Employment case notes (ET 118)

Hutchinson v Signature Security Systems Ltd—ERA, Christchurch, January 2007

The Employment Relations Authority upheld an employee’s claim of unjustified dismissal on the ground of redundancy, due to the flawed consultative process.

Initially employed in 1997, the employee filled a number of roles in the Christchurch branch of the company over the years. By 1999 he was responsible for both sales and post-sales activities. He filled this role until mid 2002.

In May 2002 the employee was informed that a reorganisation of the Christchurch management structure was planned, and that it was possible the position he held would be dispensed with. The employee then attended a meeting where he was advised his position was likely to go and would be replaced with two new roles. Neither of these roles was a supervisory position, and both their salaries would be lower than the salary he received in the role he held.

When the employee asked about the content of the new positions, he was told the job descriptions were still to be prepared. He was also told the positions were to be advertised, and would go to the best candidates. The employee was then told to finish work that day, but to consider the positions on offer and decide if he was interested. An undertaking to send the new job descriptions to him was made.

The employee never received the job descriptions and, although he searched job advertisements, neither position was ever advertised. However, another person was head-hunted by the company and offered what he described as the position previously held by the employee.

While the authority found the company’s decision to restructure its Christchurch operation because of increased competition was reasonable, it also found the consultative process employed by the company was unfair—particularly because the undertaking to send the employee the new job descriptions was never fulfilled.

Therefore, the authority found that, while the redundancy was genuine, the process was seriously flawed, and the employee’s dismissal was unjustified. The employee was awarded $6500 as compensation for hurt and humiliation, and the company also paid him redundancy compensation of $7000. Costs were reserved.

Holding v Design & Arts College of NZ Ltd—ERA, Christchurch, December 2006

An employee’s claims of a personal grievance and constructive dismissal were dismissed by the Employment Relations Authority, who found in favour of the college’s management.

After seven and a half years employment at the college, the employee claimed she had been ‘forced’ to resign. She also complained about successive changes in college principals; her deteriorating relationship with management; the fact that one of those managers eventually bought the college (without extensive staff consultation); an anti-union bias; and, ultimately, her ‘forced’ resignation. She also said she became ill due to work-related stress.

However, the college claimed the employee was “defensive, sensitive and difficult to have meetings with”. It also claimed she had resigned twice before and that, on those occasions, she had done so to strengthen her employment negotiating position. Finally, the college said it had never been notified that the employee was ill due to workplace stress.

The authority found that the college had taken all reasonable steps to retain the employee’s services, but that when her third resignation showed her lack of support for the college’s new vision, and her lack confidence in management, the college accepted her resignation.

It also found that, while the college had been undergoing significant change, that was not enough to create an unsafe work environment. The employee’s related claims of illness due to stress were dismissed by the authority, which said it was necessary for an employee to inform an employer of any illness due to workplace stress. It is not enough to just report stress.

Furthermore, the authority found that, of the eight different examples of a breach or unjustified action by the college, only one had any merit, and the authority found that even here the employee had suffered no specific disadvantage.

For this reason, the authority said the evidence did not meet the test of ‘successive or repudiatory conduct’, and that the employee had failed to make out her claim for a personal grievance or for a constructive dismissal. Costs were reserved.

Williams v Kimberleys Fashions Ltd—Employment Court, Auckland, December 2006

Mishandled procedure and insulting comments, on the part of an employer, led to an Employment Court judge’s decision to uphold the employee’s challenge to an earlier decision.

The employee worked in one of the company’s retail stores for two years. Over that time she suffered from a number of serious health and personal problems. Although the company was generally sympathetic to her problems, her store manager was not, and their relationship was a difficult one. Furthermore, the company became concerned that the employee’s ongoing absenteeism and lateness to work was excessive.

Despite the fact the employee had raised her problems with the store manager with senior management, the company owners asked the store manager to conduct a disciplinary meeting with the employee to administer a warning. While the employee conceded that her absenteeism and lateness were probably justification for a disciplinary meeting, she was distressed that the store manager, who had no experience in such situations, would be conducting it.

At the meeting the employee, who had been shaking and crying throughout, was read a note about her appearance. The note, which was from the company owners, implied she was not clean or tidy, and requested her to wear make-up—although she had a known aversion to it, and it was not part of her employment agreement.

