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Metcalfe, Jane --- "Personal relationships and the workplace: taking a gamble?" [2002] CanterLawRw 3; (2002) 8 Canterbury Law Review 315


PERSONAL RELATIONSHIPS AND THE WORKPLACE: TAKING A GAMBLE?

Jane Metcalfe[*]

I. Introduction

People who find romance in the workplace might count themselves lucky, but the consequences could be more than they gambled on. Although the happy couple may feel their relationship enhances the work environment, their employer could disagree. Faced with such disapproval, one partner in the relationship might seek employment elsewhere. As both employees are likely to be skilled and experienced in the same line of business, the departing partner will probably find employment in another company operating in that same business. Alas, more misfortune awaits that partner. Competition between the companies could be intense. When one employer discovers that an employee's partner is working for a competitor, that employee might be asked to transfer to another position or leave. The hapless employee is ultimately confronted with a choice between having a promising career or a relationship. Employees who are related by blood may encounter similar difficulties, but have even less available options. On the other hand, truly unfortunate employees could suffer both a broken heart and dismissal. When love turns sour between employees who work in the same workplace, the rejected partner might wreak revenge in a manner that amounts to serious misconduct, thus justifying dismissal by the employer.[1] Even if emotions are kept under tighter control, there may be sufficient disharmony between the employees to result in significant and continuing disruption to the workplace. Again, in these circumstances, the employer might dismiss one of the offending employees.[2] Family feuds between employees in the same workplace could have a similar outcome. Personal relationships and employment relationships are each fraught with pitfalls for the unwary, and those who mix the two need to be especially alert. Employees who choose to combine business and pleasure are vulnerable to dismissal on a variety of grounds, even where the personal relationship is harmonious. Current New Zealand employment law offers limited redress for such employees. Even so, it remains to be seen whether the full extent of possible actions has been explored yet. New Zealand case law remains sparse in this area and the Court of Appeal has yet to determine a case involving the pertinent issues.

This paper examines the legal ramifications of personal relationships in the workplace. For this purpose, the scope of personal relationships will be restricted to marital relationships, de facto relationships, consensual sexual relationships and blood relationships. The issues identified by employers as arising from such relationships in the workplace are outlined, and the potential legal grounds for dismissal are considered. However, the issue of sexual harassment is not considered in depth as, by definition, it precludes the existence of a consensual relationship. Next, the pertinent statutory framework and the discriminatory effect of employers' actions are examined. The existing New Zealand case law is then discussed. Finally, the legal position of employees who have personal relationships with employees in the same workplace or a competing workplace is reviewed, and a recommendation is made as to the form of legal proceedings which should be elected if employees wish to pursue legal action.

II. Common Concerns of Employers

Employment policies that regulate the personal relationships of employees are commonplace in the United States,[3] and have generated much debate due to their discriminatory effects.[4] American employers have cited a number of reasons for these policies, ranging from administrative inconvenience to serious productivity problems.[5] New Zealand employers have raised much the same issues in personal grievance cases involving the personal relationships of employees.[6]

Confidential Information and Trade Secrets

The employers' fear of disclosure of confidential information or trade secrets is a common issue in these cases.[7] This issue affects not only businesses where there are personal relationships between co-employees, but also businesses where employees have close personal relationships with employees of a competing business. Personal grievance cases in New Zealand indicate that dismissal of an employee is not an uncommon response by an employer to the latter situation.[8] The recent judgment in Power Beat International Ltd v Anderson[9] also demonstrates that employers may dismiss the partner or spouse of a former employee when confidentiality is threatened. Both the Employment Tribunal and the Employment Court concluded that dismissal of the former employee's wife was a reasonable response to prevent the intentional or inadvertent disclosure of confidential information.[10] On the whole, dismissals based on genuine employer concerns about confidentiality have been upheld as substantively justified by the Tribunals and Court, even where there is no evidence of any actual disclosure.[11]

Bias

Another issue often raised is that of bias. Where employees who have a personal relationship are in a reporting relationship at work, employers become exposed to accusations, or perceptions, of favouritism towards the junior employees.[12] Supervisors may be more reluctant to address disciplinary matters with their relatives, de facto partners, or spouses, than with other employees.[13] The risk of favouritism towards relatives, de facto partners, or spouses increases when the business decision also affects the financial interests of the decision-maker; for example, the selection of employees to be declared redundant where one of the affected employees is the spouse of the decision-maker, or the awarding of bonuses or promotions to a spouse.

Several New Zealand cases have included such allegations of bias. In Bowden v News Media (Auckland) Ltd[14] the applicant was successful in claiming that her redundancy was procedurally unfair due to the personal relationship between the supervisor and one of the other affected employees. The Tribunal commented: 'It seems clear...that [the supervisor] should not have been placed in the position of deciding which [employee] was to be made redundant. He was in colloquial terms, too close to the action'.[15] Goddard CJ endorsed a similar pronouncement in Day v Whitcoulls Group Ltd:

I agree with the Tribunal that it was undesirable for the appellant even to appear to have fixed ... [the bonuses]... of managers reporting to him, particularly when one was living with him so that he was at risk of being accused of favouritism.[16]

Likewise, in the recent decision of Craw v Aspinall (NZ) Ltd,[17] the Tribunal accepted that the employer had a right to be concerned about the personal relationship between a senior manager and a junior employee because of the potential problems, including other staff members' perceptions of favouritism.[18]

Domestic Disputes

Conversely, employers also seek to avoid disruption of the workplace by domestic disputes.[19] The factual backgrounds to some New Zealand cases bear out the validity of employers' concerns. In Lewis v Department of Corrections[20] the personal relationship between two co-employees appears to have ended acrimoniously. Subsequently, one employee assaulted his former partner in the workplace, intercepted and shredded work documents intended for her, and allegedly twice attempted to run her off the road with his car after work. Less dramatic, but similarly disruptive, events following relationship problems between co-employees were also described in Craw.[21] One manager had had a series of relationships with female employees in his department. Each employee was reportedly upset when their relationship ended; one allegedly suffered depression as a result, and another attacked the manager in a nearby hotel and later resigned. On the other hand, an ongoing clandestine affair where one party is married to a co-employee can have an equally destructive effect when it is exposed, as was shown in Groot v Kiwi Lumber Company Ltd.[22]

Sexual Harassment

The termination of a sexual relationship between co-employees also raises the spectre of sexual harassment allegations.[23] These allegations have two possible forms: the rejected partner might seek to revive the relationship against the former partner's will, or, if the former partner is a more senior employee, the junior employee might allege that he or she was coerced into the relationship.[24] In either of these situations, employers could be found liable in any resultant proceedings. Primarily to avoid such liability, one Christchurch employer instigated a 'relationships policy', which required personal relationships between employees to be reported and provided for the dismissal of one or both parties to the relationship, if deemed necessary.[25]

Administrative Inconvenience

Lastly, employers point to the administrative difficulties that could arise where co-employees are in a personal relationship. Scheduling of shifts, holidays and special leave could be problematic when partners in a relationship, or family members, wish to make matching arrangements. The factual background to Craw[26] included evidence that the applicant had swapped one in every seven rostered shifts to be with her partner, a significantly higher swap rate than the norm. However, while concerned about this issue, the employer was able to accommodate the applicant's shift arrangements. An employer with only a few staff may not be able to do so. In addition, employees who have a personal relationship and work on the same shifts may pose a security risk in some industries.[27] Affected employers would therefore have to establish additional internal controls or roster the employees on different shifts.

III. Common Law Grounds for Dismissal

Although employers may have legitimate business grounds for disapproving of personal relationships in the workplace, not all of these grounds will provide a legal basis for the dismissal of an employee. Employers must have substantive reasons for the dismissal which are sufficiently serious to justify dismissal.[28] There are three general grounds on which employers may substantively justify a dismissal: misconduct, lack of capacity to perform the job,[29] and redundancy.[30] Misconduct is the most common ground cited in dismissals arising from personal relationships in the workplace.[31] Although lack of capacity, in the form of significant incompatibility between employees, has also been alluded to as an arguable ground for dismissal in one New Zealand case.[32]

General Misconduct

Misconduct can range from minor infringements to gross breaches of the employment contract; the latter being classified as 'serious misconduct'. Whether the misconduct in question is sufficiently serious to justify dismissal is a matter of degree.[33] The Court of Appeal in Northern Distribution Union v BP Oil New Zealand Ltd[34] held that 'usually what is needed is conduct that deeply impairs or is destructive of that basic confidence or trust that is an essential of the employment relationship'.[35] In determining this matter, the courts usually take a two-step approach:[36]

Was the conduct in question capable of amounting to serious misconduct?
If so, was the dismissal warranted in all the circumstances of the case?

However, in the recent case of W& H Newspapers Ltdv Oram,[37] the Court of Appeal stated it is not always necessary to consider these two issues separately, as in many situations essentially the same factors are involved in each issue.[38] Significantly, the Court also modified the perspective from which courts should view a dismissal decision. Rather than considering whether the decision to dismiss was 'one which a reasonable and fair employer would have taken in the particular circumstances',[39] the Court preferred to consider whether it was 'one which a reasonable and fair employer could have taken'.[40]

Legal commentators have strongly criticised Oram for introducing an approach that is too subjective and clearly biased towards employers.[41] It is argued that the Court has effectively reduced employees' rights regarding justification for dismissal.[42] Roth expresses the hopeful opinion the Employment Relations Act 2000 necessitates a more balanced approach to fairness and that, therefore, Oram represents the end of an era governed by the Employment Contracts Act 1991.[43] In contrast, Anderson suggests that the formulation of the judgment indicates that the case is unlikely to be confined to its facts.[44] The Court of Appeal's recent majority judgment in Coutts Cars Ltd v Baguley[45] implies that Anderson's view is more likely to be correct.[46] Although Baguley was decided under the Employment Relations Act, the majority considered that the good faith provisions in the Act have not introduced any significantly different obligations to that which the courts have already placed upon parties to employment contracts in the area of redundancy dismissals. There is no indication in the majority judgment, or that of Tipping J, that dismissals on other grounds would be treated any differently.

Thus, employers are likely to be able to justify dismissal on substantive grounds where the employees' conduct could be classified as a serious breach of the underlying implied term of trust and confidence. In the context of personal relationships in the workplace, such conduct can arise in various forms. There may be obvious breaches of behavioural standards, such as assault, verbal abuse, or sexual harassment of a former partner.[47] On the other hand, the mere existence of serious conflicts of interest or the risk of disclosure of confidential information and trade secrets may be sufficient to destroy trust and confidence. Hence, employees may be justifiably dismissed although their actual behaviour has been beyond reproach.

