To have and to hold for richer and poorer

OPINION: Here is a case where the employer got almost everything it could wrong, which turned out to be very expensive. Those employers (especially in the dairy industry) who employ husbands and wives take note, writes Mary-Jane Thomas in this week's Work to Rule.

Mrs M went to work for a plastic packaging manufacturer (PP) on a casual basis. After a short time she was offered a permanent position doing process work on minimum wage. Mr M also worked for PP, which was supporting him in an adult apprenticeship in thermoforming. After a couple of years, Mr M handed in his resignation. He was going to work for an injection moulding company that had offered him more money. His new employer was not at all in competition with PP; however, the production manager at the company did not believe Mr M when he told him this.

The managing director of PP sent an email that expressed his disappointment in Mr M's resignation, especially given the investment PP had put into training him and also given his understanding that he was on a two-year employment contract. The email went on to say that his resignation was regarded as a breach of contract and concluded that: "As a further consequence of your breach of contract, you will appreciate that we are unable to continue to employ your wife for commercial competitive reasons. Accordingly her employment is also terminated."

Neither Mr M nor Mrs M was subject to a contractual restraint of trade provision, nor had they agreed to any confidentiality provision beyond that which is implied in every employment agreement.

At the Employment Relations Authority, Mrs M claimed that her dismissal was unjustified, that she had been subjected to discrimination on the basis of family status (her association with her husband) and that her employer had breached its duty of good faith.

The authority held that there was no reasonable basis for the belief that Mr M was going to work for a competitor or for the belief that there was a risk that Mr and Mrs M would collude to uplift commercially sensitive information. The best reasons the employer could come up with was that they did not trust Mr M, did not like the way he conducted his personal life and believed Mrs M to be under his influence. Mrs M's dismissal was held to be substantively unjustified, procedurally unfair and she was discriminated against on the basis of family status. She was awarded $20,088 in lost earnings and $15,000 compensation for hurt and humiliation.

For employers who have a legitimate concern about commercially sensitive material being used by former employees, remember that restraint of trade and confidentiality clauses are permitted and should be included in employment agreements. For those who employ partners or spouses, remember: they are separate employees and have to be dealt with as separate employees.Minimum Wage Order

This order, which comes into force on April 1, revokes and replaces the Minimum Wage Order 2009.

The order increases the minimum rates of pay for adult workers, new entrants, and trainees. The new minimum hourly rates of pay are as follows:w$12.75 an hour for adult workers (increased from $12.50 an hour); andw$10.20 an hour for new entrants and trainees (increased from $10 an hour).

» Mary-Jane Thomas is a partner at Preston Russell Law. E-mail questions to mary-jane.thomas@prlaw.co.nz.

- © Fairfax NZ News

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