Insurance CEO dismissal justified

The Employment Relations Authority has dismissed a claim for unjustified dismissal following the sacking of the CEO of one of New Zealand’s large insurance companies as a result of actions following the earthquakes in Canterbury and Wellington.

The employer decided that the CEO had been guilty of serious misconduct for breaching its rules around what properties it would insure in Wellington.  In particular this related to the quality and resilience of the buildings.  The CEO had failed to get a new portfolio of buildings signed off by two of the managers as required by the internal policy when more than a percentage of the buildings were located in Wellington.

The Employment Relations Authority found that the employer had followed a fair process because they had raised the allegations with the employee, given him an opportunity to respond and had advised him that he was entitled to be represented.  They had also warned him of the possible consequences including dismissal should serious misconduct be found.  The employer had fully investigated the allegations and considered the employee’s responses before reaching its conclusion of serious misconduct.  The ERA concluded that a reasonable employer could have reached that decision and therefore the dismissal was justified.

Alan Knowsley
Employment Lawyer
Wellington