"Burning Issues" Forum

At the recent annual "Burning Issues" Forum, employment lawyers were treated to hot tips and searing insights  from Her Honour Judge Inglis, Philip Skelton QC and Penny Swarbrick.

Redundancy issues

Philip Skelton QC gave an in-depth review of the current issues surrounding redundancy, in particular the ongoing debate between the Employment Court and Court of Appeal over the proper role of the Employment Court when determining unjustifiable dismissal claims in a redundancy situation. 

Mr Skelton asked to what extent the Court, when determining whether a redundancy dismissal was substantively justifiable, is able to inquire into the merits of the employer’s decision. Three recent judgments of the Employment Court, Totara Hills, Tan, and Brake, illustrate that the Employment Court, armed with s 103A of the Employment Relations Act 2000, is now more willing to inquire into the merits of the employer’s decision to declare redundancies than previously had been the case. 

There are a number of lessons for practitioners to learn from these case examples:

  • The Court and the Authority are now more willing to scrutinise the merits of an employer’s decision to dismiss a person for redundancy, in order to determine whether what the employer did was what a fair and reasonable employer could have done in the circumstances.
  • The scope of the Court’s inquiry is no longer limited to determining whether the employer was acting for genuine business reasons or for ulterior motives.
  • The Court will not substitute its view for the business decision made by the employer but it will require the employer to produce evidence to establish that it did have good reasons for reaching the conclusions that it did.
  • As part of the Court’s inquiry, it may examine the accounts and financial information relied upon by the employer. If the financial information was inaccurate, misleading or incorrect, the employer will struggle to justify the decision to dismiss. A reasonable employer would not dismiss an employee on the basis of false or misleading information.
  • An employer who requires an employee to “apply” for an alternative role which the employee has the skills and competencies to undertake (rather than simply appointing the employee into that role) now faces significant risk that the process will be held to be unfair and unjustified.
  • Employers need to take particular care in the selection criteria they use and be prepared to justify the selection criteria chosen. 

In conclusion Mr Skelton QC encouraged practitioners to keep an eye on developments as leave from the Court of Appeal is being sought to appeal both the Tan and Brake judgments. This will give the Court of Appeal an opportunity to determine whether the Employment Court has been properly applying the section 103A test in those cases, or wrongly transgressing into what are the business decisions of the employer which, if made in good faith and for genuine business reasons, should not be susceptible to review.

Health and safety

Penny Swarbrick gave an overview of the anticipated changes in health and safety legislation following the April 2012 Independent Task Force on Workplace Health and Safety and the Royal Commission into the Pike River tragedy.

Since the Minister of Labour announced his “blueprint” for health and safety at work in early August, we now have an idea of what the changes will be.  Ms Swarbrick anticipates that they will ultimately result in a fundamentally different health and safety framework than the one that has been in place for over 20 years. A Bill to enact the new legislation is expected to be introduced into Parliament in December 2013, with an anticipated commencement date of late 2014. The key proposed changes are:

  • An overhaul of health and safety legislation – repealing the current Health and Safety in Employment Act and replacing it with a new Health and Safety at Work Act.
  • The establishment of a new Crown Entity – Worksafe NZ.
  • New regulations and Approved Codes of Practice by December 2014.
  • The enactment of the Health and Safety (Pike River Implementation) Bill.

Ms Swarbrick highlighted the following points to bear in mind when advising clients:

  • There is to be a new core health and safety duty that goes beyond the employer-employee relationship and includes contractors and volunteers with a focus on risks, not hazards.
  • Duties will lie with those people in the best position to control risks to health and safety.
  • There will be a new “due diligence” duty for individuals in “governance” roles.
  • There will be enhanced penalties for breaches of health and safety.
  • The Court will have new powers – adverse publicity orders and provision for compliance or restoration orders that resolve the consequences of a failure, not just the cause.
  • Enhanced regulator powers will introduce a new concept of an “enforceable undertaking”.
  • There are to be changes to worker participation provisions to strengthen the legal framework. 

Costs, social issues, interlocutories, lay litigants and etiquette

Judge Inglis raised a range of issues, in particular the costs regime, the rise of social issues litigation in the employment jurisdiction, interlocutory applications and a reminder of our obligations as practitioners. 

Judge Inglis discussed whether the present approach to costs gives rise to a sufficient degree of predictability (enabling parties to make informed strategic decisions during the course of the litigation process); the rationale for having a different approach to costs as between the Authority, the Court, and other courts; the way in which the reasonableness or otherwise of costs is assessed; and how financial circumstances are dealt with.

Her Honour noted that a number of submissions have been received in the Court’s current review. The Chief Judge invites practitioners to write to him with their views before the costs regime is discussed at the Judges' Conference next February.

Her Honour noted that there has been a discernible upswing in social issues litigation. She observed that, depending on your perspective, there is a veritable treasure trove or pandora’s box of legal issues yet to be identified and brought before the Court. She predicted that litigation focused on human rights would represent a growing trend in this jurisdiction over the next few years.

It appears that Auckland practitioners generate significantly more interlocutory applications than elsewhere. Judge Inglis touched on why this might be and reflected on the costs implications of such an approach. She identified some issues that are more commonly arising, including parties advising that their case is ready to be set down for hearing and belatedly raising disclosure issues; seeking an urgent fixture and then applying for an adjournment (which, while often soundly based, tends to have a practical knock-on effect for other litigants and the Court roster); and the desirability of discussing an intended application with opposing counsel before filing. 

Her Honour reminded us of the heightened obligations for counsel practising in the employment jurisdiction where parties are often self-represented, and the challenges that this presents. Counsel’s obligations are first to the Court and second to the client. While the other side may have overlooked a relevant authority that is adverse to your client’s position, you are obliged to draw it to the Court’s attention. If a lay litigant is looking at sea, it may be helpful to explain the process before the hearing commences and/or offer to take the lead in addressing the Court on any preliminary issues.   

It seems that counsel and public alike sometimes forget to respect the “dignity of the Court”. Her Honour’s light-hearted observations still managed to convey the fundamental point – that our behaviour, and that of our clients, should enhance and not compromise the dignity of the Court.

For example:

  • Brief your client adequately so they know what to expect. Clarify what they are permitted to take into the witness box (i.e. no sipper bottles, food, cell phones, etc).
  • Remember basic Court etiquette – be on time, stand whilst addressing the judge, sit down while your learned friend is speaking and use correct references when referring to each other in Court (i.e. my learned friend, counsel, etc, rather than first names).
  • Refrain from eye rolling, sighing or laughing whilst counsel or witnesses are speaking.
  • And finally, no plunging necklines, exposed bellies or “builder’s bottoms” in Court ... please!
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