IN THE EMPLOYMENT RELATIONS AUTHORITY

AUCKLAND

I TE RATONGA AHUMANA TAIMAHI

TĀMAKI MAKAURAU ROHE

[2019] NZERA 392

3048194

BETWEEN STEPHEN DONNELLY

Applicant

AND BCT PERFORMANACE

LIMITED t/a MAG AND TURBO

HAMILTON

Resondent

Member of Authority: Eleanor Robinson

Representatives: Applicant in Person

Bruce Tannock, Representing the Respondent

Investigation Meeting:

Further information:

Submissions:

25 June 2019

27 June 2019

28 June 2019

Determination: 2 July 2019

DETERMINATION OF THE AUTHORITY

Employment Relationship Problem

[1] The Applicant, Mr Stephen Donnelly, claims that he has been unjustifiably dismissed,

unjustifiably disadvantaged, and that there has been a breach of good faith towards him by the

Respondent, BCT Performance Limited trading as Mag and Turbo Tyre and Service Centre

(Mag and Turbo).

[2] Mr Donnelly also claims that he is owed holiday pay by Mag and Turbo.

[3] Mag and Turbo denies that Mr Donnelly was unjustifiably dismissed or

disadvantaged in his employment, or that it breached the duty of good faith it owed him.

[4] Mag and Turbo denies that it owes Mr Donnelly any monies in respect of holiday

pay.

The issues

[5] The issues requiring investigation and determination are whether or not:

(i) Mr Donnelly was Unjustifiably dismissed by Mag and Turbo

(ii) Mr Donnelly was Unjustifiably disadvantaged by Mag and Turbo

(iii) Mag and Turbo breached the duty of good faith it owed Mr Donnelly

(iv) Mr Donnelly is owed any monies in respect of holiday pay.

The Authority’s investigation

[6] As permitted by s 174E of the Employment Relations Act 2000 (the Act) this

determination has stated findings of fact and law, expressed conclusions on issues necessary

to dispose of the matter and specified orders made. It has not recorded all evidence and

submissions received.

Background

[7] Mr Bruce Tannock is a Director of BCT Performance Limited trading as Mag and

Turbo, which is an automotive business trading in Magnetic wheels, tyres and general

servicing of vehicles.

[8] Mr Donnelly applied for a position as Workshop Manager and attended an interview

with Mr Tannock on 4 November 2017. During the interview Mr Tannock had asked him if

he had a preference for tools which could be ordered for him. Mr Donnelly had requested a

particular safety glove, and these had subsequently been provided to him.

[9] Upon commencement of his employment at Mag and Turbo on 20 November 2017

Mr Donnelly had been provided with an individual employment agreement (the Employment

Agreement) which included the following clauses:

19.3

If the employee has any concerns in regard to their safety or the safety of others in the

workplace, the employee is to report this to the Employer who will take all practicable steps to

provide and maintain a safe work environment.

34

… Before taking any form of disciplinary action an investigation into the alleged misconduct

must be carried out promptly….

35 Suspension

Where the circumstances warrant it, the Employer has the discretion to temporarily suspend

the Employee from their duties prior to full investigation of all allegations surrounding the

circumstances involving the Employee. The Employee will be paid their normal wages while

they are suspended, unless the period becomes protracted as a result of undue caused by the

Employer.

26.5

Serious misconduct by an Employee may give rise to summary dismissal and no notice period

will be given to the Employee by the Employer.

[10] Mr Donnelly spent three days being inducted by Mr Carl Akaroa, who was the

Workshop Manager when Mr Donnelly commenced employment but who left Mag and Turbo

on 22 November 2017 after he was replaced by Mr Donnelly.

[11] Mr Akaroa said he had covered all procedures and specifications for workshop

equipment, safety equipment, stock storage and movement during the three day induction

period.

[12] Mr Donnelly said that Mr Akaroa had not discussed health and safety issues with him

and that no induction process had taken place.

[13] Mr Donnelly said that after Mr Akaroa had left he worked by himself in the

Workshop until Mr Troy Clifton commenced at Mag and Turbo on 8 January 2018.

[14] Mr Donnelly said that he had raised issues of health and safety concerns with Mr

Tannock during his employment, specifically that he had:

been instructed to fit illegal wheel spacers to hobs of vehicles which would shorten

the length of the wheel stud to which the wheel bolts which was illegal; and

Using a procedure to falsify Low Volume Certification.

