Holding a union delegate responsible for 66 bottles of beer can be discrimination.  So says the Court of Appeal.  Is discrimination the new frontier?  

While the most common personal grievances are unjustified dismissals and unjustified actions, section 103(1) of the Employment Relations Act 2000 also includes a range of other personal grievance types, including discrimination.  Discrimination grievances are starting to emerge, and from a legal perspective, there are some very good reasons for alleging discrimination.  

Discrimination includes the same prohibited grounds that are set out in the Human Rights Act 1993 but also a refusal to do work under section 28A of the Health & Safety Employment Act 1992 and involvement in the activities of a union, which includes (somewhat surprisingly) being a health and safety representative.   

On 4 August the Court of Appeal released its decision in Nathan v C3 Limited allowing Mr Nathan’s appeal.  The Court of Appeal found that the Employment Court had failed to address the question of discrimination and remitted the matter back for further determination.  The claimed grounds of discrimination were Mr Nathan's "involvement in the activities of a union", including his role as a health and safety representative.  The Court of Appeal has given a fairly clear steer that there has been discrimination unless C3 is able to prove that it would have dismissed regardless of the union activity.   

This case highlights the different considerations that the Employment Court and Employment Relations Authority must take into account when dealing with a claim of discrimination and is of general application.  It also highlights that the Employment Court and Employment Relations Authority should consider whether a different type of personal grievance has occurred to that pleaded or claimed by a party.    

The Facts  

Mr Nathan and his colleague Mr Nee Nee were both union delegates and health and safety representatives.  As health and safety representatives they attended a health and safety meeting on 27 September 2011 where a liquor ban was introduced and discussed.  C3 introduced the ban following a serious assault on site after alcohol had been consumed.   

After the ban was introduced, Mr Nathan, Mr Nee Nee, two casual employees of C3, and two other employees of another stevedoring company were involved in a drinking session that lasted several hours and involved 66 bottles of beer.  When C3 discovered this, it took disciplinary action – significantly, Mr Nathan and Mr Nee Nee were dismissed, while it appears that the two casual employees (neither of whom were health and safety representatives) were not.  

It is worth noting that Mr Nathan and Mr Nee Nee did themselves no favours with their conduct – both at the time of the incident and during C3’s investigation.  As the Court of Appeal noted in its judgment, they not only "deliberately breached the liquor ban", but also "lied about their involvement for approximately eight weeks".  

The letter of termination referred to Mr Nathan being a union delegate and a health and safety representative in the context of the behaviour expected from him.  C3's General Manager properly accepted in cross examination that Mr Nathan being a union delegate and heath and safety representative was a factor in his thinking and an additional factor taken into account in deciding to dismiss.  

Mr Nathan and Mr Nee Nee both raised personal grievances, alleging that they had been unjustifiably dismissed.  The Employment Relations Authority dismissed their claims.  This decision was challenged in the Employment Court.  Mr Nee Nee withdrew his challenge at the commencement of the hearing.    

Employment Court  

The Employment Court applied the law relating to unjustified dismissal, including the test of justification under section 103A of the Employment Relations Act 2000, and found that C3's decision to dismiss was "plainly one C3 Limited could make in all the circumstances, having regard to fairness and reasonableness".  

The Employment Court rejected Mr Nathan's claim that C3 relying on him being a union delegate and health and safety representative was discrimination, and considered that C3 was entitled to take a sterner view of his behaviour because of the union roles that he held.  The Court concluded that it was a fact taken into account by C3, not by way of discrimination, but rather going to the section 103A justification criteria.  

Unfortunately, the Employment Court did not address Mr Nathan’s claims of discrimination in the context of the discrimination provisions in the Employment Relations Act.     

Court of Appeal  

In allowing Mr Nathan’s appeal, the Court of Appeal found "there is little doubt the Employment Court made an error in the law in concluding that the reasons relied on by C3… did not amount to discrimination", and that the evidence "established that Mr Nathan had been dismissed by reason directly or indirectly of his involvement in the activities of a union".  The test is not whether the discrimination is the sole or predominant factor but a "material factor" or "ingredient".  

On that basis the question should have been whether C3 would have dismissed Mr Nathan had he not held the union and health and safety roles.   

In addition, the Court of Appeal made several further comments that are salutary.  

The fact that Mr Nathan claimed a personal grievance as unjustified dismissal did not mean that the Employment Court was precluded from considering the discrimination issue in the correct statutory context.  It pointed out that section 122 of the Employment Relations Act expressly permits the Employment Court to make a finding that a personal grievance is of a type other than that alleged.  

The Court of Appeal also touched on a number of other points that were particularly relevant with regard to discrimination, and other personal grievances that are not unjustified dismissal or unjustified disadvantage.  The test in section 103A for justification only applies to dismissals and unjustified actions.  Put another way, there can be no justification for discrimination.   

Finally, the Court of Appeal also pointed out that  where an employee alleges that they have been discriminated against because of their union involvement, and one of the actions or inactions described in the Employment Relations Act occurred (as was the case with Mr Nathan being dismissed), there is a rebuttable presumption that the employee has been discriminated against.     

Comment  

The Employment Court now has a considerable headache, as does C3.   

While C3's General Manager gave evidence that Mr Nathan would have been dismissed even if he had not been a union delegate or representative, it appears that the casual employees also involved in the drinking session were not in fact dismissed.  

A further difficulty for the Employment Court (and for C3) is that C3 relied heavily on the fact that Mr Nathan was a union delegate and a health and safety representative as a reason why he should be held to a higher standard of behaviour. His status as a union delegate and health and safety representative was also relied on by C3, and seemingly accepted by the Employment Court, as a reason for rejecting the disparity of treatment argument compared to the employees who had not been dismissed.  

Given the findings of the Court of Appeal, the onus now falls on C3 to prove that it did not discriminate, and it did not behave inconsistently in dismissing Mr Nathan and the casual employees.  The heavy reliance that C3 seemed to place on the fact that Mr Nathan was a union delegate and health and safety representative in reaching the conclusion that he was guilty of serious misconduct in all circumstances and in deciding to dismiss, seems to make that task extremely difficult.