Employer ordered to pay $27,000 for constructive dismissal...

The Employment Relations Authority has recently upheld an employee’s personal grievance claim of unjustified dismissal and ordered an employer to pay $27,000.

In mid-2022, the employer and employee had a heated argument. The employee was worried about the circumstances of a coworker’s resignation. He messaged the employer asking about the resignation, but the employer responded by blaming him for it.

A confrontation occurred between employer and employee about the resignation. The employer began to yell “Do you want to quit?” The employer then attempted to grab the employee’s phone, and a chair was pushed over.

The employee resigned from his position soon after by sending a text to the employer. He provided evidence that the altercation had seriously affected him, both mentally and physically.

The Authority had to determine whether the employee had been unjustifiably dismissed. This depends on whether the employer acted as a fair and reasonable employer could have in the circumstances.

In this case, the Authority concluded that the employee had resigned. Therefore, the Authority had to consider whether the resignation could be considered a constructive dismissal.

A constructive dismissal may have occurred where the employer has breached a duty that they owe to the employee, and as a result the employee resigned.

The employee claimed that he felt disrespected and the relationship of trust and confidence between him and the employer had been destroyed. The Authority accepted that the employee had “left the workplace distressed” due to the employer’s language and behaviour towards him.

The Authority concluded that the employee was “left traumatised” by the incident and the employer had breached their duty of good faith owed to the employee. The employee was therefore forced to resign and hence been constructively dismissed.

The employer was ordered to pay over $9,000 in wage arrears, as well as $20,000 in compensation for hurt, humiliation and loss. However, the Authority decreased the compensation from $20,000 to $18,000 after accounting for the fact that the employee had also yelled at the employer and initiated the confrontation.

It is important to be aware of your obligations as both an employer and an employee. If you are confused about these obligations, it pays to seek advice from a professional with experience in the area.

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