BOYNE COMPANY LTD TRADING AS GOODDAY NEWSPAPER V MI SOOK HWANG CA CA1/05

BOYNE COMPANY LTD TRADING AS GOODDAY NEWSPAPER V MI SOOK HWANG CA CA1/05 28 April 2005IN THE COURT OF APPEAL OF NEW ZEALAND CA1/05BETWEEN BOYNE COMPANY LIMITED TRADING AS GOODDAY NEWSPAPER Applicant AND MI SOOK HWANG Respondent Hearing: 18 April 2005 Court: Anderson P, McGrath and O'Regan JJ Counsel: M W Ryan for Applicant G J O'Sullivan for Respondent Judgment: 28 April 2005JUDGMENT OF THE COURT A The application for leave to appeal is dismissed. B We award costs to the respondent of $3,000 plus reasonable disbursements (including travelling and accommodation costs of counsel, if any) to be agreed by counsel or, in the absence of agreement, to be fixed by the Registrar. REASONS(Given by O'Regan J)Introduction[1] This is an application for leave to appeal against a decision of the Employment Court, Boyne Company Limited trading as Goodday Newspaper v Mi Sook Hwang EMP C AK AC 68/04 Judge Colgan. The application is made under s 214 of the Employment Relations Act 2000 (the Act). That section provides for an appeal on a question of law from a decision of the Employment Court to this Court, but only if leave is granted by this Court. Under s 214(3) this Court may grant leave if, in its opinion, the question of law involved in the appeal is one that, by reason of its general public importance or for any other reason, ought to be submitted to this Court for decision. [2] The applicant, Boyne Company Limited (Boyne) is owned by a Korean, Jeon, Jick Ha (Mr Jeon Snr) who is the president of the company and who at all relevant times resided in the Republic of Korea. He has ultimate control over Boyne. Boyne publishes the Goodday newspaper for Korean readers in New Zealand. The managing editor of Boyne is Jeon, Chang Sun (Mr Jeon Jnr) who resides in New Zealand. [3] The respondent, Ms Hwang, worked for Boyne as a graphic designer. She also assisted in delivering newspapers, as did other staff. She did not have a written employment contract. It was a term of her contract that there would be a review of its terms and conditions after a period of between three and six months. [4] On 1 August 2003, some seven months after she commenced work, Ms Hwang asked Mr Jeon Jnr to consider reviewing and changing aspects of her working conditions. Her workload had increased because another graphic designer had left the newspaper. She asked for a pay rise. She also raised a concern about the requirement that she assist in delivering the newspaper, which she said caused her back pain. [5] Mr Jeon Jnr told her that, although the final decision lay with Mr Jeon Snr, she was the highest paid employee in the business and there was no possibility of an increase in salary because of the business' economic state. He also said he wouldput the other concerns she raised to Mr Jeon Snr, but suggested to her that if she was dissatisfied she might consider looking for another job. There was also a discussion about changing the basis of Ms Hwang's remuneration to an hourly rate, but this was not pursued as it would have yielded her less than her current salary. [6] Later that day, Mr Jeon Jnr sent an email to Mr Jeon Snr reporting on his discussions with Ms Hwang. Mr Jeon Snr replied by fax. This fax message was in Korean but the translation of it relied on by the Employment Court Judge read as follows:I read your email. We are now in a difficult situation in terms of running the business. We can't work with those who are only interested in their own benefits. Although they are very capable, we can't employ them, when we consider the situation of the company. If they insist only their own rights without considering the situation of company that is in difficult situation in its operation and has operated just less than 1 year. Notify those matters to the staff and dismiss anyone who does not change their mind. We can't help it. Work with those who come to an understanding even though there is only one person remained. Tell the staff the intention of president as it is. I demand you to do so even though you suspend one or two publications.