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Employment law industry vendetta affects iconic NZ brand – by Tristam Price


An everyday employment dispute arose at a supermarket in the Waikato, with two employees taking personal grievances for unjustified dismissal.


Pak’nSave is a franchise business model. So Pak’nSave Mill Street (Hamilton) is a trading name which is different from the legal name Gladsone Retail Ltd. There are dozens of similar companies all over the country and some franchisees own multiple stores.


Any boilerplate franchise agreement will have clauses that forbid franchisees from doing things that might bring the franchisor into disrepute, or negligently damage the brand. Any publicised ERA determination, especially one where a Personal Grievance claim is found to be justified, is not a good look.


But worst case, even if mainstream media pick it up, the story is usually forgotten within a few days.


Usually, not always. Check out this “Commitment to Employment” letter provided to the Unite union, which required that employees who left within a year pay $3,000 to Hira Corporation Ltd which owned four McDonalds franchises – a kind of bonded labour. McDonalds NZ were spewing when they found out, and swiftly removed Mr Hira’s franchises. This was necessary to mitigate the harm caused to the brand.


We didn’t report on this earlier because it was already well covered by mainstream media, although in 2020 we did report on a failed noncompete enforcement against a beautician that had far less serious consequences.

Returning to Pak’nSave Mill St, what should have been an unremarkable personal grievance got very interesting. Both the employees were represented by an employment advocate “A” and the employer, Gladstone, was represented by a lawyer “L”. Who A and L are is not relevant, but they are both locals and have been at each other’s throats for years, with each insisting the other belongs in jail.


Briefly, a lawyer holds a practising certificate issued by the Law Society and can act in any jurisdiction including the District and High Courts. A lay advocate can only represent clients within the employment jurisdiction (MBIE mediation, the ERA and the Employment Court). Lay advocates do not have to have any legal qualifications, and are generally cheaper to engage, which is why most clients of advocates are employees.


Here’s a determination dated 15 December 2021: Dyball and Draper v Gladstone Retail Ltd. There’s no decision on the personal grievance and due to some unprecedented legal chicanery there probably never will be.

1. ... Ms Draper says that Gladstone and L have disrupted the Authority’s proceedings and are in contempt. They have applied to the Authority for such an order.

2. The grounds for the application are that on 24 September 2021 L, on behalf of Gladstone, wrote a letter of demand to Ms Draper: 2 (a) threatening to sue her under the Defamation Act 1992 for comments made in the course of her personal grievance and proceedings...

3. ... s 121 of the Employment Relations Act 2000 provides that statements made, or information given in the course of raising a personal grievance or in the course of attempting to resolve the grievance or in the course of any matter relating to a personal grievance are absolutely privileged.

...

8. Under these circumstances, asking a witness to withdraw evidence placed before the Authority under the threat of litigation in another forum is fraught. At the very least it is unwise.


However, ERA Member Geoff O’Sullivan decided not to find L and his client Gladstone in contempt “because the documentation complained of has not been withdrawn from the Authority, nor has Ms Draper been dissuaded from giving evidence.”, and he also allowed L to continue to act for Gladstone.


We think the otherwise very competent Member got played.


Gladstone, having dodged a bullet, continued the defamation proceedings in the High Court. Because advocates are not allowed to represent clients in the High Court Ms Draper had to find a lawyer. So L got A off the case.


We don’t expect to hear any more about this because Ms Draper has probably already settled with Gladstone under the most oppressive terms Gladstone could get away with.


But we think the tactics of Gladstone have brought Pak’n’Save into disrepute. We think Foodstuffs North Island Ltd should seek legal advice.

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