Two recent cases serve as a timely reminder for Māori businesses who employ staff.  The cases both resulted in awards of over $50,000 to employees when their employers failed to correctly deal with suspension and dismissal. In the first example, the Employment Relations Authority has upheld a personal grievance claim, and ordered an employer to pay an employee, after it unjustifiably suspended and then dismissed him.

There were several incidents where the employee was suspected of consuming alcohol at work. On two occasions the employee was sent home. In one instance, the employer witnessed alcohol in the employee’s vehicle after sending him home in a taxi.

The employee refused to take any alcohol tests that the employer requested.

The employer invited the employee to two meetings, one with a letter explaining that he would be questioned about his alcohol consumption at work. The employer did not carry out an investigation and relied upon accounts of other employees. The employee was dismissed after the second meeting.

The Authority held that the suspension was unjustified because the employee’s employment agreement required the employer to consult with him before making a decision.

Additionally, the Authority held that the employee’s dismissal was unjustified because:

  • the employer was influenced by previous events and assumptions made when seeing alcohol in the employee’s car;
  • the employer relied on statements made by employees without investigating for themselves; the contents of one of the meeting letters implied that the employer had already made up their mind that the employee had consumed alcohol before the meeting took place; and
  • the employer was not entitled to request that the employee undertake an alcohol test according to the workplace policy.

The Authority ordered the employer to pay the employee $43,736 in lost wages and compensation of $19,000 for humiliation, loss of dignity and injury to feelings.

In the second example the Employment Relations Authority has upheld a personal grievance, and ordered an employer to pay an employee, after the employee was constructively dismissed.

The employer was a friend of the employee and hired him to help with his start-up business. The business struggled financially and the employee was not paid his full pay.

After the employee and a support person confronted the employer, the relationship began to break down. The employer suggested they take a week off.

The employer demanded the return of the business keys while the employee was away and turned up to the employee’s home and confronted his father. The employer continued on a threatening text and social media campaign against the employee and his friends.

The Authority held that the failure to pay the employee was a breach of a fundamental term of the employment agreement. The breach amounted to a constructive dismissal, as it forced the employee to look for an alternate source of income.

Additionally, the Authority held that the threats and abusive messages by text and social media meant that the employment relationship could no longer continue, and also resulted in the employee being constructively dismissed.

The employer was ordered to pay $9,529 in outstanding wages and holiday pay, $20,800 lost wages, and $20,000 as compensation for humiliation, loss of dignity and injury to feelings.


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