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Accident Compensation Cases

Whautere v New Zealand Post Ltd (ERA, 04/11/02)

Judgment Text

DETERMINATION OF THE AUTHORITY 
Member R A Monaghan
Employment relationship problem 
Ripeka Whautere says she was unjustifiably dismissed by her former employer, New Zealand Post Limited (“NZ Post”). The reason for the dismissal was redundancy. In addition she says that her employment was affected to her disadvantage by unjustifiable actions of NZ Post's. 
Ms Whautere also says her severance pay should have been calculated on the basis of 28 rather than 17 years of continuous service with NZ Post. 
Background 
Ms Whautere was employed by the Post Office in Kaikohe between 1970 and 1974, before she took up employment with the New Zealand Police in Rotorua. That period of employment lasted until October 1976. For the next two years Ms Whautere cared for her young daughter, before returning to work for the Post Office in Kaikohe on a casual basis in 1978. In 1981 the Post Office employed her as a temporary clerk at Kaikohe, commencing on or about 14 September. On 8 February 1983 Ms Whautere was appointed on probation to a permanent full time position as clerk at Kaikohe, and her permanent appointment was confirmed on 9 May 1983. 
By January 1994 Ms Whautere had progressed to the position of senior mail officer — mailroom (“SMOM”). Broadly speaking the job involved receiving bags of incoming mail, including parcels and packages, moving the bags to the relevant sorting area, emptying them and sorting the mail in them. She sorted mail addressed to post office boxes into the appropriate box, located in the floor to ceiling array of boxes. Ordinary mail was sorted according to whether it was first class or not, and according to its destination, and franked with the day's date before being placed in the appropriate outwards mail bag. Parcels and packages also had to be sorted according to their destination, and their postage stamps cancelled. All of this required lifting, carrying, bending, stretching and crouching. 
In January 1994 Ms Whautere had a work-related accident and sustained a lower back injury. She attempted to continue to work but found the associated pain too much, and was off work for some five months as a result. During her absence her duties were carried out by two employees who shared the job either on a temporary or casual basis. 
When she returned to work in or about May 1994 it was to perform light duties according to a rehabilitation arrangement reached between Ms Whautere, her employer and the Accident Compensation Corporation. The employees who had been sharing the position of mail officer — mailroom continued to do so, while a new position entitled senior mail officer — records (“SMOR”) was created for Ms Whautere in order to provide her with some light duties. The position was essentially a clerical position, and included duties such as dealing with mail redirections, maintaining post office box records, and dealing with enquiries. Ms Whautere assisted with some sorting, but did none of the lifting and transporting of bags and parcels, nor did she place post office box mail into the boxes. Activities requiring lifting, carrying, bending and twisting were outside the range of movement she could perform. The position required some 5.5 hours' work per day, 5 days per week, but taking into account ACC payments Ms Whautere continued to receive her full salary. She was also paid for an allowance for a sixth shift, which she was not required to work. 
For the next two years there was no indication that Ms Whautere was ready to return to her former duties - on the contrary she continued to provide medical certificates which indicated that was not the case. Nevertheless the question of Ms Whautere's return to her former position was addressed in that, for example, a letter dated 17 October 1995 from an orthopaedic surgeon to Ms Whautere's ACC case manager commented: 
“ … Prognosis for this condition is unpredictable as it can sometimes go onto a chronic problem. I feel that Ms Whitehira [Whautere] should return to normal work though there is the possibility of further exacerbations of pain. However, I see no reason for her to remain off work at this stage provided that she takes care with lifting and bending activities. ”
In 1996 a consultant ergonomist reported on ways in which the tasks Ms Whautere was then performing, or the equipment available to perform them, could be changed in order to minimise the risk of back pain. The ergonomist also recorded information provided from Ms Whautere to the effect that, at the end of the day's work, she went home and lay flat on the floor to recover. None of that activity led to the production of a medical clearance for Ms Whautere to return to work as SMOM. Ergonomic changes were made in the workplace. 