Conflict of Interest

Employees whose personal relationships could give rise to conflict between their own interests and those of their employer are in danger of breaching their duty of fidelity. The duty of fidelity is a term implied by law into every employment relationship.[48] The scope of this duty has been described as 'vague' and lies to be determined on the facts of each case.[49] However, the essence of the duty is that employees must not do anything to harm their employers' business during the term of their employment.[50] Furthermore, the New Zealand Court of Appeal has confirmed that dishonesty or fraud are not necessary ingredients of a breach of the duty of fidelity.[51] As with misconduct in general, the courts consider whether there is conduct which undermines the relationship of trust and confidence between employer and employee.[52]

Even so, there appears to have been a difference in the approaches of the Employment Court and the Court of Appeal. In a number of cases concerning the duty of fidelity, the Court of Appeal has overturned decisions by the Employment Court.[53] Although there is some differing interpretation of facts in these cases, Anderson explains the difference in approaches as being due to the Court of Appeal regarding the duty of fidelity as more pervasive.[54] Thus, in Tisco Ltd v Communication Workers Union,[55] the Employment Court limited the extent of an employee's duty outside working hours, whereas the Court of Appeal held that the duty covered an employee's activities outside working hours, even if there is only an indirect effect on the employer's business.[56]

Conduct associated with personal relationships between employees falls to be considered from the same perspective. Relationships between co-employees could result in one employee supporting the other in a dispute with the employer, as occurred in Milne v Caravans International Munro Ltd.[57] Such a situation, even if not involving actual misconduct, could show that this is sufficient conflict of interest to breach the duty of fidelity. Alternatively, relationships between employees who work for competing employers can result in accusations of breach of confidentiality. Employers argue that close relationships can lead to inadvertent disclosure of confidential information by otherwise trustworthy employees. This aspect of the duty of fidelity overlaps with the duty not to disclose confidential information, but the scope of these duties is quite different.

Disclosure of Confidential Information or Trade Secrets

The duty not to disclose confidential information may have developed from the duty of fidelity,[58] but there are now areas of significant difference which merit these duties being treated separately.[59] The leading case of Faccenda Chicken Ltd v Fowler[60] confirmed that the duty of fidelity covers unauthorized disclosure of any information received in confidence whilst the employment relationship exists,[61] whereas the duty not to disclose confidential information survives the termination of employment, but is limited to information which is 'of a sufficiently high degree of confidentiality'.[62] The definition of 'confidential information' has been the subject of much judicial attention. In Peninsular Real Estate v Harris,[63] Tipping J stated that 'what amounts to confidential information is not susceptible of abstract definition' .[64] However, the courts often refer to the list of matters considered by the English Court of Appeal in Faccenda:

(a) The nature of the employment... [E]mployment.. where 'confidential' material is habitually handled may impose a high obligation of confidentiality because the employee can be expected to realise its sensitive nature to a greater extent than if he [sic] were employed in a capacity where such material reaches him [sic] only occasionally or incidentally.
(b) The nature of the information itself... [I]nformation will only be protected if it can properly be classed as a trade secret or as material which, while not properly to be described as a trade secret, is in all the circumstances of such a highly confidential nature as to require the same protection as a trade secret...
(c) Whether the employer impressed on the employee the confidentiality of the information... [T]he attitude of the employer towards the information provides evidence which may assist in determining whether or not the information can be properly regarded as a trade secret.
(d) Whether the relevant information can be easily isolated from other information which the employee is free to use or disclose... [T]he separability of the information... [is not] conclusive, but the fact that the alleged 'confidential information' is part of a package and that the remainder of the package is not confidential is likely to throw light on whether the information .. is really a trade secret.[65]

These matters receive close attention in those cases where the employer wishes to restrain former employers from using information obtained during the course of their previous employment. In such cases the courts attempt to balance competing policy considerations: the preservation of confidences; the freedom of individuals to use their skills, experience and knowledge for gaining employment; and legitimate business competition.[66] The distinction between confidential information and skills or 'know-how' becomes necessary in this context.

However, these competing policy considerations are not a feature where breach of confidentiality by a current employee is at issue. Here the conflict is between the employee's duty of fidelity and his or her self-interest. In these situations, the courts have no difficulty in according primacy to the duty of fidelity.[67] Accordingly, the identification and separation of confidential information and 'know-how' assumes less importance and often only attracts superficial examination by the courts.[68] The primary focus of the courts is whether the employee's actions constituted a threat to the employer's business.[69] This is often to the detriment of employees pursuing personal grievances for unjustifiable dismissal. A glimmer of hope was offered to employees, who disclose confidential information to a spouse or de facto partner, by obiter comments made by Goddard CJ in Preston v Otago Area Health Board.[70] These comments inferred that the confidences shared between spouses or de facto partners have a different legal quality that may be taken into consideration.[71] The Tribunal in Hughes v Borden (NZ) Ltd[72] advanced this approach further, stating:

[I]f the information which [the employee] took home and briefly discussed with her husband was confidential information, but information to which she had legitimate access, and this had unfortunate consequences, then I seriously doubt her actions could be viewed as serious misconduct. She is entitled to expect what is said to her husband in confidence will go no further.[73]

However, both these cases involved somewhat unusual circumstances. The persons to whom the employees had disclosed confidential information had later informed the employers of this disclosure, following deterioration in their personal relationships. The employees were then dismissed. Nevertheless, when there is clear evidence of disclosure of confidential information, it is doubtful whether the confidential relationship between spouses or de facto partners should be permitted to defeat the duty of fidelity owed to employers. This issue was not examined fully in Preston as the Court was only considering an application for an interim injunction. Subsequent cases have not followed the approach in Hughes, even in the absence of any evidence of disclosure.[74]

IV. Statutory Framework

When employees wish to challenge the grounds for dismissal, their complaints must fall within the statutory provisions governing employment or human rights. The overlap between personal and employment relationships is also reflected by overlapping statutes. As Rossiter commented, issues that arise under these circumstances should be considered in view of not just employment legislation but also human rights legislation.[75] Employees who have been discriminated against have the option to elect to pursue a personal grievance under employment legislation or a complaint under human rights legislation.[76] The circumstances giving rise to the discrimination claim will dictate which jurisdiction is most appropriate for the employee.

Humans Rights Legislation

The Human Rights Act 1993 began as the Human Rights Commission Amendment Bill 1990, which was introduced on the last day of the Parliamentary term in 1990. The Bill extended the unlawful grounds of discrimination to include, inter alia, family status and the identity of a partner or relative.[77] In association with these new prohibited grounds of discrimination, new exceptions were also created.[78] However, a change of government saw the Bill languish in the Justice and Law Reform Select Committee. It was not until 1992 that the greater part of the original Bill was reintroduced as the Human Rights Bill. During this intervening period, the definition of family status was amended to include the identity of a partner or relative,[79] due to concern about the number of new grounds.[80] There was also a significant amendment to the clause expressing the exception in relation to the identity of a partner or relative. Originally the reporting relationship between partners or relatives had to be 'direct' and the risk of collusion 'substantive',[81] however, these qualifications were deleted in the Human Rights Bill. The Ministry of Women's Affairs submitted that the tests should be 'direct reporting relationship' and 'real risk of collusion', but to no avail.[82]

The pertinent provisions of the Human Rights Act for employees in personal relationships are: ss 21, 22 and 32. Section 21 contains the prohibited grounds of discrimination, which include:

• marital status, which means the status of being single, or married, or married but separated, or a party to a marriage now dissolved, or widowed, or living in a relationship in the nature of marriage;[83]
• family status, which means
•being married to, or being in a relationship in the nature of a marriage with, a particular person;[84] or
• being a relative of a particular person.[85]

Family status is the most applicable ground on which to base a discrimination claim when an employee has been dismissed because of a personal relationship in the workplace. Section 22 of the Act deals specifically with discrimination in employment matters. Amongst other points, this section provides that it is unlawful for an employer to terminate the employee,[86] subject the employee to detriment,[87] or cause the employee to resign because of any of the prohibited grounds.[88] However, these restrictions are tempered by the exceptions listed in s 32. Section 32 provides that it is lawful for employers to place restrictions on the employment of:

• any person who is married to, or living in a relationship in the nature of marriage with, or who is a relative of, another employer if
• there would be a reporting relationship between them; or[89]
• there is risk of collusion between them to the detriment of the employer; or[90]
• any person who is married to, or living in a relationship in the nature of marriage with, or who is a relative of, an employee of another employer if there is a risk of collusion between them to the detriment of that person's employer. [91]

Although the employer bears the onus of proving these exceptions,[92] s 32 presents a formidable obstacle to employees who have been dismissed due to personal relationships in the workplace. Some commentators interpret the meaning of 'restrictions' narrowly.[93] It is not clear whether 'restriction' under s 32 extends beyond redeployment or transfer to include dismissal of an existing employee. However, there is little to indicate that judicial bodies interpret 'restriction' as excluding dismissal.[94] To date it seems to have been given a wider interpretation. Arguably, this approach runs contrary to the spirit and intention of the Human Rights Act.[95] However, the exceptions to the prohibition on discrimination are subject to a general qualification. Section 35 of the Act provides that the exceptions do not entitle an employer to treat an employee differently if some reasonable adjustment would enable another employee to perform the activities in question. Thus, employers could be liable for unlawful discrimination if they do not consider reasonable alternatives to dismissal. Such alternatives for employees in personal relationships could include changes in reporting structures, changes in duties so that there is no access to confidential information, or internal transfers.

On the other hand, if an employee's personal relationship falls outside those specified in s 21 of the Act, then discrimination on the grounds of that relationship may not be unlawful.[96] However, s 65 provides another possible avenue of action for some employees in this situation. Indirect discrimination is unlawful under s 65 unless there is a good reason. In the workplace, indirect discrimination occurs when an apparently non-discriminatory requirement or action by the employer has a disproportionately adverse effect on the members of a class of employees that is identified in terms of a prohibited ground of discrimination.[97] American studies indicate that relationship policies in the workplace have a more detrimental affect on women.[98]

Thus, if an employer dismissed a female employee because of a personal relationship that falls outside those specified in s 21, there could be a case of indirect discrimination on the grounds of sex. However, the claimant must present specific proof of adverse impact,[99] which could prove difficult. The Complaints Review Tribunal has indicated that the use of statistical evidence, as in the United States, is also appropriate for New Zealand.[100] Yet, statistical evidence in these types of case is often rejected by American courts because the sample size is insufficient,[101] and New Zealand sample sizes are likely to be even smaller. Even if an employee is able to meet this burden of proof, the employer may be able to defend the claim by establishing a 'good reason' forthe action. Hence, the likelihood of success in a claim of indirect discrimination seems limited.

Employment Legislation

Overthe last two decades, employment legislation has consistently provided for claims by employees against employers in the form of personal grievances.[102] Personal grievances could be based on anumber of grounds, including unjustifiable dismissal,[103] unjustifiable disadvantage,[104] and discrimination.[105] The employment statutes also contained provisions defining discrimination.[106] Employees aggrieved by the treatment meted out by their employer because of a personal relationship in the workplace could make a claim based on one or more of these grounds. In practice, the majority of claims in the employment jurisdiction are for unjustified dismissal.[107]

However, until the Employment Relations Act came into force, the interface between human rights and employment legislation was problematical. A number of gaps existed between the Human Rights Commission Act 1977, the Labour Relations Act 1987, the Employment Contracts Act 1991 and the Human Rights Act 1993.[108] For the purposes of this paper, the most significant gap was that the Employment Contracts Act was not amended to reflect the increase in the prohibited grounds of discrimination, and the associated exceptions, in the Human Rights Act. Thus, the Employment Contracts Act referred to marital status but not family status as an unlawful ground of discrimination,[109] and did not contain any exception to discrimination on these grounds. Furthermore, the term 'marital status' was not defined in the Employment Contracts Act, in contrast with the Human Rights Act.

