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FYI
Employment Law
26 Aug 2010
Dismissals Case Law Update
The Employment Court recently delivered a significant decision in Secretary for Justice v Dodd. In that case, the Court found that the dismissal of an employee for admitted serious misconduct was unjustified and upheld her reinstatement.
This FYI considers the Dodd decision and also provides an update on other recent Court and Employment Relations Authority decisions concerning the actions of employers when dismissing employees.
Employee Admitted Serious Misconduct but Reinstated
In Secretary for Justice v Dodd, Ms Dodd was employed by the Ministry of Justice as a court manager and registrar. Ms Dodd's nephew was prosecuted for assaulting his former domestic partner. Ms Dodd telephoned the former partner to try to persuade her to submit a more favourable victim impact statement for her nephew. Ms Dodd had also accessed her nephew's records on the Ministry's system on a number of occasions to provide his lawyer with information.
During the Ministry's disciplinary investigation, Ms Dodd acknowledged her wrongdoing, admitted her actions constituted serious misconduct but promised not to repeat it. After concluding its investigation, the Ministry dismissed Ms Dodd.
The Court held the dismissal was unjustified. In particular, the Court found that the Ministry did not place enough weight on Ms Dodd's assurance that there would be no repeat behaviour, and did not conduct wider inquires of court staff to determine if Ms Dodd's promise not to repeat her conduct was reliable. The Court concluded that had the Ministry done so, it would have been satisfied that despite the serious misconduct, the likelihood of repeat behaviour was low, and trust and confidence in Ms Dodd could be restored. Additionally, the Ministry had failed to properly consider alternatives to dismissal, including the possibility of temporary or permanent demotion with appropriate supervision and retraining, or loss of remuneration. The Court held that in appropriate serious misconduct cases, temporary demotion could be justified even if this sanction is not expressly provided for in the employment agreement or policies.
In light of Ms Dodd's admission that her misconduct was serious, it is rather surprising that the Court reinstated her. However, this case is a reminder that under section 103A of the Employment Relations Act 2000 (ERA) an employer's actions will be subject to review by the Authority or Court in terms of its decision about whether misconduct occurred and also on the consequences of misconduct.
One of the Government's recently announced proposed reforms to employment law (see July 2010 FYI 'Government's Proposed New Employment Laws') is to change the justification test under section 103A to what a fair and reasonable employer "could" rather than "would" have done in all the circumstances. This test recognises that there may be a range of reasonable disciplinary outcomes available to an employer in any situation. It would also reduce the risk of the Court or Authority imposing on the employer their view of what action the employer should have taken in the circumstances.
Treatment of Historical Warnings
In Minhinnick v New Zealand Steel Limited, the Court found an employee's dismissal was justified and made some helpful comments on an employer's ability to rely on historical warnings.
The employee, Mr Minhinnick, was a cold-strip mill operator on New Zealand Steel's pickle line. He was dismissed for failing to be available for cover as required under a roster and his employment agreement. Mr Minhinnick claimed that he had misread the roster and that this was an honest mistake.
In dismissing Mr Minhinnick, New Zealand Steel relied on a final written warning issued in June 2007 for failure to provide cover. This warning was issued partly as an extension to another previous written warning for poor performance issued in May 2006. The 2006 warning was valid for 12 months only and therefore had expired by the time the 2007 warning was issued.
Mr Minhinnick argued that his dismissal was unjustified partly because the 2007 warning relied on the expired 2006 warning. The Court did not accept this argument. The Court noted that Mr Minhinnick did not raise any issue about this in 2007 and the parties had acted as if the 2007 warning was valid. The Court held that it would be too rigid an approach under section 103A, to determine that the dismissal was unjustifiable because of a technical issue.
This case is a reminder that, where possible, disciplinary warnings should not have an expiry date. It is also noteworthy that the Court took expired warnings into account when assessing the justifiability of the employer's decision-making process.
Authority Awards Employee More Than $245,000
In Alo v New Zealand Customs Service, the Authority awarded an employee more than $245,000 for lost earnings and damages for his unjustified dismissal.
Mr Alo was a customs officer attached to the New Zealand Embassy in Bangkok. He developed major depression and post traumatic stress disorder after being deployed to the tsunami relief effort in January 2006. Mr Alo was then due to return to New Zealand and during the handover to the incoming post holder, Mr Alo engaged in conduct which led to his dismissal. Customs investigated this conduct and commissioned a report. The report concluded that many aspects of Mr Alo's conduct amounted to serious misconduct warranting dismissal. Mr Alo was unable to read or comment on the report at the time due to his depressive illness.
Mr Alo's doctor said that he would be in a position to advise on Mr Alo's mental state at the time of the alleged misconduct, after a further appointment with Mr Alo. After receiving this information, Customs sent a draft decision to dismiss to Mr Alo's lawyer. Mr Alo's lawyer told Customs that he could not obtain further instructions from Mr Alo on the draft decision at that time. Despite this, Customs proceeded to dismiss Mr Alo.
The Authority held the dismissal was unjustified and that a fair and reasonable employer would have sought more information about Mr Alo's medical condition before deciding to dismiss. This information would have allowed Customs to understand how the medical condition may have impacted on Mr Alo's ability to participate in the disciplinary process, and also how the medical condition may have contributed to the alleged serious misconduct. Further, Customs had failed to provide Mr Alo with a safe and healthy workplace. In particular, the Authority held that Customs did not provide adequate support when Mr Alo began to show symptoms of mental harm.
The Authority ordered Customs to pay Mr Alo $164,027.50 in lost earnings, $40,000 compensation for distress, $21,507.25 for medical treatment costs and $20,000 for general damages for breach of contract.
The case highlights the difficulties employers face when employees are not able to fully engage in the disciplinary process due to a medical condition.
Authors
Carl Blake
Senior Associate - Dispute Resolution
DDI: +64 9 977 5163
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Katherine Burson
Senior Associate - Employment
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Mobile: +64 21 498 624
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In This Article:
This FYI considers the Dodd decision and also provides an update on other recent Court and Employment Relations Authority decisions concerning the actions of employers when dismissing employees.
