Tauranga worker must pay $66,681 damages after bidding for contract against employer

An employee of Sunair Aviation was ordered to pay damages after breaching his employment agreement in bidding for a Tauranga Airport contract. Photo/File.

A former worker at a local aviation firm has been ordered to pay more than $66,000 in damages after bidding against his employer and winning a contract with Tauranga Airport.

Employment Relations Authority member Andrew Dallas found Christopher Walters breached his employment agreement in bidding for a rescue fire service contract at Tauranga Airport while still employed by Sunair Aviation Ltd.

Mr Dallas said Mr Walters had breached an express and implied term of his employment agreement and in remedy awarded Sunair $66,681.90 in "loss of chance" damages.

He also ordered 5 per cent interest be paid on the damages from June 17, 2016, until June 17, 2017, or until the amount was paid in full, whichever was the earlier event.

Sunair employed Mr Walters as a rescue fire service operator from June 17, 2008, to March 31, 2015, and between 1998 and 2015, the company provided those services to the airport on a casual "verbal" basis.

In January 2015, the airport's owners, Tauranga City Council, called for tenders for the rescue fire service contract, and on February 9, 2015, Mr Walters and his wife submitted a tender under the name of Advanced Aviation Services.

Mr Walters was still an employee at Sunair at the time.

Four days later, Sunair also submitted a tender for the contract and the same day advised staff, including Mr Walters, that their jobs depended on winning this contract.

On February 20, Sunair manager and part-time owner William Power has advised the contract had been awarded to Mr Walters and Advanced Aviation Services.

Sunair contended that Mr Walters breached his obligations to the company in doing so.

The authority agreed, and found he breached a clause in his employment agreement which relates to "conflict of interest, non-competition and implied duty of fidelity."

Mr Dallas said it was also unfair that Sunair had not been told that Mr Walters had tendered for the contract when it was known he was still working for the company.

Sunair sought damages of $222,273 said to be the company's loss of profit, under the contract, plus interest and costs.

But the authority awarded only 30 per cent of that amount after it considered some contingencies, including the fact that Tauranga City Council was "under no obligation" to award the contract to either party

Mr Dallas directed the parties to submit an agreed payment schedule for costs and damages to the authority for approval.