SALT V FELL CA CA263/06

SALT V FELL CA CA263/06 22 May 2008IN THE COURT OF APPEAL OF NEW ZEALAND CA263/06 [2008] NZCA 128BETWEEN LEON SALT Appellant AND RICHARD FELL, GOVERNOR FOR PITCAIRN, HENDERSON, DUCIE AND OENO ISLANDS Respondent Hearing: 12 February 2008 Court: Hammond, Chambers and Robertson JJ Counsel: D J Neutze for Appellant A E Scott-Howman and M G Berryman for Respondent Judgment: 22 May 2008 at 10 amJUDGMENT OF THE COURT A The appeal is dismissed. B No order as to costs. REASONSHammond J [1] Chambers and Robertson JJ [69]HAMMOND J Table of ContentsPara NoIntroduction [1]BackgroundAn employment relationship deteriorates [4]The Employment Relations Authority proceedings [24]The Employment Court appeal [28]The contribution issue [34]The development of the law under s 124 Employment Relations Act 2000 [47]Was the Employment Court correct? [54]Conclusion [66]Introduction[1] This Court has granted leave to appeal on the following question of law, arising out of a determination of the Employment Court:In determining remedies under s 124 of the Employment Relations Act 2000, was the Employment Court permitted to take into account information which the employer did not know about at the date of dismissal?[2] The Employment Court upheld the findings of the Employment Relations Authority and answered that question in the affirmative: see [2006] 1 ERNZ 449. [3] It is convenient to first set out the general narrative with respect to this case in an orthodox fashion. I will then outline the way the law on this issue has developed. I will then consider whether the Employment Court was correct to answer "yes" to the question which has been raised on the appeal, in this particular case.BackgroundAn employment relationship deteriorates[4] Pitcairn, Henderson, Ducie and Oeno Islands are under the administration and control of the British Government, acting through the office of a Governorsituated at the British High Commission in Wellington, New Zealand. The Governor is appointed by Her Majesty the Queen, acting upon the advice of the United Kingdom Secretary of State for Foreign and Commonwealth Affairs. The respondent, Mr Fell, was appointed as the Governor for Pitcairn Island on 12 December 2001. [5] The day-to-day responsibility for the overall administration of the affairs of Pitcairn Island is delegated to a Commissioner, who operates out of a Pitcairn Island Administration Office in Auckland, New Zealand. [6] The appellant, Mr Salt, was appointed as the Commissioner for Pitcairn Island in June 1995 by the then Governor, Mr Williams. He commenced his duties on 1 August 1995. Mr Salt was familiar with Pitcairn Island and its numerically small population, given his previous occupation as a school teacher on the island. [7] Mr Salt's initial appointment was for a three-year period. That term expired, and he simply continued on in the post. [8] In late 2000, correspondence began between Mr Salt and Mr Williams regarding the renewal of Mr Salt's contract, which had formally expired some 30 months before. [9] By January 2001, Mr Salt had become concerned about what he believed to be complaints about his performance, which he understood had been made to either the Governor or the Deputy Governor, but of which he had no particulars. Mr Salt said that he was not prepared to sign a further contract while Ms Karen Wolstenholme continued to hold the office of Deputy Governor. It seems plain that Mr Salt was distinctly unhappy about a view that the then Deputy Governor may or may not have formed about him. Mr Williams took the position that he had received no complaints and that he would not accept the condition which Mr Salt was seeking to impose regarding his contract renewal. [10] In a letter to Mr Williams dated 20 September 2001, Mr Salt stated:The obstacle to signing a further contract still remains. I am not prepared to sign a contract agreeing to follow directions given by the present Deputy Governor We are working in a climate of serious mistrust where much goes on behind the back of this office that previously required its involvement I suggest that [the Commissioner's] office is the only office representing the views and interests of Pitcairn and Pitcairners, outside the island. I do not believe that your office always does this.[11] This employment relationship had begun to deteriorate at much the same time as police began to investigate allegations of relatively widespread instances of historic sexual abuse on Pitcairn Island. It appears that Mr Salt had considerable sympathy for the position of the islanders. He agreed with the sentiment that prosecutions would not necessarily be a good thing. [12] The employment situation was still unresolved when Mr Williams completed his term as Governor. [13] Mr Fell inherited a complex situation when he commenced his duties as Governor on 12 December 2001. One of Mr Fell's earliest steps as Governor was to endeavour to resolve Mr Salt's employment issues. Mr Salt continued to raise a number of concerns, such as the recovery of accumulated leave, whether a particular staff handbook applied to him, and allegations regarding a suggestion by Mr Salt that a Truth and Reconciliation Commission could better resolve certain criminal matters on Pitcairn Island. [14] By June 2002 Mr Fell had formed the view that Mr Salt was "prevaricating" and simply did not wish to sign a new letter of appointment. Nevertheless, Mr Salt continued on in his role as Commissioner without the parties reaching any agreement on a new contract. [15] Difficulties also arose between Mr Forbes, the newly appointed Deputy Governor, and Mr Salt, particularly over the visit of a ship to Pitcairn Island. Mr Salt's view was that he had not been adequately advised about this visit. Mr Salt complained that since Mr Forbes apparently "had no intention of listening to or taking advice from this office", all communications in the future between them would need to be in writing.[16] When these issues reached his desk, Mr Fell wrote to Mr Salt, requiring him to enter into a "constructive dialogue" with Mr Forbes. [17] Mr Fell's evidence indicates that, by March 2003, he was concerned that Mr Salt might be deliberately acting to undermine the office and authority of the Governor. Mr Abbott, the Head of the Pitcairn Logistics Team involved in facilitating criminal charges on Pitcairn, had suggested to the Governor that Mr Salt had been uncooperative in relation to visits by police officers who had the task of accompanying a legal group to Pitcairn Island. On 2 April 2003, the Governor wrote the following to Mr Salt:I do not regard your refusal to see the officers as being consistent with your responsibility to brief official visitors to the Island or with the smooth and effective management of Pitcairn affairs. I am therefore placing a copy [of Tony Abbott's report] on your personal file.Under the provisions of the staff handbook, if Mr Salt was subject to it, the placement of the report on Mr Salt's personal file amounted to a formal warning. [18] Matters not having been resolved, the Governor suggested a mediation. He offered to pay the reasonable costs for a legal representative for Mr Salt. After a degree of skirmishing, a mediation meeting took place on 27 August 2003. It did not resolve the differences between the parties. [19] Shortly after this abortive mediation, on 11 September 2003, Mr Salt wrote to Mr Fell about the renewal of his employment agreement. He referred to the non- disclosure of Mr Abbott's letter of complaint to him, as well as technical issues such as leave and the possible application of the staff handbook. However, the letter concluded:I wish to make it clear that I fully intend to comply with your lawful and reasonable instructions and I believe I have in the past. If there are any issues or instructions you wish to raise with me, please feel free to do so.