An employee resigned after being forced to sign a new employment agreement which decreased the employee’s hours and allowed the employer to temporarily stop providing work for the employee.

The employee’s personal grievance claim for constructive dismissal was upheld by the Employment Relations Authority.

The employer delivered an ultimatum to the employee that unless he accepted the new agreement, the employer would start paying the employee overtime only if he worked over 50 hours a week. The employee had previously been paid overtime if he worked more than 40 hours a week.

The ERA held that the ultimatum, and the employer’s insistence on applying it to the previous fortnight, breached the employer’s duty of good faith.

The ERA found that the employer’s breach was so significant that it was reasonably foreseeable that the employee would resign.

The ERA awarded the employee over $6,700 for lost wages plus $4,000 in compensation for humiliation, loss of dignity and injury to feelings. The employer was also ordered to pay a $2,000 penalty.