Compliance orders have wide reach - Employment Law Update January

A compliance order can, in some circumstances, be directed at a party who is not the employer of the aggrieved party. In other words, the legislation gives a wide discretion to the Employment Relations Authority in allowing it to consider an application made against “another person”. Support for this interpretation of the legislation may be found in a case under the Labour Relations Act 1987, where the wording of the legislation was to the effect that proceedings could be taken against “any person”. Several subsequent cases, including a recent one, have concluded that “another person” is synonymous with “any person”. The result, in the recent case, was that outstanding wages, holiday pay and compensation ordered by the Authority could be the subject of a compliance order against both the sole shareholder-director and the holding company of the employing company. Their association with the employing company was so close as to give rise to an “irresistible inference” that they had the power to put the employing company in a position to pay the money owed. No lifting of the corporate veil was necessary.

Allen Chambers Ltd v Pelabon [2019] NZEmpC 45 is noted at ¶50-864.

Employer breached duty of good faith by declining mediation

The Employment Relations Authority found that an employer breached its obligations of good faith towards an employee when the employer declined an employee’s request to attend mediation while there was still an existing employment relationship. When the Mediation Service contacted the employer, the employer declined the request to attend mediation. The failure to attend mediation was one of the reasons a penalty of $2,000 was imposed on the employer.

Juutilainen v Len Reid Oils Ltd trading as Pennzcorp [2019] NZERA 243 is noted at ¶70-700.

Reproduced with the permission of Wolters Kluwer NZ

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