This week the Court of Appeal handed down its decision in A
Limited v H  NZCA 419, allowing the appeal against the
Employment Court's decision in H v A Limited 
The decision is significant because it clarifies the
expectations on an employer when carrying out employment
investigations and emphasises that the circumstances of the case
will be highly relevant to the way in which a matter is
The case involved the dismissal of an airline pilot, following
allegations that he had sexually harassed a flight attendant during
The key facts, relevant to the investigation findings, were that
Mr H (a 51 year old male pilot), entered the hotel room of a 19
year old female, novice flight attendant, whom he had never met
prior to the trip, and sat on her bed under a blanket. Mr H
accepted that he had touched the flight attendant on her leg
(although he claimed it was accidental). He also accepted that
there were chairs in the room that he could have sat on, instead of
The flight attendant complained of sexual harassment, alleging
several occurrences, including the one in the bedroom.
After investigating the matter, A Limited upheld the allegation
of sexual harassment and Mr H was dismissed.
Mr H claimed unjustifiable dismissal on the grounds that the
investigation was insufficient and he had been treated differently
to the way other employees in similar cases had been treated in the
Mr H's claim in the Employment Relations Authority was
unsuccessful, but he succeeded on appeal to the Employment Court.
He was awarded lost wages, compensation and reinstatement.
Employment Court Decision
The Employment Court decision imposed a high standard for
employment investigations and set a precedent for judges to
scrutinise the way in which the investigation was carried out.
The Employment Court held that Mr H's dismissal was
unjustified, both because of the disparate treatment and because Mr
H's explanation had not been considered in an
'even-handed' manner. The Judge specifically pointed to the
vigour with which Mr H's account of events had been tested and
found that the same scrutiny had not been applied to the accounts
of the complainant and other witnesses.
In taking this approach, the Judge had imposed a rule, that an
even-handed approach to workplace investigations required all
witnesses to be questioned in the same way and to the same level of
Challenge to Employment Court Decision
A Limited challenged the Employment Court decision on the basis
the Judge erred in applying a rule that all witnesses had to be
examined in the same level of detail and in the same way,
irrespective of the circumstances;
the Court had effectively substituted its judgement for that of
the employer; and
the Judge had required the employer to undertake an
investigation akin to a judicial enquiry.
Court of Appeal's Decision
The Court agreed that the Judge in the Employment Court had
erred in law and that he had "applied a set of rules that
got in the way of a direct application of the statutory
test" for justification.
The Court said that this approach ignored the specific
reference, in the s.103 test, to assessing what is fair and
reasonable based on "all the circumstances" and taking
into account the range of reasonable responses open to a fair and
The Court (citing Angus v Ports of Auckland Ltd (No 2)
 NZEmpC 160), restated that "the requirement is for
an assessment of substantive fairness and reasonableness rather
than "minute and pedantic scrutiny" to identify any
After assessing A Limited's approach, with specific
reference to the circumstances (in particular those outlined in the
facts above), the Court allowed the appeal and set aside the order
for lost wages, compensation and reinstatement.
The case has been sent back to the Employment Court to consider
remedy, along with other issues which have developed between the
parties since the 2014 judgment.
This case scales back the employer's obligations when
undertaking investigations, to the s.103 test, doing away with the
additional rules made by the Employment Court.
Of course, employers will still have to undertake thorough and
balanced investigations into issues arising in the workplace, but
this case makes clear that there will be circumstances where it
will be justifiable to take a different approach to questioning
witnesses, so long as a fair and reasonable employer could have
taken that approach, in those circumstances.
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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