Wilson & Horton Ltd v Stiffe [2001] NZCA 353; [2001] ERNZ 296 (13 September 2001)

Last Updated: 12 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA291/00

	BETWEEN	WILSON & HORTON LIMITED
		Appellant

	AND	BRUCE WILLIAM STIFFE
		Respondent

Hearing:	28 August 2001
Coram:	Thomas J Anderson J Hammond J
Appearances:	S C Dench for Appellant G J Peploe for Respondent
Judgment:	13 September 2001

JUDGMENT OF THE COURT DELIVERED BY ANDERSON J

[1] This is an appeal, pursuant to the now repealed Employment Contracts Act 1991 (“the Act”), against a decision of the Employment Court which reversed a decision of the Employment Tribunal. The central issue before us concerns a limitation point.
[2] In 1998 the respondent was employed by the appellant as a layout/design executive on a salaried basis of $54,000 per annum. The employment contract provided for termination by either party giving four weeks notice. On 23 September 1998 the respondent gave written notice of his resignation, nominating a leaving date of 30 October 1998. The appellant accepted that resignation.
[3] On 22 October 1998 there was a meeting between Mr Stiffe and the appellant’s advertising layout and design manager, Mr Blind. The Tribunal found that Mr Stiffe told Mr Blind he had secured a job with a competitor and that this led to the issue being raised as to Mr Stiffe’s being paid out early. The following day Mr Stiffe was told that he could leave and that his final pay was waiting for him in the pay office. Mr Blind told Mr Stiffe that the company wanted him to go immediately. Mr Stiffe went to the pay office, collected his pay, uplifted his possessions and left.
[4] On 27 January 1999 Mr Stiffe, by a representative, delivered a letter to the appellant submitting a personal grievance for unjustified dismissal. Pursuant to s 33(2) of the Act the personal grievance had to be submitted to the employer within the period of 90 days beginning with the date on which the action alleged to amount to a personal grievance occurred or came to the notice of the employee, whichever is the later, unless the employer consents to the personal grievance being submitted after the expiration of that period. In this case the employer did not consent to an extension of time and raised as a preliminary issue before the Employment Tribunal whether the personal grievance had been submitted in accordance with the provisions of s 33(2) of the Employment Contracts Act. By virtue of s 33(3) the employee may apply to the Tribunal for leave to submit the personal grievance after the expiration of the 90 day period, but leave was not sought in this case.
[5] The Tribunal held that Mr Stiffe’s employment terminated on 23 October 1998 and therefore his personal grievance was filed outside the 90 day period. He appealed to the Employment Court which decided that the employment terminated on 30 October; that the Tribunal was wrong to have held that it terminated on 23 October, the grievance had been submitted within the 90 day period; and accordingly the appeal against the Tribunal was allowed. The appeal to this Court is against that determination.

Appeals qualified

[6] The jurisdiction of the Employment Court in respect of appeals from the Employment Tribunal was founded in s 95 of the Act, although the exercise of the jurisdiction was qualified by the legislative purposes of the establishment of the Employment Tribunal and the Employment Court, limitations contained in s 95(4) of the Act, and conventional recognition of the advantages and responsibilities of a primary decider of fact. Those various qualifications are succinctly elucidated in the judgment of this Court, delivered by Richardson P, in Glovers Food Processors Ltd v Leaosavaii [1999] 1 ERNZ 478. Paragraphs 18-22 inclusive of that judgment are now conveniently iterated:-

The Employment Court’s appellate function

[18] The Employment Tribunal and the Employment Court were established under Part VI of the Employment Contracts Act 1991. Section 76 specifies the object of Part VI and relevantly for present purposes the object is to establish:

“(c) A low level, informal, specialist Employment Tribunal to provide speedy, fair, and just resolution of differences between parties to employment contracts . . .:

“(d) A specialist Employment Court to oversee the role of the Employment Tribunal and to deal with particular legal issues . . .”.

