IN THE EMPLOYMENT RELATIONS AUTHORITY
WELLINGTON
[2016] NZERA Wellington 28
5560167

BETWEEN

DAVID CRICHTON
Applicant

AND

TD DRILLING 2014 LIMITED
First Respondent

AND

TD DRILLING LIMITED
Second Respondent

Member of Authority:

M B Loftus

Representatives:

Paul McBride, Counsel for Applicant
No appearance for Respondents

Investigation Meeting:

3 December 2015 at Wellington

Submissions Received:

At the investigation meeting

Determination:

3 March 2016

DETERMINATION OF THE AUTHORITY

Employment relationship problem
[1]

The applicant, David Crichton, claims he was unjustifiably dismissed (albeit

constructively) on 4 March 2015. Here it should be noted there is an issue as to who
he was employed by - TD Drilling 2014 Limited or TD Drilling Limited (both
referred to as TD).

 2
[2]

Mr Crichton also claims the events which led him to conclude he was

constructively dismissed also constituted unjustifiable disadvantages. In particular he
says TD:
a. Failed to address health and safety concerns including concerns
colleagues were under the influence of drugs and/or alcohol at work;
b. Identified Mr Crichton as the source of accusations others consumed
drugs at work which created further risk of potential harm through the
actions of hostile colleagues;
c. Failed to comply with its duty to keep Mr Crichton healthy and safe at
work;1
d. Inappropriately required Mr Crichton to undergo a drug test;
e. Engaged in inappropriate behaviour such as swearing at Mr Crichton
and issuing unjustified warnings; and
f. Failed to act in good faith.
[3]

TD denies any of the accusations have validity.2

Non-appearance of the Respondent
[4]

TD was neither present nor represented at the investigation meeting. That

raised the question of whether or not I proceed in its absence.
[5]

There is no doubt TD is aware of the investigation. It (or more correctly the

solicitor it then engaged) participated in a telephone conference during which the
investigation meeting was scheduled. The notice of investigation meeting was sent
and received at the address provided as that for service. The notice of meeting
includes advice that should a respondent fail to attend the Authority may proceed and
issue a determination in favour of the applicant.
[6]

Counsel, while no longer acting, confirmed TD’s principles were aware of the

investigation and that was confirmed in subsequent correspondence between TD and

1

Section 6 of the Health and Safety in Employment Act 1992 and clause 8 of Mr Crichton’s
employment agreement
2
Statement in Reply dated 18 June 2015

 3
an Authority support officer prior to the meeting. This exchange included TD’s
provision of witness statements three days before the meeting.
[7]

Despite that TD was not present and provided neither notification of nor a

reason for its absence.
[8]

I am satisfied TD is aware of the investigation meeting and the consequences

of non-attendance yet chose not to attend. In the circumstances and given the absence
of an explanation I considered it appropriate to continue.
Background
[9]

Mr Crichton commenced with TD as a Digger Operator in November 2014.

He had considerable relevant experience as a worker, supervisor and manager.
[10]

TD was owned and managed by Euan and Susan Tweeddale.

[11]

The first event of which he complains occurred on 29 Jan 2015 when he and a

colleague stopped at a petrol station on the way to a work site to get a coffee. He says
notwithstanding the fact this was as a common occurrence Mr Tweeddale pulled in
behind and swore at the two. It is also alleged Mr Tweeddale told Mr Crichton he
would get a warning for this though the other employee was not similarly disciplined.
[12]

TD accepts Mr Crichton was spoken to about his having taken an unauthorised

break but denies its approach was improper or that a warning resulted.
[13]

The next event occurred on 16 February 2015. Mr Crichton hit a telecom

cable while operating his digger. He accepts he did not follow protocol and check the
plan as he had been advised by the supervisor the area was clear. He says he was
again advised he was to receive a warning despite none being issue to either the
supervisor or the site spotter who oversaw the diggers operation.
[14]

TD’s says is it is not for the supervisor to check for cables and responsibility

lies with the operator and his spotter. Notwithstanding that TD denies taking any
disciplinary action at the time and the event was not formally raised with Mr Crichton
until 4 March.
[15]

Mr Crichton says when he arrived at work on 21 February he noticed 7

colleagues, including the foreman, appeared heavily intoxicated.