The job-sharing employees continued to carry out the duties of mail officer — mailroom on a temporary basis. It is hardly surprising that by October 1996 the employees' union representative was discussing with Elaine Mead, then the company's northern region human resources manager, the appropriateness of continuing to classify the two employees as temporary after a total period of almost three years. In addition it appears, and for present purposes I accept, that the relevant collective employment contract provided: 
“2.
A temporary employee is an employee who is employed on a continuous basis for a fixed term of employment. The period of employment will be specified in the employment letter …  
3.
The period of employment will generally be less than 12 months. ”
Acting on instructions from his manager Douglas MacKenzie, the manager of the Kaikohe Post Shop, initiated a procedure for filling the position of mail officer — mailroom on a permanent basis. The position was not formally advertised — instead Mr MacKenzie contacted people he had listed as having expressed an interest in working for NZ Post. He also announced at a team briefing that the position was available and anyone interested could apply for it. The job sharing employees applied for the position in January 1997 and were formally appointed to it in February 1997. It seems that the union had input into the appointment process. 
The union was assisting Ms Whautere at the same time. It is apparent from copies of correspondence between Ms Mead and the local union organiser that there was discussion to the effect that Ms Whautere's position as SMOR would be made permanent. Ms Mead deposed that a formal offer was made to Ms Whautere, and the correspondence discloses the existence of the offer as well as negotiation around the point. A facsimile message from the union, dated “18/11” referred to the negotiations and ended by saying “If these outstanding issues can be resolved there should not be any problems for Rebecca to accept this position.” 
I understand from her statement of evidence that Ms Whautere accepts she was appointed to the permanent position of SMOR in or about 1996. She also recognised the appointment was to accommodate her need for lighter duties. Her complaint was that she was not aware she then became tied to the position so that if it subsequently became surplus to NZ Post's staffing requirements, her employment would end. Nor was she aware that by taking up the SMOR position on a permanent basis, she would be deprived of an opportunity to return to her former position should she become able to perform its duties. 
In late 1999 the ACC initiated a specialist case review of Ms Whautere's circumstances. In a report dated 12 October 1999, and prepared for that purpose, an occupational therapist reviewed the duties Ms Whautere was currently performing, as well as those of the mail officer — mailroom position as they were then being carried out. She described the former as “light duties” and the latter as “normal duties” and it seems from her report that she considered “normal duties” remained part of Ms Whautere's job. I acknowledge that by late 1999 there had been significant improvements in the workplace ergonomics so that the lifting and bending requirements of the SMOM position were considerably reduced, but it was not for the occupational therapist to express a finding about whether the “normal duties” remained part of Ms Whautere's job. However she acted on that understanding, and included a recommendation that “steps are taken to get Bec back to normal duties as soon as possible.” 
The report also included a reference to Ms Whautere's having been desirous of returning to the duties of the SMOM position for some time, because she felt she could do them. However, even if the position was open to her, it was still necessary for her to obtain a medical clearance in order to return to it. 
As part of the 1999 review Ms Whautere visited another orthopaedic surgeon. She expressed to him the desire she had also expressed to the occupational therapist, namely that she was anxious to return to the position of SMOM. The surgeon's conclusion was: “It would be preferable, in my opinion, for her to remain in her current type of light work with the avoidance of particular stress to her lumbar spine” and “Her current light work, partly clerical and partly light work sorting mail would appear to me to be ideal for her.” 
In addition to the occupational therapist, Ms Whautere's case officer also took the view that there was no reason why Ms Whautere could not return to the position of SMOM as it was in 1999. In contrast the surgeon commented principally on Ms Whautere's ability to carry out the position as it was in 1994. He subsequently clarified his view that Ms Whautere could return to full-time duties in the lighter type of work she was doing at the time, which I take as a reference to the SMOR position. NZ Post was not prepared to offer the SMOM position to Ms Whautere. Ms Whautere was unhappy about this. 
Despite the 1999 reports, Ms Whautere provided a further medical certificate following an attendance on her general practitioner on or about 27 April 2000. The medical certificate referred to the continuing effects of the back injury, and a need to avoid lifting heavy objects and bending. Squatting, crouching, twisting, pulling and carrying were all subject to restrictions. According to the certificate Ms Whautere would be unable to resume any duties at work for 90 days from 4 April 2000, although I understand she did not actually take that time off. 
