Prior to August, the most recent substantive employment decisions from the Supreme Court were delivered in 2017. They were comfortably under 40 pages each. Even the seminal decision in Bryson v Three Foot Six Limited was only 20 pages in the making.

In FMV, the Court has taken a broad look at the employment jurisdiction; the theme of the Employment Relations Act 2000, the theme of the institutions created under the Act, the legislative history, and what the Court says the legislature intended as the ambit of an “employment relationship problem.” The decision was delivered just as New Zealand went into our most recent lockdown, but it will long outlast the lockdown … I hope.

The majority of the Supreme Court, Winkelmann CJ, William Young, O’Regan, and Williams JJ, (Glazebrook J dissenting) have made significant pronouncements about the employment jurisdiction:

• Challenging conventional views about the limits of the Employment Relations Authority (ERA) jurisdiction;
• Overturning the BDM Grange High Court decision from 2006, which held tort claims could proceed in the High Court for breach of fiduciary duty by a former managing director. Instead, the Court says if it can be framed as an employment relationship problem, then it should be! – given the exclusive jurisdiction of the ERA;
• Disagreeing with the Court of Appeal decision in JP Morgan Chase Bank NA v Lewis from 2015, where a CEO’s claim for breach of a settlement agreement filed in the employment jurisdiction was struck out by the Court of Appeal as not being an “employment relationship problem.”
• Holding the tort exclusion in s 161(1)(r) of the Employment Relations Act only applies to the limited circumstances of “any other action” referred to in s 161(1)(r). This means that the long list of areas in which the ERA has exclusive jurisdiction outlined in s 161 are not subject to any tort exclusion. This dispels the previous view that the objective of the Act was essentially contract-focused.
• Formulating “Our approach” at [92]-[93] of the decision. The Court provides a rationale and test for determining whether a dispute is in the exclusive jurisdiction of the ERA. A “problem” “is not a legal category alongside property, or tort or equity, but a supervening class that may encompass all of these legal forms as long as the problem relates to or arises from an employment relationship. And that means the character of a problem is not to be found in its legal presentation.” The Court considers this is a question of fact to be determined in each case. “If the controversy arises during the course of the employment relationship and in a work context, then it will be an employment relationship problem.”
• Finally, the Court accepts this approach will not resolve all jurisdictional uncertainties as sometimes it will be a question of judgment and degree. However, given the statutory language, the Court says this is unavoidable. By way of example, the Court acknowledges director employees and dual capacity cases will still produce split proceedings if there are multiple allegations and defendants who are not employees.

FMV v TZB started life as a bullying claim. The facts of the case itself did not present any great difficulty for the lower courts or the Supreme Court. The employee had framed her claim both as a personal grievance in the ERA and as a tort claim in the High Court. When she ran into difficulty pursuing her claim in the ERA, she turned to the High Court and the Court of Appeal. All three Courts found that the claim properly sat within the jurisdiction of the ERA.

However, the case has provided a valuable opportunity for the Supreme Court to develop a significant statement on the employment jurisdiction. The wide-ranging judgment will still provide plenty of room for debate, but signals a clear intention that the employment jurisdiction is to be respected and protected by the Courts. As the Supreme Court notes on the first page of the decision, the employment law jurisdiction is a unique response to the labor market; “Private law principles of contract and tort are not seen as sufficiently responsive to that context.”

It is notable that the Court did not hear from any intervenors in this appeal. In the previous Supreme Court decisions in Brown, Affco, and Bryson, the Court did hear from a variety of intervenors. Given the wide-ranging discussion the majority and Young J embarked on in this decision, it may have been of assistance to have heard from intervenors?

1. Brown v New Zealand Basing Limited [2017] NZSC 139 (the application of New Zealand law to a foreign employment agreement) and Affco New Zealand Limited v New Zealand Meat Workers and Related Trades Union Inc [2017] NZSC 135 (lock-out provisions related to off-season employees).

2. Bryson v Three Foot Six Limited [2005] NZSC 34.