What you need to know following Employment Court decision in GF v Customs

If the names GF and Customs sound familiar, you’ll likely remember the case of a fixed term border protection officer who was dismissed for declining to be vaccinated against COVID-19. In September 2021, the Employment Relations Authority held that the NZ Customs Service (Customs) had justifiably dismissed the worker (GF), the employee was not disadvantaged by Customs’ process, and Customs did not breach its good faith obligations.

On Monday, the judgment of the Chief Judge of the Employment Court was released. The Court reached the exact opposite conclusion on all three counts and awarded GF $25,000 in compensation for hurt and humiliation and three months’ lost earnings.

Breach of good faith and a failure to act as a fair and reasonable employer

The Court found that Customs had failed to comply with its obligations of good faith and did not hit the “baseline” or “stripped back” requirement to act as a fair and reasonable employer, and those failures led to GF being unjustifiably disadvantaged and dismissed.

Notably, in relation to good faith, the Court held that Customs was a large organisation with significant resources as its disposal, including in terms of human resources and access to legal advice and support. This is relevant to the assessment of good faith and the Court held it was up to Customs to ensure it met its obligations, “whether or not the employees it was dealing with, or the advocates representing them, raised red flags that others might have raised or waved them with the same degree of vigour”.

Compensation bands adjusted for inflation

The bands were first introduced by the Court five years ago and, in order to remain current for future cases, the Chief Judge took the opportunity in this case to revisit the bands. After applying the Reserve Bank’s inflation calculator, the adjusted compensation bands for hurt and humiliation are now:

1. $0-$12,000 (band 1 - low);
2. $12,000-$50,000 (band 2 - middle); and
3. $50,000+ (band 3 - high).

Effect of incorporating tikanga or tikanga values into employment relationships

One of GF’s claims was that Customs failed to comply with tikanga or tikanga values that Customs had voluntarily imported into its employment relationships with employees.

The Chief Judge did not accept that tikanga or tikanga principles were merely aspirational statements as opposed to obligations Customs was required to meet. Her Honour held that, where an employer purports to incorporate tikanga or tikanga values into an employment relationship, the extent to which these commitments have been met is relevant to an assessment, for all employees (Māori and non-Māori), of:

1. fairness and reasonableness in the test of justification (section 103A, Employment Relations Act 2000 (ERA)); and
2. compliance with the obligations of good faith (section 4, ERA).

Heightened employment obligations on public sector employers

The case also has significant implications for public sector employers.

The Public Service Act 2020 (PSA) requires a Chief Executive of a public sector organisation, such as Customs, to be a “good employer”, requiring (among other things) the Chief Executive in employment policies and practices to foster a workplace that is inclusive of all groups.

For the purpose of section 73(3)(d) of the PSA, a “good employer” is a public sector employer who operates an employment policy containing provisions for the recognition of the aims and aspirations of Māori, the employment requirements of Māori and the need for greater involvement of Māori in the public service.

The Court found that section 73 of the PSA requires Customs, as a public sector employer, to honour a commitment it has incorporated into its employment relationship with all employees (Māori and non-Māori) to act consistently with applicable tikanga or tikanga values.

More generally, the Chief Judge also held that it is ‘seriously arguable’ that the relevant provisions of the PSA placed heightened “good employer” obligations on public service organisations and this, too, is relevant to an assessment of whether the test of justification and obligations of good faith in the ERA have been met.

The judgment can be accessed here.

Please contact one of our team members below for more information.

Special thanks to Alana Harrison, Solicitor for her assistance in preparing this article.