A concern of Ms Whautere's about NZ Post's stance was that one of the job-sharing employees was Mr MacKenzie's wife. There was no evidence that Mr MacKenzie's actions were motivated by that relationship, although some of the contemporaneous documentation indicates that Ms Whautere had feared for a number of years that she was the victim of favouritism because of the relationship. Nevertheless she was clearly unable to carry out SMOM duties for a lengthy period after her initial accident. As matters developed from January 1994 both of the people filling in for her began accruing rights of their own, which NZ Post was obliged to acknowledge regardless of the relationship of one of them with Mr MacKenzie. 
Early in 2000, and in consultation with the union, NZ Post carried out a “strip clearing” trial at the Kaitaia, Kerikeri, Kaikohe and Paihia post shops. “Strip clearing” means sending outgoing mail from those post shops to a central base (Whangarei in this case) for sorting, rather than having it sorted at the local post shop. The trial continued for three months and it quickly became obvious that, if it were successful, jobs would be lost. Since the trial was considered a success David Boswell, the company's retail development manager, visited each of the post shops together with union representatives in order to discuss what would happen next. 
The collective employment contract (“CEC”) applicable at the time made express provision for surplus staffing situations. In summary, the procedure applicable at less than national level was: 
(a)
where a surplus staffing situation was identified NZ Post was obliged to notify the union and allow a 28-day period for consulting and negotiating about the existence of the surplus staffing situation; 
(b)
if, following this period of consultation, a surplus staffing situation was confirmed, a specific package of measures and options was to be constructed on a case by case basis with the involvement of the employee and the employee's representative and with the employer reserving the right to decide how to proceed if agreement could not be reached; 
(c)
the range of options included, - 
natural attrition, 
redeployment, 
relocation, 
redundancy; 
(d)
redundancy was available only where the other options were not practical or appropriate in any particular case; 
(e)
where natural attrition would not meet the required reduction in staffing, affected employees were to be given written notice that they were surplus to requirements; 
(f)
within seven days of receiving the notice, affected employees were to advise NZ Post of whether they wished to be consulted about the options available to their case; 
(g)
if agreement on the available options could not be reached, or it was not appropriate to offer redeployment or relocation, NZ Post could terminate an employee's employment and pay redundancy compensation according to the formulae in the CEC. 
By letter dated 6 April 2000 Mr Boswell notified Ms Whautere that a surplus staffing situation in the mail processing area had been identified in the Kaikohe Post Shop. He also advised that the mail processing staffing hours were to be reduced by 49 over a Monday to Saturday week. 
On 2 May 2000 Mr Boswell and Hinga Dickson, a human resources advisor with NZ Post, met with Ms Whautere and her union representative in order to discuss the surplus staffing situation. After that meeting ended Mr Boswell and Ms Dickson met with another Kaikohe employee whose supervisory position had been identified as surplus. 
During the meeting Mr Boswell clarified the parties' understanding of the duties of the SMOR position, before explaining that the mail processing aspect of the position had been eliminated because of new procedures being introduced following the strip clearing trial. Other staff members could deal with customer enquiries. Mr Boswell also referred to Ms Whautere's medical condition, as indicated by the medical certificates she continued to supply, and commented that her condition meant she could not be considered for other work in the mail processing or retail business areas. 
By letter dated 8 May 2000 Mr Boswell formally advised Ms Whautere that her position was surplus to requirements and the relevant provisions of the CEC would be applied to her. It went on to affirm NZ Post's aim of relocating or redeploying surplus staff to other work, provided that could be arranged satisfactorily, and to say redundancy provisions would be applied if no such arrangement could be made. The letter enclosed an option sheet, and Ms Whautere was asked to complete and return it by 22 May 2000. The option sheet provided an opportunity for Ms Whautere to indicate whether she wished to be considered for relocation or redeployment, and if so where and in what position. It also provided an opportunity to indicate whether redundancy was the preferred option. 
