News & Thinking

Four key points from the Employment Court’s latest decision against Customs

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Giuliana Petronelli

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Giuliana Petronelli

On 30 June 2023, Chief Judge Inglis of the Employment Court determined that the New Zealand Customs Service (Customs) did not act as a fair and reasonable employer in terminating the employment of a worker (referred to as GF).

Inglis said that “Customs failed to follow a fair and reasonable process, failed to adequately engage with GF in accordance with the applicable requirements, and the decision to terminate was predetermined and fatally flawed.”

While this case centred around a Covid-19 related dismissal, the case has confirmed a heightened standard for school Boards and public sector agencies, from the perspective of what a “good employer” is, and all employers on their obligations to uphold tikanga and tikanga values where they apply to the employment relationship. Where private sector employers incorporate either directly or indirectly, tikanga and tikanga values into their employment relationships within their organisation, they will need to ensure that they are able to adhere to their obligations by either relying upon internal or external expertise to understand and comply with tikanga principles.

Inglis highlighted four key points in her judgement:

  1. Employers who are subject to being a ‘good employer’ under section 73 Public Service Act 2020, are held to a higher standard and must meet heightened good employer obligations compared with other employers. These heightened obligations also apply to school Boards under section 597 of the Education and Training Act 2020, which mirrors section 73.
  2. Tikanga and tikanga values apply to public sector employers as “Te Ao Māori… was intended to be baked into public service operations”.
  3. Where an employer incorporates tikanga and tikanga values into its employment relationships, it must adhere to these values and principles regardless of whether the employee or the employer is Māori (as is the case with Customs).
  4. The hurt and humiliation bands laid down by the Employment Court in Archibald to determine how much compensation should be awarded for hurt, humiliation and distress are out of date. Inglis suggested the following:
  1. a. Band 1 – $0-$12,000;
  2. b. Band 2 – $12,000-$50,000; and
  3. c. Band 3 – over $50,000,

which is an increase on Band 1 of 2% and a 25% increase for Band 2 and 3.

In this case, the Court set GF’s compensation at $25,000 and declined to make any reduction for the employee’s contribution. Customs had argued that GF’s failure to engage with the roll out of its vaccine programme and GF’s refusal to continue with Customs to search for external redeployment opportunities, contributed to GF’s personal grievance.

Inglis decided that GF did not wilfully turn a blind eye to Customs’ attempts to engage with GF and it would not be fair to reduce GF’s award due to contributory conduct.

If you would like targeted advice on the implications of this case on your organisation or assistance to with an employment process presently underway, please get in touch.