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Truck driver sued for more than $27,000 after being paid eight months' wages despite leaving job

LongChill Limited, a trucking company, sued one of its former drivers for more than $27,000 claiming the truck driver continued to be paid his wages for eight months after he had left. In addition, it had overlooked paying him his accrued holiday pay of just under $900 net.

Overpaid by employerShould LongChill be able to recover the money? Would it matter if the driver thought he was entitled to the money and if he had already spent it and changed his life accordingly?

In this case, LongChill wrote to the driver, told him of the payroll error and apologised for the mistake. LongChill told him it wanted to recover the money and was willing to negotiate a payment plan. If a repayment plan could not be agreed LongChill proposed going to mediation in a subsequent letter. Finally, LongChill said it would file an application to the Employment Relations Authority to recover the money “as a last resort”.

Nothing was settled. A claim was filed in the authority. The driver was served with a claim. He was obliged to file a defence.

Nothing was heard from the driver. A notice of direction was sent by the authority to the driver urging him to provide a response to the claim. Several methods by which the authority’s investigation might be undertaken were mentioned in the direction including a face-to-face meeting.

The only communication the authority received from the driver was a single email. In the email he “expressed his dissatisfaction with LongChill as an employer” but he did not address the substance of the company’s claim.

The authority sought such a response but got none. Accordingly, the authority told the driver that if a response on the issue was not received within 24 hours the investigation meeting would be cancelled, and a determination would be made based on the material before the authority. Again, the driver did not communicate further with the authority.

This case serves as a stark warning to anybody served with legal proceedings that it is crucial to get legal advice and put forward your defence.

Here, the worker’s failure to engage made it almost inevitable that judgment would be entered against him for the $27,000 he received in error.

The authority summarised the position before it in its determination. The overpayments were a consequence of a genuine error. The driver was not entitled to the money and had been unjustly enriched by the error.

The employer had taken reasonable steps to resolve the matter, but the driver had not engaged and made no plan to repay. He had not put forward any reasons as to why he had not repaid the overpayment.

Accordingly, judgment was entered against him for the amount of the overpayment.

There are occasions when a person who is overpaid money by their employer can successfully argue the employer should not get the money back. The problem has arisen many times over the years and there are many cases going back over the decades dealing with these issues.

An 1841 English case held that an insurance company which paid out on a life insurance policy that had lapsed could recover the money, although the widow of the deceased was unaware the policy had lapsed and received the payment in good faith. The balance has shifted in favour of the recipient of mistaken payments as the years have passed.

Much more recently a case involving Air New Zealand gave the opposite answer.

Air New Zealand overpaid one of its staff by $70,000 and sought to recover the net amount of the overpayment. It won in the Employment Relations Authority but lost in the Employment Court.

The worker did not dispute the overpayment but maintained he received his wages in good faith. He altered his position in reliance on the validity of the wages he was paid. The worker relied on the defence of change of position and on a statutory defence that was then available under the old Judicature Act.

The onus of proof to establish a change of position was on the worker. He had to establish that he changed his position and that in all the circumstances it would be inequitable to require him to make restitution. The court accepted that the worker lived beyond his real means for about 16 months, spending the overpayment on various new expenditure.

The worker said he was “living the dream” before being brought down to earth rather spectacularly by being dismissed on accusations which included the allegation that he had not been proactive enough in querying the overpayments.

The judge was satisfied “that the injustice that would result from compelling [the worker] to repay the money in question would significantly outweigh the potential injustice to Air New Zealand if it is denied recovery and for that reason I reject Air New Zealand’s reinstatement claim”.

It is possible that LongChills’ former truck driver may have had a defence. It is unfortunate he did not seek legal advice. The only communication he had with the authority confirmed that he was aware of the claim and suggested his attitude towards his former employer may have played a role in his decision-making.

Doing nothing and hoping the claim might go away is never going to work. The truck driver may well regret his failure to participate.

What actions can an employee take if their employer abuses their power?

The Human Rights Review Tribunal recently decided an important case on sexual harassment. Although strictly speaking it was not an employment case, there are aspects of the case that could be relevant to employment disputes.

Human Rights Review Tribunal 300x295The facts took place in provincial New Zealand in a church context.

The plaintiff (P) had a stillborn baby. The birth was traumatic for her. She developed post-traumatic stress disorder.