By letter dated 25 May 2000 Ms Whautere said her preferred option was to be redeployed to her pre-injury position of SMOM on the basis that she was now able to perform it. She went on to make her case about why that was the fair thing to do. At the end of the letter she acknowledged that, nevertheless, she had ticked redundancy as her preferred option and redeployment as her second. She said relocation was not an option, and gave her reasons. 
Mr Boswell replied by letter dated 2 June 2000. He reiterated that the mail officer — mail room position was now a permanent position, as was the SMOR position. In terms I read as being explanatory of why redeployment could not be considered, he advised he did not accept that Ms Whautere was now able to perform the duties of SMOM because of the medical certificates the company continued to receive. Since redeployment could not be considered, the option of redundancy was being applied. Ms Whautere's employment would terminate on 16 June 2000. 
By a letter from her solicitors dated 6 September 2000 Ms Whautere submitted a personal grievance in respect of her redundancy. NZ Post replied by letter dated 3 October 2000 giving its view of the grievance and denying that Ms Whautere was unjustifiably dismissed. By letter from her solicitors dated 12 October 2000 Ms Whautere invoked the fair treatment procedure in respect of her redundancy. 
The “fair treatment procedure” was an agreed procedure for resolving personal grievances and disputes, and was set out in the CEC. The procedure amounted to the insertion of an internal semi-formal dispute resolution procedure before recourse was had to the applicable statutory procedure involving the Employment Tribunal. Thus after an employee submitted a grievance to NZ Post, and the company had responded, the employee could make a written request for a fair treatment hearing if the response was unsatisfactory. A mediator or adjudicator would be formally appointed. Arrangements for dealing with the grievance were very similar to those available in the Employment Tribunal, with the available remedies also mirroring the statutory remedies available through the Tribunal. If either party was dissatisfied with the outcome there was a procedure under which the matter could be filed as a personal grievance in the Employment Tribunal. Mediated settlements could be referred to the Tribunal for recording as such under the Employment Contracts Act 1991, which was then in force. 
Mediation was accordingly conducted under the fair treatment procedure on 16 November 2000. A handwritten document, signed by Mr Boswell and Ms Whautere but not by the mediator, recorded the parties' summary of arrangements. The document was not submitted to the Employment Tribunal, or to the mediation service under the Employment Relations Act, for formal recording as a settlement. The arrangements it summarised were: 
(a)
NZ Post was to clarify the meaning of the term “continuous service” as it related to Ms Whautere's length of service for the purpose of calculating severance pay under the CEC; 
(b)
NZ Post was to check whether clauses 24 and 40 of the CEC applied in respect of Ms Whautere's retiring leave entitlement; 
(c)
NZ Post would provide retraining assistance on the production of course details and receipts; 
(d)
NZ Post was to check certain calculations; 
(e)
Further discussions would be held once (a) — (c) above were finalised; 
(f)
Mr Boswell would give Ms Whautere a verbal apology on behalf of NZ Post. 
The basis on which Ms Whautere's severance pay should be calculated, with reference to her length of service with NZ Post, remained at issue and is part of the present employment relationship problem. The parties were also unable to reach agreement on a retraining package. The fact of this inability did not become clear until January 2002, and the present employment relationship problem was filed in the Authority in late March 2002. 
Issues for determination 
The parties have raised the following issues: 
(a)
whether Ms Whautere's employment relationship problem was resolved at the fair treatment hearing; 
(b)
whether Ms Whautere's dismissal by reason of redundancy was justified; 
(c)
whether Ms Whautere suffered a disadvantage by misrepresentations that she would be able to return to her position as mail officer — mailroom on receiving a medical clearance; and 
(d)
whether Ms Whautere was entitled to receive severance pay in respect of 28 years' service rather than 17; 
The fair treatment hearing 
It is clear that the outcome of the fair treatment hearing was not a mediated settlement under s 149 of the Employment Relations Act, or a settlement formalised under s 88 of the Employment Contracts Act 1991. There is a question of whether there was a settlement at all. I see nothing to restrict the ability of the Authority to address that question by applying the same principles as those frequently applied by the Employment Court, Employment Tribunal and the Authority. 