He says the

 4
supervisor also noted their condition, cancelled work for the day and sent all 10 staff
home. Mr Crichton expresses concern no further action was taken and he was not
paid for the day as a result
[16]

TD denies the staff were intoxicated but accepts a number were hungover. It

says the works cancellation was an appropriate response given possible health and
safety issues and claims failure to pay was an oversight which has since been
remedied. Mr Crichton accepts payment has now been made but says that was only
after his lawyer raised the issue.
[17]

The next and perhaps key event occurred on 27 February. Mr Crichton says a

colleague, M, drew his attention to a number of others who were in a van apparently
taking drugs. He says this concerned him for two reasons. First it posed a health and
safety risk and second such behaviour might jeopardise TD’s chances of getting
further work and therefore have a negative impact on his job.
[18]

On 1 March Mr Crichton telephoned Mr Tweeddale and told him about the

events of 27 February. He asked that the call be treated as confidential and says Mr
Tweeddale agreed. Mr Tweeddale denies confidentiality was discussed and says he
would not have agreed if it had been raised. He says he considered the allegations
serious and discussed them with the foreman who agreed all staff should be tested
over time.
[19]

On 2 March the foreman called a staff meeting at which he is said to have

advised all present that Mr Crichton had reported the alleged drug use and this was
going to mean drug testing. Mr Crichton says this caused him extreme concern. A
number of his colleagues had a history of violence, drug use and imprisonment and he
now felt he was possibly at risk of a retaliatory reaction. He considered the situation
unpredictable and unsafe.
[20]

Mr Crichton says following the meeting he and M were told to go to the depot

where they and the foreman were then drug tested. He takes issue with this as he
claims no other employees were then tested. He also expressed concern M failed the
test but was allowed to return to work regardless. M accepts that was the case – as he
put it his result was swept under the carpet. M adds the others were tested after Mr
Crichton left TD’s employ but no action was taken in respect to five failures.

 5
[21]

TD denies Mr Crichton was identified as the source of the allegations but

claims other staff would have figured out who it was in any event. TD refers to the
later testing of other staff and says two were stood down as a result.
[22]

Mr Crichton then left the workplace and after speaking to his wife she called

Mr Tweeddale. It is alleged Mr Tweeddale told her he found the drug allegations
hard to believe and that he trusted his staff. It is also alleged Mr Tweeddale said he
could not afford to test all at once but it would be done over the following weeks and
that M had failed to corroborate Mr Crichton’s allegations. Mrs Crichton says Mr
Tweeddale accepted her husband had been identified as the complainant and agreed
that should not have happened but then added he considered the issue a storm in a
teacup. Ms Crichton says when she asked what support would be available for her
husband she was told nil.
[23]

Mrs Crichton told her husband of the conversation. He then returned to work

but was removed from the digger. He says that while it was normal he perform other
work he had never before been required to do so for an extended period. TD says the
performance of other tasks was standard procedure and aired allegations about Mr
Crichton’s inadequate care of truck and tools when it responded to this.
[24]

Mr Crichton then took the next day off work. He called in sick and says he

did so in fear he would again be singled out for negative attention.
[25]

On 4 March Mr Crichton arrived at work. He says he was cornered by Mr

Tweeddale who loudly advised, before at least five other employees, that while
serious his allegations were unsubstantiated given the foreman’s clear test and the fact
M had not seen anything. He says Mr Tweedle then accused him of causing a big
f…ing rift here. Mr Crichton says he stated the two should be having the discussion in

private but claims Mr Tweeddale continued to act inappropriately. Mr Crichton
therefore decided to leave.
[26]

He says he then considered the situation and concluded he could not return.

He says:
It doesn’t take much to realise the huge difficulty I would have had
continuing to work with the others. I had raised a serious concern
and it could have impacted on their incomes, so from their
perspective I had crossed them. They would not be able to be trusted
… The day after talking to [Mr Tweeddale] I had already been
targeted by being only one of three workers drug tested, without

 6
cause or random selection, and was then put on the concrete cutter
all day instead of doing my usual work. That would have been just
the start of it.

[27]

Mr Crichton then contacted Mr McBride who wrote to TD the following day.

The letter advised Mr Crichton’s decision to depart and raised his personal grievance.
[28]

TD says it was Mr Crichton who arrived at work intent on trouble – it claims It

appears from his manner he was trying to be intimidating.

