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A sorry end for a sorry employer
When it comes to colourful portrayals of miserable characters, it is difficult to go past the work of Charles Dickens.
Think of his writing, and you will inevitably conjure up images of deceitful low-lifes or sadistic proprietors depriving their children of an extra bowl of gruel.
It would be nice to think that in today's society there is little room for the existence of such characters. Regrettably, however, it may be that if he were alive today Mr Dickens would take some inspiration from the pages of our employment law reports.
An illustration of this possibility is provided by the recent decision of Prins v Tirohanga Group Ltd (Unreported, Employment Court, Auckland, 10 May 2006).
The case concerned a motel in the Taupo region. Mr and Mrs Prins managed the business. They were paid a salary for doing so, and were also given free accommodation and food.
In about late 2000, the motel business was sold. Mr Walters was the principal of the company which purchased the business.
The Prins had been told that they could continue in their pre-existing employment arrangement following the sale. However, Walters had a different preference.
Walters told the Prins that he would prefer an arrangement whereby they would lease the motel premises, and effectively generate their own income accordingly. The Prins rejected this arrangement because they thought it to be economically unsound - if not commercially suicidal.
Over the next few months, a number of events occurred which caused the Prins to take a dim view of Walters.
Significantly, Mrs Prins alleged that Walters had subjected her to sexual harassment on a number of different occasions. She said that he had made inappropriate suggestive comments towards her - including a suggestion that she wear shorter skirts to "show more leg" and that she should refrain from losing weight in case it diminished her breast size.
After several months, Walters gave the Prins a memorandum which, in effect, detailed his perceived shortcomings of their work. It also suggested a different arrangement for their employment which, amongst other things, suggested that they "get rid" of some staff and do more menial work themselves.
The Prins were particularly upset about this communication. Mrs Prins provided a detailed response to the criticisms of their management. Further, the Prins made it clear that they did not wish to reduce their base income by accepting the alternative arrangement that Walters had proposed.
But that was not the end of the matter. About a month later, Walters told the Prins that he had negotiated a sale of the motel business. He explained that new owners would be taking over the motel complex - and that they had agreed to the type of contractual arrangement that the Prins had rejected. As a result, the Prins were to become redundant.
This representation was simply untrue. Walters had not negotiated a sale of the complex, and had simply appointed new managers whom he hoped might agree to lease the motel complex. Further, he instructed the new managers to create the impression that they had purchased the motel, and were the new owners of the business.
When the Prins discovered the truth of their situation they were understandably distressed. Regrettably, at about this time, Mr Prins suffered a heart attack. Mr and Mrs Prins attributed a part of the reason for this ill health to the treatment that they had suffered at Walters' hands - although this argument was not able to be made at court.
The Prins brought a claim against their former employer in the Employment Relations Authority, and succeeded. They appealed to the Employment Court – on the basis that they had not received adequate compensation for their treatment. In this respect, they succeeded on appeal.
The Court ordered the employer to pay approximately $53,000 to the Prins to compensate them for their various losses. Significantly, it ordered the payment of $4,000 to Mrs Prins to compensate for the various incidents of sexual harassment.
In this regard, Walters did not assist himself by his conduct at the hearing. The court found that he attempted to take control when he was giving evidence. Amongst other things, Walters had asked the judge to look at his wife (who was seated in the court) and to understand that because of her attractiveness and success, he would have no interest in Mrs Prins - whom he characterised as being "taller than me with big boobs".
The judge took a dim view of this behaviour and concluded that Walters was "someone who felt he needed to be in control of all situations in which he was involved".
On top of the amounts ordered to be paid by way of compensation, the court took the relatively unusual step of requiring the employer to pay a penalty (effectively a fine, paid to the Crown, in response to a breach of the employment legislation).
The moral of the story? Don't act like a character from a Charles Dickens novel unless you are prepared to pay for it.