Thus, s 28 of the Employment Contracts Act raised the issue of whether discrimination on the basis of a relationship with a particular person was discrimination on the basis of marital status. This issue has been the subject of many judicial debates in overseas jurisdictions, with mixed outcomes.[110] However, many applicants under the Employment Contracts Act did not raise claims of discrimination.[111] Eggleston v Firestone Tyre and Rubber Co (NZ Ltd)[112] appears to be the only New Zealand employment case in which the meaning of marital status has been expressly raised. Although not expressing a view on the correct interpretation, the adjudicator impliedly accepted a broad interpretation of 'marital status'.[113] Conversely, a different adjudicator in the contemporaneous case of Meeuwsen v New Zealand Rail Ltd[114] seems to have adopted anarrow interpretation.[115] The Employment Relations Act addressed these anomalies. Sections 104, 105 and 106 of the Act ensure the prohibited grounds of discrimination and exceptions under the employment jurisdiction are now consistent with those under the human rights jurisdiction. Section 104 now expressly encompasses indirect, as well as direct, discrimination. Section 105 replicates the prohibited grounds of discrimination set out in the Human Rights Act, and s 106 imports the associated exceptions. Thus, detrimental action against an employee by the employer because of the identity of an employee's spouse could found a personal grievance for discrimination on the grounds of family status. Equally, it is now clear that if there is a reporting relationship or a risk of collusion to the detriment of the employer then the discrimination may be lawful.

Choice of Jurisdiction

Section 112 of the Employment Relations Act provides than an employee must choose to either raise a personal grievance under the Employment Relations Act or make a complaint under the Human Rights Act. In the past, the latter has proved to be the more popular choice.[116] Commentators have attributed this to several reasons: the procedures under the Human Rights Act are perceived as being cheaper, less confrontational, more flexible and perhaps more generous.[117] A comparison of the average compensation for sexual harassment shows that awards under the human rights jurisdiction are $3,000 higher than those under the employment jurisdiction.[118]

In addition, the human rights institutions may demand a firmer evidential basis for exceptions to the prohibited grounds of discrimination than do the employment institutions. The accuracy of this perception is difficult to assess due to the general unavailability of case details from the Human Rights Commission. However, in J v D&W Ltd,[119] the Complaints Division formed the opinion that an employer had failed to prove a defence under s 32 of the Human Rights Act. This case involved a female applicant for a vacancy who was refused consideration because her brother worked for the same employer. The Complaints Division considered that there was no evidence of actual or real risk of collusion, only an assumption of risk because of a family relationship. Furthermore, the Complaints Division is reported as stating that:

[C]ollusion must involve more than merely letting a secret slip out. It must be some form of secret arrangement between the parties to act to the employer's detriment... [P]artners in a relationship could be expected to uphold the confidences of another.[120]

This approach to s 32 contrasts with that taken by the Employment Tribunal and Employment Court, where the employer's assessment of risk is usually accepted.

However, s 113 of the Employment Relations Act leaves some doubt as to whether employees wishing to challenge their dismissal still have a choice of procedures under s 112. Section 113(1) provides that if a dismissed employee wishes to challenge that dismissal, or any aspect of it, for any reason, in any court, that must be done through the personal grievance provisions of the Employment Relations Act. Read literally, s 113 seems to mean that an employee dismissed because of a prohibited ground of discrimination would be unable to make a complaint under the Human Rights Act as this would be a challenge to the dismissal 'for any reason' .[121] It remains to be seen whether the Employment Tribunal or Employment Court will interpret s 113 in this way.

V. New Zealand Case Law

Despite the pitfalls that may befall employees who mix business with pleasure, there are few significant New Zealand employment cases in this area. There are numerous cases where personal relationships have provided the background for misconduct leading to dismissal,[122] but relatively few cases where the existence of a personal relationship has been the primary reason for dismissal. In addition, most of these cases have been decided at Tribunal level. Employment Court cases concerning personal relationships are infrequent, and, to date, none of these cases have proceeded to the Court of Appeal.

Competing Employers

Foundation Cases

Northern Clerical Workers Union v Printpac UEB Carton[123] still remains the leading New Zealand case concerning dismissal arising out of an employee's relationship with someone employed by a competitor of the employer. In Printpac, the applicant, Ms Krueger entered a de facto relationship with a co-employee. However, her partner was later made redundant and subsequently gained employment with a competitor of his former employer. On discovery of this fact, the employer suspended Ms Krueger on full pay, and explored the possibility of an internal transfer to address the situation. A few weeks later, Ms Krueger was offered an alternative position. Ms Krueger declined this offer because the working hours were longer and the level of responsibility was lower than her previous position. After rejecting an alternative arrangement proposed by Ms Kreuger, the employer dismissed her with four weeks' salary in lieu of notice. Travis J, delivering the judgment of the Labour Court, referred to a number of English cases, in particular: Foster v Scaffolding Ltd,[124] Foote v Eastern Counties Timber Co Ltd,[125] and Skyrail Oceanic Ltd v Coleman.[126] The Court distinguished those cases involving actual disclosure of commercial information to an employee of a competing company.[127] Instead, the Court relied mainly on Skyrail Oceanic Ltd, in which an employee was dismissed two days after her marriage to an employee of a competing firm. In that case, as in the one under consideration, there was no proof of disclosure of confidential information. Nevertheless, both courts found that if an employer believes on reasonable grounds that there is a risk of disclosure of confidential information by an employee to someone with whom they have a close relationship, then this may constitute a justifiable ground for a dismissal.[128]

Interestingly, the Labour Court accepted the respondent's suggestion that the situation was analogous with that of redundancy.[129] Thus, the Court assessed the employer's dismissal decision from the perspective of a competent businessperson, requiring only that the decision was one which might reasonably have been made, not that it should be the best one possible. The Court then concurred with the employer's assessment of the commercial risk posed by Ms Krueger's personal relationship if she were to continue in her existing position.[130] In doing so, the Court referred to Ms Krueger's access to commercial information, the sensitivity of this material, and the senior position held by Ms Krueger's partner.[131] This assessment mirrored that adopted by the Industrial Tribunal and the Employment Appeal Tribunal in Skyrail:

whether having regard to past conduct the amount of access to confidential information, the importance of such information and the positions held by the two employees it is fair and reasonable.. to treat the risk as sufficiently great as to justify dismissal.[132]

Thus, the Court held that Ms Krueger's dismissal was substantively justified.

However, the matter did not rest there. The Court proceeded to consider whether the dismissal had been procedurally fair. On this issue the Court found against the employer. The evidence disclosed that two other employees who were married to employees of competing firms had not been dismissed, although they also had access to confidential information of interest to their spouses' employers. On the basis of this disparity in treatment, the Court held that Ms Krueger's dismissal was unjustifiable. During 1993 the Employment Tribunal considered two cases akin to Printpac: Meeuwsen vNew Zealand Rail Ltd[133] and Eggleston v Firestone Tyre and Rubber Co (NZ) Ltd.[134] In both of these cases female employees were dismissed because of their personal relationship with employees of competing firms. However, the adjudicators reached opposite conclusions as to whether the dismissals were justified.

In Eggleston, the Tribunal found the dismissal was unjustified, both substantively and procedurally. The adjudicator distinguished Printpac on the facts. After consideration of the applicant's position and that of her husband, he concluded that the associated risk to the employer's interests was only minimal. Hence, the employer's decision to dismiss was unreasonable. The manner of dismissal was also held to be unfair; the dismissal decision had been predetermined and the applicant had not been given any opportunity to consider or respond to the employer's concerns. In contrast, the adjudicator in Meeuwsen emphasised the limitations on the Tribunal's review of the employer's decision.[135] The Tribunal restricted its consideration of the dismissal decision to whether the decision was a genuine one made with proper motives. In doing so, the Tribunal accepted the employer's appraisal of the risk that the applicant's relationship might create for the business. Thus, the Tribunal found that there were sufficient grounds for the dismissal. This seemingly blind acceptance of the employer's appraisal of the commercial risk, if made in good faith, attracted criticism.[136] Anderson favoured the approach taken in Eggleston, whereby a firm evidential basis was required for the perceived risk.[137] The Tribunal inMeeuwsen also found in favour of the employer with respect to procedural fairness. This aspect of the decision was criticised by legal commentators as well.[138] As in Eggleston, it appears that the applicant was summoned to a meeting where she was informed of a predetermined decision to dismiss her, and then summarily dismissed without any real opportunity to respond. The only difference in the process was the employer had investigated relocating or redeploying the employee to address the issue, albeit unsuccessfully. The Tribunal excused the employer's deficient process on the grounds 'it would have been undesirable and insensitive for the employer to suggest... how she should conduct her private life'.[139] With respect, this argument is unconvincing in view of the severe consequences subsequently suffered by the employee. Section 28 of the Employment Contracts Act led to the Tribunal also addressing claims of discrimination in Eggleston and Meeuwsen. As with procedural fairness, the findings of the adjudicators contrasted sharply. In Eggleston, the Tribunal found that the only reason for the applicant's dismissal was her marriage to Mr Eggleston. The Tribunal considered the conflicting interpretations of 'marital status' in overseas jurisdictions, and preferred to adopt the 'but for' test proposed in NZ Workers IUOW v Sarita Farm Partnership.[140] Applying this test, the Tribunal held that the employer had breached s 28 of the Employment Contracts Act. Conversely, the decision in Meeuwsen lacks analysis of the meaning of'marital status' or the appropriate test to apply. This aspect of the case is covered by the statement that 'it was Ms Meeuwsen's close personal association with [her partner], whether inside or outside wedlock, that was of significance to [the employer]'.[141] The Tribunal held that marital status had not been the cause of dismissal.

The first case of this type to reach the Employment Court was Kotzikas v LEP Freightways International Ltd.[142] Once again, this case concerned a female employee whose de facto partner was a former co-employee. Her partner had left the business to set up in direct competition with his former employer. One year later the employee, Mrs Kotzikas, was dismissed on the grounds of destruction of the necessary trust and confidence in the employment relationship. Mrs Kotzikas's behaviour in this intervening period was in sharp contrast with that of the applicants in previous cases. Her disparaging comments about the employer and strong advocacy of her partner's business provided convincing evidence to support the employer's concerns about confidentiality and fidelity. Hence, Palmer J upheld the Tribunal's finding that the dismissal was substantively justified. Likewise, the Court held the dismissal process was generally fair and reasonable. The Court identified some procedural defects but considered that these were insufficient to compromise the substantive basis of the dismissal decision. The deficiencies were that the employer had not notified the employee that the meeting could lead to disciplinary action or dismissal, nor notified her that she could or should have representation, and, during the meeting, had not warned her that her responses provided grounds for dismissal. In view of these defects, Rossiter aptly described the Court's approach as a 'limited application of generally accepted procedural principles'.[143]

Both the Tribunal and the Court also found the employer had not discriminated against the applicant on the grounds of her marital status. The Court's judgment was instructive as regards the correct approach to discrimination allegations. Palmer J described the decision in Meeuwsen as 'inappropriate', and expressly approved the approach adopted in Eggleston regarding the use of the 'but for' test. However, in applying this test, he found that the personal relationship was not the reason for dismissal but merely part of the surrounding circumstances.