TD says Mr Tweeddale

approached in order to raise a concern about what he saw as Mr Crichton’s
unauthorised absence on 2 March (refer [22] above) but did not have an opportunity
to do so as Mr Crichton became aggressive and kept asking asked if he (Tweeddale)
wanted to fight. TD says Mr Tweeddale responded by walking away.
[29]

Mr Tweeddale then wrote to Mr Crichton asking that he answer a range of

potentially serious allegations. These included the damaged telecom cable ([13]
above); the allegation regarding drug use which is characterised as targeting only one
employee (the foreman) who was then cleared by testing; the unauthorised absence of 2
March; the circumstances of Mr Crichton’s sickness on 3 March and an allegation [in]
respect to your general standard of work.

[30]

Mr Crichton did not respond. He says that while dated 4 March he notes the

letter was sent by e-mail and this did not occur till after TD had received notice of his
departure and personal grievance on 5 March.
[31]

TD responded to the personal grievance on 9 March. Its position is essentially

one of complete denial and was supported by short statements signed by various staff.
One of those was signed by M.

M says the documents were pre-prepared and

presented by the foreman with a demand they be signed. He says there was a lot of
coercion and all, including himself, signed. He attributes his decision to do so to a
fear he would be out of a job the next day should he not.
Determination
[32]

Before proceeding there is the preliminary question of who employed Mr

Crichton – TD Drilling 2014 Limited or TD Drilling Limited or both.

The

directorships, shareholding and registered offices of the two companies are identical.

 7
[33]

From Mr Crichton’s perspective there is no difference with the two being

indistinguishable. He says reference was always made to TD Drilling. Both are
mentioned in the body of the employment agreement with, for example TD Drilling
2014 Limited being named in the parties clause but TD Drilling Limited as the
signatory. The grievance was raised with both and the response of 19 March 2015
was sent on behalf of TD Drilling (ie: neither). Attempts to clarify the issue have not
been answered and I note they were followed by formal advice to TD Drilling Limited
that, having not been initially cited it in the statement of problem, Mr Crichton was
seeking to have it joined as a party.

That notice was forwarded before the

investigation and the response was limited to an assertion Mr Crichton was employed
by TD Drilling 2014 Limited and various unsupplied documents could confirm that.
[34]

I conclude on the evidence before me, the fact the grievance was raised with

both, that neither responded to enquiries aimed at resolving the issue, that neither
company appears concerned with differentiating themselves and the fact both are
identified in the employment agreement, they shall be held jointly and severely liable
for the awards that are going to be made in this determination.
[35]

As already said Mr Crichton claims he was constructively dismissed. He also

claims the employer actions which led to his conclusion he had been constructively
dismissed constituted unjustified actions which affected his employment to his
disadvantage.
[36]

In Auckland etc. Shop Employees etc IUOW v Woolworths (NZ) Ltd3 the Court

of Appeal held constructive dismissal includes, but is not limited to, cases where a
breach of duty by the employer causes an employee to resign.
[37]

There must also be a causal link between the employer’s conduct and the

tendering of the resignation4 and the possibility of resignation in response to that
conduct should be foreseeable.5
[38]

While a simplistic summary of more complex law, the underlying assumption

is actions or words of the employer amounted to a breach which induced a
subsequently proffered resignation. The onus falls on Mr Crichton to establish, prima
facie, there was such a breach.
3

(1985) ERNZ Sel Cas 136; 2 NZLR 372 (CA)
Z v A [1993] 2 ERNZ 469
5
Weston v Advkit Para Legal Services Ltd [2010] NZEmpC 140
4

 8
[39]

While TD was not present at the investigation I at least had the advantage of

its statement in reply and the witness statements (refer [31] above) obtained in March
2015. I therefore had information which could be used to test and challenge Mr
Crichton’s claims. He passed the test – indeed I found him to be an extremely
credible witness. The same can be said of his supporting witnesses whose candidness
extended to unsolicited admissions of criminal activity.
[40]

It follows I accept Mr Crichton’s precise of events. That acceptance leads me

to conclude he was, as claimed, constructively dismissed.
[41]

The key claims revolve around the provision of a safe workplace.

Mr

Crichton essentially resigned as he felt TD was duty bound to provide a safe
workplace but failed to do so by placing him in a potentially unsafe situation and then
refusing to rectify the situation.
[42]

That TD was bound to provide a safe workplace is indisputable. It is both a

statutory requirement and, in this instance, one expressly covered in the applicable
employment agreement. That a breach of this duty can amount to a constructive
dismissal is also well accepted.6
[43]

The evidence of Mr Crichton, M and another ex-colleague leads me to accept

drug use was an issue in this workplace. This is especially so given M’s concession
about his own behaviour in this respect.

