The Employment Relations Authority has ordered an employer to pay $14,500 after the employee successfully lodged a personal grievance claim of unjustified dismissal against the employer.

The employee signed an employment agreement in which a pay rate of $22 per hour was agreed upon. Within the first two weeks of her employment, the employer unilaterally changed it to $20 per hour. The agreement also included a 90 day trial clause which gave the employer the right to terminate the employment within the employee’s first 90 days.

The employer exercised this clause, dismissing the employee in writing within the 90 day trial period. The employee was dismissed effective immediately, without receiving payment for a two week notice period, as contained in her employment agreement.

The Authority firstly decided that the decrease in pay rate was a breach of employment standards, as to vary an employment agreement, the employee must agree to the change in writing.

Secondly, it was decided that the dismissal was unjustified, as the written employment agreement was signed after the employee started work. This means that the 90 day trial clause was not enforceable, as at the commencement of her employment the employee was not subject to it.

Finally, the Authority decided that the employer was required to pay the employee for a two week notice period and that the failure to do so was a breach of the required employment standard.

The Authority ordered the employer to pay $12,000 as compensation for hurt and humiliation, as well as $2,500 as reimbursement for unpaid wages and holiday pay.

If there is confusion round the correct dismissal procedure, 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 & Matthew Binnie

Litigation Team
Wellington