P’s profound grief led her to become a parishioner at a local Anglican church and to be counselled by a priest assistant (Reverend) who held a licence as a priest. He began helping P with her grief and trauma issues, following the death of her baby.

She claimed that the reverend sexually harassed her on several occasions and on one occasion forcibly attempted to have sexual intercourse with her. P took proceedings before the tribunal seeking a declaration that the reverend discriminated against her by sexually harassing her and sought $150,000 damages for humiliation and loss of dignity and injury to feelings.

The relationship between the reverend and the Anglican Church was similar to an employment relationship.

Initially there were three defendants to the proceedings: the reverend in question; the local bishop; and the vicar of the parish in question. The bishop and the vicar initially defended the claim using the technical arguments you would expect from a lawyer.

Later, to their credit, the vicar and the bishop abandoned their defences, admitted that the reverend in question had a pastoral role that included providing spiritual counsel and advice, and that he was their agent. At that point in time P was seeking a total of $100,000 for humiliation and distress. The settlement included that they would pay the $100,000 compensation.

A public apology was made to P. The diocese agreed to improve its processes to protect parishioners. The claim against the bishop and vicar was withdrawn.

At that point in time P had been paid the damages she was seeking in her litigation. Subsequently, she amended her claim for humiliation and distress from $100,000 to $150,000. Her claim against the reverend continued.

The tribunal held that the reverend did use language and physical behaviour in the course of providing services to P that was of a sexual nature on multiple occasions. It was unwelcome. Sexual harassment was established.

The tribunal decided that the $100,000 P first sought was the appropriate remedy. No award could be made because P had already received $100,000 compensation for the same humiliation from the bishop and vicar. P did not seek costs.

The case is significant because the reverend in question took no part in the proceedings. He said he could not afford the costs. His position was that what occurred was consensual and he admitted no wrongdoing.

A complaint to police did not result in a prosecution. All of the evidence about what occurred was from P and her witnesses.

The case is important because of the trust that P put in the reverend to get much needed help. The reverend was in a position of power. The abuse of power was significant. The relationship between an employer and worker is also one where trust and confidence is at the heart of the relationship.

Our Employment Relations Act acknowledges the imbalance of power between employers and employees.

The tribunal sometimes has overlapping jurisdiction with the Employment Relations Authority. Privacy cases in an employment context would normally be heard by the tribunal, but discrimination matters (including sexual harassment) can be heard in either.

There have been some very high awards for humiliation and distress in the tribunal.

Two cases stand out. The first was about photos of a cake shared on Facebook. The claimant (H) had resigned from her employment with Credit Union Baywide, the defendant in the case.

A cake was baked for a party attended by some employees of the defendant, after H left. Unfortunately, the top of the cake had been iced with the words “NZ CU F… You.” The side of the cake had the obscenity “C...” inscribed on it.

Next a photograph of the cake appeared on H’s Facebook page. Only those accepted as H’s friends had access to the photograph.

The company gained access to the Facebook page and took a screenshot of it. This was sent to multiple employment agencies in the area with a follow-up phone call.

Pressure was brought to bear on H’s current employer. Ultimately H resigned. She was unemployed for 10 months. Although the case arose in an employment context it was to be determined under the Privacy Act and by the tribunal.

The tribunal found the employer breached an information privacy principle. Significant remedies were awarded. Awards were made for lost income, career regression and legal costs. Significantly $98,000 was awarded for humiliation, loss of dignity and injury to feelings.

Another sexual harassment case saw a humiliation and distress payment of $120,000, along with other remedies.

Compensation awards in the employment jurisdiction have increased significantly over recent years, but awards of $98,000 or $120,000 are practically unheard of.

Employees with discrimination claims might bear this in mind when deciding where to pursue their claims.

Returning now to the reverend and his parishioner. Sadly, P technically got no award of humiliation at all from the tribunal.

She had received $100,000 from the bishop and vicar settling her claim against them and that was all she was seeking at that stage. The tribunal decided it was the appropriate amount, and that she could not be compensated twice for the same hurt and humiliation.

It may seem P had to go through a three-day hearing and then effectively gained nothing. That is a risk of litigation.

Can a worker refuse to work if their employer is not following Covid-19 guidelines?

The Covid-19 Delta variant continues to circulate in the community and most of us are feeling the stress and anxiety which comes with this. Many essential workers in Auckland will feel like they face higher risks going to work each day.

