The Employment Relations Authority has ordered an employer to pay $31,000 after finding that the employer had unjustifiably dismissed an employee.

The employee was offered work from the employer whilst he was in New Zealand on a student visa. After accepting the offer the employee worked for six months before he was given an employment agreement to sign.

The employment relationship came to an end through a text message chain, where the employer inferred that the employee had been stealing clients from the company, as it was discovered that the employee was working for two employers. The employer had no proof to show that this accusation was true, but dismissed the employee anyway.

When an unjustified dismissal claim is brought to the Authority, an assessment will be made as to whether the employer has acted in a fair and reasonable manner in the circumstances.

In this situation, the employer dismissed the employee by text, with no investigation into the claims they made regarding an alleged poaching of clients from the employer. The employee was not offered any chance to give feedback on the proposed dismissal, and no investigation meeting was conducted.

The Authority decided that the dismissal was unjustified as the employer had not acted as a fair and reasonable employer would have in the circumstances.

The employer also breached some of the employment standards that are required under New Zealand law. The employer did not provide the employee with an employment agreement in a timely manner, failed to keep wage and time records, and failed to pay the employee their holiday pay entitlements.

The employer was ordered to pay $20,000 as compensation for the hurt and humiliation caused by the dismissal, $4,000 in unpaid wages, as well as a penalty of $7,000.

If there is confusion around the required process when dismissing an employee, it pays to seek advice from a professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Alan Knowsley