Discrimination Developments

A further aspect of discrimination claims was explored by the Tribunal in Copland v Auto Point Motors Ltd t/a King Toyota.[144] As with previous cases, the employer had dismissed the applicant because of a perceived risk of disclosure of confidential information to her de facto partner, who worked for a competing business. However, there was also the complicating factor that at the time of dismissal the applicant and her partner had ceased living together, although the relationship had not terminated. The Tribunal considered that it was bound by Printpac, and found that the applicant's relationship with her partner was sufficiently close to provide a substantive ground for dismissal.

The Tribunal also dismissed the argument that the Court in Printpac had failed to consider discrimination issues. The adjudicator drew attention to s 32 of the Human Rights Act 1993, enacted since the decisions in Printpac, Eggleston and Meeuwsen. The Tribunal held that this provision precluded any finding of unlawful discrimination against the applicant, if the relationship was in the nature of marriage. Furthermore, the adjudicator stated that in the absence of such a relationship, there was no unlawful discrimination. Thus, the employer had not unlawfully discriminated against the applicant.

This application of s 32 of the Human Rights Act is arguably flawed. The case was decided under the Employment Contracts Act which did not contain this exception in its parallel provision, s 28. In applying this exception, the Tribunal does not seem to have recognised that it may have exceeded its jurisdiction. However, in the reverse situation, the Employment Court commented that unlawful discrimination on grounds which were specified in the Human Rights Act, but not in the Employment Contracts Act, could comprise a sufficient breach of confidence and trust to establish an unjustifiable dismissal.[145] In view of this, it would be difficult to deny employers the same flexible approach. Moreover, this debate is purely academic now. Sections 105 and 106 of the Employment Relations Act have remedied these gaps.

Procedural Fairness Developments

Since Meeuwsen and Kotzikas, there has been an increasing emphasis on procedural fairness by the Tribunal and the Court. This trend seems to have started with the Employment Court's judgment in Circle Pacific Asparagus v Scia Scia.[146] The facts of this case fit the familiar plot. A married couple and their daughter had all been employees in the same business. After the husband left to set up a competing business, his former employer dismissed his wife and daughter on the grounds there was a risk of disclosure of confidential information. The Tribunal held that these dismissals were substantively justified, following the precedent of Printpac. There was no appeal against that conclusion.

However, the Tribunal also held the dismissals were procedurally unfair and, therefore, unjustifiable. Mrs Scia Scia had been dismissed by letter without any opportunity to discuss the matter; her daughter had been informed in person that her employment had ended, again with no opportunity for discussion. On appeal, the Employment Court upheld the Tribunal's findings. Goddard CJ described the process by which Mrs Scia Scia was dismissed as 'utterly inadequate'.[147] The Court considered that the circumstances of the case required the employer to assure the employees they were not being dismissed merely because their employee hated or disliked the person to whom they were related. Furthermore, it was necessary for the employer to discuss with the employees less drastic solutions, which may have addressed the confidentiality problem. The Court regarded it as quite inadequate for the employer simply to suggest that Mrs Scia Scia could later apply for a seasonal position in another division. Goddard CJ found the employer's appeal to be 'entirely without merit'. Subsequent cases have echoed this emphasis on procedural fairness. In Copland, the Tribunal held that the employer's action in removing some duties from the employee indicated a degree of predetermination about the dismissal decision. Further, the employer had not pursued alternatives to dismissal, nor given the employee an opportunity to suggest other options. These matters rendered the dismissal unjustifiable. The Tribunal stressed that in situations where the employee is not guilty of any blameworthy conduct, procedural matters become vital. Similarly, in Fullerton v Tenpin New Zealand Ltd,[148] the employer's failure to consider fully the available options was a major factor in making the dismissal unjustified. However, this approach was taken to another level in Strange v Imperial Enterprises Ltd t/a Parapine.[149] In that case, an employee had been dismissed because her brother held a senior position with a fierce competitor of the employer. The Tribunal noted the Court of Appeal's statement that there was no sharp dichotomy between procedural and substantive fairness,[150] and the Employment Court's submission that the inquiry into procedure should come first.[151] The Tribunal then considered whether the dismissal procedure met the requirements specified in New Zealand Food Processing etc IUOW v Unilever New Zealand Ltd.[152] The employee had not been given notice of the employer's concerns or that she could be dismissed if her replies were deemed inadequate, the dismissal decision was predetermined, and the employee had no real opportunity to respond to the employer's concerns. Unsurprisingly, the Tribunal held that the dismissal procedure was unfair. Having reached this conclusion, the Tribunal then declined to address the substantive issues. The adjudicator stated that the procedural defects were so significant that the dismissal decision was fatally flawed. Notwithstanding this approach, the Tribunal did refer to the substance of the employer's concerns when distinguishing previous cases and considering remedies. With respect, the Tribunal seems to have overlooked the Court of Appeal statement that the overall question is whether the employee has been treated fairly in all the circumstances.[153] It seems unlikely that this question could be answered without any consideration of the substantive issues in a case. Although some applicants are likely to applaud the approach in Strange, it is doubtful whether the Employment Court or the Court of Appeal would endorse it. Indeed, the Employment Court expressly declined to follow such a course in Court v Falloon.[154]

Common Employer

Collusion

Cases arising from dismissals founded on alleged collusion between co-employees are infrequent. In Court v Falloon,[155] the Employment Court considered whether the dismissal of an employee for allegedly assisting her husband to 'poach' clients was justified. The case concerned an accountancy practice in which the applicant, Mrs Court, was a clerical worker and her husband, the former practice owner, was a consultant. The employer became concerned about the lack of control he had over Mr Court's dealings with clients and believed that he was endeavouring to 'poach' clients. The employer also considered that Mrs Court was colluding with her husband by providing clerical assistance to him when he worked from home. Consequently, the employer terminated Mr Court's consultancy and Mrs Court's employment. In doing so, the Court found that the employer had not investigated the suspected misconduct adequately nor given the applicant an opportunity to be heard. The decision to dismiss the applicant had been predetermined. Hence, the dismissal was procedurally unjustified, a point conceded by the employer during the hearing. The Court's examination of the employer's substantive justification for the dismissal was thorough. This contrasts with the approach often taken when employees are in a relationship with someone who works for a competing company. The Court assessed the evidence presented by the employer and concluded that Mrs Court was not guilty of serious misconduct, and that the employer could not reasonably conclude that she had been. It was not the employee's responsibility to oversee her husband's work, and the employer had failed to prove that she had passed information to her husband to facilitate his alleged poaching.

However, in assessing remedies, the Court considered whether there was substance in the employer's concerns about Mr Court's activities. The Court found that these concerns were substantively justified. Furthermore, the Court formed the conclusion that Mr and Mrs Court both harboured deep antipathy towards the employer, for reasons beyond the summary dismissal of Mrs Court. Under these circumstances, the Court reasoned that Mrs Court's continued employment would have become progressively intolerable after her husband's termination. Therefore, her employment would probably have ended within months, either by mutual consent or by justifiable dismissal. The compensation awarded to the applicant was adjusted accordingly. The recent case of Milne v Caravans International Munro Ltd[156] showed a similar depth of examination of substantive issues. However, the outcome of this case is in marked contrast with that ofCourt. InMilne, the applicant had been dismissed after refusing to perform assigned work in support of his brother-in-law. The applicant, Mr Milne, had attended a disciplinary meeting with their employer as a representative for his brother-in-law, Mr Martin. Mr Martin was in dispute with the employer about payment for a certain type of work. During the course of this meeting, Mr Milne actively supported his brother-in-law's refusal to perform the work and informed the employer that he would likewise refuse if asked to perform that work. Subsequent meetings failed to resolve the matter and the brothers-in-law were summarily dismissed.

In its analysis of the substantive justification for Mr Milne's dismissal, the Tribunal traversed the evidence relating to Mr Martin's dispute and the applicant's role therein. The Tribunal concluded that the employer had fulfilled the requirements of procedural fairness and was substantively justified in dismissing Mr Milne. The position of Mr Milne was differentiated from that of his brother-in-law. He did not have a dispute with the employer. His actions were the result of taking a supportive stand in the dispute between his brother-in-law and the employer. The Tribunal noted that such a stand could only result in serious conflict between the applicant, who was a supervisor, and the employer. In contrast with Court, the applicant's actions in refusing to accept a lawful instruction amounted to serious misconduct, thus justifying summary dismissal. These cases illustrate the fine line between familial loyalty and employee disloyalty. Court fell on one side of the line, whilst Milne fell on the other. In such cases, it seems that both the Tribunal and the Court pay close attention to the evidential basis for the employer's decision. There is no indication that these situations are treated as analogous to redundancy. Thus, the employer must establish actual misconduct; honest suspicion of misconduct is an insufficient basis for dismissal in these cases. It is also noteworthy that neither of these cases included any claims of discrimination.

Reporting Relationships

The Tribunal and the Court also carefully scrutinise evidence in cases where employees have been dismissed because of their personal and reporting relationships with other employees. In Day v Whitcoulls Group Ltd,[157] the appellant had been summarily dismissed for two reasons: his de facto relationship with an employee who reported to him, and alleged irregularities in the payment of a bonus to himself. The appellant had disclosed the existence of this personal relationship to the previous executive of the company, but had not informed the new management following a change of ownership in the company. The Employment Court concluded there was no firm evidential basis for the perceived impropriety. The supposed non-disclosure of the personal relationship was described as a 'spurious' reason for dismissal. This finding was based, in part, on the rules relating to separate corporate personality: 'the company could not claim ignorance of what it had been told under its previous management' .[158] Therefore, the dismissal was unjustified. However, the Court also commented it was undesirable for the appellant to have fixed the bonus payments without independent verification.

In assessing remedies, the Employment Court considered the causative effect of the personal relationship. The Court held the appellant's non-disclosure of this relationship to the new managers was not contributory conduct; he was entitled to assume that they knew. Thus, remedies would not be reduced on this account. However, in considering the appellant's conduct with respect to the bonus payments, the Court found that payment of a bonus to his de facto partner was a 'very real' contribution. As a result, the Court reduced the compensation for lost wages by 33 per cent. This aspect of the case is somewhat troublesome, as there was no allegation of impropriety in the payment of this particular bonus and this conduct was not regarded as a major factor in the circumstances giving rise to the personal grievance.[159] Nevertheless, like Court, this case shows the impact that a potential conflict of interest can have on the overall outcome of a personal grievance, even when the dismissal is unjustified. An employment policy regulating the personal relationships of employees was alluded to in Day, but not discussed. In contrast, a formal relationship policy was a major feature of the factual background to Craw v Aspinall (NZ) Ltd.[160] The applicant, Ms Craw, claimed she had been constructively dismissed, or unjustifiably disadvantaged, due to the employer's relationship policy. Ms Craw had entered a personal relationship with a manager to whom she reported in the workplace. On discovery of this, the employer informed the applicant that she would have to transfer to another department or leave the company. After a number of fruitless discussions, Ms Craw eventually resigned. The Tribunal examined the reasons for the relationship policy and concluded that the employer, a casino company, had a right to be concerned about personal relationships in the workplace, especially those between senior managers and junior employees. However, the adjudicator also noted that the concerns about security might have been overstated in view of the existing internal controls. Even so, the Tribunal upheld the employer's contractual right to require an employee to transfer or leave. Notwithstanding this conclusion, the Tribunal found the applicant had been constructively dismissed from her existing position. The Tribunal also held that the dismissal was procedurally unfair. In doing so, the Tribunal effectively found that there was disparity in the treatment accorded to the applicant and that accorded to her partner, Mr Cargin.[161]

The employer had initially relied on Mr Cargin to convey the employer's concerns and the available alternatives to Ms Craw; it was several months later before the employer raised the issue directly with the applicant. The employer also failed to discuss the matter with both parties to the relationship present. The employer's emphasis throughout was on the applicant doing something to resolve the situation; there was no serious suggestion that her partner should transfer or leave. The Tribunal commented on the inherent discrimination in this approach, noting that Mr Cargin had in fact transferred to another position shortly after Ms Craw left. In contrast with Day, the Tribunal did not believe that there was any contributory fault by the applicant. The relationship policy had lapsed at the time when she was employed and she was not informed of its existence. Thus, remedies were not reduced.

