| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2011] NZERA Auckland 472 |
| Hearing date | 23 Aug 2011 |
| Determination date | 02 November 2011 |
| Member | E Robinson |
| Representation | S Blick ; K Burston |
| Location | Auckland |
| Parties | McFadgen v Auckland Council |
| Summary | JURISDICTION – Respondent claimed Authority did not have jurisdiction to order that respondent pay applicant redundancy as excluded by Local Government (Auckland Transitional Provisions) Act 2010 (“ATP Act”) – Applicant initially employed by Auckland City Council (“ACC”) – Applicant’s employment agreement with ACC provided if applicant made redundant applicant entitled to redundancy – Respondent established following merger of local authorities including ACC – ATP Act provided redundancy not available where employees received same or substantially similar offer of employment – Statutory body (“ATA”) set up to oversee transition of local authorities, including ACC, to respondent – Respondent offered applicant substantially similar position (“first role”) – Offer letter stated applicant would only be entitled to redundancy if applicant declined first role offer - Applicant applied for offered role and second role at respondent - Second role substantially different to applicant’s role at ACC and in higher salary band – ATA offered applicant second role with respondent – Applicant claimed accepted second role but noted salary band incorrect and emailed ATA’s recruitment coordinator (“B”) requesting amendment – B responded had confirmed salary had been correctly recorded in lower band – Applicant claimed had been offered and accepted role on understanding would be in higher salary band – B’s co-worker at ATA (“M”) confirmed second role had been offered to applicant at incorrect salary band and would not be reviewed – M told applicant if applicant wished to decline offer would be entitled to redundancy in circumstances - M later claimed redundancy offer based on M’s incorrect assumption that applicant had declined substantially different role and therefore entitled to redundancy – Applicant told M decided to accept redundancy – Found although no response received applicant’s employment later terminated by ATA - E told applicant as had been offered similar role if applicant turned offer down was not entitled to redundancy – Applicant claimed confused by E’s contrary advice and emailed M for clarification – M responded ACC’s acting group manager (“W”) had agreed to applicant receiving redundancy – Applicant repeatedly sought response from E and M and claimed neither E nor M replied – ATA sent applicant letter which stated would not receive redundancy – Authority found ATA authorised to act on behalf of ACC but applicant remained employed by ACC – Found therefore ACC remained liable for termination of applicant’s employment – Found liability for actions of ACC and ATA as agent transferred to respondent or, alternatively, not equitable to leave applicant without any means of recourse – Found Authority had jurisdiction to hear applicant’s claim against respondent - UNJUSTIFIED DISADVANTAGE – Applicant claimed unjustifiably disadvantaged as respondent failed to pay redundancy – Found applicant accepted second offer of substantially dissimilar position – Found applicant understood that if declined substantially similar position would not be eligible for redundancy – Found applicant did not raise redundancy issue rather M made representation to applicant - Found M confirmed salary banding was incorrect and advised applicant ATA would advise ACC of applicant’s entitlement to redundancy – Found M should have been aware that applicant initially offered substantially similar role which meant applicant ineligible for redundancy – Found applicant reasonably believed M aware of first offer and redundancy offer related to second role – Found applicant entirely reasonably relied on M’s assurance entitled to redundancy and as result of assurances decided to decline earlier acceptance of second offer – Found estoppel created as applicant not offered opportunity to accept second role on either higher or lower salary band – Found applicant unjustifiably disadvantaged by M’s refusal to honour redundancy assurances – REMEDIES - $15,000 compensation appropriate - $15,000 reimbursement of lost redundancy appropriate - GOOD FAITH – Applicant claimed respondent’s actions breached duty of good faith – Found E effectively withdrew redundancy offer - Found although no response received applicant’s employment later terminated by ATA – Found E, M and W repeatedly failed to respond to applicant’s requests for clarification – Found respondent breached duty of good faith – PENALTY - $5,000 penalty appropriate – Penalty to be shared between applicant and Crown - Business Process and Systems Consultant |
| Result | Applications granted ; Compensation for humiliation etc ($15,000) ; Reimbursement of lost redundancy ($15,000) ; Penalty($5,000) ($3,000 payable to applicant)($2,000 payable to Crown) ; Costs reserved |
| Main Category | Personal Grievance |
| Statutes | ERA s4;ERA s4(1A)(b);ERA s135(2)(b);ERA s136(2);ERA s157(3);ERA s161;ERA s161(1);ERA s161(1)(r);Local Government Act 2002;Local Government (Auckland Transitional Provisions) Act 2010;Local Government (Auckland Transitional Provisions) Act 2010 s35;Local Government (Auckland Transitional Provisions) Act 2010 s104;Local Government (Auckland Transitional Provisions) Act 2010 s104(1);Local Government (Auckland Transitional Provisions) Act 2010 s107;Local Government (Tamaki Makaurau Reorganisation) Act 2009 s7;Local Government (Tamaki Makaurau Reorganisation) Act 2009 s13;Local Government (Tamaki Makaurau Reorganisation) Act 2009 s13(1)(f);Local Government (Tamaki Makaurau Reorganisation) Act 2009 s13(4);Local Government (Tamaki Makaurau Reorganisation) Act 2009 s35(e) |
| Cases Cited | Burbery Mortgage Finance & Savings Ltd v Hindsbank Holdings Ltd [1989] 1 NZLR 356;National Westminster Finance NZ Ltd v National Bank of New Zealand [1996] 1 NZLR 548 |
| Number of Pages | 21 |
| PDF File Link: | 2011_NZERA_Auckland_472.pdf [pdf 105 KB] |