By Kathryn McKinney - 18 Mar 2024
No, held the Employment Court in the case of Breen and Prime
Resources Company Limited,
[1] because the company's actions were based solely on a
genuine interpretation of a clause in the employment agreement.
Mr Breen was initially not paid for two months' wages in August
and September 2021, and told to work from home, following the COVID
outbreak. He was subsequently paid in full for those months after
attending mediation, but remained dissatisfied and pursued a
personal grievance claiming he had been unjustifiably disadvantaged
by the late payment of his wages.
The Employment Relations Authority determined that the company
had unjustifiably disadvantaged Mr Breen by the late payment of
wages. Mr Breen was paid $2,000 by way of compensation for hurt and
humiliation, loss of dignity and injury to feelings for the
unjustified disadvantage suffered.
There followed appeals by both parties in the Employment Court.
Mr Breen challenged the amount he was awarded for unjustified
disadvantage, and the company claimed (amongst other things) that
there was no jurisdictional basis for Mr Breen's personal grievance
because it derived solely from a dispute about the interpretation
and application of an employment agreement.
Analysis
To establish a claim for unjustified disadvantage, an employee
must raise a personal grievance. Section 103(1) of the Employment
Relations Act 2000 prescribes the grounds for a personal grievance
and section 103(3) specifically excludes an action by the employer
deriving solely from the interpretation, application, or operation
(or disputed interpretation, application or operation) of any
provision of an employment agreement. Any such matter can be raised
as a dispute, but does not give rise to claims for unjustified
disadvantage and therefore compensation for hurt and humiliation,
loss of dignity or injury to feelings.
The Employment Court held:
[25] The actions complained of
(reduction in pay and late payment) were allegedly contrary to the
provisions of the employment agreement and were
unjustified. However, the company's actions were based on a
genuine interpretation of cl 4 of the employment
agreement. The company's interpretation may well have been
wrong (a point I do not need to decide), but the claim was an
action deriving solely from a disputed interpretation of an
employment agreement. Therefore, the dispute procedure
applied, and no grievance based on disadvantage arose.
As the Employment Court ruled in favour of the company, the
Employment Relations Authority's decision in Mr Breen's favour was
set aside and no compensation was payable.
The jurisdiction point was raised by the company quite late in
the piece in this case and Chief Judge Inglis acknowledged that Mr
Breen might well feel frustrated by the outcome, saying that:
"If there had been no jurisdictional bar to the claim
proceeding, I would likely have dismissed the company's challenge
against the Authority's finding of unjustified disadvantage and
upheld Mr Breen's challenge to the Authority's determination as to
relief."
One to remember for those raising personal grievances and/or
disputes, or those defending such claims.
[1] [2023] NZEmpC 199.
Contacts
Kathryn McKinney
Saleha Hamid-Drew