[15] He said he had raised these as health and safety issues in accordance with clause 19.3

of the Employment Agreement but Mr Tannock’s response when he raised these issues and

refused to comply with his instructions was to yell at him in an intimidating way.

[16] Mr Tannock denied that Mr Donnelly had raised any health and safety issues with

him other than customers coming into the workshop. On that occasion he had instructed Mr

Donnelly to send the customers back into the showroom.

[17] Mr Tannock denied that he had behaved in an intimidating manner towards Mr

Donnelly.

[18] Mr Akaroa said that he had worked for Mr Tannock for four years at Mag and Turbo

and found him to be a fair and respectful manager throughout his employment and with whom

he had enjoyed a good working relationship.

[19] Mr Clifton said that Mr Tannock always asked him and Mr Donnelly to carry out the

tasks in a pleasant manner and he had never witnessed Mr Tannock being rude or angry when

giving them jobs to perform.

[20] Mr Akaroa said that all the work he had carried out during his employment on many

modified vehicles had complied with both warrant of fitness and low volume certification

regulations.

[21] He explained that the wheel alignment machine at Mag and Turbo had two plate

positions designed to be used for both Short Wheel Base (SWB) and Long Wheel Base

(LWB) vehicles.

[22] He had used the SWB position for the majority of alignments as instructed by Mr

Tannock. This was the default or common placement used throughout his employment and

was being used when Mr Donnelly commenced employment. If required to fit a LWB

vehicle on the hoist he would change the plate position.

[23] Mr Tannock said that the SWB position was the standard position as over 85% of the

vehicles Mag and Turbo services are SWB.

[24] Mr Clifton said that Mr Tannock had told him and Mr Donnelly on many occasions

how he had wanted the alignment machine used and instructed them to move the alignment

plates on the hoist between the back and front positions as required.

[25] Mr Tannock said he had instructed Mr Donnelly to follow the standard procedure on

numerous occasions during his period of employment prior to 23 May 2018 because Mr

Donnelly continually moved the hoist to a LWB position. Mr Donnelly had complied with

his instructions without complaint prior to 23 May 2018.

[26] Mr Clifton said he had witnessed Mr Donnelly using both positions on the wheel

alignment machine on a regular basis and adjusting them as instructed to do by Mr Tannock

without complaint.

Health and Safety Issues

[27] Mr Donnelly said that Mag and Turbo regularly fitted illegal wheel spacers. He had

refused to do so, but believed that Mr Tannock or Mr Clifton had carried out the work.

[28] Mr Tannock said that on occasion Mag and Turbo would trial fit wheels for

customers, and that not all the sample wheels available were the correct fitment for a vehicle.

If required Mag and Turbo would use wheel spacers to trial fit the wheels to demonstrate to

the customer. If the customer proceeded with their order, the correct fitment wheels were

sourced and fitted to the customer’s car.

[29] He said that at no time was the vehicle unsafe when having a wheel fitted on site, it

was a purely visual exercise to identify the correct fitment per LVVTA (Low Vehicle Volume

Technical Association) regulations. He said that Mr Donnelly had never been asked to fit

anything other than legal wheel spacers as per LVVTA regulations.

[30] However on one occasion Mr Donnelly had raised his concern with him that a vehicle

had arrived in the Mag and Turbo workshop with a wheel spacer already fitted. The car had a

warrant of fitness and Mr Tannock said the customer had been informed that the wheel

spacers were not of an LVVTA standard; however this was the extent of Mag and Turbo’s

ability to act as it had no authority to enforce Warrant of Fitness (WOF) standards.

[31] Mr Donnelly said that Mr Tannock began asking him to do modifications to vehicles

that were not only unsafe but illegal and when he told Mr Tannock that he could not carry out

the procedure as instructed on that basis, Mr Tannock had told him that Mag and Turbo had

public liability insurance and he would have cover if he carried out the work.

[32] Mr Tannock confirmed that on one occasion he had instructed Mr Donnelly to adjust

the suspension on a Mitsubishi Lancer as Mr Donnelly had been unsure how to carry out the

procedure and was attempting to adjust the vehicle’s suspension incorrectly. Mr Donnelly

had told him that he believed he was personally liable for any work he carried out on a vehicle

and he could not carry out the adjustment.