The differing approaches in Day and Craw are interesting. It appears that the sex and junior position of the applicant in Craw influenced the Tribunal in its findings. Although there was no claim of discrimination on the grounds of sex, the Tribunal was clearly conscious of this undertone. The Tribunal's acceptance of the relationship policy curtailed any examination of whether the applicant was guilty of misconduct, but this acceptance was qualified. The Tribunal required that the employer must treat both parties to the relationship as equals in the implementation of such a policy. This approach has the potential to counter the indirectly discriminatory effect that s 106(i) of the Employment Relations Act is likely to have on female employees. It is hoped that the Employment Court will approve.

Double Dismissals

One situation that occasionally features in cases is the simultaneous dismissal of employees who are in a personal relationship.[162] Sometimes the grounds for dismissal relate to the conduct of one of the employees and the other employee is included by association only. The Employment Tribunal considered two such cases in 1995: Karaitiana v Singh[163] and Redmond v DML Resources Ltd.[164] The circumstances in these cases were materially different. However, both adjudicators agreed that the dismissals based solely on the personal relationship were unjustified. As with the cases concerning collusion,[165] the Tribunal required a firm evidential basis for the dismissals.

In Karaitiana, a married couple was employed at a thermal springs resort. Within months of commencing employment, the relationship between the couple and their employers had seriously deteriorated. There were public confrontations between the employer and Mr Karaitiana, and incidents in which the employer accused the couple of dishonesty. These events culminated in the dismissal of the couple. Applying Airline Stewards and Hostesses of New Zealand IUOWv Air New Zealand Ltd[166] and Unilever,[167] the Tribunal held that the dismissals were unjustified. The employer's belief in misconduct was no more than a mere suspicion; there was no clear evidence, no careful investigation, no notice given to the employees of the specific allegations and no real opportunity for the employees to respond. The Tribunal found that 'Mrs Karaitiana was dismissed because she was Mr Karaitiana's wife. It almost goes without saying [that] her dismissal on those grounds was substantively unjustified'.[168]

The situation in Redmond was less clear-cut. In that case a married couple was employed by a New Zealand company and seconded to work overseas. After several months, Mr Redmond became concerned about discrepancies in the company's tax returns. He raised these concerns with the employer but was not satisfied with the response. Thereafter, communication problems developed and Mr Redmond became convinced that his dismissal was imminent. Subsequent events proved this to be a self-fulfilling prophecy; within two months, Mr Redmond was dismissed for refusal to follow instructions. The Tribunal held that this dismissal was substantively and procedurally justified.[169]

The dismissal of Mrs Redmond arose under atypical circumstances. The employer maintained there was no intention to dismiss Mrs Redmond but Mr Redmond had advised the employer that it would be impossible for Mrs Redmond to remain, and had negotiated a settlement for her. Mr Redmond had then informed his wife that they had both been dismissed. The Tribunal accepted that the employer believed that Mr Redmond was acting as his wife's agent. However, the Tribunal concluded that the employer should have asked for proof that Mr Redmond was a duly authorised agent. In addition, there was no reason why the employer could not have spoken directly to Mrs Redmond. Under these circumstances, the Tribunal held that Mrs Redmond's dismissal was substantively unjustified and procedurally unfair.

Notwithstanding these findings, the Tribunal reconsidered the effect of Mr Redmond's dismissal when assessing remedies. Mrs Redmond's term of employment was contractually linked to that of her husband. Therefore, the Tribunal found that she was not entitled to any compensation for lost earnings. This aspect of the decision is reminiscent of the Employment Court's findings in Court,[170] demonstrating once again that even when dismissal is unjustified the existence of a personal relationship may limit the award of remedies.

Other

The recent case of Power Beat International v Anderson[171] falls outside the above categories, but has some common features with the Scia Scia case. In Power Beat, a husband and wife were both employed by an electronics company. After a number of performance problems, the employer dismissed Mr Anderson. Initially the employerwas contentto continue Mrs Anderson's employment, having emphasised the need to maintain confidentiality. However, circumstances changed following a letter from Mr Anderson in which he claimed that he had been unjustifiably dismissed and appeared to threaten the release of commercially damaging information. At this point, the employer decided it would have to deny Mrs Anderson access to the company's files, as she had previously declared her first loyalty was to her husband. The employer also decided that this action would reduce Mrs Anderson's workload to such an extent that she should be made redundant. Thus Mrs Anderson was declared redundant.

Both the Tribunal and the Court found this was not a genuine redundancy and that Mrs Anderson had been dismissed. The Tribunal also applied the 'but for' test and held the employer had discriminated against Mrs Anderson on the grounds of her personal relationship. However, this discrimination would be lawful under s 32(b) of the Human Rights Act 1993 if the employer could show a risk of collusion between Mr and Mrs Anderson to its detriment. The Tribunal found that Printpac, Kotzikas, and Meeuwsen were different on the facts; Mr Anderson was not in competition with the employer and was merely pursuing a legal right to claim unjustifiable dismissal. Nevertheless Scia Scia was of assistance. The Tribunal held that the dismissal was substantively justified but procedurally unfair. The Court upheld this decision, finding that 'there was evidence upon which a reasonable and fair employer could conclude there was a real risk that confidential information could be leaked, whether intentionally or inadvertently, by Mrs Anderson'.[172] Thus, it appears that the same principles apply to any dismissal where an employee's personal relationship gives rise to a risk that confidential information could be disclosed to the employer's detriment.[173] It is also clear that the Employment Court continues to place importance on procedural fairness, in particular, the granting of a proper opportunity to discuss alternatives to dismissal. Although the Court did not comment on the Tribunal's application of s 32 of the Human Rights Act, the lack of adverse comment implies that the Court accepted the use of this exception within the employment jurisdiction. The Tribunal's comments in Copland have been implicitly endorsed.[174]

VI. The State of Play

New Zealand employment law offers small solace to employees who are dismissed because of personal relationships. If their partner or relative works for a competing employer, employees have little chance of success in challenging the substantive justification for their dismissal.[175] The Employment Court and Tribunal will consider the employee's position, the type of information to which he or she had access, and the employment position of the employee's partner.[176] However, the Tribunal and the Court often accept the employer's commercial assessment about the risk of collusion.[177] This frequently limits the basis of the unjustifiable dismissal claim to procedural fairness issues.[178] The same broad principles apply where an employee is dismissed because their partner is pursuing legal action against the employer.[179] Partners or relatives who have a common employer fare better. The Tribunal and Court closely examine the evidential basis of an employer's decision to dismiss co-employees.[180] In doing so, there is usually more emphasis on the existence of actual misconduct rather than a risk of collusion. Consequently, the outcomes of these personal grievance cases vary according to the particular facts. The level of risk to confidentiality that the employer has to show remains a troublesome issue. There are conflicting decisions at Tribunal level, and the Employment Court has not clearly resolved the matter. In Printpac, the Employment Court set the test: [whether] 'an employer on reasonable grounds considers there is a risk of disclosure'.[181] This test has been applied in subsequent Tribunal cases with mixed results. In Eggleston, the adjudicator required evidence that the level of risk was more than minimal.[182] In contrast, the adjudicator in Meeuwsen restricted the examination of 'appreciable' risk; the Tribunal was more concerned with the good faith of the decision than the evidential basis for it.[183] The more recent Employment Court judgment in Power Beat is open to varying interpretations. Travis J stated that 'there was evidence upon which a reasonable and fair employer could conclude there was a real risk that confidential information could be leaked'.[184] It is not clear whether this statement establishes the level of risk that must be shown by employers, or whether it merely describes the level of risk present in that case. Unfortunately, the context of the statement suggests it is the latter. The Human Rights Commission Complaints Division has adopted an approach that is more favourable to employees. According to the Complaints Division, there must be an actual or real risk and collusion must involve more than an inadvertent lapse of confidentiality.[185] Arguably, this test imposes a higher standard than Parliament intended.[186] Nevertheless, there should be a balancing of the harms. The harm to employees is obvious in these cases;[187] dismissal is a severe penalty.

However, the harm to the employer in continuing the employment relationship needs to be demonstrated.[188] The risk to confidentiality posed by an employee's personal relationship should be proved by firm evidence.[189] As Rowe asserts, the opinion of the employer may be relevant but it cannot be sufficient proof of the objective existence of the risk.[190] The higher standard of procedural fairness required in recent cases provides some respite for employees. The Employment Court has made it clear that employers must:

• consider possible solutions less drastic than dismissal;
• give adequate notice about the problem to the employee;
• discuss the matter with the employee;
• allow the employee an opportunity to respond and suggest other solutions; and then
• decide whether dismissal is necessary.[191]

Thus, the Court has relieved some of the concerns about the 'light' standard of procedural fairness expected of employers in earlier cases.[192] Employers must also ensure that employees in similar situations are treated alike.[193] It is submitted that this latter requirement should also encompass equal treatment of both parties to the personal relationship in question.[194] In the absence of such an approach, female employees are likely to be disproportionately disadvantaged.[195]

However, employees may find that a successful claim of unjustifiable dismissal is a hollow triumph. The Employment Court and the Tribunal reconsider the employee's contributory conduct when the award of remedies is made. Where the dismissal is substantively justified but procedurally unfair, the compensation for loss of income is often limited to an amount reflecting a reasonable period of notice.[196] In Day, the Court held that the employee' s contribution to the situation warranted a reduction in remedies even though the employer's action was substantively unjustified.[197] This seems to be an uncommon approach. However, employees need to be aware that their partner's behaviour can also affect the remedies awarded. In Court, the employee's dismissal was substantively unjustified, but her husband's behaviour led to the conclusion that justifiable dismissal was inevitable at some stage.[198] Hence, the compensation for loss of wages was reduced. A similar result occurred in Redmond due to a contractual linkage between the employment term of the employee and that of her husband.[199]

Discrimination claims are infrequent in personal grievance cases arising from personal relationships. Hence, there is limited judicial analysis of the discriminatory effects of employers' actions in these situations. The statutory exceptions to discrimination, provided by s 32 of the Human Rights Act, can prove fatal to an employee's claim.[200] The apposite provision in the Employment Relations Act[201] removes any doubt about the application of these exceptions to employment cases. Thus, an employer can defend discrimination allegations by pointing to the existence of reporting relationships or the risk of collusion between spouses, partners or relatives. However, the Employment Relations Act also makes it clear that the general qualification on exceptions applies to employment cases.[202] This reinforces the Court's view that the employer is obliged to consider alternatives to dismissal.

