Employer Wins Compensation for Employee’s Refusal to Work Notice Period
- Business Central
- Oct 24, 2024
- 3 min read
Updated: Nov 5, 2024
Southern Superior Roofing Limited (Superior Roofing) employed Mr Shimozato for a roofing job to start on 24 February 2023. He was paid weekly. After a few periods of unavailability, Mr Shimozato left his employment on 8 June 2023 before the job was completed. Superior Roofing submitted to the Employment Relations Authority (the Authority) that it overpaid Mr Shimozato compared with the total days he worked. It claimed a reimbursement for $6,000.
Superior Roofing agreed to pay Mr Shimozato $25,000 for the roofing work. It would pay $2,000 each week until he had been paid the full $25,000. Mr Shimozato, Mr Brown, the sole director, and another worker needed to travel from the South Island to the job in the lower North Island. Mr Brown texted Mr Shimozato on 13 February 2023 that he and the other worker were booked for the ferry on 23 February 2023. The ferries had issues and Mr Shimozato advised he could not get a ferry until 5 March 2023. Mr Brown offered to have Mr Shimozato flown up by plane on 22 February 2023 and his luggage delivered by post. Mr Shimozato ultimately declined the flight that was offered that day because he had not packed yet.
Superior Roofing began the job without Mr Shimozato. By 5 March 2023, most of the first section of the roof had been completed. Mr Brown told Mr Shimozato there was no point coming up for just a short period and then waiting for the scaffolding to go up. Mr Shimozato asked to be paid in advance, which Superior Roofing did. Mr Shimozato worked the next phase of the job from 20 to 30 March 2023, then had to return home for an event. After that, Mr Shimozato worked the agreed times until 29 May 2023.
On 8 June 2023, Mr Shimozato was meant to come back for the next stage of the project. Instead, events soured when he arrived on site and after a brief discussion with Mr Brown, he collected his gear and left. He later texted, “I just grab gears when I am not happy with discussion tonight. But now I’m [sic] feeling like dealing with moody [Mr Brown]. Sorry I don’t have energy for that. Yes. I’m going now.” Superior Roofing had paid Mr Shimozato 600 hours of work at $24,000, when he had only worked 336 hours.
The Authority laid out that Mr Shimozato was paid in advance on the basis that he would work until its completion. His exit without notice breached the employment agreement. Superior Roofing experienced expenses from this departure, including Mr Brown having to put more of his own time into the job and having to employ another labourer. Therefore, the Authority accepted that as a result of Mr Shimozato’s resignation, Superior Roofing suffered damage and loss of a foreseeable nature.
Superior Roofing’s employment agreement template had a termination clause that provided that if a resigning employee did not provide notice, then the employer could withhold 50% of wages owed. However, Superior Roofing could not locate a signed copy of the agreement. Without this, the Authority could not allow the unsigned terms in the document to be used.
The Authority found that Mr Shimozato was always free to resign on his own accord. However, a notice period of reasonable length would be implied into the parties’ work arrangement. It assessed that the damage suffered was what Mr Shimozato should have worked. Combining its estimation of a reasonable notice period and the termination clause in the employment agreement template, it deemed this to be one week. The Authority awarded Superior Roofing $2,000 for Mr Shimozato’s notice period and reimbursement of the filing fee at $71.56.
Southern Superior Roofing Limited v Shimozato [[2024] NZERA 154; 18/03/24; H Doyle]]