[33] Mr Tannock said he had informed Mr Donnelly that Mag and Turbo had

comprehensive Public Liability Insurance and that he would not be personally liable for any

work he carried out. Mr Donnelly had then carried out the required work on the vehicle.

[34] Mr Tannock said that Mag and Turbo had a perfect Health and Safety record.

Following Mr Donnelly’s employment with Mag and Turbo, it had been contacted by

Worksafe in connection with an anonymous complaint. He had answered questions spoken to

a Worksafe representative who had decided there was no basis to take any further action.

Incident on Wednesday 23 May 2019

[35] Mr Donnelly said that he had positioned a commercial van brought to the workshop

on 23 May 2018 by Mr Aaron Tipping on the hoist in what he believed to have been the safest

and most practical position to perform the wheel alignment. This was in a LWB position.

[36] Mr Tannock had had told him to put the hoist plates in the SWB position and he had

refused to do so on the basis that he considered the LWB position to be the safest.

[37] Mr Tannock said he had instructed Mr Donnelly to move the hoist plate position to

the SWB position which was the standard position which both suitable for the vehicle and

completely safe, and to start the alignment; however Mr Donnelly had refused to do so stating

that he wanted to do it: “my way”.

[38] He had asked Mr Donnelly a second time to follow his instructions but again Mr

Donnelly refused to do so, stating that the next car to be seen was LWB. Mr Tannock said he

had explained that there was no work to be carried out on that particular vehicle and to adjust

the hoist to the SWB position.

[39] Mr Tannock said that it was only at the third time of asking Mr Donnelly to carry out

the work that Mr Donnelly had raised a health and safety issue. He had asked Mr Donnelly

the basis for his issue about safety. Mr Donnelly’s opinion had been that his method was the

safest so Mr Tannock said he had explained that the instruction he had been given was

completely safe, and that there was no risk in his performing the task using the standard

procedure.

[40] At that point he cautioned Mr Donnelly that by continuing to refuse to obey his

instructions he could be facing disciplinary action. However, despite repeated requests Mr

Donnelly had refused to obey the instruction he had been given.

[41] At that point Mr Tannock said he had instructed Mr Donnelly to go home on the basis

that he was non-responsive to the request made and argumentative, and the exchange had

been disruptive.

[42] Mr Clifton had witnessed the exchange between Mr Donnelly and Mr Tanner which

had lasted approximately 15 minutes and said that Mr Donnelly repeatedly refused the request

to move the plates on the hoist. As the exchange proceeded he said that both men had raised

voices. After Mr Donnelly had left, he had moved the plates on the hoist as instructed and

continued to carry out the alignment.

[43] Mr Aaron Tipping, a customer at Mag and Turbo, said he had brought his vehicle in

for new tyres and witnessed the exchange between Mr Donnelly and Mr Tannock in which

Mr Donnelly had continually refused to obey Mr Tannock’s instruction to him. He said both

men had become heated during the altercation and it was noisy.

[44] During that time he had witnessed two groups of other customers enter Mag and

Turbo, observe what was happening between Mr Donnelly and Mr Tannock, and leave

without being served, and he had also witnessed telephone calls being unanswered.

[45] Later that same day, Wednesday 23 May 2018, Mr Tannock emailed Mr Donnelly

stating:

This is giving you official notice under Section 35 of your employment

contract … that you have been suspended from your duties for serious

misconduct, insubordination on Wednesday 23rd

May.

I will be carrying out a full investigation and notifying you of the disciplinary

meeting in due course. You will not be required for work on Thursday 24th

May whiles this is carried out, and you have leave organised for 25th

May.

You will be given 48 hours’ notice of the disciplinary meeting, and are

permitted to bring a support person with you.

[46] Mr Donnelly responded the following day, Thursday 24 May 2018, stating his view

that he had not been suspended but had been dismissed stating: “You specifically stated I no

longer have a job, and told me to leave the premises and to take all my stuff with me.”

[47] Mr Tannock emailed Mr Donnelly on Friday 25 May 2018 stating:

At no time were you “fired” or “dismissed”, you were instructed to leave the

premises as you refused to carry out your duties as instructed and you were

disrupting the operation of the business.