[7] A copy of this fax came into the possession of Ms Hwang (there was a dispute as to how this occurred). Ms Hwang thought it had been sent in response to her request for a review of her terms and conditions of employment, and took the view that the fax had the effect of dismissing her. She spoke with Mr Jeon Jnr's wife, Ms Choi about this. There was some dispute about what was discussed which the Judge did not need to resolve. [8] Ms Hwang then spoke to her husband who told her to leave the office immediately as she had been dismissed. However she elected not to do so, completed some design work and left at about 5 pm. She took with her her personal possessions and told other staff that she may or may not return. [9] Ms Hwang contacted an employment advocacy service and was advised that she should not make contact with Boyne and should not return to work because she had been dismissed. She later approached another advocacy service and on 7 August a representative of that service sent a letter to Boyne raising Ms Hwang's personal grievance of unjustified constructive dismissal. Ms Hwang did not return to work orcontact Boyne. Mr Jeon Jnr wrote to her on 7 August asking her to explain her reason for her absence – this appears to have crossed with the letter from Ms Hwang's advocate. On 8 August Mr Jeon Jnr wrote to her again, and then on 11 August wrote another letter asking her to respond and advising that if she did not do so she would be regarded as having resigned. A mediation was arranged, and on 13 August Boyne's lawyer responded that she had not been dismissed. On the same day Mr Jeon Jnr wrote to Ms Hwang saying that Boyne regarded her as having resigned voluntarily.Employment Court decision[10] Ms Hwang's challenge to the decision of the Employment Relations Authority was heard by Judge Colgan. The Authority had found that Ms Hwang was not constructively dismissed. [11] Judge Colgan found that she was constructively dismissed. Judge Colgan said that Ms Hwang was entitled to a review of her terms and conditions under her contract of employment. He said that to meet her request for an increase in salary and to address a health and safety issue (the effects of the newspaper delivery task) with a threat of dismissal if she persisted was a breach of the requirement for good faith dealings. He said this was a fundamental breach of the employment contract entitling Ms Hwang to treat the contract as being repudiated by the employer. This meant she was constructively dismissed. [12] The Judge said that although Ms Hwang stayed at the premises of Boyne until the end of the day in question, her conduct during the period after her discussion with Mr Jeon Jnr was consistent with considering whether to accept the employer's repudiation of the employment contract. He said there was some explanation for her remaining at the place of work: she wished to complete some unfinished design work, and she relied on a fellow employee to give her a lift home. [13] The Judge then turned to justification. He said that Boyne had not discharged the onus of establishing that dismissal was justified in this case. He said that Boyne had an obligation to consider her requests on their merits, and that it hadfailed to do this by threatening dismissal if she persisted. Accordingly he found that her constructive dismissal was unjustifiable. [14] The Judge then turned to remedy. He referred to evidence that she had sought alternative employment over a period of about six and a half months after her dismissal, but her previous experience of working only for Korean companies and her limited English counted against her. She had her own design business which she had commenced while working for Boyne, but it continued to run at a loss after her employment at Boyne was terminated. He noted that, if she had not been dismissed she would have earned $17,875 during the period from the time of the constructive dismissal until mid-February 2004 when she obtained another job. He found that it was probable that if she had not been unjustifiably constructively dismissed, she would have continued to work for Boyne and to have earned salary at her current rate of pay. Accordingly she was entitled to payment for the lost remuneration of $17,875. The Judge rejected the contention that Ms Hwang's contributory conduct giving rise to the grievance was so substantial that she should be disentitled to any monetary remedies or that the remedy should be reduced accordingly. He said there was no justification for such an approach under s 124 of the Act. [15] The Judge considered that Ms Hwang's embarrassment at her dismissal was substantial because she was part of a relatively small expatriate Korean community, and the news of her fate became known quickly not only to other newspaper staff members but to proprietors of the outlets for the newspaper. He awarded her $8,000 compensation under s 123(c)(i) of the Act for distress.Grounds of the proposed appeal[16] On behalf of Boyne, Mr Ryan put forward five proposed grounds of appeal. These were: (a) The Employment Court erred in law in having found that Boyne breached its duty to Ms Hwang by then failing to