New Zealand: Dairy Matters: employment law

Last Updated: 15 December 2015
Article by Dan Winfield

In this edition we look at:

  • Reduced remedies for employees unjustifiably dismissed where a flawed procedure did not change the outcome.
  • Crackdown on breach of employment law requirements: Ministry of Business, Innovation and Employment enforcement action against dairy farmers.
  • Farm bike safety: reminder that helmets must be worn on quad bikes even when off-road.

Unjustified dismissal for animal cruelty does not result in remedies

Employers should take some respite in a recent Employment Court case, where a dairy worker dismissed for animal cruelty was not awarded any financial remedies, even though the dismissal was considered procedurally unjustified.

In Waterford Holdings Limited v Morunga, the herd manager, Mr Morunga, was dismissed for serious allegations of animal cruelty, including driving farm bikes into stock, slamming gates into stock, and kicking at stock. Following the dismissal, Mr Morunga raised a personal grievance for unjustified dismissal.

The Employment Relations Authority found the employer's flawed procedure meant the dismissal was procedurally unjustified. The critical factor was the employer had failed to provide him with written witness statements before the disciplinary hearing. The Authority awarded Mr Morunga remedies of three months' lost wages and $5,000 in compensation, which were reduced by 50% for his contributory conduct.

The employer successfully challenged this decision in the Employment Court. The Court accepted that the dismissal was procedurally unfair, but declined to award any remedies:

  • No wages were awarded because dismissal would have been the outcome, regardless of the flawed procedure; and
  • No compensation for hurt and humiliation was awarded because there was no evidence of ill effects.

Even if awards had been considered appropriate, the Court found this was a rare case where the employee's contributory misconduct was so egregious he would not have received any financial remedies.

This case highlights that employees may not be awarded lost wages where a dismissal is found procedurally unjustified, but the outcome (dismissal) is not affected.

However, regardless of remedies, personal grievances can be costly and time consuming. It is important that employers fully understand their obligations, and carry out disciplinary matters fairly and reasonably. If you are considering dealing with disciplinary matters, we recommend that you seek legal advice before taking action.

Crackdown on breach of employment law requirements

In a recent crackdown on breaches of employment law requirements, a high proportion of dairy farmers have been found in breach of employment law requirements and could face substantial penalties.

Between November 2014 and February 2015, the Ministry of Business, Innovation and Employment visited 29 dairy farms across New Zealand to check for employment law compliance. The ministry took enforcement action against 19 farmer employers, issuing 15 improvement notices and four enforceable undertakings for a total of 71 breaches of minimum employment standards.

The majority of these breaches related to poor record keeping, including failure to keep accurate time and wage records as required by law. Several farms also had significant minimum wage breaches. Overall it was estimated over $120,000 in arrears was owed to employees.

The Labour Inspectorate Central Regional Manager, Natalie Gardiner, stated that "the level of non-compliance identified during this operation was extremely high".

According to Gardiner, the ministry takes exploitation of workers very seriously and was working proactively to crackdown on it through compliance operations targeting sectors and at-risk workers across New Zealand. "We will not hesitate to take action for breaches of employment law. Breaches will be subject to compliance action and potential penalties of up to $10,000 for individuals and $20,000 for companies," Ms Gardiner said.

In light of potential penalties, farmers should ensure compliance with employment law. We recommend that farmers seek legal advice to ensure that:

  • All employees are provided written employment agreements prior to commencing employment.
  • All records of employee wages, holidays, and leave entitlements are retained for six years.
  • All employees are paid at least the minimum wage.
  • All employees are provided with entitlements under Holidays Act legislation.
  • All contractual obligations and entitlements are met.
  • Any migrant workers are entitled to work in New Zealand.

Farm bike safety

A recent High Court decision reminds farmers and their employees that helmets must be worn on quad bikes even when off-road, in light of health and safety legislation.

In Jones v Worksafe New Zealand, fines were imposed on two sharemilking farmers and their employee for failing to wear helmets, and failing to ensure small children accompanying them wore helmets, while using quad bikes on their farm. These actions occurred despite previous warnings and prohibition notices being issued by Worksafe inspectors.

The High Court rejected the farmers and employee's defence for a reduction in fine given the lack of resulting harm. The High Court did not consider that the Land Transport (Road User) Rule 2004 provided an exception for wearing helmets on off-road quad bikes. The High Court found that the law requires people to avoid taking recognisable risk.

However, fines were modestly reduced because of their financial inability to pay. The High Court reduced the two employers' fines from $20,000 to $15,000 each, and the employee's fine from $15,000 to $12,000, on the basis that the drop in dairy prices had detrimentally affected their incomes, and greatly reduced their financial abilities to pay the fines.

Dairy farmers must remain vigilant about farm bike safety, given the high price paid for employees sustaining injury as a result of not wearing a helmet. In Health and Safety Inspector v Hickey, a dairy employee was contracted to use her own quad bike by her share-milking employer, but was not provided a helmet. Following the employee's serious head injuries as a result of a work accident on the bike, the employer was fined $30,000 and ordered to pay $25,000 in reparation to the employee.

Similarly, in Department of Labour v PA & SC Steens Ltd, the District Court imposed a fine of $78,000 on an employer for failing to take all practicable steps to ensure the safety of an employee, who was killed using a quad bike. Specifically, the employer failed to ensure the employee was properly trained in using quad bikes and failed to provide a helmet. Reparation costs of $60,000 were awarded to the employee's family.

Farmers and employers should ensure everyone using a quad bike wears a helmet and is adequately trained. The risks of off-road farm bikes are high, as are the chances of penalties imposed when things go wrong.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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