resignation reasonably foreseeable – Applicant delayed resignation for four months until specified project completed – Applicant’s resignation provided had “no choice but to leave” as respondent’s treatment of applicant destroyed employment relationship – Authority found while was bullying, respondent entitled to be angry as applicant’s inaccurate forecasts put respondent in jeopardy – Found while respondent’s conduct inconsiderate, did not constitute repudiatory conduct sufficient to justify termination of employment – Found applicant’s decision to delay resignation and ability to continue working suggested employment relationship not destroyed – Found overall, email exchanges did not make resignation reasonably foreseeable – No constructive dismissal – Vice President |
| Result | Application granted (Unjustified disadvantage) ; Applications dismissed (Breach of contract)(Unjustified dismissal) ; Compensation for humiliation etc ($5,000)(Disadvantage) ; Costs reserved |
| Main Category | Breach of Contract |
| Cases Cited | Auckland Electric Power Board v Auckland Provincial District Local Authority Officers’ IUOW [1994] ERNZ 168;Auckland Shop Employees Union v Woolworths (NZ) Ltd [1985] 2 NZLR 372;Wellington, Taranaki and Marlborough Clerical etc IUOW v Greenwich V.V & C.F. (t/a Greenwich and Associates Employment Agency & Complete Fitness Centre) [1983] ACJ 965 (AC) |
| Number of Pages | 23 |
| PDF File Link: | aa 415_09.pdf [pdf 69 KB] |