Especially given the current economic environment, many workers can become desperate for work. In particular, we have seen the tourism and hospitality sectors continue to suffer considerably from the effects of our border closure. In such an environment, prospective employees are often asked to undertake a period of work observation, or work trial. It is important for employers to ensure that any such requests are made for proper purposes, and that the nature of any period of work observation is communicated, agreed and recorded in writing.
The conflict and frustration that can ensue when a period of work trial is left unpaid is demonstrated in a recent Employment Court case, 123 Casino Ltd T/A 123 Palm Bar & Restaurant & Function Centre v Zuo.
In August 2017, Ms Zuo applied for a job as a chef at 123 Casino Ltd (“Palm Bar”). The parties agreed that Ms Zuo would complete an unpaid observation period on 11 and 12 August 2017. She declined to return for a further period of unpaid work observation. On 13 August 2017, however, Ms Zuo was invited by the Duty Head Chef for a paid work trial. She completed this paid work trial from 16 to 19 August 2017, and was eventually offered employment on 20 August 2017.
Ms Zuo was added to the roster and allocated shifts – she was rostered to work from 20 August, until 17 September 2017. She worked for a brief period, until she left abruptly on 8 September 2017, in protest at not being paid for the work trial in mid-August.
On that same day, Ms Zuo’s partner went to Palm Bar to seek payment of the wages owing to Ms Zuo for the period of work trial. In the ensuing discussion, Ms Zuo’s partner told Palm Bar that they needed to pay Ms Zuo, otherwise she would stop work.
After Ms Zuo left, Palm Bar made several unsuccessful attempts to contact her. Ms Zuo initially responded that she would not discuss what had happened until her wages were paid. Ms Zuo’s partner also advised Palm Bar by email that Ms Zuo had not resigned, and was essentially on strike for not being paid for the work trial.
On 11 September 2017, Ms Zuo advised Palm Bar that she received legal advice, and that she was prepared to resume work the following day. She repeated this message later that day, and apologised for any inconvenience she had caused. Palm Bar did not respond.
Ultimately, Ms Zuo considered that she had been unjustifiably dismissed, and raised a personal grievance.
In this case, Palm Bar challenged the Authority’s determination that Ms Zuo was unjustifiably dismissed. It claimed that Ms Zuo was not unjustifiably dismissed because she was a casual employee when she ended employment by abruptly leaving work in September 2017.
Palm Bar also argued that, if she was not a causal employee, she had repudiated her employment agreement by leaving the workplace, or she had abandoned her employment.
Grounds for challenge
As to the first ground, there was a dispute over whether Ms Zuo was advised that her employment would be casual only. The Court noted that the agreement described the employment as casual, but other parts of the agreement were more consistent with ongoing employment. In particular, the Court observed that there would be no reason to provide for redundancy if Ms Zuo had been employed casually. Overall, the Court concluded that Ms Zuo was not a casual employee.
In relation to the repudiation argument, the Court noted that Palm Bar did not communicate its cancellation of the employment agreement after the alleged repudiation by Ms Zuo. The Court found that nothing was said or done by Palm Bar that could be construed as making Ms Zuo aware that it considered she had repudiated the agreement, or that it was cancelling the agreement in response.
The Court noted that Palm Bar was already in breach when Ms Zuo staged her protest and, while the walk-off was not commendable, it was perhaps understandable.
The Court also rejected the argument that Ms Zuo had abandoned her employment. It noted that under the employment agreement, abandonment did not occur unless Ms Zuo was absent from work for three consecutive working days without notifying Palm Bar. The Court found that three working days had not elapsed before Ms Zuo sought to return to work on 11 September 2017.
Palm Bar also pointed out that the employment agreement included a dispute resolution mechanism, which had not been followed by Ms Zuo. The Court was not swayed by this argument. It noted that Ms Zuo had been told that the period of work trial would be paid, and Palm Bar had failed to provide payment. The Court did not accept that the onus was on Ms Zuo to follow the dispute resolution mechanism to obtain payment of the wages owing to her.
Overall, the parties agreed that the initial work observation was not employment, and would be unpaid.
However, the Court agreed with the Authority’s conclusion that the failure or refusal to restore Ms Zuo to the roster meant that she was dismissed with effect from 11 September 2017.
While it was argued that Ms Zuo’s behaviour showed a lack of good faith, the Court found that Palm Bar was in breach of its employment obligations, and its attitude towards paying her was the cause of all that followed. In those circumstances, a fair and reasonable employer could not have left matters as they were by ignoring Ms Zuo’s requests to return to work, and to work out the problem between them.
Ultimately, the Court held that Ms Zuo was unjustifiably dismissed, and entitled to remedies.
First, the Authority awarded $5,569.20 gross as reimbursement of lost wages. The Court arrived at this by considering the default position under the Employment Relations Act applicable to this situation, namely that they must order reimbursement of three months’ lost wages. The Court reduced this amount to reflect the contribution Ms Zuo’s actions had to the decision to dismiss.
Additionally, Ms Zuo claimed $15,000 as compensation for humiliation, loss of dignity and injury to feelings. However, the Court agreed with the Authority that $7,000 was appropriate to reflect the hurt suffered by Ms Zuo. This amount was similarly reduced, in this case by 20%, to account for her actions which contributed to the personal grievance. The Court accepted that whilst Ms Zuo had a legitimate issue to raise, she did so in an unsatisfactory way.
Practically, this case serves as a reminder for employers to ensure that they comply with all relevant employment laws when requiring prospective employees to undertake a period of work trial or work observations. Employers ought to ensure any agreements pertaining to such arrangements are reflected in writing, to avoid similar disputes down the track.
At Jennifer Mills & Associates, we have expertise on a range of employment, health and safety, and immigration matters. Please contact us if you require any advice or assistance, we would be more than happy to assist.