[19] That oversight role, which recognises that the Employment Tribunal is the specialist body adjudicating differences between parties to employment contracts, is reflected in the appeal provisions of s 95. By subs (1), any party to any proceedings before the Tribunal who is dissatisfied with any decision of the Tribunal in the proceedings may appeal to the Court against that decision. Subsection (4) provides:

“(4) In hearing any such appeal the Court shall—

“(a) Subject to paragraph (b) of this subsection, consider only those issues, explanations, and facts that were placed before the Tribunal:

“(b) Consider issues, explanations, or facts other than those placed before the Tribunal only if the Court —

“(i) Is satisfied that they may be relevant to the decision made by the Tribunal; and

“(ii) Is satisfied—

“(A) By the party seeking to introduce them, that that party could not, by the exercise of reasonable diligence, have placed them before the Tribunal; or

“(B) That, because of exceptional circumstances, it is fair to consider them.”

[20] In matters before it, and matching the like provision relating to the Employment Tribunal under s 79(2), the Employment Court has “full and exclusive jurisdiction to determine them in such manner and to make such decisions or orders, not inconsistent with this or any other Act or with any applicable collective employment contract, as in equity and good conscience it thinks fit” (s 104(3)); and “Except on the ground of lack of jurisdiction or as provided in sections 132 to 135 of this Act, no decision, order, or proceedings of the Court shall be removable to any Court by certiorari or otherwise or be liable to be challenged, appealed against, reviewed, quashed, or called in question in any Court” (s 104(5)).

[21] The important qualification expressed in s 104(3) is that the exercise of the jurisdiction cannot be inconsistent with the Employment Contracts Act or any other Act or with any applicable collective employment contract. Thus it cannot be inconsistent with the limitations on the appeal function inherent in the nature of an appeal under s 95 and it cannot be inconsistent with s 95(4). And in its terms s 104(5) preserves the liability of the Employment Court's decision to be appealed against as provided in s 135 “as being erroneous in point of law” (s 135(1)).

[22] In Big Save Furniture Ltd v Bridge [1994] 2 ERNZ 507 (CA) and Samu v Air NZ Ltd [1995] 1 ERNZ 636 (CA), referring to that statutory scheme, this Court emphasised that an appeal from the Tribunal is not expressed to be by way of rehearing, as are appeals from the District Court to the High Court and from the High Court to the Court of Appeal. Except in exceptional circumstances, the Employment Court may consider only those issues, explanations, and facts that were placed before the Tribunal. In Big Save Furniture Ltd Hardie Boys J continued at p 522:

“The Court's role is primarily to deal with legal issues (s 76(d)) but it is entitled to differ from the Tribunal's findings of fact, although it will of course be reluctant to do so when they turn on credibility, and on the advantage the Tribunal had in having the witnesses before it in person.”

And in Samu, Hardie Boys J said at p 639:

“The material the Employment Court may consider on an appeal is limited by s 95(4). None the less it is entitled to form its own assessment of the facts that are properly before it, bearing in mind first that every appellate Court must make full allowance for the advantage the trial Court had in seeing and hearing the witnesses; and secondly that it is for the appellant to show that the trial Court was wrong.”

See also Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 (CA).

Limitation on appeals to Court of Appeal

[7] Appeals from the Employment Court to the Court of Appeal are confined to questions of law. Section 135(1) of the Act provides as follows:-

Where any party to any proceedings under this Act is dissatisfied with any decision of the Court (other than a decision on the construction of any individual employment contract or collective employment contract) as being erroneous in point of law, that party may appeal to the Court of Appeal against the decision; and section 66 of the Judicature Act 1908 shall apply to any such appeal.

