Constructive dismissal following suspension without pay…

The Employment Relations Authority has upheld a claim for personal grievance for a constructive dismissal.  The employer suspected that the employee had stolen company property and suspended the employee pending an investigation into those allegations. 

The employee, however, was suspended without the opportunity to comment on the suspension and without pay.  Both of those failings, along with a failing to keep the employee advised of progress of the theft investigation, meant that it was reasonable for the employee to refuse to work under those circumstances and he was entitled to resign and bring a claim for constructive dismissal.

The employee was awarded $3,800 lost wages for the period while he was suspended without pay and also for the period he was out of work after he resigned.  The employee was also awarded $10,000 compensation and $2,000 holiday pay.

However, after the employee commenced his claim in the Employments Relation Authority the defendant company was placed into liquidation, so it is probably unlikely that the employee will receive any of the compensation awarded.


Alan Knowsley
Employment Lawyer
Wellington