[20] As the Employment Relations Authority astutely noted, the nature of the Governor's reply the very next day was unlikely to have been anticipated by Mr Salt. That letter stated:I refer to our various correspondence and discussions over the course of the recent past. As I have previously communicated to you, as a result of a variety of recent events I no longer have the requisite level of trust and confidence in your ability to discharge your functions as Commissioner. It is therefore with deep regret that I am now dismissing you from your role. I am writing to provide you with one month's notice of your dismissal from employment. You will not be required to work out this month's notice, and as a consequence you will be paid in lieu. You have, therefore, today served out the last day required of you in your employment. You will also be paid in respect of any accrued annual leave, assessed as at the last date of your employment. I must remind you that your obligations of confidentiality survive the termination of your role. It is also important that you ensure that you immediately return all property of the office, particularly including all documentation relating to the .pn domain name. I regret that it has been necessary for me to take this action, and wish you well in the future. (Emphasis added).[21] When Mr Fell was cross-examined before the Employment Court, he gave this explanation for the dismissal:I suppose I finally decided that this was just an unworkable relationship, late in 2003, because I thought that we had reached the point then that it was no longer, if you like, Mr Salt's attitude was that the policy approach we were taking on Pitcairn was wrong and his strong feelings that it was wrong, and his expressions of those feelings and had moved from a position, if you like in my judgement, from almost non-cooperation to obstruction, in terms of his willingness to work with colleagues in the Pitcairn government and his willingness to participate in necessary meetings prior to people going to the Island and so forth.[22] Mr Salt took the view that his dismissal from his position as Commissioner was both procedurally and substantively unjustified. He brought proceedings under the Employment Relations Act 2000 ("the Act") seeking those findings, and a full range of remedies. [23] The parties accepted that New Zealand law applied to the employment relationship between Mr Salt and Mr Fell, and that the Employment Relations Authority had jurisdiction to investigate and determine the case. It seems that nothing was said on this point in the Employment Court, and it was not raised before us.The Employment Relations Authority proceedings[24] The Employment Relations Authority held that, as to procedural matters, there was a contractual obligation to allow Mr Salt to give an explanation for any alleged misconduct and that explanation had to be recorded on his personal file. Furthermore, he should have been provided with a written warning and "natural justice would require the content of the warning to indicate that Mr Salt's continuing employment was in jeopardy": AA358/04 8 November 2004 at [68]. [25] As to the substantive reasons for the dismissal, the Authority said that the Governor had put forward, under the general rubric of a loss of trust and confidence, the following seven matters as justifying the dismissal (at [70]):(a) That in January 2001, Mr Salt stated that he would not enter into a new employment agreement while the Deputy Governor at the time, Ms Wolstenholme, remained in her position. (b) That early in January 2001, Mr Salt had indicated that there was a mutual feeling of distrust regarding his relationship with various officials and in particular, the Deputy Governor. (c) In May 2001, Mr Salt expressed concerns that the office of the Governor failed to consult with him on various matters and that he remained determined not to sign a new employment contract that would bind him to follow instructions given by senior staff of the Governor's office. This was the first indication from Mr Salt that he was not willing to follow the instructions of senior staff, in particular, the Deputy Governor. (d) In September 2001, Mr Salt proffered the suggestion that only his office was representing the views and interests of Pitcairn Islanders. Mr Salt expressed the view that the Governor's office did not always represent the views and interests of people on the Island. (e) In February 2003, Mr Salt conveyed that he saw no point in meeting with the new Deputy Governor, Mr Forbes, and that all communication between the two men should be in writing. Mr Salt had to be instructed to meet with Mr Forbes and other officials but when he did meet with these people, his attitude was less than co- operative. (f) In March 2003, Mr Abbott had reason to complain to the Governor about the attitude displayed by Mr Salt. In early April 2003, Mr Abbott's report was placed on Mr Salt's personal file. Mr Fell was of the view that this action constituted a warning to Mr Salt.(g) In July 2003, Mr Fell invited Mr Salt to attend a meeting to address outstanding contractual issues and Mr Salt's "continuing" refusal to cooperate with officials. The proposed meeting subsequently became a mediation session.[26] As to those matters, the Authority's view seems to have been that they were simply "insufficient" to justify dismissal. The Authority concluded (at [73]): that at the time that the dismissal was visited upon Mr Salt, the implementation of such a severe penalty was unjustified, particularly given that on 11 September 2003 Mr Salt gave an assurance that he fully intended to comply with the Governor's lawful and reasonable instructions.[27] The Authority held that Mr Salt was unjustifiably dismissed, that he had a resulting personal grievance, and that he was entitled to remedies pursuant to ss 123 and 128 of the Act. The Authority declined to reinstate Mr Salt to his previous position. However, it awarded him reimbursement of wages and superannuation to the sum of $20,706, reduced by 50 per cent to a gross sum of $10,353. Mr Salt was awarded the compensatory sum of $12,000 for distress and associated matters under s 123(c)(1) of the Act, which was also reduced by 50 per cent to $6,000. The 50 per cent deductions seem to have been made on the basis of certain evidence "pertaining to [a] series of emails" (at [105]) which came to light after the hearing, to which I will refer later in this judgment.The Employment Court appeal[28] Mr Salt appealed to the Employment Court against some of those determinations. Neither party challenged the conclusion of the Authority that Mr Salt was unjustifiably dismissed by the Governor. [29] Mr Salt challenged the quantum of the award. His principal concern on appeal was that there should not have been a 50 per cent deduction from his award for lost earnings and compensation for distress. He also challenged the Authority's failure to impose penalties on the Governor for breach of the employment agreement and to award payment of interest on the remedies awarded. [30] The appeal was treated by Judge Couch as a "non de novo" challenge, which "is a convenient expression to describe a challenge pursuant to s 179 which is not a full hearing of the entire matter": at [30]. In civil litigation terms, the hearing was treated as a rehearing on the record brought up from the Employment Relations Authority as supplemented by the additional evidence allowed by the Employment Court, but with the Employment Court accepting an obligation to reach its own conclusion as to what the outcome ought to be. [31] In the Employment Court, Mr Fell was successful in enlarging his award to $57,970 for reimbursement of salary and contributions to superannuation lost by him as a result of his dismissal. The reason for this is that the Employment Court differed with the Authority as to the appropriate period for which reimbursement of lost earnings should have been awarded. The Employment Court held that "the plaintiff's employment would not have continued beyond August 2004 even if he had not been dismissed in September 2003" (at [92]). Mr Salt's annual salary was $85,000. He received a 5 per cent employer contribution to superannuation making a total remuneration package of $89,250 per year. He was paid for the first month following his dismissal. His loss of remuneration was therefore $59,500, being eight months' salary and superannuation. During the period