The Employment Relations Authority has ordered an employer to pay over $34,000 after forcing an employee to resign by reducing their hours.

The employee worked briefly on a part-time basis, and then at least 37.5 hours per week for the rest of her employment. The employee would sometimes work more than 50 hours a week. The employee was paid under the minimum wage through parts of her employment, as she was not properly compensated for the hours that she worked.

The employee eventually resigned from her position after the employer reduced her hours to 16 a week. The employee explained that this was not enough work to support her family, and the employer allowed her to resign without notice.

The employee soon after raised a personal grievance claim of unjustified dismissal with the Authority.

The Authority decided that the employee had been unjustifiably constructively dismissed. A constructive dismissal occurs when an employer’s conduct causes an employee to resign, and that resignation was foreseeable from the employer’s actions.

In this case, the Authority decided the employer had seriously breached their duty not to do anything calculated or likely to harm the employment relationship, by significantly reducing the employee’s hours. The Authority held that the employee was forced to resign without notice and seek other employment, as they could not otherwise afford to provide for their family.

The Authority also decided that the employer had breached a number of laws under the Employment Relations Act. These breaches included failing to pay the employee minimum wage, failing to keep a copy of a written employment agreement, failing to pay-out accrued leave on termination and failing to keep wage and time records.

The employer was ordered to pay over $14,000 in wage arrears, as well as $5,000 for their breaches of employment standards. The Authority also ordered the employer to pay $15,000 to the employee as compensation for the hurt, humiliation and loss of dignity she suffered during the employment.

There is an important process which must be followed when dismissing an employee. If you are confused about this process, it pays to seek advice from a professional with experience in the area.


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Alan Knowsley and Hunter Flanagan-Connors