Employer ordered to pay $30,500 after unjustified dismissal of employee...

The Employment Relations Authority has ordered an employer to pay $30,500 after the unjustified dismissal of one of its employees.

The employee signed an employment agreement that included a 90-day trial clause. This clause stated that the employer could dismiss the employee at any point during the 90 days without fear of an unjustified dismissal claim being brought against them.

After a few weeks of work the employee raised with the employer that his wages were not being paid on time.

After raising the issue multiple times with the employer he received a text that stated his trial period was over. This was the end of the employment relationship.

The employee brought a claim of unjustified dismissal to the Authority, claiming that the employer was not entitled to rely on the 90-day trial clause as it was invalid.

The Authority decided that the clause contained in the employment agreement was defective as it did not provide for a notice period, and was signed after the employee had already commenced his employment. This meant that any reliance on this clause was unlawful.

The employer dismissed the employee through text message, and followed no formal process, other than his reliance on this clause. This meant that the dismissal was unjustified due to a failure to follow the process required when dismissing an employee.

The employer was ordered to pay $7,000 in unpaid and lost wages, $20,000 for the hurt and humiliation caused by the dismissal, a penalty of $2,000, and costs of $1,500.

If there is confusion around the correct process when dismissing an employee, 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