HONG v CHEVRON TRAFFIC SERVICES LIMITED [2020] NZCA 339

HONG v CHEVRON TRAFFIC SERVICES LIMITED [2020] NZCA 339 [12 August 2020]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA208/2020[2020] NZCA 339BETWEEN YOON CHEOL HONGApplicantAND CHEVRON TRAFFIC SERVICESLIMITEDRespondentCourt: Miller and Clifford JJCounsel: Applicant in personG M Pollak for RespondentJudgment:(On the papers)12 August 2020 at 9.30 amJUDGMENT OF THE COURTA The application for leave to appeal is declined.B The applicant is to pay costs to the respondent for a standard applicationon a band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Clifford J)Introduction[1] In April this year the Employment Court dismissed claims made bythe applicant, Yoon Cheol Hong, against the respondent, Chevron Traffic Services Ltd,for unjustified dismissal and related personal grievances.1 Mr Hong now applies1 Hong v Chevron Traffic Services Ltd [2020] NZEmpC 44.pursuant to s 214 of the Employment Relations Act 2000 (the Act) for leave to appealthat decision as being wrong in law.[2] We may grant leave if the question of law proposed is one that, by reason of itsgeneral or public importance or for any other reason, ought to be submitted tothis Court for decision.Background[3] Mr Hong was employed by Chevron as a traffic controller between12 September 2017 and 7 June 2018, on which date Mr Hong was summarilydismissed.[4] Chevron is a traffic management business. As a traffic controller, Mr Hongworked in close cooperation with other traffic controllers, by use of radio telephones,to manage traffic through one-way sections of roads under repair. Mr Hong wasdismissed following events on 25 May 2018. On that day he was observed, on at leastthree occasions, by the traffic superintendent of the head contractor at the site allowingtraffic onto the one-way section of roadway when traffic was still coming from theopposite direction. The traffic superintendent said Mr Hong was clearly not listeningon his radio telephone, and that he had seen similar incidents involving Mr Hong onanother site. The traffic superintendent directed Mr Hong be removed to another partof the site. When similar incidents involving Mr Hong occurred later that same day,the traffic superintendent indicated that he did not wish to have Mr Hong back on hissites ever again.[5] The traffic superintendent made a formal, written complaint to Mr Hong'semployer, Chevron. An investigation by Chevron followed.[6] During the course of that investigation Mr Hong, as well as asserting that thealleged incidents had never happened, raised a number of other personal grievances.[7] As now relevant, one of those personal grievances raised a question as to thereal nature of Mr Hong's employment relationship with Chevron, namely whether itwas casual or ongoing. Related questions of entitlement to holiday pay, public holidaypay and the lawfulness of relevant terms of Mr Hong's employment contract thenarose.[8] The Holidays Act 2003 entitles an employee to not less than four weeks paidannual holiday after the end of each completed 12 months of continuous employment.2Holiday pay is to be paid before the employee takes their annual holiday, or wherethe employer and the employee agree, in the pay that relates to the period during whichthe holiday is taken.3 Where, however, an employee works for the employer on a basisthat is so intermittent or irregular that it is impracticable for the employer to providethe employee with four weeks annual holidays, s 28 of the Holidays Act provides that,by agreement, holiday pay at a rate not less than eight per cent of the employee's grossearnings may be paid as part of regular pay. Similarly, s 23 provides that an employeewhose employment comes to an end less than 12 months after it began must be paideight per cent of their gross earnings as holiday pay.[9] In accordance with the express terms of Mr Hong's employment agreement,and in reliance on s 28, Chevron adopted the eight per cent approach to the paymentof holiday pay. During the Authority's investigation Mr Hong said that, in fact, hewas not a casual employee so that Chevron was not entitled, as a matter of law, to takethat approach.[10] Mr Hong also challenged Chevron's approach to payment for (non-worked)public holidays. Section 49 of the Holidays Act requires an employee to be paid fora public holiday he or she does not work if that day would otherwise have beena working day for that employee. Clause 5.2 of Mr Hong's employment contractprovided that as Mr Hong was a casual employee he would "normally" not be entitledto be paid for a non-worked public holiday. Mr Hong said Chevron had failed tocomply with s 49, given he had not been a casual employee. Moreover, cl 5.2 wascontrary to s 49 and Chevron had accordingly breached s 65(2)(b)(i) of the Act, whichprohibits individual employment agreements from containing anything "contrary tolaw". Mr Hong sought holiday pay compensation, and that Chevron pay a penalty,accordingly.2 Holidays Act 2003, s 16.3 Section 27.[11] The Authority agreed with Mr Hong as to the nature of his employmentrelationship: it was ongoing, rather than casual.4 But, the Authority also found, at theoutset of the employment relationship, as confirmed by the terms of the employmentagreement, Chevron and Mr Hong believed the employment relationship was casual.That is, work would only be available to Mr Hong on an intermittent and irregularbasis. As that was not the case in practice, Chevron had incorrectly adopted theeight per cent approach, because s 28 did not apply. Nevertheless, because Mr Hong'semployment did not continue for 12 months or more he never became entitled toannual holidays. Furthermore, Mr Hong received the full payment of his annualholiday pay through the payment of the additional eight per cent that had been madeas part of his regular pay.5[12] The Authority agreed with Mr Hong that his entitlement to wages for publicholidays had not been correctly determined by Chevron, and made an order — whichChevron has complied with — for the payment of additional wages for publicholidays.