[8] The differences between the appellate functions of the Employment Court and this Court were observed by Cooke P in the following terms in Big Save Furniture v Bridge [1994] 2 ERNZ 507 at 520:-

It is important to bear in mind that on an appeal under s 95 the Employment Court has jurisdiction to differ from the Employment Tribunal on the facts, although it is elementary that, except in cases of new evidence, the Court must make full allowance for the advantages enjoyed by the Tribunal in seeing and hearing the witnesses. In this Court, by contrast, appeals under s 135 are confined to questions of law. If the Employment Court has merely differed from the Tribunal on the facts, the Court of Appeal must normally proceed on the basis of the Employment Court’s findings.

The hearing before the Employment Tribunal

[9] The evidence before the Employment Tribunal consisted of various documents as well as testimony from Mr Stiffe and, on behalf of the appellant, Mr Blind and the appellant’s finance manager of its advertising department, Ms Miller, a chartered accountant. The witnesses were examined, cross-examined and re-examined, and counsel had the opportunity of presenting submissions to the Tribunal. The documents included Mr Stiffe’s resignation form, employment contract, relevant pay documents, and a letter from the appellant to Mr Stiffe, dated 28 January 1999, in the following terms:-

Dear Bruce

This is to advise you of your earnings with this Company for the period 1st April 1998 until your leaving date to (sic) 30th October 1998 were as follows:

Gross P.A.Y.E

$37126.32 $9665.92

In addition to this you received Non Taxable earnings of $114.60

If you have any queries please do not hesitate to contact the Payroll Department.

[10] A consideration of the oral testimony at the hearing and the Tribunal’s decision does not convey to this Court any material conflict of evidence.
[11] The Tribunal was guided by a decision of this Court in GFW Agri-Products Ltd v Gibson [1995] 2 ERNZ 323 at 329 where it was observed:-

It is a mixed question of fact and law as to when a contract of employment comes to an end. A “payment in lieu of notice” is equivocal: Delaney v Staples [1992] 1 AC 687, 692. It may be that there is a summary dismissal putting an end to the employment relationship with the payment being, in effect, on account of damages for breach by failure to give proper notice. It may be on the other hand that the employment relationship continues with the payment of wages until the end of the period of notice though the employee is not required to attend for work.

[12] The Tribunal also referred to Delta Timber and Hardware Co Ltd v S Wardlaw, a decision by Judge Finnigan in the Employment Court on 10 October 1997 under AEC 118/97, and Poverty Bay EPB v Atkinson [1992] 3 ERNZ 413, 419.
[13] The Tribunal’s conclusion was expressed in these terms:-

It is evident from both Poverty Bay Electric Power Board (supra) and GFW Agri-Products (supra) that the date on which the 90 day period commenced was the date on which the notice period expired. However, the reason for the finding in those cases was that the Court did not find in either case that the date when notice of termination was given was the date on which the employer had permanently sent away the employee. In the instant case the situation is that while the initial arrangement had been that the employment was to terminate on the 30th and Mr Stiffe was to work out his notice until that date (if that had happened then the employment clearly would have terminated on 30 October), part way through the notice period things changed. Mr Stiffe, acting very commendably and with integrity, approached Mr Blind and told him that he was going to work for a competitor. He said he thought that that was information that the company should have. He also said to Mr Blind that he was aware that in certain circumstances Wilson & Horton had chosen to pay employees out. As a result Mr Blind had a conversation with Ms Miller, and decided to pay Mr Stiffe out and terminate the employment immediately. This was the information that he gave to Mr Stiffe. I do not think there can be any doubt in Mr Stiffe’s mind that the employment relationship between him and the Herald was to cease at that point.

Mr Stiffe’s employment terminated on 23 October and therefore his personal grievance was filed outside the 90 day period. No application for leave to submit the grievance out of time was made.