following his dismissal, Mr Salt earned $1,530 from consultancy work. Deducting that amount from the loss for which he was to be reimbursed left a sum of $57,970. The 50 per cent deduction was made from that sum. [32] It is not entirely clear to me whether Judge Couch considered that all of the 50 per cent deduction related to post-dismissal conduct. Judge Couch referred to the "improper attitude" of Mr Salt but did not allocate that behaviour to pre and post- dismissal conduct. In principle, some of that "improper conduct" could have been pre-dismissal, in which case even if Mr Salt is correct as to the law on post-dismissal conduct, the case could well have had to be remitted to the Employment Court for such an allocation. That would be an unfortunate prolongation of already protracted litigation. Counsel either overlooked this problem, or decided to make it an "all-or- nothing" case. [33] No penalty was imposed on the employer, but interest was awarded to Mr Salt. Costs were reserved. Leave was not sought to appeal on any of those matters, which are therefore now concluded.The contribution issue[34] What was distinctly at issue in the Employment Court, and is advanced to this Court on appeal as a question of law, is whether the Employment Court was right to deduct 50 per cent from the awards made to Mr Salt for what can be termed "contribution". [35] I use the term "right" advisedly. No challenge is made by either party to the quantum of the deduction nor, in a sense, to the reasons for it. Rather, it is argued on Mr Salt's behalf that, in the circumstances of this case, neither the Employment Relations Authority nor the Employment Court had, as a matter of law, the ability to make any deduction at all for the reasons it did. [36] The contribution issue is thus presented to us as an "all or nothing" one. In addition to the calculation problem I have already noted in [32], this can be somewhat awkward where the answer to a question of law that a court thinks is required is context-specific or needs to be qualified in some way. [37] The reasons the Governor put forward for dismissal, set out at [25] above, were all matters which had appeared in written correspondence between Mr Salt and the Governor. There could therefore be no dispute about them. What the Employment Relations Authority and the Employment Court held is that those matters did not in and of themselves justify dismissal, particularly because Mr Salt belatedly stated, it may be thought somewhat archly, that he intended to fully comply with the Governor's instructions. [38] After Mr Salt had been dismissed, during continued investigations in relation to possible criminal charges on Pitcairn Island, United Kingdom police came across private emails sent from Mr Salt by computer to various recipients on Pitcairn Island. The emails were sent over a period from January to August 2003. They contained comments of a highly disparaging nature pertaining to the Governor and other government officials. In dismissing Mr Salt, the Governor had, of course, apprehended at least a flicker of the flame of condemnation beneath the smokeattaching to what Mr Salt had been doing; the subsequently discovered emails indicated that there had been a veritable conflagration. [39] It is convenient to reproduce the relevant facts as to these emails as found by the Employment Relations Authority, which have not been challenged in subsequent proceedings:[85] While it is not practicable or appropriate to reproduce the total content of the emails, a sample of them shows that Mr Salt had a total disregard for the office of his employer. For example, in an email dated 27 January 2003, he refers to the Governor being: "quite determined to bankrupt us so that either they have another excuse to close the place down, or the Pitcairners dependence upon the UK becomes indisputable. He has put obstacles in the path of any revenue gathering initiatives over the past year and he seems quite keen to see the fund disappear completely." [86] In an email dated 2 February 2003, Mr Salt refers to Mr Abbott as "still in denial however, as only a Pommy Foreign Office civil servant can be." [87] An email dated 5 February 2003, makes reference to the Pitcairn Logistics Team and the British High Commission. Mr Salt writes: "The complete and utter incompetence of these people never ceases to amaze me " Then further: "we may not be infallible but compared to the Poms, you and I must be ranked with the angels!!" [88] In an email dated 6 February 2003, Mr Salt makes reference to pending criminal charges relevant to Pitcairn Island, since heard and decided. Mr Salt writes: "My source told me that the intention is to lay charges during April against six men on Pitcairn. Keep that completely confidential at this stage as there is still a possibility, remote though it may be, that we can engineer a change of decision." And in the same email, Mr Salt refers to Mr Abbott as a "dickhead". [89] Then on 10 March 2003, in reference to Mr Fell and Ms Lock, the Governor's representative, Mr Salt writes: "Sad isn't it. Who would trust his puppet? Why is it that he thinks colonials are stupid and gullible." In a further email dated 11 March 2003, Mr Salt refers to the Governor as a "sad bastard". [90] In the same email, once again in reference to the criminal matters, Mr Salt writes, "The meeting could then decide that they would not go out to meet the legal team arriving on Braveheart, unless I was with them and had made my presence known. It would take some engineering and it could easily fall over if anyone was to indicate to the MoD of GP that it was premeditated. The bottom line is though that all of these tactics will help in the long run to keep these men from incarceration and to keep Pitcairn alive."[91] The following day, 12 March 2003, Mr Salt writes: "You will need to be confident that any of the suggestions made last night cannot be traced back to you. Neither of us should be seen to be inciting civil disobedience." [92] In an email dated 8 July 2003, subject matter, "Slippery caniving [sic]??? Bastards?????" Mr Salt makes reference to a proposed British Ordinance relevant to the protection of children on Pitcairn Island. Mr Salt writes: "I think the Poms see "arrogance" as one of their most endearing qualities. They are arrogant beyond belief. There needs to be an out-cry if this ordinance is imposed on them. Perhaps they should consider a ceremonial burning of it when it arrives and a complete refusal to accept it." [93] Then finally, there is an email that is undated, but the evidence of Mr Forbes is that it was written after the mediation that occurred in August 2003, and provided to the Police by a Pitcairn Islander. Mr Salt refers to his second meeting with Mr Fell, following Mr Fell's appointment as Governor. Mr Salt writes: "At that point I knew that I could never trust Fell, that he was lying and that he probably had some other agenda." [94] It is also clear that Mr Salt was aware that his emails were inappropriate, as at various times, he makes reference to appropriate steps being taken by the recipient to ensure that the correspondence was not discovered. [95] The content of the emails clearly shows that Mr Salt exhibits considerable distain [sic] for his employer, the Governor, and other officials of the British Government. Furthermore, Mr Salt appears to have been advocating a disruptive approach in an attempt to thwart due legal process in regard to the criminal matters that arose on Pitcairn Island. It is obvious that Mr Salt's loyalties lay with others and not with his employer. It is also clear that the attitude of Mr Salt was substantially in conflict with his responsibilities as Commissioner and as an employee of the Governor. Indeed, Mr Fell was correct to conclude that he did not have a sufficient level of trust and confidence in the ability of Mr Salt to carry out his functions as an employee, albeit the extent of Mr Salt's transgressions were not known at the time that he was dismissed.