[13] The Authority also acknowledged cl 5.2 of the employment agreement did notreflect the terms of s 49. But the use of the word "normally" reflected, again, the jointunderstanding of Chevron and Mr Hong at the outset that Mr Hong was to be a casualworker. Given Chevron had in fact paid Mr Hong for some of the public holidays hedid not work in accordance with s 49, albeit not others, the presence of the clause itselfwas not a breach of s 65(2)(b)(i).6[14] On that basis, the Authority concluded Mr Hong had failed to establish abreach of the Holidays Act as it pertains to Chevron's obligations under ss 16, 28 or 49of the Holidays Act, or s 65(2)(b)(i) of the Act.4 Hong v Chevron Traffic Services Ltd [2019] NZERA 14 at [30].5 At [35]–[37].6 At [51]–[52].Employment Court decision[15] In the Employment Court, Mr Hong challenged the Authority's findings thathe had not been unjustifiably dismissed, that Chevron had not breached the HolidaysAct or the Act and that no penalties were to be paid.[16] The Employment Court was satisfied that Chevron's decision to dismissMr Hong summarily was a reasonable response in all the circumstances.7 Although inhis "close and intensive cross-examination of the witnesses" for Chevron someinconsistencies arose, the witnesses did not resile from their primary evidence.8In the Court's view the evidence against Mr Hong was overwhelming.9 It agreed that,in the context of Chevron's operations and responsibilities to the public, Mr Hong'sactions amounted to serious misconduct. Mr Hong had not, therefore, beenunjustifiably dismissed.10[17] As regards the breaches of ss 16 and 28 of the Holidays Act and s 65(2)(b)(i)of the Act, the holiday pay and pay for public holiday issues, the Employment Courtnoted that issue had been resolved by the Authority's determination. The EmploymentCourt agreed with the Authority that Chevron's breaches were unintentional, reflectingthe initial mutual understanding Mr Hong was to be a casual employee.11 It went onto note that the relevant provisions of the Act and the Holidays Act were difficult andconcluded this was not a situation that called for a penalty. Moreover, Mr Hong'scontention Chevron breached its duty of good faith could not be considered as it hadnot been advanced before the Authority.12Leave application[18] Mr Hong seeks leave to appeal on the grounds that, given the evidence, noreasonable Employment Court Judge could have made the decision that his dismissalwas not unjustified; that the Judge's finding that cl 5.2 of his employment contract hadnot involved a breach of s 65(2)(b)(i) of the Act was plainly wrong; and that no7 Hong v Chevron Traffic Services Ltd, above n 1, at [23].8 At [19].9 At [23].10 At [24].11 At [26].12 At [25].reasonable Employment Court Judge could have reached the conclusion that Chevronhad not acted in bad faith.[19] He says leave should be granted because the errors of law he identified areones of general or public importance.AssessmentAn error in finding Mr Hong's dismissal not unjustified?[20] An appeal on a point of law can be brought on the ground there was insufficientevidence upon which the Judge could reach the challenged conclusion: here,the Judge's finding Mr Hong's dismissal was not unjustified. We are satisfied, asthe Judge was as regards the Authority's decision, that the evidence against Mr Hongwas formidable. That Mr Hong made some progress with witnesses does not affectthat conclusion. In particular, the evidence of the traffic superintendent was clear andthe inquiry which Chevron undertook following the receipt of his complaint was aproper one. Leave is declined to challenge that decision.An error in finding no breach of s 65(2)(b)(i)?[21] The essence of the Judge's finding was that, whilst cl 5.2 as worded did notaccurately reflect s 49 of the Holidays Act, the use of the word "normally", andChevron's actions in fact in paying Mr Hong for some but not all of the public holidaysfor which he was entitled to be paid, meant that the clause was not necessarilyinconsistent with s 49. Rather, the clause reflected the initial understanding that —because as a matter of fact Mr Hong was expected to be a casual employee only — itwould be unusual if his pattern of work entitled him to pay for a public holiday. But, asMr Hong had complained, the Judge went on to find Chevron had not followed therequirements of s 49 as regards some, but not all, of the occasions on which Mr Hongsaid that he had wrongly not been paid for a public holiday. The Judge orderedpayment by Chevron to the extent of that error, and Chevron has made that payment.On that basis, no question of law of general or public importance is raised and leaveto appeal is declined.An error in finding no bad faith?[22] Finally, Mr Hong challenges the Judge's ruling that he did not have jurisdictionto find Chevron had not acted in good faith because that claim had not been raisedbefore the Authority, as was the legislative requirement, and that there had not, in fact,been a breach of the employer's duty to act in good faith.[23] As Mr Hong had elected for the Employment Court to hear his challengesde novo, the Court would have had jurisdiction to consider Mr Hong's claim for abreach of the duty of good faith.13 To that extent, there would appear to have been anerror of law in the Employment Court's decision. Having said that, it was on the basisof the strength of the evidence against Mr Hong, and Chevron's properly conductedinquiry, that the Judge was able to conclude — irrespective of that error of law — thatChevron had not acted in breach of its duty of good faith. For similar reasons as thoseset out as regards the first ground of appeal for which leave is sought, we also declineleave on this third point as well.Result[24] Mr Hong's application for leave to appeal to this Court is declined.[25] Mr Hong is to pay costs to Chevron for a standard application on a band Abasis and usual disbursements.13 Silby v Christchurch City Council [2002] 1 ERNZ 476 (EmpC) at [47].