consider whether the breach was serious enough to warrant Ms Hwang leaving under the conditions prevailing;(b) The Employment Court erred in law in finding that the letter faxed from Mr Jeon Snr in Korea was causative of Ms Hwang's decision to act on Boyne's repudiatory breach; (c) The Employment Court erred in law in having found that Boyne had breached its duty to Ms Hwang, by then failing to consider whether a substantial risk of resignation was reasonably foreseeable to Boyne, having regard to the seriousness of the breach; (d) The Employment Court erred in law in finding a constructive dismissal in the true and only reasonable conclusion on the evidence contradicted that decision. (e) The Employment Court erred in law in that it awarded $17,875 loss of remuneration but failed to take into account income acknowledged as being earned by Ms Hwang following her departure from Boyne's employment. [17] Grounds (b) and (d) above were not raised in the application for leave, but were raised in Mr Ryan's written submissions. There was no objection to our considering them. [18] We will consider the grounds individually, in the order in which they appear above.(a) Breach of duty of good faith[19] Judge Colgan found that the response by Boyne to Ms Hwang's request for a variation of the terms of her employment (threat of dismissal) was a fundamental breach of the contract entitling her to repudiate. He considered the provisions of s 4 of the Act, which requires parties to an employment relationship to deal with each other in good faith. He noted that s 4(3) permitted a party to an employment relationship to communicate to another person a statement of fact or of opinion reasonably held about an employer's business. That would presumably permitcommunication of the employer's view of the impact of an employee's request on the future business prospects of the employer's business. But Judge Colgan said that threatening dismissal if compliance with the employer's position refusing a request to review employment terms is in breach of the requirement for good faith dealings. [20] Mr Ryan said the Judge had misdirected himself because he applied s 4 as amended by s 5 of the Employment Relations Amendment Act (No 2) 2004, which came into effect on 1 December 2004. He said this was an error because the present dispute pre-dates the amendment. Having carefully read Judge Colgan's decision we can see no indication that the Judge applied the new test: in fact it seems clear to us from para 27 of his judgment that he was applying the requirements of s 4 prior to the amendment coming into force. There is therefore nothing in this point. [21] Mr Ryan also argued that the Judge had misinterpreted the letter from Mr Jeon Snr. He said Mr Jeon Snr's letter contemplated a discussion with all of Boyne's employees to advise them of Boyne's financial position. In addition, he said that Ms Hwang knew that Mr Jeon Jnr had not followed directions from Mr Jeon Snr on a previous occasion. [22] Mr Ryan argued that the wording of the letter may be unreasonable, but did not indicate that Boyne was acting in bad faith. [23] In our view Mr Ryan's argument on this point raises no question of law. In essence he disputes the Judge's finding of fact based on his interpretation of the letter from Mr Jeon Snr. That interpretation was clearly open to the Judge and is not amenable to appeal under s 214, which limits appeals to questions of law. [24] Mr Ryan made a similar argument that the Judge had misinterpreted the letter from Mr Jeon Snr in finding that Boyne had indicated an intention not to address Ms Hwang's health and safety concern (the weight of the papers she had to deliver). He said the letter was silent on health and safety issues. Although the interpretation of a document is essentially a matter of law, the implications of conduct, including communications are eventually matters of fact. In its context the conduct of theemployer raises no question of law, certainly not one which warrants further consideration by this Court.