Decision of the Employment Court

[14] The Employment Court had before it the same evidential material as the Employment Tribunal. Chief Judge Goddard held that the real question to be determined was very much a mixed question of fact and law calling for a conclusion from the Tribunal as to whether the arrangement originally made, under which the employment was to end on 30 October, was varied, or whether only some detailed aspects of that arrangement were altered. The Court considered that on the facts there were three possibilities, which were expressed as follows:-

• One was that the notice expiring on 30 October was withdrawn, and another one substituted expiring on 23 October. That is not a plausible explanation because it does not take into account that Mr Stiffe was paid for a further week beyond that date and was paid for a statutory holiday that fell during that further week.
• Another possibility is that, on learning that Mr Stiffe was going to work for a competitor, the respondent summarily dismissed him. That does not tally with the facts. The respondent never said that it was summarily dismissing him and it continued to pay him for a further week and for a statutory holiday falling during that further week.
• The third possibility is that, without disturbing the arrangements that the appellant’s employment should end on 30 October, the respondent did not insist upon him working out his notice to the full but permitted him to go a week earlier. The fact that it insisted upon his going a week earlier as well as permitting him to do so is not to the point. In any event, there required to be a certain degree of cooperation between the parties because Mr Stiffe essentially had the right to work out his notice. The language used in the evidence depicting the conversation between Mr Stiffe and Mr Blind is entirely consistent with this analysis. There is talk in the evidence of paying the appellant out and of telling him that his money (that is, his money until 30 October) was ready in the pay office.

[15] The Court’s conclusion on the issue was expressed in these terms:-

While it is plain that the respondent wanted him to go and that no doubt he wanted to go that very day, it is equally plain that no attempt was made to pay him only until that day. In these circumstances it is clear that the employment terminated on 30 October, that the Tribunal was wrong to have held that it terminated on 23 October, and that therefore (it being common ground that the date of termination is the date from which the 90-day period runs) the personal grievance was submitted in time. The appeal must be allowed and there must be substituted a declaration that the appellant’s grievance was submitted in time.

Synopsis of submissions for appellant

[16] The appellant’s submissions on appeal fall under four heads. First, that the Employment Court simply substituted its preferred view for the Tribunal’s factual findings, without establishing whether the Tribunal is plainly wrong and without making appropriate allowance for the advantage the Tribunal had in seeing and hearing the witnesses.
[17] The second head of submissions is that the Employment Court appears to have based its conclusion on the fact that Mr Stiffe was paid out in full his ordinary pay, holiday pay, and a day’s statutory holiday pay. Counsel submitted that the Court erred in law in concluding that employment terminated on 30 October by reason of those matters rather than examining the true nature of those arrangements in the context of the employment contract.
[18] The third head is that the Employment Court confined its consideration to three possible interpretations of the arrangements, as previously set out in this judgment, and disregarded a fourth possibility, namely a consensual arrangement between the parties for the immediate termination of Mr Stiffe’s employment on the terms that he would receive what he otherwise would have if the employment had continued to the original notice date.
[19] The fourth head is that although the Employment Court recognised the theoretical possibility that the arrangements reached on 23 October 1998 amounted to a summary dismissal by the employer, the Court nevertheless approached that possibility in a legally wrong manner. It rejected the possibility on the basis that the employer never said it was summarily dismissing Mr Stiffe and continued to pay him for a further week and for a statutory holiday falling during that week. The submitted error is in failing to analyse the legal consequences of an arrangement, rather than expecting the employer to declare that the employee had been dismissed.

Synopsis of respondent’s submissions

[20] Mr Peploe, who represented the respondent as an employee advocate granted leave to appear in opposition to the appeal, submitted that the decision of the Employment Court involved questions of mixed fact and law and that this Court did not have jurisdiction to entertain the appeal because of the limitations specified in s 135(1) of the Act. He further submitted that the Employment Court was entitled to come to a different factual conclusion from the Tribunal, and in support of that proposition he invoked the authorities to which we have already referred in this judgment. The Employment Court’s entitlement to take a different view on the facts was, in his submission, obvious in a case like this where no questions of credibility on any material matter arise, nor any material dispute as to the facts. A primary fact-finder has no advantage over an appellate Court in such circumstances because factual findings could not be influenced by issues of demeanour and credit. Moreover, in Mr Peploe’s submission, the Tribunal’s reasons for its factual finding were not elucidated, and the Employment Court was in as good a position as the Employment Tribunal to conclude what had factually happened and had correctly applied the law to such conclusion.
[21] It was further submitted on behalf of Mr Stiffe that the Employment Court did not automatically conclude that payment up to 30 October 1998 meant that he was employed to that date.
[22] As to the appellant’s arguments relating to summary dismissal, it was submitted that before the Employment Tribunal the matter of summary dismissal had not been an issue, the employer arguing instead that there had been consensus as to immediate termination of the employment. The jurisdictional constraints on the Employment Court would have rendered unjustified any dismissal of an appeal to that Court by Mr Stiffe on the grounds that he had been summarily dismissed.

