Nil compensation fair despite unfair dismissal

There appears to be a common misconception that if an employer's dismissal process is flawed, the employee gets off scot-free.

OPINION: A man who was dismissed through a text message has won his case for unjustified dismissal in the Employment Relations Authority. But despite being wrongfully dismissed, he did not receive any money.

He was employed by Yankee Bourbon Company Ltd as a factory worker. During the 63 days he worked there he would often arrive late and then take a coffee break before he had even started work. He used company vehicles for personal use without permission, using fuel the company paid for. He was issued with a mobile phone for work and he would watch pornography on it during work time.

He was certainly not what most would consider a good employee. Why shouldn’t an employer be able to dismiss an employee who behaves like this?

Despite his actions, the Employment Relations Authority found that he was wrongly dismissed. Although he was only in the job for 63 days, there was no valid trial period and the employer neglected to take appropriate steps before dismissing him, such as meeting with him to discuss concerns and giving him a chance to respond.

While the employer’s process was lacking, because his poor behaviour constituted ‘‘contributory conduct’’ the authority saw fit to reduce any compensation he might have received for being dismissed by 100 per cent. Accordingly, he did not receive any money from his employer as compensation.

The authority and the court have a wide discretion to reduce awards to the extent that the employee’s own actions have contributed to their misfortune. As seen in this case, an award can be removed altogether if the employee’s behaviour is exceptionally bad.

The Court of Appeal has previously stated that a 50 per cent reduction for contributory conduct would be very significant. Despite this, the authority continues to be willing to reduce awards up to 100 per cent when the facts allow it.

Last month the authority found that a chef working in Kapiti was unjustifiably dismissed after attempting to sell methamphetamine to her colleagues. While overseas in Fiji, a director of the restaurant received a text message from a friend saying that the chef had been offering staff methamphetamine.

When the director returned to Wellington she confronted the chef but the chef denied the allegations. The director spoke to employees, two of whom confirmed they had been offered drugs by the chef. When the chef arrived for work the next day the director told her that ‘‘anyone who was offering drugs to my staff would not be tolerated’’. The chef was not given a chance to respond and was dismissed immediately.

The authority found the dismissal to be unjustified as the director did not carry out a proper investigation into what exactly happened regarding drugs being offered. The employer should have also given the employee an opportunity to respond to the allegations and then considered the response with an open mind. The employer failed to do these things and therefore the dismissal was unjustified.

The chef asked for three months’ wages plus $10,000 in compensation. However, despite finding the dismissal unjustified, the authority refused to order any compensation or payment.

The authority found that, on the basis of the evidence before it, the chef did offer methamphetamine to staff as alleged. The authority concluded that in light of this finding, the chef’s conduct was so egregious that it deprived her of any right to compensation.

There appears to be a common misconception that if an employer’s dismissal process is flawed the employee gets off scotfree and can seek compensation, regardless of how they behaved previously.

While it is crucial that employers carry out a thorough process in even the most difficult situations, these recent authority decisions show that employees will still be held responsible for their actions.

Of course, employers are on far stronger grounds if they do follow a proper procedure and they are not left to rely on persuading the authority that 100 per cent contributory conduct occurred. It’s too big a risk.

Peter Cullen is a partner at Cullen – the Employment Law Firm. He can be contacted at peter@cullenlaw.co.nz