(b) Causation[25] Mr Ryan argued that Judge Colgan was wrong to find that the letter from Mr Jeon Snr was causative of Ms Hwang's decision to act on Boyne's repudiatory breach. He argued that the real reason that Ms Hwang thought she had been dismissed was the comments made to her by her husband, when she contacted him after the discussion she had with Mr Jeon Jnr and Ms Choi. He said that Mr Jeon Jnr told Ms Hwang that she had not been dismissed, and that there was evidence before the Employment Court that Boyne could not afford to lose Ms Hwang as an employee. He also said that the advice which Ms Hwang received from the first employment advocacy service that she contacted after her departure from Boyne was causative of her believing that she had been dismissed. He said the Judge made an error of law in determining that there was a causal link between the breach of the employment agreement by Boyne and Ms Hwang's decision to repudiate that agreement. [26] In response, counsel for Ms Hwang, Mr O'Sullivan said it was clear the Employment Court determined as a matter of fact that she considered herself to have been dismissed before the discussion with her husband or the employment advocacy service. He said the Judge's findings of fact in this regard at para [29] are clear. He said that the fact that Ms Hwang may have been aware that Mr Jeon Jnr did not follow instructions from Mr Jeon Snr on another occasion was irrelevant, because the terms of the letter from Mr Jeon Snr were clear, and there was no indication that an alternative proposal was forthcoming from Mr Jeon Jnr. [27] Again we can identify no legal issue for consideration by this Court. Mr Ryan's complaints are complaints about the factual findings made by Judge Colgan. He does not assert that the factual findings have no evidential foundation, but rather says that other factual findings could have been made on the evidence. Allegations of errors in findings of fact of this nature are not properly the subject of appeal under s 214.(c) Reasonable foreseeability of resignation[28] Mr Ryan said that Judge Colgan erred in finding that Boyne had breached its duty to Ms Hwang by failing to consider whether a substantial risk of resignation was reasonably foreseeable to Boyne having regard to the seriousness of the breach. He said this was an error of law. To a large extent his arguments under this head repeated his arguments relating to causation: Ms Hwang knew that Mr Jeon Jnr had not followed directions from Mr Jeon Snr in the past, and Mr Jeon Jnr told her she was not dismissed. In addition he pointed to the fact that Ms Hwang remained on the Boyne premises until the end of the working day, which he said was inconsistent with her having been constructively dismissed. It indicated affirmation of the employment contract. [29] Mr Ryan did not identify any legal issue which was probably susceptible to appeal to this Court. His complaint appears to be about the Judge's factual findings, though we are unable to see why the fact that Ms Hwang remained at Boyne's premises after the incident bears on the foreseeability of a substantial risk of resignation. The Judge made findings of the fact which were open to him, and there is no question of law on which an appeal can properly lie.(d) No evidence of constructive dismissal[30] Mr Ryan said the Employment Court was wrong to find a constructive dismissal when the true and only reasonable conclusion on the evidence contradicted that decision. That proposition would found an appeal on a question of law only if it could properly be said that there was no evidence on which the Judge could make the finding that he did. That is patently not so in this case. Mr Ryan's criticism of the Judge all related to factual matters and no question of law arises.(e) Damages[31] Mr Ryan said the Employment Court erred in law in awarding damages of $17,875 for loss of remuneration, but failing to take into account the income whichMs Hwang acknowledged she had earned following her departure from Boyne's employment. Mr Ryan relied on a spreadsheet provided by Ms Hwang which showed that she had earned income of $18,989.34 from the freelance design business that she undertook after her departure from Boyne. He said this income should have been taken into account in mitigation of the loss suffered by Ms Hwang. However, the same spreadsheet shows that she incurred expenses of $20,258.97 in the conduct of that business which meant that she had suffered a loss over that period of $1,269.63. The Judge correctly notes at para [36] that Ms Hwang's design business ran at a loss during this period. Accordingly, there was no error made by the Judge, let alone an error of law.Result[32] Boyne has not identified any question of law, let alone a question of law of general or public importance, on which leave to appeal could properly be granted under s 214. Its application for leave to appeal is therefore dismissed.Costs[33] We award costs to Ms Hwang of $3,000 plus reasonable disbursements (including the travelling and accommodation costs of counsel, if any) to be agreed by counsel or, in the absence of agreement, to be fixed by the Registrar.Solicitors: Haigh Lyon, Auckland for Applicant Davis O'Sullivan, Wellington for Respondent