Court of Appeal allows employment dispute to proceed to determine personal grievance claim validity

During the lockdown, employer withheld salary, doubting that the employee worked full-time at home

Court of Appeal allows employment dispute to proceed to determine personal grievance claim validity

The Court of Appeal has granted leave to appeal an employment dispute to determine if a personal grievance claim can proceed when the dispute primarily involves interpreting an employment agreement.

In Breen v Prime Resources Company Limited [2024] NZCA 223, the applicant was hired as a sales manager for a property development company. His employment agreement specified that he would not be paid for hours not worked due to personal matters. During the COVID-19 lockdown in August 2021, the employee informed the employer that he would work from home. However, the employer did not believe he worked full-time and withheld part of his salary for August and September.

Following a mediation, the employer paid the outstanding salary. Nonetheless, the employee filed a personal grievance claim with the Employment Relations Authority (ERA), alleging an unjustified disadvantage due to the late payment. The ERA ruled in his favour, awarding $2,000 in compensation for humiliation and loss of dignity.

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Both parties challenged the ERA's determination. The employer argued that the employee's claim was not a personal grievance but a dispute over the employment agreement’s interpretation. The Employment Court agreed, citing s 103(3) of the Employment Relations Act 2000 (ERA), which excludes claims solely based on the interpretation of employment agreements from being classified as personal grievances. The court concluded that the employee should have pursued the dispute resolution process under s. 129 of the ERA, thus setting aside the ERA's award.

The employee applied for leave to appeal the Employment Court’s decision, arguing that the interpretation of the employment agreement was not the sole issue. The appeal raised the question of whether s. 103(3) is a jurisdictional bar to the personal grievance claim.

The Court of Appeal found that the proposed appeal involves significant questions of law that warrant further examination. Specifically, the court noted that the application of s. 103(3), and interpreting what constitutes a personal grievance requires clarification.

Ultimately, the Court of Appeal granted leave to appeal, allowing further examination on whether the Employment Court erred in its interpretation and application of s. 103(3) of the ERA. The appeal will determine if the employee’s claim should be considered a personal grievance despite involving an employment agreement dispute.

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