Essential workers risksThe stress of the times seems to be affecting behaviour generally. Retailers have reported a surge in abuse towards its workers, which it has been speculated is due to increased stress and anxiety generally within the population. Some retailers are contemplating equipping workers with body cameras.

Many workers may wonder when the risks are serious enough for them to refuse to work. For example, could you refuse to work if your employer operates a retail business but does not require all customers or staff to wear face masks?

What about if you live in a city outside Auckland and your employer organises an event with more than 50 attendees?

The general law of the land has for many years supported the right of a worker to refuse an instruction or work that presents an unacceptable risk to their safety. Guidance is now provided by the Health and Safety at Work Act and by the Employment Relations Act.

A worker may refuse to carry out work if they believe doing so will expose them or any other person to a “serious risk” to their or the other person’s health and safety. There must be an “immediate or imminent exposure” to the hazard.

Additionally, the worker must attempt to resolve the matter with their employer under the good-faith obligations, preferably before they take any action. If this is not possible, they must promptly attempt to work with the employer to resolve the issue once they have taken such action.

So if an employer is not following the Covid-19 guidelines, by far the most important thing a worker should do before taking any unilateral action is to speak to their employer.

It is so easy under times of stress for an employment relationship to be damaged or destroyed. The employer could well be under significant stress because of economic pressure on their business among other things. Refusing to work because of non-compliance could create significant risks that disciplinary action is taken against the employee (rightly or wrongly).

Where workers raise concerns, it is significantly important that the employer listens carefully to them. It may be relatively easy to change a practice to address and accommodate the concerns the worker has.

Your workers are so critical to your business the last thing you want is to have the relationship breakdown because of the fears that people have. Failure to listen and adjust procedures appropriately could well expose the employer to grievances for unjustified disadvantage or a complete refusal to work.

Employees are entitled to seek their union support and advice on these matters and I would encourage that. An employment lawyer or advocate can also assist.

There are surprisingly few cases where an employee’s right to refuse work has been considered. However, the cases which do exist show the threshold for refusing work is not low.

One case involved two different unions working at the same port. One union decided to strike, and the second union told its members they could refuse to cross the other union’s picket line on the grounds of health and safety.

It said that “emotions run high during strikes” so it would be “concerned for their health and safety if the picket line were crossed”. It speculated that because the workers lived in the same community, there could be “repercussions and reprisals”.

The court held that while the belief was genuinely held, the union’s focus was more on what could occur in the wider community rather than the possibility of confrontation on the picket line.

The court observed there was a dissonance where one union was saying there would be no obstructive picket line, whereas the other believed there would be health and safety risks.

The court concluded that the evidence was not sufficient to establish an “immediate and significant risk”.

In another case, the Employment Relations Authority held that there was no “serious risk” arising from an employee being required to work 26 minutes overtime a day.

The authority accepted that the longer a person worked in a day, the more likely there would be an adverse effect on the worker’s health. But, the authority held that this was an “incremental risk” rather than an “immediate or imminent exposure to a hazard”.

Given the limited case law on the subject, and the tenuous nature of claims which have been argued, there is little guidance on what may be a serious and imminent risk to compare a claim too. Where a worker is in an inherently risky role, there will need to be a material increase in that risk.

A worker will be in the strongest position where health guidelines or orders are being breached by their employer. But, whether this presents an imminent risk to the safety of the employee, entitling them to refuse work, will probably depend on the facts of the case.

For example, an essential worker in Auckland, where there remains a community outbreak, will probably have a stronger claim than a retail worker outside of Auckland where an employer has not been following the Covid guidelines.

Where possible, I would urge anyone to first speak to their employer about concerns, and before taking any action, to speak with their union advocate or lawyer to get a second view.

There is nothing worse than acting out of unfounded fears and damaging or even destroying your employment relationship.

Independent contractor or employee?

There have recently been some interesting and potentially far-reaching Employment Court cases on the question of whether a worker is an independent contractor or an e                               mployee.

Section 6 of the Employment Relations Act says that the “real nature of the relationship” determines whether a worker is an employee. In considering what the “real nature of the relationship” is, the Court must consider all relevant matters, including any matters that indicate the intention of the person.

This section has had a good workout in recent times, including a finding last month that a builder taken on as a contractor was in fact an employee.  

Read the full article here:  2021_HRNZ_Spring_Magazine_ISSUU_Employment_Law_Case_Review.pdf