There are certain industries that seem to have more than their fair share of employment relationship problems, in particular, the author notes that the farming sector prominently features in this category.
In the case of the rural sector, a complex individual employment agreement (‘IEA’) is often purchased from Federated Farmers which contains detailed explanatory notes to the employer, on what the employer needs to do to ensure the IEA is validly executed. These lengthy notes are often overlooked by farmers, and the IEA is duly signed by the parties, but not always correctly executed. One such case is the September 2019 Employment Court Case of A v N Limited  NZEmpC 129 (name suppression orders in place).
Ms A commenced employment as a farm assistant in September 2016, on a Federated Farmers IEA, as a farm assistant. The terms of employment included accommodation in a farm cottage, that by implication, formed part of the workplace. The IEA made it clear that there was a zero tolerance for drug use at the farm, including the cottage.
In October 2016, a male employee, Mr J, also commenced employment at the farm. Ms A and Mr J soon formed a romantic relationship, and shortly thereafter, Ms A discovered she was pregnant. Mr J at first acknowledged paternity, however, the relationship started to rapidly deteriorate and he subsequently alleged infidelity, and withdrew his acknowledgement as the father.
The deterioration in the relationship between Ms A and Mr J started to cause significant problems on the farm, and although the owners, Mr and Mrs C, tried their best to support the couple, they noticed in particular, that Ms A’s conduct in the workplace was becoming problematic. This conduct included erratic behaviour towards Mr J, Mr C and Mrs C, lack of memory/short attention span and on at least one occasion, Ms A storming out of the shed during milking, when two people were required for the process.
Mr J then informed Mr and Mrs C that Ms A had been using marijuana the entire time they had been involved and provided them with a written signed statement, stating this. This led to Mr and Mrs C demanding that Ms A submit to a drug test, which she refused to do.
Mr and Mrs C were relying on a clause in the IEA that allowed for drug testing under a range of circumstances but which concluded with the clause “When we initiate testing it shall be in accordance with a Drug and Alcohol Testing Policy (which may be introduced by us at any time) or according to the testing policy of an independent agency engaged to carry out the testing.”
The explanatory notes in the IEA expressly informed the employer that “…if Employers wish to exercise this right, they must have a testing policy in place (a testing policy can be purchased separately from Federated Farmers), or engage an independent testing agency to conduct the test(s).”
Mr and Mrs C had not put a testing policy in place, but when faced with their suspicions of drug use by Ms A, hurriedly purchased a policy from Federated Farmers, and tried to retrospectively impose this on Ms A as a precursor to compelling her to undergo a drug test. The Employment Court described this approach as “ham fisted.”
This situation was not aided by Federated Farmers informing Mr and Mrs C that they were not allowed to photocopy the policy, but must purchase each copy for $100. Presumably to save money, the employer gave the one copy to Ms A for a brief period of time for her to read and seek legal advice on, but she was then required to return the policy to them.
The Court held that this approach was unreasonable, even though a brief extension to read and obtain legal advice was granted. Meantime, the clock was ticking in relation to the drug test, as with each day that passed, the probability of any drug having cleared Ms A’s system increased. Ms A eventually provided a clear drug test to Mr and Mrs C obtained by Ms A from her GP, however, this test was not acceptable to them.
Mr and Mrs C then indicated that they had information from a third party which raised their suspicions regarding drug taking (the earlier statement from Mr J), however, they refused to provide this document until late in the piece. This was one aspect subsequently held to be unfair and unreasonable, in breach of s 103A of the Employment Relations Act.
Ms A was dismissed and took her case to the Employment Relations Authority (‘Authority’), where she was awarded $10,000 compensation (reduced by 10 percent for contributory conduct), but was refused an award for lost remuneration as the Authority held that although the dismissal suffered from procedural failings, the substantive reason for the dismissal was justified.
Ms A challenged the lack of lost remuneration in the Employment Court, and was awarded six weeks’ lost remuneration, again with a 10 percent reduction for contributory conduct, in addition to the $10,000 awarded in the Authority.
The take-home tip for employers from this case is to ensure not only that they have a valid IEA, but that they utilise it correctly. It is best practice for an IEA to be signed prior to the employee commencing employment (imperative if a trial period, only for employers with less than 20 employees, is included) and particularly in relation to the Federated Farmers IEA, employers should take careful note of the explanations/instructions provided, if they wish to rely on the IEA further down the track.