Monumental casino loss ends twenty-year career

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Earlier this month, the Employment Relations Authority published a case that was interesting, not only from an employment law perspective, but also for the insights it provides into the life of high rollers at Auckland’s SkyCity.

Keith Hayashi commenced employment with SkyCity Management Limited in 1995. At the time of the incident that led to his dismissal in February 2016, he was employed as operations manager at SkyCity Casino, Central Auckland.

Mr Hayashi started the sunrise shift (from 3am) on 16 February 2016. During a briefing at the commencement of the shift, an advisory was made by the outgoing manager that the “Any Pair Bet” (that is, the “player” wager and the “banker” wager) in Salon 86 – understood to be a gaming area for significant international players – was a combined maximum total of $25,000.

For reasons that are unclear, Mr Hayashi and several other employees, thought that the same advisory applied to Salon 82, where Ms A had been playing Baccarat – for nine days! Table betting limits are displayed on screens next to each table, and Ms A’s screen had the total combined maximum for Any Pair Bet of $20,000. Mr Hayashi advised Ms A that the table limits she had been playing under were wrong. For reasons not explained in the decision, Mr Hayashi informed her that the table limit should have been a combined maximum of $10,000.

Mr Hayashi told Ms A that SkyCity would investigate the reduction in table limit and took the approach that it should apply retrospectively to Ms A’s nine days’ worth of play. Mr Hayashi then had other employees calculate a reimbursement amount using the handwritten tracking sheets that record each hand. SkyCity stated in evidence that reimbursements for over/under payments would always be calculated using the CCTV surveillance footage.

Mr Hayashi’s calculation came in at $310,400 and despite having the delegated authority to only authorise payments for overpayments of up to $5000 for hands he had seen played “live”, Mr Hayashi informed Ms A she would be receiving a refund of $310,400. When Mr Hayashi informed the surveillance team of this, he was advised to consult with his manager, Ms Vellanki.

Ms Vellanki informed Mr Hayashi that there had been no overpayment. Mr Hayashi suggested a goodwill payment be made to Ms A, and did not inform Ms Vellanki that he had already told Ms A she would be receiving the amount of $310,400. Ms Vellanki instructed Mr Hayashi to apologise to Ms A and inform her there would be no overpayment. Mr Hayashi said in evidence that he went and saw Ms A at 9.10 am, however, surveillance records showed he did not. At around 10.46 am Mr Hayashi sent surveillance an email querying one of Ms A’s tracking sheets. He cc’ed Ms Vellanki into the email. Ms Vellanki asked Mr Hayashi why he was still investigating this. It became clear during this conversation that Mr Hayashi had still not informed Ms A that no overpayment would be made, even though he had been instructed to do so at around 8.40 am.

Mr Hayashi informed Ms A shortly thereafter that the table limits had not changed and there would be no overpayment. Ms A demanded that SkyCity honour the $310,400 payment, and the chief executive eventually authorised payment. Following a disciplinary investigation, Mr Hayashi was dismissed for authorising an overpayment to Ms A contrary to SkyCity’s procedures and the limits of his financial authority and for failing to follow the lawful and reasonable instruction of Ms Vellanki for a period of two hours to advise Ms A that there was no change to the limits in Salon 82 and no overpayment would be forthcoming. The Authority held that Mr Hayashi’s dismissal was justified.

There are numerous cases involving a one-off inadvertent error on the part of an employee, where the question arises whether this can validly constitute serious misconduct. In the 2005 case of Marlow v Gorrie Fuels (SI) Limited, a 14-year-old employee was summarily dismissed, within six minutes of mistakenly filling a vehicle with diesel instead of petrol. The Authority held his dismissal was unjustified, both for the reasons for the dismissal and for deficiencies in the disciplinary procedure, given that there wasn’t one.

This decision was partially overturned on challenge to the Employment Court, where Judge Couch held that the dismissal was unjustified for procedural reasons, but that the conduct of putting the wrong fuel in a vehicle, although unintentional, could be viewed as serious misconduct. His Honour noted that the employee in that case was clearly aware of the serious consequences if a vehicle was filled with the wrong fuel. Indeed, when he realised the error he was visibly shaken and should have understood the importance of always checking. Judge Couch cited the definition of serious misconduct from the 1989 case of BP Oil NZ Ltd v Northern Distribution Workers Union  being any “…conduct that deeply impairs or is destructive of that basic confidence or trust that is an essential of the employment relationship.”

Employers should note that this has now become the standard definition of serious misconduct in employment law in New Zealand.

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Erin Burke

Employment Lawyer and Director at Practica Legal Email: erin@practicalegal.co.nz phone: 027 459 3375

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