Brown v New Zealand Basing Ltd - [2017] NZSC 139

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IN THE SUPREME COURT OF NEW ZEALAND

SC 145/2016
[2017] NZSC 139

BETWEEN

DAVID BROWN
First Appellant

GLEN SYCAMORE
Second Appellant

AND

NEW ZEALAND BASING LIMITED
Respondent

Hearing:	13 June 2017
Court:	Elias CJ, William Young, Glazebrook, OʼRegan and Ellen France JJ
Counsel:	P G Skelton QC, G M Pollak and S C I Jeffs for Appellants A H Waalkens QC and M G Lawlor for Respondent A S Butler and M W McMenamin for Human Rights Commission as Intervener
Judgment:	13 September 2017

JUDGMENT OF THE COURT

AThe appeal is allowed and the judgment of the Employment Court is restored.

BThe order for costs made in the Court of Appeal is set aside.
CThe respondent is to pay the appellants costs in respect of the Court of Appeal hearing, to be fixed by that Court, and in respect of this appeal costs of $25,000 and reasonable disbursements. We certify for two counsel.

____________________________________________________________________

REASONS

William Young and Glazebrook JJ	[1]
Elias CJ, O’Regan and Ellen France JJ	[75]

WILLIAM YOUNG AND GLAZEBROOK JJ

(Given by William Young J)

Table of Contents

Para No
The appeal	[1]
The issues in the case: an overview	[4]
The facts in a little more detail	[10]
An overview of the legislative scheme	[17]
The litigation in the Courts below	[23]
Did the Employment Court have personal jurisdiction over NZBL?	[35]
Did the Employment Court have subject matter jurisdiction over the employment agreements between NZBL and Messrs Brown and Sycamore?	[39]
Do the provisions of pt 9 of the 2000 Act relating to discrimination apply to the conduct of NZBL towards Messrs Brown and Sycamore?	[50]
Overview	[50]
The New Zealand legislation	[59]
Crofts	[62]
Subsequent cases concerning expatriate employees	[64]
Our conclusions	[66]
Disposition	[74]

The appeal

Part 9 of the Employments Relations Act 2000 (the 2000 Act) provides for a personal grievance procedure which creates, somewhat indirectly as we will explain, various statutory rights associated with employment. These include the right not to be discriminated against on grounds of age.[1] This is provided for in part by reference to the related provisions of the Human Rights Act 1993 (HRA) and is subject to certain exclusions.[2]
[1]Employments Relations Act 2000 [the 2000 Act], ss 104–105.
[2]See ss 105(2) and 106.
The appellants, David Brown and Glen Sycamore, are Cathay Pacific pilots based in Auckland. Their employer is the respondent, New Zealand Basing Ltd (NZBL), a Hong Kong registered company which is a wholly owned subsidiary of Cathay Pacific. Its only business is to employ New Zealand-based staff.[3] NZBL’s letters of offer to Messrs Brown and Sycamore and Conditions of Service 2002 (CoS02), which collectively form the employment agreement between the parties, provide that the governing law of the agreements is that of Hong Kong and empowers NZBL to require them to retire at the age of 55. Hong Kong law not prohibiting discrimination by reason of age, NZBL has sought to exercise…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NZSC 139
Decision Date: 13 September 2017

CaseChat Overview and Summary

David Brown and Glen Sycamore, Cathay Pacific pilots based in Auckland, are challenging their employer New Zealand Basing Ltd's (NZBL) attempt to exercise its power to require them to retire at the age of 55. The appellants rely on pt 9 of the Employment Relations Act 2000 (the 2000 Act), which provides for a personal grievance procedure, including the right not to be discriminated against on grounds of age. NZBL contends that, because the proper law of the agreements is the law of Hong Kong, the right not to be discriminated on grounds of age provided for by the 2000 Act is inapplicable. The Employment Court held that the relevant provisions of the 2000 Act are applicable to the employment of Messrs Brown and Sycamore and thus that they cannot be required to retire by reason of attaining the age of 55. The Court of Appeal disagreed. The appeal raises three issues: (a) did the Employment Court have personal jurisdiction over NZBL? (b) did the Employment Court have subject matter jurisdiction over the employment agreements between NZBL and Messrs Brown and Sycamore? (c) do the provisions of pt 9 of the 2000 Act relating to discrimination apply to the conduct of NZBL towards Messrs Brown and Sycamore? The Supreme Court held that the appeal should be allowed and the judgment of the Employment Court restored. The Court held that the 2000 Act does not contain a provision akin to s 204 of the UK Act and likewise there is nothing in its legislative history which gives a clear pointer to the territorial scope of its provisions. For these reasons, the Court agreed that Crofts was not directly on point but saw Crofts as relevant. The Court held that the general right not to be discriminated against provided by s 103(1)(c) sits alongside the rights not to be sexually or racially harassed (s 103(1)(d) and (e)). Sexual or racial harassment is wrong irrespective of what an employment agreement may say (or not say). The prohibition of such conduct is in the nature of a “legislative requirement” addressed to conduct and the only significance of the employment relationship is that it provides the context in which the conduct is legislatively addressed. The rights not to be sexually and racially harassed are not, in any sense, contractual and there is therefore no sensible reason for confining them to employment relationships governed by the law of New Zealand. Accordingly, they are not excluded by even a bona fide choice of another system of law as the proper law of the employment agreement. Instead, they are breached by any conduct which occurs within New Zealand. This being so in relation to sexual and racial harassment, it would be difficult, on ordinary principles of statutory construction, to reach a different conclusion in respect of the right not to be discriminated against. The Court also held that the 2000 Act is premised on the view that employment involves a relationship (and thus status) and not just contract. This is explicit in the title of the statute and is implicit in s 3(a)(i) and (ii) which provides: 3 Object of this Act The object of this Act is—(a) to build productive employment relationships through the promotion of good faith in all aspects of the employment environment and of the employment relationship—(i) by recognising that employment relationships must be built not only on the implied mutual obligations of trust and confidence, but also on a legislative requirement for good faith behaviour; and(ii) by acknowledging and addressing the inherent inequality of power in employment relationships. Given that the characterisation of a personal grievance right arising out of a “legislative requirement” addressed to “good faith behaviour” as contractual would be, at worst, contrary to the premise of the 2000 Act and at best a matter of impression, there seemed to be little point in engaging in a two-step interpretative exercise. The Court accordingly held that the right not to be discriminated against on grounds of age is not limited to employment relationships where the employment is governed by New Zealand law. Given this, its territorial application must be determined by reference to other criteria. The issue in the present appeals is rather more straightforward, given that Messrs Brown and Sycamore are based in New Zealand. To adapt the language of Lord Hoffmann in Crofts, there can be no doubt that the paradigm case for the application of pt 9 remedies is that of an employee working in New Zealand at the time it is alleged that the personal grievance right was infringed. This necessarily means that there is a decision to be made in the case of someone who works both in and outside New Zealand. As the Court had already explained, the statutory context (including the HRA and Employment Court Regulations) shows that, at least in respect the right not to be discriminated against on grounds of age, the right does apply to such a person.

Orders