$35 loan leads to unjustified dismissal

The Employment Relations Authority has upheld a personal grievance claim for unjustified dismissal.

An employee had borrowed $35 from his boss and an altercation followed the boss asking to be repaid.  The altercation occurred in front of other employees and resulted in the employee going home feeling stressed.  The employer then dismissed the employee by text message.

The ERA found that no proper process had been followed in relation to the non-repayment of the loan.  If a disciplinary process had been followed it might have resulted in justified disciplinary action against the employee which could have included dismissal, however as no process was followed the employer was not justified in dismissing the employee by text in the way it did.

The employer was ordered to pay the employee three months wages plus $7,000 compensation and other costs.  There was a deduction made of 30% for the employee’s contributory conduct in relation to non-payment of the loan.

Alan Knowsley
Employment Lawyer
Wellington