You were asked numerous times to follow instructions, and refused. You

were informed after the third request to comply that further refusal would

result in disciplinary action.

We were getting nowhere discussing this matter verbally, so I asked you to

leave.

You were instructed to take your personal belongings with you as Mag and

Turbo Hamilton would not like to be held responsible for any loss or damage

to your property while you were not present.

At the first available instance, 4.15pm you were officially notified of your

Employment Suspension via email as per your employment contract for

serious misconduct.

I have concluded my investigation, and your employment suspension period

has now ended.

I would like to schedule a disciplinary meeting for Monday 28th

May at 5.15

pm at Mag and Turbo Hamilton to go over the matter in question, where you

are permitted to have a support person present with you. If this time is not

suitable please advise.

As Monday is a scheduled day of work as per section 4.1 of your employment

contract … I can offer you Annual leave or leave without pay for this day.

[48] Mr Donnelly sent no response but Mr Ronald Jones, an advocate whom he had

appointed to act on his behalf, contacted Mr Tannock by email at 4.33p.m. on Monday 28

May 2018 advising that the proposed meeting could not take place due to the notice being

provided to him and Mr Donnelly being: “too short”. Mr Jones also requested that further

correspondence be directed to him as he was acting on behalf of Mr Donnelly.

[49] Mr Jones did not propose an alternative date for the meeting in that email but Mr

Tannock said he had spoken to Mr Jones subsequently by telephone and Mr Jones proposed

that he and Mr Tannock meet to discuss the matter in Auckland.

[50] Mr Tannock refused to do so on the basis that he and Mr Donnelly resided in

Hamilton and that was also the location of Mr Donnelly’s workplace.

[51] Mr Tannock said that he had nothing further from Mr Jones or Mr Donnelly until he

received an email from Mr Jones dated 18 June 2018 attaching a letter raising a personal

grievance in respect of Mr Donnelly.

Was Mr Donnelly unjustifiably dismissed by Mag and Turbo?

[52] Following Mr Donnelly’s appointment as Workshop Manager on 20 November 2017

there is no evidence that he had not completed work in compliance with Mag and Turbo’s

standard procedures and the evidence supports him having completed many SWB alignments

with the hoist on the SWB setting as instructed by Mr Tannock prior to the incident on 23

May 2018.

[53] On 23 May 2018 there was an exchange between Mr Donnelly and Mr Tannock in

which Mr Donnelly was instructed to move the hoist wheel plates to the standard SWB

position. Mr Donnelly refused to do so even after repeated requests, and the assurance of Mr

Tannock that the procedure was quite safe.

[54] There is no evidence substantiating Mr Donnelly’s health and safety concerns as

justified.

[55] Mr Donnelly had been asked to leave the Mag and Turbo premises only after a

number of requests to carry out the task as instructed and after the exchange had been

witnessed not only by Mr Clifton but by Mr Tipping and possibly other customers.

[56] I find that Mr Tannock’s request was a reasonable one. Employees are expected to

obey reasonable and lawful instructions given by an employer and there is no evidence that

the instruction given by Mr Tannock was unsafe or unlawful as supported by the evidence

provided by Mag and Turbo (from both Automotech, Automotive Equipment Specialists, and

George Stocks & Company Limited, Automotive Equipment Suppliers), which certify the

hoist used by Mag and Turbo as safe.

[57] I find that Mr Donnelly refused to obey a reasonable request from his manager.

[58] Mr Tannock ordered Mr Donnelly to leave the premises and suspended him in

accordance with clause 35 of the Employment Agreement.

[59] It was Mr Donnelly’s belief that he had been dismissed after he had been asked to

leave and to take his personal possessions with him.

[60] However Mr Tannock emailed him shortly after the incident to advise him that he had

not been dismissed but suspended. While Mr Donnelly disputed this, the further letter sent by

Mr Tannock on 25 May 2018 stated clearly that this was a misunderstanding on Mr

Donnelly’s part.

[61] Mr Donnelly’s belief that he had been dismissed was based upon the words used and

the fact that he had been asked to leave and to take his personal possessions with him.

[62] The circumstances in which Mr Tannock told Mr Donnelly to leave Mag and Turbo

arose from a situation in which Mr Donnelly was repeatedly refusing to carry out a wheel

alignment on a customer’s car using a SWB alignment.

