A recent Employment Court decision, Faitala v Pacific Island Business Trust, has confirmed that an employer will have breached its obligations where it fails to adhere to cultural values that are expressly incorporated into the employment relationship. The Court agreed with the Employment Relations Authority’s Determination that the Pacific Island Business Development Trust (Trust) had unjustifiably dismissed Mr Faitala and Ms Vea (plaintiffs), due to serious procedural failures during their restructuring and redundancy process. In the Court’s view, the Trust had breached its obligations by, among other things, failing to comply with the Pasifika values they had committed to.
Consideration of Pasifika Values
The finding that the Trust had breached its duty of good faith was partly due to its failure to meet its obligations to adhere to Pasifika values when restructuring. The Trust’s employment agreements and role descriptions intentionally embedded Pasifika values within the business structure. This was an explicit inclusion, with the plaintiffs’ job descriptions recognising the specific Pasifika values of respect, reciprocity, family, community, and spirituality.
The Court emphasised that the plaintiffs were Pasifika employees working in a Pasifika organisation, selected for their cultural capability, and employed within a framework that incorporated Pasifika values. Against that backdrop, the Court found that the Trust’s handling of the restructure failed to adhere to those values. Serious procedural failures, such as not following through on commitments, not engaging transparently, moving abruptly to termination, and failing to genuinely consider redeployment, were found to be inconsistent with Pasifika values of respect, reciprocity, care and dignity.
The Court reaffirmed that where Pasifika values are expressly incorporated into an employment agreement, they must be treated as integral to decision‑making processes, such as restructuring and redundancy.
Court Awards
When considering the proper award for compensation under s123(1)(c)(i) of the Employment Relations Act 2000 (Act), the Court considered the impact of Pasifika values in two contexts; first, how the Trust’s failure to adhere to those values contributed to the unjustified disadvantage and dismissal; and secondly, how the plaintiffs’ cultural identities and values amplified the impact of the Trust’s conduct and the manner of their dismissal. Mr Faitala and Ms Vea received $30,000 and $45,000 of compensation for this respectively. Compensation for lost wages was also ordered. However, the Court declined to impose penalties on the Trust, as it concluded that while the breaches were serious, they were not sustained or deliberate within the meaning of s4A of the Act.
Wider Ramifications
This judgment confirms a trend we have seen concerning employers’ obligations to consider cultural values. An earlier Court judgment in 2023, GF v Comptroller of the New Zealand Customs Service, found that a business which voluntarily incorporated tikanga principles into its procedures was obligated to follow them. The judgment here is in a similar vein.
While Pasifika values were clearly incorporated into the employment agreement in this instance, the Faitala judgment also considers instances where the context of the employment relationship means that a consideration of Pasifika values would be expected. The Court in its judgment referred to another Employment Court decision, Good Health Wanganui v Burberry, where the Court held that the fact that the employee was Māori and working in a Māori setting meant that the onus was not on the employee to assert or request that their cultural identity be recognised.
Although the Court’s findings in the Faitala judgment were grounded in the express incorporation of Pasifika values, it also placed weight on the plaintiffs’ cultural identities and on the Trust presenting itself as a Pasifika organisation serving Pasifika communities. The judgment suggests that where cultural values are clearly an integral part of a working environment, it is likely that the employer must operate in accordance with those values.
Key Point for Employers
This case confirms that employers must follow their own undertakings. If an employer has actively pledged to incorporate a value, whether cultural or otherwise, those values must be reflected in its processes, decision‑making, and conduct. A failure to do what the employer says it will do is likely to compromise the reasonableness (and therefore the lawfulness) of the process.
If you have any questions about employers’ obligations, please get in touch with our Employment Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