[40] It was on account of these emails that the Employment Relations Authority declined to reinstate Mr Salt to his position as Commissioner. No effort was made to persuade the Employment Court that reinstatement ought to have been ordered. [41] The context of this matter is of the utmost importance. Mr Salt was effectively the executive officer for Pitcairn Island. He knew of the administrative difficulties which were in the wind in relation to the possible criminal prosecutions. He owed the highest duty of loyalty to the Governor. Plainly he had to be extremelycircumspect in what he did and said. The Governor's apprehension that Mr Salt was quite unloyal turned out to be entirely well-founded. As the Employment Court held, had the subsequently discovered emails been available at the time of dismissal, the Governor would have been well justified in dismissing Mr Salt. [42] In taking the course it did, the Employment Relations Authority relied on what it considered to be the plain meaning of s 124 of the Act, and certain observations of this Court in Ark Aviation Ltd v Newton [2002] 2 NZLR 145 (to which I will refer later in this judgment) and the Employment Court in Carlton and United Breweries (NZ) Pty Ltd v Bourke [1994] 2 ERNZ 1. In the latter case, Judge Palmer said (at 7):"The law [would indeed be] an ass" if in an employment setting, the Tribunal – and now this Court on appeal – was to ignore as irrelevant deliberate and serious misconduct by an employee committed against and significantly affecting his employer, which inherently comprises a very grave/destructive abuse of the basic level of confidence and trust which underpins the employment relationship simply because such misconduct was not known to the employer at the time it dismissed the particular employee for unrelated alleged misconduct and/or non-performance occurring in the course of his/her employment.[43] Judge Palmer also considered that, quite independently of the then statutory directions in ss 40(2) and 41(3) of the Employment Contracts Act 1991, the Tribunal ought to take serious misconduct by an employee into account in awarding remedies as a matter of equity and good conscience, notwithstanding that the employer was ignorant of that misconduct when it dismissed the employee for other reasons. [44] The Employment Court rejected a submission by counsel for Mr Salt that "the emails cannot have contributed towards the situation that gave rise to the personal grievance as they were not known to the defendant when the unjustified dismissal arose" (at [69], emphasis added). [45] The Employment Court considered Carlton not to be of assistance because it concerned remedies where the subsequently discovered evidence related to issues other than those relied on by the employer for dismissal. Rather, the Employment Court held that the issue turned on the proper construction and application of s 124. It said (at [65]):Contribution under s 124 is to be assessed on the basis of "the actions of the employee", not what the employer knew of the actions of the employee. While it is well established law that a dismissal can only be justified on the basis of what was known by the employer at the time the decision to dismiss was made, assessment of the actions of the employee relevant to contribution under s 124 is not subject to the same limitations.[46] The Employment Court therefore upheld the determination of the Employment Relations Authority, subject to the adjustments to quantum noted above.The development of the law under s 124 Employment Relations Act 2000[47] Section 124 of the Act provides as follows:124 Remedy reduced if contributing behaviour by employeeWhere the Authority or the Court determines that an employee has a personal grievance, the Authority or the Court must, in deciding both the nature and the extent of the remedies to be provided in respect of that personal grievance,- (a) consider the extent to which the actions of the employee contributed towards the situation that gave rise to the personal grievance; and (b) if those actions so require, reduce the remedies that would otherwise have been awarded accordingly.[48] Section 124 created a single provision addressing the reduction of remedies for contributory conduct, replacing the similarly worded ss 40(2) and 41(3) of the Employment Contracts Act. While those provisions had "reflected the past practice of the Court", more recent cases suggested that "the Court is showing an increasing willingness to reduce remedies in appropriate cases including making nil awards":Mazengarb's Employment Law Vol 1 (looseleaf ed) at 680,405. See also Woodward "The Effects of Employee Conduct on Personal Grievance Remedies" (1995) 20 N.Z.J.I.R. 183. [49] In Ark Aviation, in relation to the former sections, this Court said (at [45]- [47]):[45] While it is not strictly in issue in the present case we should make it clear that we do not rule out the possibility that in some situationsmisconduct of an employee only discovered after a dismissal may be so egregious as to require the discretion to provide for a remedy under s 40(2) not to be exercised at all in favour of the employee whose grievance has been established. We have in mind deliberate and serious misconduct by an employee, which significantly affects the employer, and which amounts to a serious abuse of the trust and confidence that underpins the relationship. [46] As the Employment Court pointed out in Carlton and United Breweries (NZ) Pty Ltd v Bourke [1994] 2 ERNZ 1, it would be surprising indeed if Parliament had intended that such misconduct, knowledge of which was unavailable until an employee had left the place of employment, should not be relevant to remedies simply because the dismissal was procedurally flawed. In the Carlton and United Breweries case the Court saw the issue as turning on s 79(2) of the 1991 Act, which gives jurisdiction to determine such matters as in equity and good conscience, the tribunal thinks fit. The difficulty we see with that approach is that under s 79(2) the equity and good conscience jurisdiction can only be exercised consistently with the Act. The true basis must accordingly first be sought in the specific statutory provisions as to personal grievances. We are inclined to the view it lies in ss 40(1) and 41(1)(b). A contract of employment is a special relationship under which workers and employers have mutual obligations of confidence, trust and fair dealing: Telecom South Ltd v Post Office Union (Inc) [1992] 1 NZLR 275 at p 285 per Richardson J (as he then was). An employee guilty of a fundamental breach of those contractual obligations arguably cannot be said under s 40(1) to have lost wages or other money or any benefit, or under s 41(1)(b) to have lost remuneration, as a result of a personal grievance. If that is so no obligation to order reimbursement arises at all. Nor would reinstatement or compensation for humiliation, loss of dignity or injury to feelings, both of which are discretionary remedies, be appropriate. [47] The answer may also be implicit in the term "grievance" in the definition of "personal grievance" under s 27. The essence of a grievance in its ordinary meaning is the infliction of a wrong or hardship upon a person. An employee guilty of a fundamental breach of such central obligations to the employer justifying dismissal arguably cannot be said to have been subjected to wrong or hardship and thus to have a grievance at all. However, neither point was argued before us and the present case does not require their determination.[50] Clearly, this Court in Ark Aviation was uneasy that the Employment Court inCarlton had taken the course of utilising the equity and good conscience jurisdiction rather than basing its decision on the relevant statutory provisions. [51] The editors of Mazengarb's Employment Law have noted (at 680,605):The facts of both Ark Aviation Ltd and Bourke are unusual. Not only was the misconduct extremely serious, it was not discovered – largely because the employee was in a position to conceal it. If considered, it certainly would have resulted in dismissal. On the facts of [Ark Aviation], the Court'sposition is clearly justifiable. It is suggested, however, that considerable caution needs to be exercised in applying it to other situations.