[63] The evidence of Mr Tannock, as supported by that of Mr Clifton, was that this was a

procedure he was instructed to use before and which he had expressed no objection to using

on previous occasions.

[64] The evidence also establishes that the request by Mr Tannock and the refusal by Mr

Donnelly were repeated on more than one occasion and that Mr Tannock had tried to question

and understand the basis for Mr Donnelly’s concern on that occasion to carrying out a

procedure as he had done on previous occasions.

[65] Both men had become heated during their exchanges, and their voices were raised. It

was in this emotionally charged situation that Mr Tannock asked Mr Donnelly to leave the

Mag and Turbo premises. In Boobyer v Good Health Wanganui Ltd, a case which was

concerned with a resignation, the Employment Court said of that in this type of case that the

employer cannot safely insist on what the employee may have said:

This is also the position where words of resignation form part of an

emotional reaction or amount to an outburst of frustration and are not meant

to be taken literally and either it is obvious that this issue or it would have

become obvious upon inquiry made soberly once “the heat of the moment”

had passed and taken with it any “influence of anger or other passion

commonly having the effect of impairing reasoning faculties1

[66] In that situation, it is reasonable to examine the actions taken after the parties have

had the opportunity for a ‘cooling down’ period.

[67] In this case Mr Tannock contacted Mr Donnelly by email at the first opportunity and

within a short time of the incident occurring to advise him that he had been suspended from

work pending an investigation. Thus confirming that the employer understood the

employment was still ongoing.

[68] Mr Donnelly’s response that he did not accept he had been suspended but understood

that he had been dismissed was replied to by Mr Tannock at length with further clarification

about the circumstances in which the actions had taken place, and advising of a disciplinary

meeting which was to take place on 28 May 2018.

[69] I find that it was not reasonable for Mr Donnelly to rely on his belief that he had been

dismissed when that misunderstanding had been promptly addressed by Mr Tannock and “the

heat of the moment had passed”.

[70] In the letter dated 25 May 2018 Mr Tannock asked Mr Donnelly to let him know if

the time suggested for the proposed disciplinary meeting was not suitable, however Mr

Donnelly did not attend the proposed meeting on the basis that the notification of the date was

too short.

[71] The only alternative proposed by Mr Jones acting on Mr Donnelly’s behalf was that

the meeting take place in Auckland. I do not find that suggestion to have been reasonable or

justifiably on the basis that Mag and Turbo was based in Hamilton which had been Mr

Donnelly’s place of work and that was the location where he and Mr Tannock resided.

[72] There was no further contact from Mr Jones until he raised a personal grievance on

Mr Donnelly’s behalf. Whilst I accept Mr Donnelly’s evidence that he had tried, without

success, to have Mr Jones be more proactive in the engagement on his behalf with Mag and

Turbo, nonetheless he had chosen to appoint Mr Jones to act on his behalf in the matter.

[73] I find that by raising the personal grievance on 15 June 2018 stating that Mr Donnelly

had been unjustifiably dismissed, Mr Donnelly had, via Mr Jones his agent, initiated the

ending of the employment relationship between him and Mag and Turbo.

[74] I determine that Mr Donnelly was not unjustifiably dismissed by Mag and Turbo.

1Boobyer v Good Health Wanganui Ltd (unreported) WEC 3/94 at pg 3

Was Mr Donnelly unjustifiably disadvantaged by Mag and Turbo?

[75] Mr Donnelly is claiming unjustifiable disadvantage. Section 103 (1)(b) of the Act is

applicable to disadvantage grievances and states:

that the employee’s employment (including any condition that survives

termination of the employment), is or are or was (during employment that has

since been terminated) affected to the employee’s disadvantage by some

unjustifiable action by the employer;

[76] The elements of s103 (1) (b) are twofold:

a. An unjustifiable action by the employer, which

b. Affected the employee’s terms and conditions of employment, and this was

to the employee’s disadvantage.

[77] Mr Donnelly must therefore establish that there was some unjustifiable action by Mag

and Turbo which affected his terms and conditions of employment to his disadvantage.

