ERA removed employment relationship problem to Employment Court under s 178 Employment Relations Act 2000 – applicant sought order declaring the matter was not properly removed and directing ERA to investigate – was the ERA wrong in ordering removal of the whole matter?
Smalley v Hamilton Hindin Greene Ltd [2024] NZEmpC 195
James Smalley was an employee of Hamilton Hindin Greene Ltd (the company) from 2006 until 2018. He was also a director and shareholder of the company until June 2017.
In June 2021, Smalley filed a statement of problem in the Employment Relations Authority (ERA) raising claims to underpaid Holidays Act entitlements as an employee, as well as contractual salary or wage entitlements.
He filed an amended statement of problem in July 2022 seeking a range of unquantified orders (relevant entitlements, interest thereon, penalties and costs). Smalley takes the position that he is not yet able to quantify his claims, three years after filing his original statement of problem.
There were initial interlocutory disputes regarding settlement agreements which were determined by the ERA. An appeal to the Employment Court was discontinued and, in mid-2023, the ERA’s investigation resumed.
Between June 2023 and April 2024, there were extensive disputes regarding disclosure. The ERA convened several case management conferences but was unable to resolve matters.
The scheduled investigation meeting was deferred on two occasions due to the unresolved disclosure issues. Further issues arose at the stage when briefs of evidence were supposed to be filed, including allegations of falsification of documents and issues as to how confidential board papers should be dealt with.
In April 2024, the ERA advised the parties that it resolved to refer the matter of disputed disclosure to the Employment Court under s 178(1) Employment Relations Act 2000, on its own motion. Submissions were requested.
The company filed submissions requesting the removal of the entire proceeding, not just the disclosure issue. Smalley filed submissions opposing both the removal of the disclosure issue (as signalled by the ERA) and the removal of the entire proceeding (as sought by the company).
The ERA found that “exceptional grounds” existed for removing the entire matter to the Employment Court and did so.
Smalley then applied to the court for an order that the ERA be directed to investigate and determine his claims. The court convened an in-person hearing for this rare application.
Applicable principles: Employment Relations Act 2000, ss 3, 143, 174E, 178, schedule 2, clause 13; Employment Court Regulations, regs 37-52; Employment Relations Authority Regulations, reg 12 – did the ERA determination fail to meet the requirements of s 174E? (no, a sense of realism is necessary, and a state of perfection is not required) – was the ERA wrong in ordering removal of the whole matter? (no) – does the formal disclosure regime in the Employment Court Regulations mean the court is better placed to resolve those issues? (yes) – is removal barred by s 178(6) because the disclosure direction was a matter of procedure? (no) – does non-compliance with regulation 12 of the Employment Relations Authority Regulations 2000 vitiate the ERA’s decision? (no – substance, not form, should be the focus, and natural justice was observed) – does the extinguishment of Smalley’s ability to challenge findings of fact or errors of law as of right affect the position? (no, s 178, once satisfied, explicitly envisages a limit to challenge rights)
Held: The removal order was made properly. The application for return of the matter to the ERA is accordingly dismissed.
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