I also accept the workforce contained

members with a propensity for violence. I also accept Mr Crichton’s claim he was
identified at the meeting of 2 March and if follows I accept this potentiality placed
him in a dangerous situation. Finally I accept Mr Tweeddale did little or nothing to
address Mr Crichton’s resulting concerns. I conclude that was a serious breach and
one that could justify Mr Crichton’s conclusion an ongoing employment relationship
was now untenable. I also conclude this was a foreseeable reaction to the situation.
[44]

The conclusion Mr Crichton was constructively dismissed raises the question

of whether or not TD can justify the dismissal.7

TD’s failure to attend the

investigation means there was absolutely no evidence in this regard so it follows the
answer is no.

6

See for example Auckland Provincial District Local Authorities Officers IUOW v Auckland Electric
Power Board [1992] 1 ERNZ 87 and Weston [n 5 above]
7
Section 103A of the Employment Relations Act 2000

 9
[45]

The above conclusion leaves four of Mr Crichton’s alleged disadvantages

unanswered. I have already found in Mr Crichton’s favour on the key issues but for
completeness I note my acceptance of his evidence and that of M means I accept he
was given the alleged warnings. Again there is no evidence they can be justified. It
also means I accept it as he who was sworn at on both 29 January and 4 March and
Mr Tweeddale was the perpetrator. I must also suggest the decision to drug test Mr
Crichton as a response to his complaint of drug use by others appears vindictive and,
again, there is no justification of this decision.
[46]

Finally there is the claim of a breach of the duty of good faith. It goes without

saying the lack of action by TD constitutes a failure to act in a manner conducive to
the maintenance of a productive employment relationship. All of these events served
to fuel Mr Crichton’s disquiet and clearly affected his employment to his
disadvantage given his decision to leave and the fact they influenced it.
[47]

The conclusion Mr Crichton has a grievance in that he was both unjustifiably

dismissed and unjustifiably disadvantaged raises the question of remedies. He seeks
wages lost as a result of the dismissal and $25,000 as compensation for hurt and
humiliation.8
[48]

Section 128(2) of the Act provides the Authority must order the payment of a

sum equal to the lesser of the sum actually lost or 3 months ordinary time
remuneration. Additional amounts may be awarded on a discretionary basis and Mr
Crichton asks that I exercise the discretion and award his full loss to the date of the
investigation.
[49]

Mr Crichton mitigated his loss with alacrity but in doing so he had to accept a

job which paid significantly less than he had received when working for TD. It was
also casual and there was, at least initially, no guarantee of income. His casual status
also meant he received no sick or annual leave. He quantifies his loss as $11,115.00
net.
[50]

Mr Crichton’s evidence leads me to conclude this is a situation in which I

should exercise the discretion especially as the total is still less than the three months
full time wages mandated by s 128 as payable when one has a personal grievance. I
do so.
8

Section 123(1)(c)(i) of the Employment Relations Act 2000

 10
[51]

Turning to compensation. Mr Crichton is claiming $25,000. I must say that

is, in this jurisdiction, a claim that would rarely be attained. That said he did support
his claim with strong evidence which, in my view, warrants a significant award. The
evidence leads me to consider $12,000 appropriate.
[52]

The conclusion remedies accrue means I must, in accordance with s124 of the

Act, address whether or not Mr Crichton contributed to his dismissal in a way which
warrants a reduction in remedies. There is absolutely no evidence he did.
Conclusion and orders
[53]

For the above reasons I conclude Mr Crichton has a personal grievance in that

he was unjustifiably dismissed and unjustifiably disadvantaged in his employment.
[54]

As a result I order the respondents, TD Drilling 2014 Limited and TD Drilling

Limited, who I find jointly and severely liable, to make the following payments to the
applicant, David Crichton:
i.

$11,115.00 (eleven thousand, one hundred and fifteen dollars) net as
recompense for wages lost as a result of the dismissal. PAYE payable on
that sum is additional with an appropriate amount to be calculated by the
respondents and forwarded to the Inland Revenue Department; and

ii.

A further $12,000.00 (twelve thousand dollars) as compensation for
humiliation, loss of dignity and injury to feelings pursuant to section
123(1)(c)(i) of the Act; and

[55]

Costs are reserved.

M B Loftus
Member of the Employment Relations Authority