Applying those principles I look first at the words used in the summary of arrangements. There is an immediate difficulty with the words “further discussions would be held once (a) — (c) were finalised.” On their face those words are not consistent with the existence of a concluded settlement. The document gives no assistance as to the scope of the “further discussions”. The discussions could have been intended to cover final administrative matters associated with all of the items referred to in the document, or to cover item (d) only (if (a) — (c) had already been finalised), or to broaden again to ensure that all matters associated with Ms Whautere's employment, and its termination, were settled. 
Indeed another difficulty with the document is the lack of any provision expressly referring to a full and final settlement. 
In addition, the parties were unable to finalise (a) and (c) of the summary of arrangements. Significant issues of fact and interpretation remained unresolved in respect of (a) in particular, and the word “clarify” is too vague to allow me to conclude that the resolution of those issues was no more than an administrative matter when it came to implementing the alleged settlement. 
I therefore conclude that Ms Whautere's grievance was not settled at the fair treatment hearing. 
Justification for dismissal by reason of redundancy 
The nub of Ms Whautere's problem regarding her redundancy was that her original position in the mailroom was not disestablished and the people who were carrying out the associated duties continued to do so. As it was put in her statement of evidence: “It is another injustice to me that the persons who now have my position have the benefit of lighter physical duties on the job, as well as the permanence of the position which I once held.” Ms Whautere's feeling of grievance was exacerbated by the ongoing employment of Mr MacKenzie's wife. 
Nothing in the Accident Rehabilitation and Compensation Insurance Act 1992 (“the ARCI Act”) obliged NZ Post to keep the position of SMOM open for Ms Whautere following her accident in 1994. The rehabilitation arrangements entered into in 1994, it appears, entered into under Part III of the Act, which affirms an injured person's entitlement to rehabilitation assistance from the ACC. Part III included a right to vocational rehabilitation, under such programme as might be approved by the ACC, with the objective of restoring the injured employee to the employee's former capacity for work in the original occupation or a similar one. However those arrangements were primarily as between the ACC and the injured employee. In Ms Whautere's case the employer was a participant in the approved individual rehabilitation programme. 
The contractual position between Ms Whautere and her employer was that, from January 1994, Ms Whautere was unable to perform the work she was employed to perform. She was at least fortunate in that she had an employer that was able to create an alternative position for her, and participate in her rehabilitation programme. However, subject to any undertaking it may have given in respect of the rehabilitation programme, it was open to NZ Post after a period to take the view that employing staff to perform Ms Whautere's original job on a temporary basis was no longer satisfactory. 
That is what it did in or about October 1996. Ms Whautere had been unable to perform her original duties for a little under three years, and this state of affairs could not go on indefinitely. The job-sharing employees had been treated as temporary staff members for the same period, and that could not go on indefinitely either. With the involvement of the union, the positions of the temporary staff members were confirmed as I have set out. I see nothing wrong in that. Similarly, with the involvement of her union, Ms Whautere's position was resolved by her appointment to the permanent position of SMOR. There is nothing wrong in that either. 
In short, by the agreed appointment to the position of SMOR Ms Whautere no longer had any contractual entitlement to or obligation in respect of the SMOM position. It was no longer her position at all. The position of SMOR was her position. She was on a new employment path. I do not believe it was encumbent upon NZ Post at the time to indulge in what would have amounted to postulating scenarios or speculating about the future of either position. 
It was another three years before the specialist case review led to the suggestion from the occupational therapist and ACC case officer that Ms Whautere would be able to carry out the duties of the SMOM position as they had become. Even if I accept that assessment as correct, it had been almost 6 years since Ms Whautere had any association with the SMOM position and three years since she had been formally appointed to another position. She no longer had any claim to the SMOM position, whether or not the duties had changed. 