Neither the Employment Court nor the Tribunal appears to have considered indirect discrimination in the context of personal relationships in the workplace. The definition of indirect discrimination in s 65 of the Human Rights Act seemingly excludes discrimination on the grounds of family status if the exceptions under s 32 of the Act apply.[203] This may account for the paucity of indirect discrimination claims in these cases. Yet, employees could claim indirect discrimination if their personal relationships fall outside the definition of family status. However, such claims place a heavy burden of proof on the employee and can be defeated by the employer showing that there was a 'good reason' for the action against the employee.[204] Nevertheless, this is an aspect of discrimination which merits further study. The effect of relationship policies on female employees is undetermined in New Zealand, but the majority of applicants in these dismissal cases are female.[205] Perhaps research data could provide a stimulus for legislative reform in this area, leading to greater statutory protection for female employees.

VII. Conclusion

Smart punters know the odds before placing a bet. Likewise, employees should know the legal ramifications of personal relationships in the workplace before they enter one. The employees most at risk are those whose partners or relatives work for a competing business. If these employees have access to sensitive information, their employer may have substantive grounds for dismissal. At the very least, employees could be removed from the position that gives them access to this information. Personal relationships between co-employees can have a similar impact. If one party to the relationship leaves the workplace under hostile circumstances, the employer may consider that the remaining party has such divided loyalties that dismissal is the only option. Even if the employment relationships remain harmonious, the employer has a legal right to place restrictions on an employee where there is a reporting relationship between partners or relatives. The same applies where there is a risk of collusion detrimental to the employer.

Current employment law stacks the odds in favour of the employer. The Employment Tribunal sometimes accepts an employer's appraisal of the risk of collusion without hesitation. Thus, the success of an employee's personal grievance claim can rest solely on whether or not the employer used a fair process. But even when the Tribunal gives extensive consideration to the weight of an employer's evidence, commercial reasons often prevail over an employee's personal rights. These personal rights are restricted by the exceptions contained in the Human Rights Act and the Employment Relations Act to the prohibited grounds of discrimination. Hence, employees also have little chance of success in discrimination claims.

However, employees can improve these odds by ensuring that their claim is heard in the jurisdiction most favourable to them. There are few authoritative judgments in this area of law. The Court of Appeal has not considered a case of this type and most decisions in the employment jurisdiction are at Tribunal level. Thus, the employment case law is developing slowly and, at times, somewhat erratically. At present, it seems that the human rights jurisdiction protects employees to a greater extent than the employment jurisdiction. The Human Rights Commission Complaints Division takes a more robust approach to the commercial reasons used to justify an employer's actions. This approach restores some balance between the competing interests of employers and employees in these cases. Nevertheless, the scope of protection available in the human rights jurisdiction may not yet have been fully determined. So far, there is no reported opinion or ruling on indirect discrimination arising from relationship policies in the workplace.

People cannot choose their relatives. However, they can choose their lovers and their employers. In doing so, they should bear in mind the legal consequences of mixing personal and employment relationships. The wrong combination could turn into a game of Russian roulette.


[*] Jane Metcalfe is a Policy Advisor for the Employer Relations Service, Department of Labour, in Wellington. This paper was written as part of the undergraduate Honours programme.

[1] Butterworths, Employment Law Guide (5th ed, 2001) 550.

[2] Ibid 556.

[3] J L Dean, 'Employer Regulation of Employee Personal Relationships' (1996) 76 Boston University Law Review 1051.

[4] D Alerding, 'The Family that Works Together...Can't: No-Spouse Rules as Marital Status Discrimination Under State and Federal Law' (1994) 32 Journal of Family Law 867; J L Dean, 'Employer Regulation of Employee Personal Relationships' (1996) 76 Boston University Law Review 1051; J P Furfaro and M B Josephson, '"No-Spouse" and Anti-Nepotism Policies' (1995) 213 New York Law Journal 3; A Giattina, 'Challenging No-Spouse Employment Policies as Marital Status Discrimination: A Balancing Approach' (1987)33 The Wayne Law Review 1111; K R Kelly, 'Marital Status Discrimination in Washington: Relevance of the Identity and Actions of an Employee's Spouse' (1998) 73 Washington Law Review 135; N B Porter, 'Marital Status Discrimination: A Proposal for Title VII Protection' (2000) 46 The Wayne Law Review 1; J M Steiner and S P Steinburg, 'Caught between Scylla and Charybdis: Are Antinepotism Policies Benign Paternalism or Covert Discrimination ?' (1994) 20 Employee Relations Law Journal 253; R Wolkenbreit, 'In Order to Form a More Perfect Union: Applying No-Spouse Rules to Employees Who Meet at Work' (1997) 31 Columbia Journal of Law and Social Problems 119.

[5] Wolkenbreit, above n 4, 127.

[6] For example, Craw v Aspinall (NZ) Ltd, Employment Tribunal, D S Miller, 28.1.00, CET271/97 (sexual harassment; security; confidentiality; internal control structures).

[7] Circle Pacific Asparagus v Scia Scia [1999] NZEmpC 63; [1999] 1 ERNZ 579; Copland v Auto Point Motors Ltd t/a King Toyota,, G J Wood, 23.7.99, WET598/98; Eggleston v Firestone Tyre and Rubber Co (NZ Ltd), Employment Tribunal, G M Teen, 6.9.93, CET485/92; Fullerton v Tenpin New Zealand Ltd, Employment Tribunal, R A Monaghan, 31.3.00, AET109/99; Jack v Allied Document Storage and Management Limited, Employment Tribunal, CM Clark, 14.9.95, WET1011/94; Kotzikasv LEP Freightways International Ltd, Employment Court, Palmer J, 18.10.96, CEC31/96; Meeuwsen v New Zealand Rail Ltd, Employment Tribunal, A Dumbleton, 16.8.93, AET990/92; Northern Clerical Workers Union vPrintpac UEB Carton [1989] 2 NZILR 644; Richardson v McKay t/a Coastlands Fruitpackers, Employment Tribunal, J A Newman, 5.7.95, AET1315/93; Strange v Imperial Enterprises Ltd t/a Parapine, Employment Tribunal, M B Loftus, 6.6.00, WET236/99; WvNew Zealand Police, Employment Court, Palmer J, 20.3.01, AEC105/00.

[8] Ibid.

[9] Power Beat International Ltd v Anderson, Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/00.

[10] Ibid 8-9.

[11] See Circle Pacific Asparagus v Scia Scia [1999] NZEmpC 63; [1999] 1 ERNZ 579; Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Fullerton v Tenpin New ZealandLtd, Employment Tribunal, R A Monaghan, 31.3.00, AET109/99; KotzikasvLEP Freightways International Ltd, Employment Court, Palmer J, 18.10.96, CEC31/96; Meeuwsen v New Zealand Rail Ltd, Employment Tribunal, A Dumbleton, 16.8.93, AET990/92; Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644; Power Beat International Ltd v Anderson, Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/00. But see Eggleston v Firestone Tyre and Rubber Co (NZ Ltd), Employment Tribunal, G M Teen, 6.9.93, CET485/ 92; Jack v Allied Document Storage and Management Limited, Employment Tribunal, C M Clark, 14.9.95, WET1011/94.

[12] Alerding, above n 4, 869; Dean, above n 4, 1055; Giattina, above n 4, 1114; Wolkenbreit, above n 4, 127; Day v Whitcoulls Group Ltd [1997] NZEmpC 152; [1997] ERNZ 541, 561.

[13] Giattina, above n 4, 1114.

[14] Employment Tribunal, B M Stanton, 21.7.92, AET392/91.

[15] Ibid 21.

[16] [1997] NZEmpC 152; [1997] ERNZ 541, 562.

[17] Employment Tribunal, D S Miller, 28.1.00, CET271/97.

[18] Ibid 54.

[19] Wolkenbreit, above n 4, 127.

[20] Employment Relations Authority, S Bathgate, 31.7.01, WEA155/01.

[21] Employment Tribunal, D S Miller, 28.1.00, CET271/97.

[22] Employment Court, Palmer J, 13.1.97, WEC1/97. The discovery of the affair had a severe effect on the aggrieved spouse, the details of which are subject to a suppression order.

[23] Dean, above n 4, 1053-4. See also Crockett v Canterbury Clerical Workers Union (1983) 3 NZAR435.

[24] Craw vAspinall (NZ) Ltd, Employment Tribunal, D S Miller, 28.1.00, CET271/97, 53-4.

[25] Ibid 9, 16.

[26] Ibid 32.

[27] For example, the gaming industry as in Craw v Aspinall (NZ) Ltd, Employment Tribunal, D S Miller, 28.1.00, CET271/97, 53.

[28] Butterworths, above n 1, 535.

[29] This ground encompasses incompetency, incompatibility and illness or injury.

[30] Butterworths, above n 1, 539.

[31] Circle Pacific Asparagus v Scia Scia [ [1999] NZEmpC 63; 1999] 1 ERNZ 579; Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Eggleston v Firestone Tyre and Rubber Co (NZ Ltd), Employment Tribunal, G M Teen, 6.9.93, CET485/92; Fullerton v Tenpin New Zealand Ltd, Employment Tribunal, R A Monaghan, 31.3.00, AET109/99; Jack v Allied Document Storage and Management Limited, Employment Tribunal, C M Clark, 14.9.95, WET1011/ 94;Kotzikas v LEP Freightways International Ltd, Employment Court, Palmer J, 18.10.96, CEC31/ 96; Meeuwsen v New Zealand Rail Ltd, Employment Tribunal, A Dumbleton, 16.8.93, AET990/ 92; Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644; Strange v Imperial Enterprises Ltd t/a Parapine, Employment Tribunal, M B Loftus, 6.6.00, WET236/99; W vNew Zealand Police, Employment Court, Palmer J, 20.3.01, AEC105/00.

[32] Groot v Kiwi Lumber Company Ltd, Employment Court, Palmer J, 13.1.97, WEC1/97, 8, 17.

[33] BP Oil NZ Ltd v Northern Distribution Workers Union [1989] 3 NZLR 580, 582 (CA).

[34] [1992] 3 ERNZ 483.

[35] Ibid 487.

[36] Auckland Local Authorities Officers IUOW v Northland Area Health Board [1991] 2 ERNZ 215,222.

[37] [2001] NZCA 142; [2001] 3 NZLR 29.

[38] Ibid 37.

[39] Northern Distribution Union v BP Oil New Zealand Ltd [1992] 3 ERNZ 483,487 (CA). Emphasis added.

[40] W & H Newspapers Ltd v Oram [2001] NZCA 142; [2001] 3 NZLR 29, 37. Emphasis added.

[41] See G Anderson, 'Recent Case Comment: W&H Newspapers Ltd v Oram' [2001] Employment Law Bulletin 73; P Roth, 'The Poverty of Fairness in Employment Law' [2001] Employment Law Bulletin 85.

[42] Roth, ibid 85; Anderson, ibid 77.

[43] Roth, above n 41, 85.

[44] Anderson, above n 41, 77.

[45] Coutts Cars Ltd v Baguley, CA 102/01, 21.12.01, Richardson P, Gault, Blanchard, Tipping, McGrath JJ.

[46] Ibid.

[47] See above Part II.

[48] Robb v Green [1895] 2 QB 315, 320 (Smith LJ): 'I think that it is a necessary implication which must be engrafted on such a contract [that is a contract of service] that the servant undertakes to serve his master with good faith and fidelity'.