[52] It was drawn to our attention that Professor Anderson has criticised the approach of this Court in Ark Aviation ("Reimbursement and Compensation for Unjustified Dismissal" (2006) 12 NZBLQ 230 at 243):It is suggested that this approach (that is, reliance on s 124) is incorrect, in that s 124 was concerned with conduct contributing to the facts giving rise to the grievance which excludes later discovered misconduct. The Employment Court's equity and good conscience approach overcomes this objection and also provides greater flexibility in confining the exercise of the power to the rare cases of more egregious misconduct.[53] There are authorities in the Employment Court where information acquired after a dismissal has been taken into account in assessing the appropriate remedial quantum. See, for example, Lwin v A Honest International Company Ltd [2003] 1 ERNZ 387, where Judge Travis took later discovered misconduct into account, although the conduct in that case, revealed in Employment Relations Authority proceedings, was closely related to the grounds of dismissal.Was the Employment Court correct?[54] In my view, the Employment Court was correct to reduce the remedies under s 124, notwithstanding that this reduction was based on information which the employer did not know about at the date of dismissal. This conclusion is subject to certain qualifications which I will explain later in this judgment. [55] First, reliance upon ex post justifications for events has in general been allowed at common law but not in employment law. Counsel have not suggested in this case that the fundamental principle should not continue to obtain that justifieddismissal can only occur on the facts as they were known to the employer at the time of dismissal. Of course it may be said: well, if that is so, why does the same thing not apply to remedies? I will deal with that point shortly.[56] Secondly, on a purely textual analysis, I agree with the Employment Court that it is the actions of the employee, taken as a whole, which are relevant to the exercise of the broad remedial jurisdiction which is conferred upon that Court. [57] Thirdly, this is supported by what this Court said in Ark Aviation: that a broad approach must be taken to the construction of s 124. I agree and would add only that such a broad approach must take into account the important purposes of the employment legislation itself. It cannot be right that what may ultimately be revealed – in employment terms – as disgraceful behaviour by an employee should not come into the scales. That is the very thing s 124 seems to contemplate. [58] Fourthly, at the level of fundamental legal principle, legal systems can adopt a "monistic" or a "dualistic" approach to remedies. A monistic approach sees the underlying rights and appropriate remedies as being inextricably intertwined. A dualistic approach has the court identify the wrong and then decide what remedy is appropriate in the particular circumstances of the case for the infraction of that right. For a more detailed discussion, see Hammond "Rethinking Remedies: The Changing Conception of the Relationship Between Legal and Equitable Remedies" in Berryman (ed) Remedies: Issues and Perspectives (1991) 87 at 90-91. New Zealand case law now substantially adopts the dualistic position, and many New Zealand statutes are drafted that way. [59] Reading the provisions as a whole, the very scheme of the Act is dualistic. It proceeds on the footing that once a personal grievance is established (which is the underlying "right"), s 123 provides a suite of remedies. Section 124 goes on to provide that the remedies in s 123 may be reduced on account of the actions of the employee contributing towards the situation that gave rise to the personal grievance. Section 125 reverses the traditional common law approach that monetary awards are to be preferred over performance based awards, stipulating that reinstatement is to be the primary remedy. There is a good deal of debate about that proposition at common law today, particularly in relation to specific performance. But there is no doubt that the legislature has paid particular attention to that issue in s 125, and provided a distinctive solution.[60] It follows, to my mind, that the argument advanced by counsel for Mr Salt, that only things known to the employer at the time of dismissal can be considered in relation to remedies, conflates right and remedy in a narrowly monistic fashion, and is quite outside the way in which the remedial scheme of this legislation should be viewed. [61] Fifthly, in this case we do not have to decide, and I do not do so, whether something completely unrelated to the initial concern of the employer may appropriately lead to a reduction in the quantum of an award. For instance, an employee may be dismissed, perhaps for not following express instructions. After the employment has terminated, the employer may discover that the employee was also guilty of theft. [62] In this particular employment context, the reason Mr Fell gave for dismissal was that he no longer had the requisite level of trust and confidence in Mr Salt. The emails that were discovered after dismissal were entirely supportive of such a proposition. The Governor's problem was that, at the time of dismissal, the full extent of Mr Salt's unconscionable behaviour was not known. If, as a matter of law, a reasonable degree of connection is required between the reason given for a dismissal and subsequently discovered evidence, then that connection existed in this case. [63] Some concern was expressed in oral argument as to the possible downstream consequences of this viewpoint. It was suggested that future employers may give only the briefest, and very broad, reasons for dismissal and then commence investigations for justificatory material post-dismissal. This would lead to prolonged and unedifying "witch-hunts". I doubt if such activities can be proscribed in advance, let alone prescribed in terms of formal rules. The degree of connection between subsequently discovered evidence and the reason for dismissal is ultimately a question of fact and degree; and there is every reason to think the Employment Court will be astute to condemn inappropriate "witch-hunts", by declining or diminishing adjustments under s 124. That is a task which the Employment Relations Authority and the Employment Court are well placed to undertake.[64] Sixthly, I agree with the qualification proposed by counsel for Mr Fell, that whatever is relied upon in the way of post-dismissal evidence must be satisfactorily proved in court. That has been done in this case. [65] Seventhly, as I indicated in the precis of s 124 above, the law has evolved in the direction taken by the Employment Court in this proceeding. Awards have been made in the Employment Court, and implicitly endorsed by this Court inArk Aviation, that allow later acquired knowledge to be taken into account. For myself, I do not regard the law as being in such an unsatisfactory state that we should intervene here, and disallow the apportionment determined by the Employment Court. Indeed, the onus is on those who would seek to disturb what I perceive to be the status quo approach. If there is thought to be a case for a complete change of direction in the law, that would be better resolved in the Supreme Court of New Zealand, if that Court thought it fit to grant leave.Conclusion[66] I would dismiss the appeal. [67] My answer to the question posed is that in determining remedies under s 124 of the Employment Relations Act 2000, the Employment Court is permitted to take into account information which the employer did not know about at the date of dismissal. This proposition is subject to the qualifications that subsequently acquired evidence relied upon for a deduction must be reasonably connected to the reason(s) given for dismissal and that evidence must be proved to the satisfaction of the Court. Both of those conditions were satisfied in this case. [68] I would have awarded costs of $6,000 and usual disbursements to Mr Fell. I can understand why no costs were awarded on the leave application – each party succeeded on a particular point. In