Many employers are probably unaware that the laws of New Zealand permit the Employment Court to consider an alternative type of claim – commonly the “disadvantage grievance” (more formally known as a “Section 122”), even if this type of claim has not been raised by the applicant. In fact, many applicants are probably not even aware of its existence either. So, should employers be worried?
Whilst grievances based on constructive or unfair dismissal may seem commonplace before the Court, these are not the only types of claim that an employer needs to be mindful of in a grievance.
Based on last week’s judgment in Spotless Facility Services (NZ) Ltd v Mackay, it seems that the Court is permitted to actively look-for other types of claims (and apply remedies) even if the applicants themselves have not considered them a possibility.
For example, Mrs M initiated a claim for constructive dismissal against her employer on the pretext that she was forced to resign after enduring torment and bullying by co-workers. This claim was upheld and damages were awarded. Interestingly, however, that was not the end of the matter.
Not content with just the constructive dismissal element, the Court decided to invoke a Section 122 and consider whether the applicant had also been subject to a “disadvantage grievance”, based on the employers’ failures when conducting its own internal process. Although Mrs M had not herself thought about pursuing this type of claim, the Court took the view that the employer needed to learn a harsh lesson – proving a double whammy for Spotless!
Here, the Court was highly critical of the employers’ failure to adhere to what, on the face of it, appeared to be a comprehensive ‘Professional Behaviours’ internal grievance policy.
The Court concluded that after presenting her supervisor with a detailed four-page complaint letter setting out her concerns and listing examples of the negativity shown towards her by others, the employer was reasonably required to follow its own internal process of a timely investigation and swift resolution. The policy specifically encouraged the reporting of unacceptable behaviour; gave assurances that complaints would be treated in a serious, sensitive and confidential manner; and confirmed that complainants would be continually informed of progress.
Yet, on reviewing the evidence for the initial constructive dismissal claim, the Court was not satisfied that the employer had complied with its own obligations. It had taken Spotless eight weeks to conduct its own investigation, during which time the bullying continued and Mrs M’s health deteriorated; this was not considered ‘timely’. It had also failed to keep her informed of its actions causing her to feel unsupported and isolated at a very distressing time. Not acceptable, ruled Judge Corkill.
Spotless failed to comply with its own obligations set out in the policy; it did not act according to what a fair and reasonable employer could have done in all the circumstances. The conditions of Mrs M’s employment were affected to her disadvantage and evidence of an alternative claim arose. The Court ordered a further financial penalty against Spotless, and Mrs M was awarded a second set of damages.
Unsurprisingly, it turned out to be a very expensive lesson for this employer and one that many businesses should pay attention to.
Irrespective of what claim is pursued by the applicant, the Court has the authority and power to look beyond that claim and consider the broader picture. If the Court is even remotely concerned that an applicant has been disadvantaged by the actions of the employer, this could be sufficient to demonstrate an alternative type of claim (the Section 122) in which additional damages could be awarded.
So, in answer to our initial question – “should you be worried” – the answer is a resounding “yes, you should”! If you have policies in place, please adhere to them, otherwise you could find yourself in a Spotless situation.