[49] Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 149, 174 (Greene MR).

[50] Tisco Ltd v Communication & Energy Workers Union [1993] 2 ERNZ 779, 780 (Cooke P).

[51] Big Save Furniture Ltd v Bridge [1994] 2 ERNZ 507.

[52] Ibid 517 (Tipping J).

[53] Tisco Ltd v Communication & Energy Workers Union [1993] 2 ERNZ 779; Big Save Furniture Ltd v Bridge [1994] 2 ERNZ 507; McKay Electrical (Whangarei) Ltd v Hinton [1996] 1 ERNZ 501.

[54] G Anderson, 'Recent Case Comment: McKay Electrical (Whangarei) Ltd v Hinton' [1996] Employment Law Bulletin 108, 109.

[55] Tisco Ltd v Communication & Energy Workers Union [1993] 2 ERNZ 779.

[56] Ibid.

[57] Employment Tribunal, J W Haslemore, 3.10.00, HET253/99. One brother-in-law supported another in a dispute with their employer. Consequently, the supportive brother-in-law was justifiably dismissed for refusing to perform assigned work and refusal to carry out lawful instructions.

[58] K Miller, 'Implied Duties of Confidentiality in the Contract of Employment' (1986) 102 Law Quarterly Review 359, 360.

[59] Butterworths, Employment Law Guide (5th ed, 2001) 1065.

[60] Faccenda Chicken Ltd v Fowler [1986] 1 All ER 617 (CA).

[61] Ibid 625.

[62] Ibid.

[63] [1992] 2 NZLR 216.

[64] Ibid 219.

[65] Faccenda Chicken Ltd v Fowler [1986] 1 All ER 617, 626-7.

[66] Butterworths, above n 59, 1070.

[67] Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Meeuwsen v New Zealand Rail Ltd, Employment Tribunal, A Dumbleton, 16.8.93, AET990/92; Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644; Power Beat International Ltd v Anderson, Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/00; Scia Scia v Circle Pacific Asparagus Ltd, Employment Tribunal, R E Hall, 8.4.98, WET1133/95; W v New Zealand Police, Employment Court, Palmer J, 20.3.01, AEC105/00.

[68] Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644; Meeuwsen v New Zealand Rail Ltd, Employment Tribunal, A Dumbleton, 16.8.93, AET990/92; Scia Scia v Circle Pacific Asparagus Ltd, Employment Tribunal, R E Hall, 8.4.98, WET1133/95. But see Auckland Local Authorities Officers IUOW v Northland Area Health Board [1991] 2 ERNZ 215 and Fullerton v Tenpin New Zealand Ltd, Employment Tribunal, R A Monaghan, 31.3.00, AET109/99 where there was extensive discussion about whether the information in question was confidential.

[69] Ongley Wilson Real Estate Ltd v Burrows [1999] NZEmpC 17; [1999] 1 ERNZ 231.

[70] [1993] 1 ERNZ 179.

[71] Ibid 183.

[72] Hughes v Borden (NZ) Ltd, Employment Tribunal, D S Miller, 8.10.93, CET576/92.

[73] Ibid 19.

[74] Fullerton v TenpinNew ZealandLtd, Employment Tribunal, R A Monaghan, 31.3.00, AET109/99; Power Beat International Ltd v Anderson, Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/ 00; Scia Scia v CirclePacific Asparagus Ltd, Employment Tribunal, R E Hall, 8.4.98, WET1133/95.

[75] G Rossiter, 'Personal Relationships and Conflict of Interest' [1997] New Zealand Law Journal 353.

[76] Employment Contracts Act 1991 (NZ) s 39; Employment Relations Act 2000 (NZ) s 112, as amended by Human Rights Amendment Act 2001.

[77] Explanatory Note to the Human Rights Commission Amendment Bill 1990 (NZ).

[78] Ibid.

[79] Human Rights Bill 1992 (NZ) cl 34(I).

[80] Report of the Department of Justice to the Human Rights Bill Sub-Committee of the Justice and Law Reform Committee, ABGX, W5137, JL/2/28/3, [Archives New Zealand/Te Whare Tohu Tuhituhinga O Aotearoa, Head Office, Wellington] 18.

[81] Human Rights Commission Amendment Bill 1990 (NZ) cl 15M.

[82] Archives New Zealand/Te Whare Tohu Tuhituhinga O Aotearoa, Head Office, Wellington, above n 80, 29.

[83] Human Rights Act 1990 (NZ) s 21(1)(b).

[84] Human Rights Act 1990 (NZ) s 21(1)(I)(iii).

[85] Human Rights Act 1990 (NZ) s 21(1)(I)(iv).

[86] Human Rights Act 1990 (NZ) s 22( 1 )(c).

[87] Human Rights Act 1990 (NZ) s 22( 1 )(c).

[88] Human Rights Act 1990 (NZ) s 22( 1 )(d).

[89] Human Rights Act 1990 (NZ) s 32(a)(i).

[90] Human Rights Act 1990 (NZ) s 32(a)(ii).

[91] Human Rights Act 1990 (NZ) s 32(b).

[92] Human Rights Act 1990 (NZ) s 85.

[93] Rossiter, above n 75,354; Butterworths, 'Personal Grievances (NZ), Grounds for Dismissal, Misconduct, Breach of Implied Terms [5.13]’, 15 November 2001, <http:// www.butterworthsonline.com> .

[94] In A v C and C a woman complained that her employer had a policy that husbands and wives could not work together at the same branch. The woman was dismissed when her employer discovered that she was married to a co-employee. The Complaints Division formed the opinion that she had not been discriminated against because there was a direct reporting relationship, applying s 32(a)(i) of the Human Rights Act: Human Rights Commission, Human Rights Commission Complaints Division(C404/00), 'July 2001-Quarterly Case Studies', 20 November 2001, <http://www.hrc.co.nz/ org/legal/teritojuly0 1.htm> Similarly, neither the Employment Tribunal nor the Employment Court have found that dismissal is excluded under s 32(a)(i) of the Human Rights Act. See Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Power Beat International Ltd v Anderson, Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/00.

[95] Avis Rent A Car v Proceedings Commissioner [1998] NZCRT 16; (1998) 5 HRNZ 501, 507: We accept that the special nature of human rights or antidiscrimination laws mean that exceptions or other efforts to depart from the basic principles enshrined in those laws should be construed and applied restrictively'. It is also interesting to note that the Department of Justice commented that it would be contrary to the philosophy of the Human Rights Bill to add another exception to discrimination on the grounds of family status, which would allow an employer to show that the requirements of the enterprise precluded an offer of employment or promotion. This comment suggests that s 32 was intended to be quite limited in its application: Archives New Zealand/Te Whare Tohu Tuhituhinga O Aotearoa, Head Office, Wellington, above n. 80, 30.

[96] See J Elkind, 'Anti-Discrimination Law in New Zealand' (1996) 1 Human Rights Law and Practice 230, 231; Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98, 6.

[97] I Adzoxornu, 'Indirect Discrimination in Employment' [1997] New Zealand Law Journal 216, 216-7.

[98] N B Porter, 'Marital Status Discrimination: A Proposal for Title VII Protection' (2000) 46 The Wayne Law Review 1, 28-33.

[99] Adzoxornu, above n 97, 218.

[100] Wheen v Real Estates Agents Licensing Board [1995] NZCRT 1; (1996) 2 HRNZ 481, 494.

[101] R Wolkenbreit, 'In Order to Form a More Perfect Union: Applying No-Spouse Rules to Employees Who Meet at Work' (1997) 31 Columbia Journal of Law and Social Problems 119, 141-2.

[102] Labour Relations Act 1987 (NZ) s 210; Employment Contracts Act 1991 (NZ) s 27; Employment Relations Act 2000 (NZ) s 103.

[103] Labour Relations Act 1987 (NZ) s 210(1)(a); Employment Contracts Act 1991 (NZ) s 27(1)(a); Employment Relations Act 2000 (NZ) s 103(1)(a).

[104] Labour Relations Act 1987 (NZ) s 210(1)(b); Employment Contracts Act 1991 (NZ) s 27(1)(b); Employment Relations Act 2000 (NZ) s 103(1)(b).

[105] Labour Relations Act 1987 (NZ) s 210(1)(c); Employment Contracts Act 1991 (NZ) s 27(1)(c); Employment Relations Act 2000 (NZ) s 103(1)(c).

[106] Labour Relations Act 1987 (NZ) s 211; Employment Contracts Act 1991 (NZ) s 28; Employment Relations Act 2000 (NZ) ss104, 105, 106.

[107] Butterworths, above n 59, 505.

[108] For a discussion of the gaps in coverage of discrimination complaints under the Employment Contracts Act and the Human Rights Act, see J Hughes, 'Discrimination - The Missing Grounds' [1995] Employment Law Bulletin 75.

[109] Employment Contracts Act 1991 (NZ) s 28(1).

[110] See BoehringerIngelheim Pty Ltd v Reddrop [1984] 2 NSWLR 13 (NSW CA); Cashin v Canadian Broadcasting Corporation (1988) 9 CHRR D/5343 (Can FCA); Muer vCA Muer Corp 362 NW 2d 650 (Mich 1985); Ross v Stouffer Hotel Co (Hawai’I) 879 P 2d 1037 (Haw 1994); Washington Power Co v Washington State Human Rights Commission 586 P 2d 1149 (Wash 1978); Whirlpool Corp v Civil Rights Commission 390 NW 2d 625 (Mich 1986).

[111] For example, Scia Scia v Circle Pacific Asparagus Ltd, Employment Tribunal, R E Hall, 8.4.98, WET1133/95; Fullerton v Tenpin New Zealand Ltd, Employment Tribunal, R A Monaghan, 31.3.00, AET109/99; Strange v Imperial Enterprises Ltd t/a Parapine, Employment Tribunal, M B Loftus, 6.6.00, WET236/99.

[112] Employment Tribunal, G M Teen, 6.9.93, CET485/92.

[113] Ibid 8. In applying the 'but for' test, the adjudicator phased it in terms of whether ' "but for" her status as a person married to Mr Eggleston Mrs Eggleston would not have been dismissed'. Emphasis added.

[114] Employment Tribunal, A Dumbleton, 16.8.93, AET990/92.

[115] Ibid 10. The adjudicator stated: 'Marital status was not the reason for the termination of the applicant's employment. It was Ms Meeuwsen's close personal association with Mr Z, whether inside or outside of wedlock, that was of significance to NZ Rail'.

[116] S Dyhrberg, 'Remedies in Respect of Personal Grievances, and Surviving Common Law Options' in New Zealand Law Society, Employment Law Conference (2000) 179.

[117] Ibid. Butterworths, Employment Law Guide (5th ed,2001) 608.

[118] Dyhrberg, above n 116, 179. These figures were for the period from 1995-2000.

[119] Complaints Division, C110/97, Human Rights Commission, 'Case Studies of 1997', 20.11.01 <http://www.hrc.co.nz/org/legal/jvd.htm>

[120] T Watkin, 'Living with Professional Conflicts of Interest', New Zealand Herald (Auckland, New Zealand) 24 March 2001.

[121] Butterworths, above n 117, 609.