The parties also disputed whether NZ Post complied with the surplus staffing provisions in the CEC in implementing Ms Whautere's redundancy. The drafting of the provisions is not clear, and it was sensible of the parties to address that matter in the succeeding CEC. However with reference to the provisions applicable at the time, by counsel Ms Whautere says she was not given a 28-day period for consultation and negotiation, notice of the right to this process was inadequate, she was not given procedural rights in respect of the specific package of measures and options available to her, and nothing was proposed in respect of redeployment or relocation. 
The obligation to enter into a 28-day period of consultation was effective as between the union and NZ Post and was for the purpose of confirming whether there was a surplus staffing situation at all. As the union was closely involved in the strip clearing trial, as well as participating in discussions about Ms Whautere's own position, I have no reason to believe there was any breach of the obligation, let alone one likely to have led to unfairness to Ms Whautere. 
Regarding the obligation to consult and negotiate with Ms Whautere, the letter of 6 April 2000 and meeting of 2 May 2000 allowed the company to explain that it had identified a surplus staffing situation and why, and for the parties to discuss the detail of Ms Whautere's position. Following this process, the existence of the surplus staffing situation was confirmed in the letter dated 8 May 2000. At that point Ms Whautere had her opportunity to indicate her preferences regarding the available options, which she did not only by her completion of the options form but by additional conversation and correspondence. Agreement could not be reached and NZ Post terminated her employment on the two weeks' notice required under the CEC. I find no breach of the CEC in respect of any of those actions. 
There was some discussion at the investigation meeting about the correctness of the assessment that mail processing staffing hours should be reduced by 49 per week. I believe it is obvious that a change of process in which Kaikohe's outwards mail was no longer to be sorted at the Kaikohe office would result in a drop in the number of hours required for sorting, and possibly associated duties although nothing turns on this. I believe it was also obvious that the change was made for genuine reasons, and the evidence was that there was union participation in the decision. It is not for the Authority to delve any further into details such as the assessment of exactly how many hours could be dispensed with. This falls within the employer's right to manage its business as it sees fit. 
In conclusion I find Ms Whautere's redundancy was justified. She does not have a personal grievance on the ground of unjustified dismissal. 
Unjustifiable disadvantage 
I had difficulties with Ms Whautere's evidence in support of her allegation that she has a personal grievance under s 103(1)(b) of the Employment Relations Act (a “disadvantage grievance”). As formulated in the statement of problem, the grievance was that Ms Whautere's conditions of employment were affected to her disadvantage in that NZ Post made representations that she would, at some stage, be able to return to her previous position upon receiving medical clearance. When she received the clearance, she was not returned to her previous position. Subsequently she was made redundant. 
Although Ms Whautere did not give evidence to such effect, I would be prepared to accept that on her return to work in May 1994 it was explained to her that she could return to her former position on receipt of a medical clearance. The rehabilitation provisions of the ARCI Act and a reference in a letter from Ms Whautere's solicitors dated 6 September 2000 support this possibility. However medical clearance was not forthcoming, and the passage of time coupled with the formalising of the SMOR and SMOM positions in 1996 extinguished any effect such representations might have had. 
As I have said, that was not the evidence in any event. Ms Whautere's written statement of evidence did not give any information about the alleged misrepresentations, including what was said, when or by whom. Her oral evidence at the investigation meeting was that she had continuously tried to get her old job back since 1995 and 1996, but Mr Mackenzie would laugh at her. This evidence does not support the allegation that Ms Whautere was told she could have her job back at any time from 1996 onwards. 
In short there was not enough evidence to justify a conclusion that representations of the kind alleged by Ms Whautere were made. However not only are there evidential difficulties arising from this grievance, but I assume the disadvantage on which Ms Whautere relied was that her security of employment as SMOR was jeopardised to the extent her employment eventually terminated by reason of redundancy, whereas her security of employment as SMOM was not so jeopardised. The difficulty with any argument of this kind is that the jeopardy did not crystallise until the decision to restructure was made in 2000. There was no such jeopardy in 1996, when Ms Whautere was appointed to the permanent position of SMOR, nor even in 1999 when there may have been disagreement about her fitness to return to the position of SMOM. 

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