John Rooney recently spoke to the National Business Review on employment law obligations during unprecedented and unpredictable events and the heightened scrutiny on employers to avoid terminating employees: key lessons from the COVID-19 era. Click here  to watch the full interview and read the article [paywall].

The obligation to act fairly and reasonably: always in force

In times of unprecedented and unpredictable events, such as pandemics and natural disasters, employment laws continue to apply. While governments may introduce temporary mandates or emergency regulations, employers must act fairly and reasonably. This includes the obligation on employers to approach proposed dismissals with an open mind and to genuinely consider all reasonable alternatives, including leave without pay, before making a final decision.

How to meet the obligation

The recent COVID-19 case of Hullen v Air New Zealand Ltd illustrates how to meet this standard. Air New Zealand kept employees informed and engaged in consultation regarding vaccination mandates, both before and after the orders were issued. Air New Zealand also explored alternatives to dismissal, including redeployment and leave without pay which were rejected by the employees. 

The Employment Relations Authority (Authority) found that Air New Zealand had acted fairly and reasonably, having made reasonable efforts to avoid terminating employment. As a result, the employees’ claims of unjustified dismissal were unsuccessful.

What can go wrong if you do not meet the obligation

In contrast, the 2023 decision of Wills v IDEA Services Ltd demonstrates what can go wrong when these obligations are not met. IDEA Services failed to provide Ms Wills with relevant information prior to her dismissal, did not properly consult her, and did not genuinely consider alternatives such as working remotely. Although IDEA Services provided a reasonable explanation to the Authority as to why remote work was unfeasible for Ms Wills, her recent start and limited understanding of the role, this was not communicated to her at the time. 

The Authority found that IDEA Services should have offered discretionary leave while it consulted on and genuinely considered her proposal to work remotely. Ms Wills unjustified dismissal claim succeeded, and remedies were awarded.

Practical tips for employers

To mitigate these risks employers should:

Genuinely consult with employees:

• Share relevant information with affected employees.
• Genuinely consider employee feedback.
• If an alternative is not feasible, explain why at the time.

Explore all reasonable alternatives to dismissal, including:

• Redeployment to other roles.
• Remote work options.
• Leave without pay.
• Discretionary leave.

Document everything: 

• Information shared with employees.
• Evidence of consultation.
• Consideration of alternatives.

Get in touch

Please feel free to reach out to any of our experts if you have any questions about this article.

Special thanks to Law Graduate, Caitlin Walker for her assistance in writing this article.