this Court, Mr Salt is just another unsuccessful appellant, and the usual result should follow. He is not within any of the recognised exceptions.CHAMBERS AND ROBERTSON JJ(Given by Chambers J)Table of ContentsPara NoIntroduction [69]Mr Salt's argument [75]What s 124 means [77]The relevance of subsequently discovered misconduct [82]Result [103]Introduction[69] The Employment Relations Authority, when determining whether Mr Salt was unjustifiably dismissed, did not take into account the emails Mr Salt had sent while employed, as Mr Fell did not know about them until after Mr Salt's dismissal. The authority held, based on the information which was available to the employer at the time, that Mr Salt's dismissal was unjustifiable. The employer did not appeal from that finding. Accordingly, it was not an issue before the Employment Court or before us as to whether the authority was right to determine the question of the justifiability of the dismissal without reference to the subsequently discovered conduct. We see it as an open question whether the authority (or, on appeal, the Employment Court) is always debarred from considering evidence of subsequently discovered misconduct when determining whether a dismissal was justifiable. This opinion proceeds on an assumption that such evidence is inadmissible on the issue of whether a dismissal was justifiable, but whether that premise is right is open for subsequent consideration. [70] It was also not in issue before the Employment Court as to whether Mr Salt should be reinstated: he was no longer seeking that remedy. What was in issue was the level of compensation Mr Salt was entitled to and, in particular, whether the Employment Relations Authority and the Employment Court ("the tribunals") were entitled to take into account information which the employer did not know about at the date of dismissal when determining what remedies to order and the extent of anyremedy. On this issue, Judge Couch reached a similar view to that which the authority had reached. He considered the emails demonstrated Mr Salt had an "unacceptable attitude" and that he "had acted in accordance with that attitude": [2006] 1 ERNZ 449 at [74]. He went on to take that information into account when determining: (a) the time period for reimbursement of lost wages; (b) an overall reduction in Mr Salt's compensation for his "contributing behaviour". [71] So far as reimbursement of lost wages was concerned, Judge Couch approached the matter in this way. He noted that two of the emails had come to the employer's attention in March 2004 and the rest became known to him in August 2004: at [91]. He accordingly found that, while the employer did not have proper grounds for dismissing Mr Salt in September 2003, "these emails would have provided him with proper grounds 11 months later". So an 11 month period became the outer limit. The judge then went on to consider Mr Salt's general attitude and found, as a "contingency", that Mr Salt's conduct after September 2003, had he remained in employment, "may have given grounds for dismissal even before the emails were discovered": at [94]. He thought Mr Salt's "entirely negative attitude" to Mr Fell was by that time "entrenched": at [94]. He seems to have given that contingency a weighting of two months, as he eventually concluded, at [96], that the reimbursement for lost earnings should be calculated for a nine month period. [72] Judge Couch set out the calculation as follows:[97] The plaintiff's annual salary was $85,000. He also received a 5 percent employer contribution to superannuation, making a total remuneration package of $89,250 per year. The plaintiff was paid for the first month following his dismissal. His loss of remuneration was therefore $59,500, being eight months' salary and superannuation. During the period following his dismissal, the plaintiff earned $1,530 from consultancy work. Deducting that amount, the loss for which the plaintiff should be reimbursed is $57,970.[73] Later in the judgment, Judge Couch made a further adjustment to the figure of $57,970. That adjustment was the result of applying s 124. In making thatadjustment, Judge Couch again took into account Mr Salt's emails: at [114]. The judge, "taking all of the facts into account", held the authority had not erred in finding a 50 per cent contribution by Mr Salt: at [119]. That reduced the sum to which Mr Salt was entitled by way of reimbursement to $28,985: at [145]. [74] Judge Couch also considered what compensation Mr Salt should receive for humiliation, loss of dignity, and injury to feelings under s 123(1)(c)(i). He agreed with the authority that $12,000 was the appropriate award of compensation under this head: at [113]. That sum was then subject to a 50 per cent reduction, on the same grounds as the reduction in wages reimbursement. The ultimate award under this head was thus $6,000: at [145].Mr Salt's argument[75] Mr Neutze, for Mr Salt, accepted that "subsequently discovered conduct" (such as the emails in this case) could be taken into account in deciding whether an employee should be reinstated (under s 123(1)(a)) and, to an extent, with respect to the time period for reimbursement of lost wages (under s 123(1)(b)). In the present case, Mr Neutze did not challenge the use of the emails to limit the reimbursement period initially to 11 months. He also accepted the judge was entitled to reduce that period by two months to nine months. In short, he accepted the judge's reasoning as summarised at [71] above. But he disputed that subsequently discovered conduct could be utilised under s 124 to reduce the wages reimbursement by 50 per cent. (In other words, the wages reimbursement under s 123(1)(b) should have been $57,970.) Similarly, Mr Neutze challenged the 50 per cent reduction in humiliation compensation. [76] His argument was simple. Section 124 permits the tribunals to consider only "actions of the employee [which] contributed towards the situation that gave rise to the personal grievance". Obviously, consideration must be restricted to the employee's actions about which the employer knows, as it is only such actions that could have affected what the employer did. The employer could not be heard to say he was unwisely driven to a hasty dismissal by an employee's acts of which he was not aware.What s 124 means[77] Section 124 reads as follows:124 Remedy reduced if contributing behaviour by employeeWhere the Authority or the Court determines that an employee has a personal grievance, the Authority or the Court must, in deciding both the nature and the extent of the remedies to be provided in respect of that personal grievance, - (a) consider the extent to which the actions of the employee contributed towards the situation that gave rise to the personal grievance; and (b) if those actions so require, reduce the remedies that would otherwise have been awarded accordingly.[78] The words "the situation that gave rise to the personal grievance" mean, in this context, "the situation that gave rise to the unjustifiable dismissal". Mr Neutze is right when he says that, as a matter of logic, only actions of the employee about which the employer knows can have contributed towards the employer's wrongful decision to dismiss. As Judge Travis said in Paykel Limited v Ahlfeld [1993] 1 ERNZ 334 at 337-338, there must be a "causal link between the employee's conduct and the situation which gave rise to the dismissal". See, to like effect, McGivern v Watercare Services Limited [1993] 2 ERNZ 1057 at 1071. [79] Mr Neutze also drew support for his submission from an article by Associate Professor Anderson, "Reimbursement and Compensation for Unjustified Dismissal" (2006) 12 NZBLQ 230 at 242-243. In that article, the professor expressed the view that "s 124 is concerned with conduct contributing to the facts giving rise to the grievance which excludes later discovered misconduct": at 243. We agree with that part of the professor's analysis. It is clear s 124 is intended to operate like a "contributory negligence" provision: if the employee, by his or her own behaviour, is partly the cause of the employer's hasty or ill-judged action (here, in dismissing the employee), then the employee should have the remedies to which he or she would otherwise have been entitled reduced.