[122] For example, Davies v Nationwide Reservations (NZ) Ltd t/a Best Western, Employment Court, Shaw J, 17.2.00, AEC155/98; Dick v Accident Rehabilitation and Compensation Insurance Corporation, Employment Tribunal, K Anderson, 2.8.00, HET342/98; Groot v Kiwi Lumber Company Ltd, Employment Court, Palmer J, 13.1.97, WEC1/97; Kean v Rob Kean Ltd, Employment Tribunal, W R C Gardiner, 19.9.94, AET1594/93; Lewis v Department of Corrections, Employment Relations Authority, S Bathgate, 31.7.01, WEA155/01.

[123] [1989] 2 NZILR 644.

[124] Industrial Tribunal (GB) 342/73.

[125] [1972] IRLR 83.

[126] [1980] 9 IRLR 226, reversed [1981] 10 IRLR 398 (CA). Note that the appeal case did not disturb the Employment Appeal Tribunal's finding that the dismissal was substantively justified; the reversal concerned the findings as to whether the employer had discriminated against the employee on the grounds of sex.

[127] Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644, 647-648. The cases included Foster v Scaffolding (GB) Ltd, Industrial Tribunal (GB) 342/73.

[128] Coleman v Skyrail Oceanic Ltd [1980] 9 IRLR 226, 229; Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644, 649.

[129] Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644, 647.

[130] Ibid 649.

[131] Ibid.

[132] Coleman v Skyrail Oceanic Ltd [1980] 9 IRLR 226, 229.

[133] Employment Tribunal, A Dumbleton, 16.8.93, AET990/92.

[134] Employment Tribunal, G M Teen, 6.9.93, CET485/92.

[135] As expressed in Printpac by the acceptance of the analogy with redundancy dismissals.

[136] G Anderson, 'Recent Case Comment: Meeuwsen v New Zealand Rail Ltd; Eggleston v The Firestone Tyre and Rubber Co (NZ) Ltd' [1993] Employment Law Bulletin 110.

[137] Ibid.

[138] Ibid 110. G Rossiter, 'Personal Relationships and Conflict of Interest' [1997] New Zealand Law Journal353, 354.

[139] Meeuwsen v New Zealand Rail Ltd, Employment Tribunal, A Dumbleton, 16.8.93, AET990/92, 12.

[140] NZ Workers IUOW v Sarita Farm Partnership [1991] 1 ERNZ 510, 515-6.

[141] Meeuwsen v New Zealand Rail Ltd, Employment Tribunal, A Dumbleton, 16.8.93, AET990/92, 10.

[142] Employment Court, Palmer J, 18.10.96, CEC31/96.

[143] Rossiter, above n 138, 355.

[144] Employment Tribunal, G J Wood, 23.7.99, WET598/98.

[145] Trilford v Car Haulaways Ltd [1996] 2 ERNZ 351. This comment was obiter.

[146] [1999] NZEmpC 63; [1999] 1 ERNZ 579.

[147] Ibid 583.

[148] Employment Tribunal, R A Monaghan, 31.3.00, AET109/99.

[149] Employment Tribunal, M B Loftus, 6.6.00, WET236/99.

[150] Nelson Air Ltd v New Zealand Airline Pilots Association [1994] 2 ERNZ 665, 668.

[151] Drummond v Coca Cola Bottlers NZ [1995] NZEmpC 238; [1995] 2 ERNZ 229, 232-3.

[152] [1990] 1 NZILR 35, 45-6. In applying these requirements, the adjudicator did not distinguish between disciplinary dismissals and non-disciplinary dismissals.

[153] Nelson Air Ltd v New Zealand Airline Pilots Association [1994] 2 ERNZ 665, 668.

[154] [1991] NZEmpC 38; [1991] 2 ERNZ 955, 999-1000.

[155] Ibid.

[156] Employment Tribunal, J W Haslemore, 3.10.00, HET253/99.

[157] [1997] NZEmpC 152; [1997] ERNZ 541.

[158] Ibid 561.

[159] GAnderson, 'Recent Case Comment: Day v Whitcoulls Group' [1998] Employment Law Bulletin 15, 16.

[160] Employment Tribunal, D S Miller, 28.1.00, CET271/97.

[161] Note: The applicant also alleged that there had been disparity between the treatment accorded to her and that accorded to other employees who had personal relationships in the workplace. However, the Tribunal considered the claim to be so uncertain in its scope that the Tribunal could not take the matter any further. Nevertheless, the adjudicator did comment adversely on the fact that the manager, who had dismissed the applicant, had subsequently entered a similar relationship with a junior employee in his own department. Prima facie, it appears that the applicant had an arguable case for disparity on these grounds; the Tribunal's finding of uncertainty seems misplaced. Ibid 66-7.

[162] Similar to the situation in Court v Falloon [1991] NZEmpC 38; [1991] 2 ERNZ 955. However, in that case Mr Court was not classified as an employee, and the employer also alleged misconduct by Mrs Court.

[163] Employment Tribunal, J L Scott, 8.5.95, AET627/94.

[164] Employment Tribunal, J M Scott, 5.4.95, AET163/95.

[165] See above.

[166] [1990] 3 NZLR 549 (CA).

[167] [1990] 1 NZILR35, 45-6.

[168] Karaitiana v Singh (Unreported, Employment Tribunal, J L Scott, 8 May 1995) AET627/94, 18.

[169] The Tribunal found that the employer had met the minimum requirements for procedural fairness as outlined in New Zealand Food Processing etc IUOW v Unilever New Zealand Ltd [1990] 1 NZILR 35.

[170] See above.

[171] Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/00.

[172] Ibid 8.

[173] This is also illustrated by the recent case of W v New Zealand Police, Employment Court, Palmer J, 20.3.01, AEC105/00. This case involved an unjustifiable constructive dismissal claim by a police typist who refused to transfer to a position where her access to sensitive information would be limited. The redeployment had arisen due to the discovery that her partner had previous criminal convictions and was suspected of continuing illegal activities. Both the Tribunal and the Court held that the employer's actions were a reasonable response to the situation and that the employee had not been constructively dismissed.

[174] See above.

[175] Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Kotzikas vLEPFreightways International Ltd, Employment Court, Palmer J, 18.10.96, CEC31/96; Meeuwsen v New Zealand Rail Ltd, Employment Tribunal, A Dumbleton, 16.8.93, AET990/92; Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644; Scia Scia v Circle Pacific Asparagus Ltd, Employment Tribunal, R E Hall, 8.4.98, WET1133/95.

[176] Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Eggleston v Firestone Tyre and Rubber Co (NZ Ltd), Employment Tribunal, G M Teen, 6.9.93, CET485/92; Fullerton v Tenpin New Zealand Ltd, Employment Tribunal, R A Monaghan, 31.3.00, AET109/99; Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644; Scia Scia v Circle Pacific Asparagus Ltd, Employment Tribunal, R E Hall, 8.4.98, WET1133/95.

[177] But contrast Fullerton v Tenpin New Zealand Ltd, Employment Tribunal, R A Monaghan, 31.3.00, AET109/99.

[178] Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644; Scia Scia v Circle Pacific Asparagus Ltd, Employment Tribunal, R E Hall, 8.4.98, WET1133/95.

[179] Power Beat International Ltd v Anderson, Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/00.

[180] Craw v Aspinall (NZ) Ltd, Employment Tribunal, D S Miller, 28.1.00, CET271/97; Court v Falloon [1991] NZEmpC 38; [1991] 2 ERNZ 955; Day v Whitcoulls Group Ltd [1997] NZEmpC 152; [1997] ERNZ 541; Karaitiana v Singh, Employment Tribunal, J L Scott, 8.5.95, AET627/94; Milne v Caravans International Munro Ltd, Employment Tribunal, J W Haslemore, 3.10.00, HET253/99; Redmond v DML Resources Ltd, J M Scott, Employment Tribunal, 5.4.95, AET163/95.

[181] Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644, 649. Emphasis added.

[182] Eggleston v Firestone Tyre and Rubber Co (NZLtd), Employment Tribunal, G M Teen, 6.9.93, CET485/92, 4.

[183] Meeuwsen v New Zealand Rail Ltd, Employment Tribunal, A Dumbleton, 16.8.93, AET990/92, 9.

[184] Power Beat International Ltd v Anderson, Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/00, 8. Emphasis added.

[185] See above Part IV.

[186] Ibid.

[187] GCRowe, 'Misunderstanding Anti-Discrimination Law: The New South Wales Court of Appeal in Reddrop' [1986] AdelLawRw 2; (1986) 10 Adelaide Law Review 318, 338.

[188] Ibid.

[189] Ibid.

[190] Ibid.

[191] Circle Pacific Asparagus v Scia Scia [1999] NZEmpC 63; [1999] 1 ERNZ 579, 584; Power Beat International Ltd v Anderson Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/00.

[192] Rossiter, above n 138, 355; Butterworths, Employment Law Guide (5th ed, 2001) 93.

[193] Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644, 649-50.

[194] As suggested by the Tribunal in Craw v Aspinall (NZ) Ltd, Employment Tribunal, D S Miller, 28.1.00, CET271/97, 57-8.

[195] See above Part IV.

[196] Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Power Beat International Ltd v Anderson, Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/00, 10; Scia Scia v Circle Pacific Asparagus Ltd, Employment Tribunal, R EHall, 8.4.98, WET1133/95.

[197] Day v Whitcoulls Group Ltd [1997] NZEmpC 152; [1997] ERNZ 541, 567-8.

[198] Court v Falloon [1991] NZEmpC 38; [1991] 2 ERNZ 955, 1007.

[199] Redmond v DML Resources Ltd, Employment Tribunal, J M Scott, 5.4.95, AET163/95, 18.

[200] Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Power Beat International Ltd v Anderson, Employment Court, Travis J, 28.2.01, AEC13/00, AEC18/00.

[201] Employment Relations Act 2000 (NZ) s106(1)(i).

[202] Employment Relations Act 2000 (NZ) s106(1)(l).

[203] Although maintenance of confidentiality or prevention of detrimental collusion could be described as neutral requirements, any adverse effect on married, de facto or related employees would not be on prohibited grounds if the s 32 exceptions apply.

[204] See above Part IV.

[205] Circle Pacific Asparagus v Scia Scia [1999] NZEmpC 63; [1999] 1 ERNZ 579; Copland v Auto Point Motors Ltd t/a King Toyota, Employment Tribunal, G J Wood, 23.7.99, WET598/98; Court v Falloon [1991] NZEmpC 38; [1991] 2 ERNZ 955; Craw v Aspinall (NZ) Ltd, Employment Tribunal, D S Miller, 28.1.00, CET271/97; Eggleston v Firestone Tyre and Rubber Co (NZ Ltd), Employment Tribunal, G M Teen, 6.9.93, CET485/92; Fullerton v TenpinNew Zealand Ltd, Employment Tribunal, R A Monaghan, 31.3.00, AET109/99; Kotzikas v LEP Freightways International Ltd, Employment Court, Palmer J, 18.10.96, CEC31/96; Meeuwsen v New Zealand Rail Ltd, Employment Tribunal, A Dumbleton, 16.8.93, AET990/92; Northern Clerical Workers Union v Printpac UEB Carton [1989] 2 NZILR 644; Power Beat International Ltd v Anderson, Employment Court,Travis J, 28.2.01, AEC13/ 00, AEC18/00; Strange v Imperial Enterprises Ltd t/a Parapine, Employment Tribunal, M B Loftus, 6.6.00, WET236/99.


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