[78] The law on suspension has been long established in several leading judgments. In

Sefo v Sealord Shellfish Ltd the then Chief Judge Colgan commented:

… justification for doing so in any particular case will depend upon the

circumstances of the parties and the employment and the fairness and

reasonableness of the action at the time and in those circumstances. That is

because suspension of an employee pending investigation and determination

of allegations of serious misconduct in employment may, and indeed

frequently does, affect the employee's employment or one or more conditions

of that employment to the employee's disadvantage.2

[79] In Singh v Sherilee Holdings Limited the Court commented:

In the absence of an express contractual provision authorising suspension, it

will only be in unusual cases that it is justifiable. The fact that an employer

may have reason to suspect that an employee has engaged in misconduct, or

even serious misconduct, does not of itself justify suspension while those

concerns are investigated. To justify suspension, an employer must have good

reason to believe that the employee's continued presence in the workplace

will or may give rise to some other significant issue.3

[80] In this case there was a contractual provision for suspension in the Employment

Agreement issued to Mr Donnelly. However that provision did not necessarily mean that

2 Sefo v Sealord Shellfish Ltd [2008] ERNZ 178 at [33]

3 Singh v Sherilee Holdings Limited AC 53A/05 22 September 2005 at [91]

Mag and Turbo’s decision to suspend Mr Donnelly was fair and reasonable. What was

necessary is that it followed a fair procedure:

Just as in the case of dismissal, a decision to suspend an employee will

normally only be justifiable if it is made as a result of a fair process. The

minimum requirement for a fair process is that the employee be told that

suspension is being considered and the reasons why, and then given a proper

opportunity to be heard on that issue before a decision is made. 4

[81] Mr Tannock confirmed in the Investigation Meeting that he did not discuss

suspension with Mr Donnelly prior to informing him that he was suspended in reliance on his

belief that the contractual provision in the Employment Agreement gave him the right to do

so.

[82] Whilst I have found that there was a contractual right to suspend, Mag and Turbo will

only be justified in suspending Mr Donnelly if it had good reason to believe that Mr

Donnelly’s continued presence in the workplace will or may give rise to some other

significant issue.

[83] In this case it is clear that Mr Donnelly was not prepared to follow Mr Tannock’s

instruction and that the altercation between him and Mr Tannock was clearly audible to

potential customers and becoming disruptive to the business operation of Mag and Turbo.

[84] Instructing Mr Donnelly to leave the premises in that situation was an appropriate

response to the situation.

[85] Clause 35 of the Employment Agreement gave Mag and Turbo the right to suspend

pending a full investigation, and Mr Tannock said that he had undertaken an investigation.

[86] Mr Donnelly was suspended on full pay pending the proposed disciplinary meeting to

be held on to be held on 28 May 2018.

[87] I find that the suspension did not disadvantage Mr Donnelly initially. However

Monday 28 May 2018 was a scheduled day of work for Mr Donnelly. Mag and Turbo did not

propose to continue Mr Donnelly’s suspension on full pay for that day but instead the letter

dated 25 May 2018 suggested that Mr Donnelly either used a day of annual leave or took

leave without pay for that day.

4 N3 above at [93]

[88] I find that was unreasonable and constituted an unjustifiable disadvantage to Mr

Donnelly.

[89] I determine that Mr Donnelly was unjustifiably disadvantaged by Mag and Turbo in

respect of 28 May 2018.

Did Mag and Turbo breach the duty of good faith it owed to Mr Donnelly?

[90] The duty of good faith is a duty that applies equally to employers and employees.

Both are to behave towards each other in good faith, as set out in s 4 of the Act, in particular

the requirement as set out in s4(1A)(b) which requires the parties to an employment

relationship:

to be active and constructive in establishing and maintaining a

productive employment relationship in which the parties are, among

other things, responsive and communicative

[91] Mr Tannock acted hastily in telling Mr Donnelly to leave the Mag and Turbo

premises after their heated altercation; however he had acted in a timely manner to clarify the

situation and in advising Mr Donnelly that he had not been dismissed but suspended,

reconfirming this position after Mr Donnelly informed him that he understood he had been

dismissed.

[92] Whilst I have found the suspension of Mr Donnelly to constitute an unjustifiable

disadvantage I find that Mr Tannock was acting in the belief that he had a contractual right to

suspend and did not therefore fail to act in good faith. Moreover I find his intention of trying

to bring the two parties together in the proposed disciplinary meeting to have been in good

faith.