[80] This conclusion means that the authority and Judge Couch were wrong to reduce Mr Salt's entitlements by 50% under s 124. That is because, in reaching that figure, they took into account the emails. The sending of those emails in no way affected, however, the employer's decision to dismiss, as he was not aware of them. [81] This does not mean, however, that no reduction under s 124 should have been made. Judge Couch did not rely just on the emails when deciding s 124 was applicable and the extent of the reduction to be made under it. He considered Mr Salt's "entirely negative attitude", which had been amply demonstrated prior to his dismissal, to have contributed towards "the situation". He would have been entitled to make some reduction on account of that.The relevance of subsequently discovered misconduct[82] This approach to the meaning of s 124 does not mean, however, that subsequently discovered misconduct is irrelevant. It can be highly relevant to what remedy should be provided. Mr Neutze himself acknowledged that. For instance, he accepted that subsequently discovered conduct "may properly be used to refuse reinstatement (as it was in this case)". He also accepted Judge Couch had been entitled to take the emails into account when fixing the 11 month cut-off for wages reimbursement. [83] Subsequently discovered misconduct of a truly significant nature can be taken into account when determining remedies under s 123 itself. That section, as this court said of its predecessor, confers "remedies in broad discretionary terms": see Ark Aviation Limited v Newton [2002] 2 NZLR 145 at [35]. The Employment Court was required to exercise this "broad discretionary" power as "equity and good conscience" dictated: see s 189(1). Powers are to be exercised "for the purpose of supporting successful employment relationships and promoting good faith behaviour". [84] Before explaining this proposition further, we want to emphasise that we are referring in this opinion only to misconduct of a truly significant nature. (The present case falls into this category as the tribunals below have found the misconduct to be so significant that, if known by the employer, it would have justifieddismissal.) We are not referring to isolated acts of minor misconduct which may come to light subsequently. We are not encouraging employers to conduct witch-hunts following every dismissal. [85] Everyone accepts that subsequently discovered misconduct might result in reinstatement being totally inappropriate. It might also render inappropriate, however, full compensation. We demonstrate that by considering the following four situations:Situation 1 An employee is summonsed by his employer to discuss a concern the employer has about X (a particular act of the employee's). During the course of the interview, the employee blurts out that he has stolen a lot of money from the employer and given secret information to a competitor. The employee is dismissed on the basis of all his wrongful acts.Situation 2 The employee is summonsed by the employer to discuss the employer's concern about X. The employee is dismissed. X did not warrant dismissal. A week later, after the employee has been dismissed and left, he decides to confess to the fact that, while in the employer's employment, he had stolen a lot of money from the employer and given secret information to a competitor.Situation 3 The employee is summonsed by the employer to discuss the employer's concern about X. The employee is dismissed. X did not warrant dismissal. Nine months later, the employer discovers the employee had, while in the employer's employment, stolen a lot of money from the employer and given secret information to a competitor.Situation 4 The employee is dismissed on the basis of X. X did not warrant dismissal. The employee had committed no other misconduct. The employee does not seek reinstatement and nine months later finds other comparable employment.[86] The employee in situation 1 has acted much better, legally and morally, than the employee in situations 2 and 3. The employee in situation 1, while acting disgracefully in stealing from his employer and giving secret information to a competitor, has at least complied with his duty of good faith to his employer in admitting to that wrongdoing: see s 4. The employees in situations 2 and 3 have, by keeping silent about their transgressions, misled and deceived their employers and thereby committed a further breach of the duties owed to their employers. Employee 1, however, is justifiably dismissed, while employees 2 and 3 are not. That outcome is an inevitable consequence of focusing on the facts known to the employer at the time of dismissal when deciding whether the dismissal was justifiable. It would defy all logic, however, to suggest that employees 2 and 3 should end up financially much better off than employee 1. [87] Everyone would also agree that employee 2 had acted much better, legally and morally, than employee 3. Employee 2 did, after all, albeit belatedly, confess to his earlier wrongdoing. On Mr Neutze's argument, however, and indeed on Judge Couch's analysis, employee 3 ends up considerably better off than employee 2. Can that be right? [88] Further, on Mr Neutze's analysis, employees 3 and 4 end up being treated the same so far as wages reimbursement is concerned. Can that be right? [89] It is concerns of this sort that led to this court's obiter dicta in Ark Aviation(at [45]-[48]) as to how subsequently discovered conduct should be taken into account. The court did not reach a definitive view: it did not have to in that case. [90] One can justify taking into account subsequently discovered conduct in s 123 assessments in more than one way. For instance, one could rely on the principle that any compensation must reflect the fundamental maxim of the law that no one should benefit from his or her own wrong. Employees 2 and 3 should not end up better off than employee 1. The common law reflects this maxim in the solution it has devised to the situation where a contract is cancelled for a bad reason but, unknown at the time to the cancelling party, a good reason exists. The common law has long held that rescission or termination of a contract, based upon a reason that was in factinadequate, could nonetheless be supported if there were at the time facts in existence which would have provided a good reason. See the excellent discussion in Burrows, Finn & Todd Law of Contract in New Zealand (3ed 2007) at [18.3.5(c)] and the cases there cited, in particular Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401 at 447, Denmark Productions Limited v Boscobel Productions Limited [1969] 1 QB 699 at 722 and 732 (CA), and Thompson v Vincent[2001] 3 NZLR 355 at [86]-[87] (CA). Whilst the precise mechanics of the common law solution cannot be utilised in the case of an unjustified dismissal, at least if the premise on which this opinion is based is right, the underlying principle, that a wrongdoer should not benefit from his or her wrong simply because it is for a time unknown to the other party, can and should be respected in assessing remedies under s 123. [91] Another justification could be the need to ensure that the outcome conforms with the tribunals' mandate to make decisions that conform with "equity and good conscience". In this regard, we endorse what Judge Palmer said in Carlton and United Breweries (NZ) Pty Limited v Bourke [1994] 2 ERNZ 1 (at 7):To adopt Mr Bumble's aphorism "The law [would indeed be] an ass" if, in an employment setting, the Tribunal – and now this Court upon appeal – was to ignore as irrelevant deliberate and serious misconduct by an employee committed against and significantly affecting his employer, which inherently comprises a very grave/destructive abuse of the basic level of confidence and trust which underpins the employment relationship simply because such misconduct was not known to the employer at the time it dismissed the particular employee for unrelated alleged misconduct and/or non-performance occurring in the course of his/her employment.