Decision on the appeal

[23] This Court would be concerned if the Employment Court had allowed the appeal against the Employment Tribunal on an arbitrary basis of subjective preference as to factual conclusions. There could be cases where such an approach might constitute an error of law which this Court could correct. Under the now repealed Act, the Employment Court’s jurisdiction did not exist in a vacuum, but in the context of the legislative purpose of oversight of the Employment Tribunal and the dealing with particular legal issues by a specialist Court. But as this Court recognised in cases such as Big Save Furniture Ltd (supra), the Employment Court is entitled to differ from the Tribunal’s findings of fact. In this case it examined the evidence with more particularity than the Tribunal did. The findings of the Tribunal tended to be more conclusionary, whereas the Employment Court identified, plainly as significant features, the payment of holiday pay and for the statutory holiday.
[24] If the Employment Court’s conclusion could not be rationally supported having regard to the evidence there would have been a reviewable error of law, but there is an adequate evidential basis for the Court’s findings. Having regard to the evidential basis and the supervisory nature of the Employment Court’s function, we do not consider that the Employment Court erred in law in differing from the Employment Tribunal on material issues of fact. It cannot be said that wrong legal principles were applied to the factual findings.
[25] We do not think it is open to the appellant at this stage to raise the possibility and implications of summary dismissal when that was not put in issue before the Employment Tribunal.
[26] Nor do we accept that the Employment Court erred in law in its approach to the issue of summary dismissal. It is plain that the Employment Court was aware of the implications of what must be a frequently recurring and elementary proposition before it. With respect to counsel for the appellant, his dissection of the words used to reject a possibility never really put in issue is unconvincing.
[27] As to the submission that the Employment Court failed to identify the possibility of consensual termination of employment, we are unable to accept that the Employment Court overlooked the crux of the respondent’s case before the Employment Tribunal and before that Court. The appellant’s manifest contention was always that although the originally intended date of termination was 30 October, arrangements were made, in terms of the discussions between Mr Blind and Mr Stiffe on 23 October, that Mr Stiffe should leave immediately and receive payment in lieu of continuing employment. The position taken on behalf of Mr Stiffe is that although he did not carry on working for the extra week and was not required to, the correct interpretation of the arrangements is that the employment contract would end on 30 October and that the employer’s letter of 28 January 1989 is entirely consistent with that proposition.
[28] We think the Employment Court captured these competing, essential arguments in the first and third possibilities which it examined in the passage referred to in paragraph [14] of this judgment.
[29] The arrangement between the employer and employee was obviously more concerned with practical realities than legal consequences in relation to the time of termination. Time became relevant only when the employer took a technical point which we think could have been much more expediently met on behalf of the respondent by an application for leave to extend time pursuant to s 33(3) of the Act than by adopting a course involving essentially procedural arguments before the Employment Tribunal, the Employment Court, and now this Court.
[30] The appellant has not persuaded us that there has been an error of law by the Employment Court warranting intervention by this Court.
[31] The appeal is therefore dismissed with costs of $3500 to be paid to the respondent together with reasonable and actual disbursements, including travelling and accommodation expenses incurred by Mr Stiffe’s advocate in connection with the appearance on the appeal.

Solicitors
P B Smith, Auckland, for Appellant