Employment obligations cut both ways. Whilst it is more common for employees to bring legal claims against their employers, equally employers can sue employees for failing to meet their contractual duties.
In a recent case the Employment Relations Authority ordered a builder to pay damages to his former employer after he walked off the job without giving the required contractual notice. Mark Allan Robinson was employed by Armour Group Limited (“AGL”), a Timaru based building company. Robinson abruptly left his employment in the middle of a refurbishment job after claiming that other employees had made “defaming remarks about him”.
Disputes then arose regarding property that the company said Robinson had in his possession and failed to return, followed by the company’s refusal to process his final pay pending the return of these items. When Robinson threatened legal action AGL relented and paid the employee what he was due. However, they also took the unusual step of filing a claim against him in the authority claiming that he had breached his obligation to give notice of termination.
The authority upheld AGL’s claim finding that Robinson had abandoned his employment “without good reason” and was in breach of his employment agreement. He was ordered to pay $3000 in compensation to AGL.
Another case of an employer suing an employee involved Phoenix Cabs 2006 Limited and its former employee Maya Artho who crashed a company taxi whilst driving drunk. The company took a case to the authority seeking full reimbursement of the replacement value of the cab which was effectively a write off.
In its determination, the authority upheld the company’s claim finding that Artho “did not exercise reasonable skill and care and breached her employment agreement by driving the employer’s vehicle while intoxicated”. Whilst Artho had not signed an employment agreement, the authority found that she was “bound to carry out her duties in a proper and responsible manner”. It ordered Artho to pay the company $10 000 for the vehicle replacement cost and $1225.13 for towing and storage expenses it incurred
A further example of an employer successfully bringing a claim against an employee involved City Electricians Wellington Ltd and Jordan Churchill. In that case the employer suspected the employee was moonlighting in other employment during a period in which he was supposedly on ACC leave following surgery for an injury.
David Scott, one of the company’s two directors, went to Churchill’s property on a Saturday and tried to retrieve the company car, laptop and tablet. An altercation broke out during which Scott was ejected from the house and was unable to retrieve the property. Churchill accused Scott of aggressive behaviour and called the Police. Churchill returned the company’s property later that afternoon via the Police, but not before factory resetting the computer and tablet resulting in all of the data being permanently deleted from them. Two days later he resigned.
Churchill commenced proceedings for constructive dismissal claiming that after the incident at his home he had no alternative but to resign. The company then counter claimed for the losses arising from breaches by Churchill of his employment obligations, including the loss of data and costs incurred in engaging a forensic expert to recover deleted information.
Whilst the authority found that it was unwise for Scott to have attended Churchill’s home, especially on a Saturday apparently unannounced, he had sufficient reason to be concerned about Churchill’s activities. Further, Churchill escalated the situation by becoming agitated and seeking to manhandle Scott in an attempt to remove him from the premises. The authority found that Scott’s actions were not sufficient reason to cause Churchill to resign and rejected the constructive dismissal claim.
With regard to the company’s counter claim, the authority ordered Churchill to pay special damages of $2000 and a $500 penalty for breaches of his good faith obligations. In this regard the authority found that Churchill was technically astute and would have been well aware of the damage that his actions would cause to the company.
The other circumstance in which claims against former employees are typically made involve breaches of restraint of trade and confidentiality obligations. In the most extreme case of this type, Rooney Earthmoving was awarded $4.29 million in damages after three former employees set up in competition against the company and solicited their clients.
The employees, Kelvin McTague, Clarence Whiting and Kerry Bartlett were found to have breached their duties of fidelity and trust and confidence by soliciting the Rooney’s clients whilst still in its employ and further soliciting other staff to leave and join their new venture. They were also found to have removed confidential pricing information and client lists and then used that information to undercut Rooney.
These cases serve as a warning to employees that they too will be held to employment obligations and may be liable to pay significant amounts in damages and penalties if they breach them.
This article was originally printed in The Post
