Constructive dismissal by change of hours

The Employment Relations Authority has upheld a personal grievance claim for unjustified disadvantage and unjustified dismissal following the resignation of a shop employee.  The employment agreements allowed the employer to change the employee’s hours of work following consultation and notice.  In this case however the ERA found that the clause did not provide for a reduction of hours below the 40 hours per week provided for in the agreement and in addition the employer presented the change as an announcement with no prior consultation.

The unilateral change of hours, reduction of hours and change of duties by the employer made a resignation foreseeable and this amounted to a constructive dismissal.

The employee was awarded $9,620 lost wages and compensation of $15,000 for hurt and humiliation.

The receipt by the employee of ACC payments following her resignation did not reduce the lost wages payable by the employer.  Any reimbursement to ACC was a matter between ACC and the employee and the employer remains liable for lost wages following a constructive dismissal.  The same would have applied if the employee had gone on a social security unemployment benefit or similar.

Alan Knowsley
Employment Lawyer
Wellington