[93] As such I find no sustained breach of good faith in Mr Tannock’s actions.

[94] Mr Donnelly had appointed Mr Jones to represent him and to act as his agent in the

matter. It is a long held principle that knowledge acquired by an agent is imputed to his

principal if the agent was at the time employed on the principal’s behalf: Jessel Properties v

UDC Finance5

[95] Mr Jones, acting upon Mr Donnelly’s instructions, informed Mag and Turbo that he

and Mr Donnelly would not be attending the proposed disciplinary meeting which would have

5Jessel Properties v UDC Finance, [1992] 1 NZLR 138 {CA}

Ibid at para [143]

provided an opportunity for Mr Donnelly to explain and justify his actions and could have

resulted in re-establishing a productive employment relationship.

[96] Mr Jones did not provide an alternative date for a meeting in the email but in a

subsequent telephone call between him and Mr Tannock proposed that a meeting take place in

Auckland. I find this was not a reasonable suggestion made in good faith in circumstances in

which his client and Mr Tannock worked in Hamilton and Mr Donnelly’s place of work at

Mag and Turbo was in Hamilton.

[97] There was no communication from Mr Donnelly until the letter received by Mag and

Turbo on 18 June raising a personal grievance. I find that this was not acting in good faith.

[98] I find that Mr Jones, and Mr Donnelly who was instructing him, did not act in good

faith by not being: “active and constructive in establishing and maintaining a productive

employment relationship” pursuant to s 4 (1A)(b) of the Act.

[99] I determine that Mag and Turbo did not breach the duty of good faith it owed to Mr

Donnelly in relation to the dismissal.

Is Mr Donnelly is owed any monies in respect of holiday pay?

[100] I accept the Employee Audit Trail as supplied by Mag and Turbo. This sets out that

in the period of his employment Mr Donnelly was paid $25,841.88.

[101] Holiday pay at 8% on that amount is an entitlement of $2,067.35.

[102] Mr Donnelly contractual working day was 8.5 hours at a contractual rate of $203.15

gross per day.

[103] Mr Donnelly has taken 6 days of annual leave during his employment on 27, 28 and

29 December 2017 and 3 January 2018, 4 May 2018 and 25 May 2018. This equates to a

payment in respect of holiday pay of $1,218.90 ($203.15 x 6)

[104] This equates to an outstanding payment in respect of holiday pay of $848.45 gross

($2,067.35 -$1,218.90.

[105] Following mediation Mag and Turbo paid Mr Donnelly the sum of $576.05 gross as

holiday pay (Final pay slip dated 7 October 2018).

[106] I determine that Mag and Turbo owes Mr Donnelly the sum of $272.40 as holiday

pay entitlement.

Remedies

Unpaid wages

[107] Mr Donnelly was no longer suspended on Monday 28 May 2018. He was therefore

entitled to be paid for that day.

[108] I order that Mag and Turbo pay Mr Donnelly the sum of $203.15 gross (8.5

hours x $23.90 per hour)

[109] I order that Mag and Turbo pay Mr Donnelly the sum of $272.40 as unpaid

holiday pay.

Compensation for Hurt and Humiliation under s 123 (1) (c) (i) of the Act.

[110] I have found that Mr Donnelly was unjustifiably disadvantaged by Mag and Turbo in

respect of the suspension on 28 May 2018.

[111] I order that Mag and Turbo pay Mr Donnelly the sum of $1,500.00, pursuant to

s 123(1) (c) (i) of the Act.

Contribution

[112] I am required under s. 124 of the Act to consider the issue of any contribution that

may influence the remedies awarded.

[113] Mr Donnelly did not contribute to the circumstances giving rise to his unjustifiable

suspension, and there is no reduction in the remedies ordered.

Costs

[114] Costs are reserved. Given the extent to which both parties have been successful I am

of a mind to let costs lie where they fall.

[115] However, in the event that costs are sought, the parties are encouraged to resolve that

question between them. If the parties fail to reach agreement on the matter of costs, they may

lodge and serve a memorandum as to costs within 28 days of the date of this determination

with any reply submissions to be lodged with 14 days of receipt. I will not consider any

application outside that timeframe.

[116] All submissions must include a breakdown of how and when the costs were incurred

and be accompanied by supporting evidence.

Eleanor Robinson

Member of the Employment Relations Authority