Successful personal grievances lead to over $42,000 in penalties...

The Employment Relations Authority has recently ordered an employer to pay over $42,000 after an employee raised successful personal grievance claims of unjustified disadvantage and unjustified dismissal.

The employee and employer agreed, before the employee commenced work, that the employee would receive $25 per hour. It was also agreed that the employee would work nine hours a day, five days a week.

However, on the employee’s third day of work, the employer decided that the employee would instead receive an hourly rate of $21. This decrease in pay was not agreed to by the employee, nor was any employment agreement provided to them.

Three weeks later, the employer sent the employee a message in a group chat saying that they “did not think the job was for them”. The employee then raised personal grievance claims of unjustified dismissal and disadvantage with the Authority.

The Authority first had to determine whether the employee was unjustifiably dismissed. This requires considering whether the employer acted as a fair and reasonable employer could have in the circumstances, considering the resources available to the employer and the procedures followed during dismissal.

In this case, the employer provided no reasons for their decision to dismiss the employee. Some evidence was provided that the employer had indicated the employee was not productive enough in their work, but those concerns were not raised seriously or formally with the employee.

The employee was also not provided with a chance to respond to the dismissal before it was confirmed, or to have his feedback considered. The Authority concluded that no fair process was followed by the employer and therefore the employee was unjustifiably dismissed.

The Authority then had to consider whether the employee had also been unjustifiably disadvantaged. Unjustified disadvantage may occur where a person’s employment or any condition of their employment has been affected to their disadvantage by an unjustifiable action.

A reduction in an employee’s pay without consultation or agreement is an unjustified disadvantage to their employment. Further, the employer in this case provided no substantive justification behind reducing the employee’s hourly rate.

The Authority concluded that the employee had been unjustifiably disadvantaged.

The employer was ordered to pay $3,927 in wage arrears, as well as $360 in annual holiday pay. The Authority ordered the employer to pay the employee a further $9,000 for wages they lost while they looked for a new job, and $22,500 in compensation for hurt, humiliation and loss.

The Authority also ordered the employer to pay a penalty of $7,000 for their breaches of employment laws.

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

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