John Farrow, Partner at Anderson Lloyd, shares a detailed case note of Gill v Restaurant Brands Limited, where an employee was dismissed for lack of a valid visa. In this article, John highlights new complexities due to COVID-19, and the importance of employers to communicate in good faith to its employees, in undertaking the labour market test.
The requirement to hold the necessary visa to work in New Zealand is commonplace. However, the effects of COVID-19 have added several layers of complexity. For example, what are an employer’s s 4 and s 103A obligations to a visa holder when restructuring if it knows that the consequences may be that the visa holder is forced to return to their home country. On the other hand, in industries such as tourism where there is now wholesale unemployment, is there an obligation on the employer to favour a New Zealand resident or does that give rise to a potential disadvantage claim?
The decision of Gill v Restaurant Brands Limited offers some insight into an employer’s good faith obligations.
Dilshaad Gill was employed by Restaurant Brands Limited as a permanent employee in the positon of Assistant Restaurant General Manager at Johnsonville. At the time he was appointed, Restaurant Brands was aware that his work visa expired on 11 March 2017.
In November 2018 Mr Gill emailed Restaurant Brands asking for the further documents that he would need to complete an application for an Essential Skills Work Visa. He needed such a visa to continue his role.
In January 2019 he received an email from Restaurant Brands noting that his visa was due to expire on 7 March 2019, and pointing out that he needed to have a valid work visa to remain employed. The email made it clear that his employment would terminate on 7 March 2019, should he fail to provide Restaurant Brand with evidence that he had obtained a new work/study visa.
On 14 February 2019, 3 weeks before his visa was due to expire, Mr Gill received a phone call from Restaurant Brands advising that his application to retain his position was unsuccessful and as a result Restaurant Brands could not support his application for a new visa.
Mr Gill filed grievances both for unjustified disadvantage and unjustified dismissal.
In November 2018 when Mr Gill requested documents necessary to complete as part of his application for an Essential Skills Work Visa, he was advised that prior to providing the documentation Restaurant Brands would need to go through a recruitment process. Mr Gill’s evidence was that it did not occur to him that he would have to reapply for his own job as he was a permanent employee.
Restaurant Brands however viewed Mr Gill’s email as a request to provide a form INZ 1113. That meant that Restaurant Brands would need to undertake the ‘labour market test’ meaning it would need to test the market to see whether or not it could find a suitable New Zealand citizen.
Restaurant Brands’ view was that if the labour market test failed it could not complete the form as it was only intended to be completed where the labour market test resulted in a pass.
On that basis, Restaurant Brands advertised Mr Gill’s position. Mr Gill was able to apply for the position. He put in his application. He then followed this up on 8 February 2019 some 3 weeks before his visa was due to expire. He received a phone call from the General Manager who told him that his application for position had been unsuccessful, and that Restaurant Brands could therefore not support his application for a new visa. He was told that his job had been offered to a New Zealand citizen.
This telephone call was followed up with an email indicating that if Restaurant brands hadn’t received confirmation that Mr Gill had received a new or interim visa before the date his visa expired, his employment would be terminated.
Mr Gill however could not apply for the Essential Skills Visa without Restaurant Brands’ support. Restaurant Brands had already appointed another person to his position and that person had already started work on 19 February. Mr Gill argued that he had been dismissed and had been disadvantaged because Restaurant Brands failed to assist him in his application for Essential Skills Visa despite the fact that he was employed on a Permanent Employment Agreement.
Restaurant Brands argued that the labour market had altered so that while initially it had been unable to fill Mr Gill’s position with a New Zealand citizen, that was no longer the case.
Restaurant Brands also referred to the Employment Agreement which stated
‘should for any reason the legal right to work in New Zealand be withdrawn, the employee’s employment will terminate‘.
Restaurant Brands’ positon was that Mr Gill’s employment was conditional on his right to work in New Zealand.
Expert evidence from an immigration specialist indicated that while Restaurant Brands was required to undertake a labour market test, that didn’t preclude the possibility of Immigration New Zealand exercising its discretion. That exercise of discretion required procedural fairness and natural justice. If an application had been made, Mr Gill would have been offered an opportunity to provide evidence.
The Authority found that Restaurant Brands’ evidence was that it knew it could assist Mr Gill more but believed he had no chance of success in obtaining his visa.
The Authority referred to Restaurant Brands’ s 4 obligations including a positive duty to be very clear in its communication with Mr Gill. It needed to let him know as early as possible that it was not intending to support his application and the reasons why. He could then have been part of that discussion. Restaurant Brands’ failure to discuss the issue properly could not be said to be active and constructive in maintaining the employment relationship. It made decisions which Mr Gill remained absolutely unaware of to his detriment.
Restaurant Brands never informed Mr Gill that it had decided it would not continue to support him with his visa application and was actively seeking a New Zealand citizen to fill his role. Those actions disadvantaged Mr Gill.
In addition, Mr Gill was advised on 8 February that he had not been successful in his application and that Restaurant Brands would not support his application for a new visa. He was told at that time his job had been offered to a New Zealand citizen. The Authority found that as at that date, the decision to dismiss him had been made not withstanding that his last day of actual employment was 7 March. He was there for unjustifiably dismissed. That dismissal was pre-emptive and unjustified as it was some 3 weeks before Mr Gill was required to have his visa or some form of temporary visa.
However, the Authority found that as Mr Gill was not entitled to continue his employment after 7 March, he could not be compensated for any wages lost. The Authority ordered compensation of $18,000 pursuant to section 123. This was based on evidence that Mr Gill was embarrassed to have to ask for money from family and friends. He had to sell some of his possessions and felt that he failed as a husband and a father.
What is clear is that while an employer may have obligations to undertake the labour market test, it needs to communicate this in good faith to its employees. The employer’s good faith obligations include a positive duty to assist workers in their application for visas as that is part of the obligation to be active and constructive in maintaining the employment relationship.
  NZ ERA 61 3069072
John Farrow is the Partner leading Anderson Lloyd’s National Employment and Health and Safety Team. He is a member of the Institute of Directors, a LEADR accredited mediator and a past president of the Otago branch of the New Zealand Law Society. Contact John at [email protected] or connect via LinkedIn
Disclaimer: The opinions expressed in this article are those of the writer and do not purport to be specific legal or professional advice