[92] Although Judge Palmer accepted, as we have done, that the precursor to s 124 could not be utilised (because of the absence of a causative link between the conduct and the dismissal), he nonetheless considered the conduct could be taken into account "in equity and good conscience" and, by that means, could justify reduced awards of compensation. Indeed, in that case, Judge Palmer awarded nothing for humiliation compensation, on the basis that benefits should not be awarded where the employee had effectively repudiated his contract by the misconduct. [93] In Ark Aviation, this court saw some "difficulty" with Judge Palmer's approach in that "the equity and good conscience jurisdiction can only be exercisedconsistently with the Act": at [46]. While it is correct that the equity and good conscience jurisdiction must be exercised consistently with the Act, we do not see how Judge Palmer's approach was inconsistent with the Act. Section 123 and its predecessor are silent as to how compensation should be calculated: it is the courts which have developed the applicable principles. In the main, in doing this, they have looked to contractual principles, although they have recognised that "equity and good conscience" might in some cases necessitate the adoption of different criteria. [94] A third approach to the problem of how to take into account subsequently discovered misconduct was tentatively suggested by this court in Ark Aviation at [47]:The answer may also be implicit in the term "grievance" in the definition of "personal grievance" under s 27. The essence of a grievance in its ordinary meaning is the infliction of a wrong or hardship upon a person. An employee guilty of a fundamental breach of such central obligations to the employer justifying dismissal arguably cannot be said to have been subjected to wrong or hardship and thus to have a grievance at all. However, neither point was argued before us and the present case does not require their determination.[95] This is an intriguing proposition, which deserves further study. This point has not been argued before us, so cannot be taken further. It is this possibility, however, along with the common law approach set out at [90] above, that means there is a need to flag for the future whether it is right that subsequently discovered conduct cannot be taken into account in determining whether a dismissal was justified and whether there was a "grievance" at all. [96] Whichever approach is adopted, the result should be that the employee does not benefit from his or her wrong. At times, the subsequently discovered conduct may be so egregious that no remedy at all should be given, notwithstanding the dismissal being technically unjustifiable. But that will not often be the outcome. After all, the employer has also committed a wrong, namely an unjustified dismissal based on what he or she knew at the time. He or she did not act as a fair and reasonable employer would have acted in all the circumstances at the time. [97] It follows that we are persuaded Judge Couch erred in his approach to wages reimbursement. While he correctly took into account the subsequently discoveredconduct when assessing wages reimbursement, he used it inappropriately. It should not be used to fix the cut-off period, as that ties the employee's compensation to the entirely fortuitous circumstance of when the employer discovers the wrongful conduct. The judge's logic would mean that the employee in situation 3 does much better financially than the employee in situation 2 – for no good reason. It also means the employee in situation 3 does just as well as his innocent counterpart in situation 4. [98] The judge should have taken as his starting point the fact that the subsequently discovered conduct was so bad, in the court's estimation, that, had it been known to the employer at the time of Mr Salt's dismissal, it would have justified that dismissal. That suggests the wages reimbursement should, as a matter of equity and good conscience, be small. The dismissal was only technically unjustifiable, as, had Mr Salt owned up to what he had been doing, the court would have found his dismissal justified. The judge would have had to consider s 128. That section applies, according to subs (1) where –the Authority or the Court determines, in respect of any employee, - (a) that the employee has a personal grievance; and (b) that the employee has lost remuneration as a result of the personal grievance.[99] For present purposes, we are proceeding on an assumption that Mr Salt had "a personal grievance": cf the suggestion in Ark Aviation at [94] above. We are also assuming that it is correct to say, in these circumstances, that he "lost remuneration as a result of the personal grievance". There must be an argument that, in the circumstances where the employer could have lawfully dismissed had the employee not kept secret his or her misconduct, the loss of remuneration has not truly stemmed from "the personal grievance" but rather from the other conduct which would have justified immediate dismissal. See the interesting discussion in Mazengarb's Employment Law (looseleaf ed) at [ERA128.5]. None of this has been argued before us, with the consequence that we merely float this suggestion as a possibility. [100] Assuming, however, s 128 does apply, then the judge in this case would have had to order the employer to pay to Mr Salt the lesser of a sum equal to his lostremuneration or to three months' ordinary time remuneration: see subs (2). Since Mr Salt was unemployed for longer than three months, presumably the three months' time limit would have applied. Since the employer did pay him for one month, this would have led to a wages reimbursement equal to two months' ordinary time remuneration. We doubt in the circumstances that the discretion to award more, as conferred by s 128(3), would have been exercised. It is possible some reduction would have been warranted under s 124 for such conduct of Mr Salt's that Mr Fell did know about as contributed to the dismissal. [101] We are not saying that this is the only award the judge could or should have come to. We are merely trying to illustrate how a judge might in practice approach the analysis under s 123 in cases such as these, where the subsequently discovered misconduct is so egregious as to have warranted dismissal had it been known by the employer. [102] The judge also erred in fixing the humiliation compensation. He appears to have ignored the subsequently discovered misconduct in fixing the prima facie figure, instead taking it into account by way of reduction under s 124. Rather, he should have approached the question of humiliation compensation on the basis that, while Mr Salt was unjustifiably dismissed, he could have been justifiably dismissed (so both the Employment Relations Authority and the Employment Court found) had the employer been aware of the emails.Result[103] The question posed for us is as follows:In determining remedies under s 124 of the Employment Relations Act 2000, was the Employment Court permitted to take into account information which the employer did not know about at the date of dismissal?[104] On the premise on which this opinion is based, we answer that question:The subsequently discovered information could not be taken into account under s 124, but could and should have been taken into account when determining wages reimbursement and humiliation compensation under s 123.[105] It is inevitable that, had the matter been approached in this manner, Mr Salt would have received less compensation than he did. Since there has been no cross-appeal by the employer, the fairest course is to let matters stand as they are. It would be inappropriate to remit the case to the Employment Court for reassessment. Accordingly, we formally dismiss the appeal. [106] Costs should lie where they fall. Mr Neutze has succeeded in showing Judge Couch's approach was wrong. But he has failed to persuade us that Mr Salt should have received more compensation. The result is effectively a draw.Solicitors: Brookfields, Auckland for Appellant Bell Gully, Wellington for Respondent