The employee was so distressed and upset by the meeting, and particularly the note, that she resigned the next day. She worked out her month’s notice wearing make-up, but grew increasingly despondent. After her employment was over, she became very depressed.

She claimed she was unjustifiably constructively dismissed, discriminated against on the grounds of sex and disability, and suffered victimisation which disadvantaged her employment. However, the company claimed this was not the case and that the employee had simply over-reacted to the note. The company owners described the employee’s reaction to the meeting as ‘absurd’.

Judge Perkins found that a number of actions by the company led to the employee’s resignation. The failure to deal with her problematic relationship with the store manager, the disciplinary meeting itself, and the note combined to create a breach of duty in the employment relationship which led to the employee’s resignation. The judge also said the situation showed the extent to which company management were “out of touch with the real need to act with humanity and compassion towards an employee”.

The judge also found that all the requirements for constructive dismissal were in existence and that the entire matter was procedurally mishandled. However, he dismissed the claims of discrimination and victimisation because the allegations overlapped and he preferred to deal with the issues on a contractual basis.

Judge Perkins awarded the employee an award of six months reimbursement of lost earnings and compensation of $12,000. Costs were reserved.  

Sidal v Chief of Defence Force—ERA, Wellington, December 2006

Fifteen years of good service was not enough to stop the Employment Relations Authority agreeing with the defence force that an employee’s drunken episode warranted dismissal.

For most of the employee’s years of work, there had been no problems with him. However, in early 2005, the employee—who was suffering from depression—started reporting to a new staff sergeant who had a firm approach to management.

Over the next few months, the employee had several arguments about work-related matters with the staff sergeant. Eventually, the employee was given a warning for misconduct. In October 2005, the employee got drunk at a staff function and behaved in an inappropriate, threatening manner. After this incident, the employee was given a final warning. He was also told that if he did not behave according to the defence force’s code of conduct he would be dismissed.

In December 2005, the employee arrived at work drunk, and had a heated argument with the staff sergeant. The employee was told his behaviour was serious enough to warrant a disciplinary investigation, and sent home. In early 2006, a disciplinary investigation—which included two disciplinary meetings—took place and concluded with the dismissal of the employee.

The employee claimed that the staff sergeant was racist, that he had been unjustifiably dismissed, and claimed reinstatement. However, the chief of the defence force claimed the employee’s dismissal was justified because of his continuing pattern of insubordination, threatening behaviour, and drunkenness.

The authority found that a fair and reasonable employer would have followed the disciplinary process followed by the defence force. It also found that the employee’s second drunken episode justified summary dismissal on its own, and that this, in combination with the employee’s repeated misconduct, would have led a fair and reasonable employer to dismiss him. Costs were reserved.

Hiddleston v Wattyl (NZ) Ltd—ERA, Christchurch, November 2006

The Employment Relations Authority upheld an older employee’s complaint of unjustified dismissal, which left his former company owing him thousands of dollars in remuneration.

After nearly 20 years at the company, the employee suffered a number of serious health-related problems which led to some extended absences. However, while all the absences were medically-certified, when it became obvious the employee required further leave for health reasons, and that leave coincided with the company’s busy season, the employee was dismissed.

The company said the employee’s intention to continue working indefinitely was unacceptable, given his recent attendance record and work ethic. Furthermore, it would not have been possible to hold the employee’s position open over the busy season. As a result, the company decided that, due to the employee’s inability on medical grounds to fulfil his work obligations, it was necessary to terminate his employment.

However, the employee said that, while he had kept the company informed on the status of his health, they had not indicated to him that dismissal was an option. He said he was surprised and distressed by the termination of his employment.

The authority found an employer can not be expected to hold a role indefinitely due to medical reasons. But it also found the company’s failure to directly raise its concerns about the employee’s alleged poor state of health, as well as its failure to advise him that it would not be able to keep open his position during the busy season, meant the employee had been unjustifiably dismissed.

Given the employee’s age, he was awarded compensation for loss of remuneration and benefits from the date of his dismissal till late 2006. He was also awarded a further five months compensation for loss of future remuneration, and the company was ordered to pay him $12,500 compensation for distress.

—Selected and written
by Miriam Bell

Previous Employment Case Notes

Issue 148
Issue 147
Issue 146
Issue 145
Issue 144
Issue 143
Issue 142
Issue 141
Issue 140
Issue 139
Issue 138
Issue 137
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