News
Breaking up is hard to do
First published in The Independent, 2 October 2008.
It is no accident that, under New Zealand law, the contract of employment is referred to as a "relationship".
There are many parallels with a relationship of a personal nature. Often, the way one approaches one's job can be influenced by emotion in a way that would be unusual in a purely commercial contract.
New Zealand law recognises the importance of the employment relationship to employees by placing some premium on a worker's right to security in his or her job. An employer is restrained in its ability to terminate employment and, in order to ensure compliance with the law (and to avoid exposure to the risk of claims) it must adhere – often slavishly – to rules of procedure which are intended to ensure fairness in the termination of the employment relationship.
The need to abide by these rules of procedural fairness is sometimes challenged by employers on the basis that, in certain cases, they present an unfair and unnecessary burden. Equally, employees (and occasionally unions) maintain that such procedures are necessary to ensure justice in a particular situation.
A recent case illustrates some of the issues that can arise in this area.
The employee in Reddy v Mega Mags Limited (Unreported, Employment Relations Authority, Auckland, 9 September 2008) was a barista at a store in Auckland. Issues arose about seven months into her employment relationship.
A manager at the store alleged that Reddy took extended breaks, gave drinks to friends without paying for them, read books at the counter, wore an iPod while serving, and had made drinks for friends while not rostered on or dressed for duty.
The store had surveillance cameras, and the manager said that he had video evidence of these different things.
The employer arranged a meeting with Reddy to discuss these concerns. It was intended that, prior to the meeting, Reddy would receive a letter informing her of the seriousness of it and her right to bring a support person or representative. There was, however, no evidence that she had received any such letter and Reddy claimed she first learned of the different allegations against her at the meeting itself.
In the meeting, the employer told Reddy that she had been "caught on video" giving drinks to friends. Reddy promptly admitted that she had done so – but said that other staff had also done this sort of thing.
Reddy then asked if the employer wished to raise any other matters – at which time the other issues of reading at the counter, using her iPod and taking unscheduled breaks were raised.
At one point – when the employer was discussing an issue relating to not wearing a name badge – he apparently made an exclamation that he thought Reddy had "an attitude problem". This caused Reddy to leave the meeting and to return to work. The meeting had lasted less than five minutes.
It transpired that the employer had not, prior to the meeting, followed up the manager's claim that there was video footage illustrating Reddy's various breaches. After the meeting, it became apparent that no such evidence existed.
The employer decided to dismiss Reddy. It listed seven instances of breach in support of its decision.
Reddy was said to have accepted each of these seven allegations – but did not apologise for her breaches.
The outcome was a decision by the employer to dismiss Reddy for committing certain breaches, at least some of which were admitted. But in getting to this outcome, the employer failed in a number of the procedural requirements.
It had not provided Reddy with proper notice of the disciplinary meeting and had surprised her with its list of allegations.
It decided to dismiss Reddy before giving her a proper opportunity to respond to its concerns, especially in light of the revelation that video footage did not identify any of the breaches.
It transpired that Reddy had an answer to some of the allegations – she had a receipt confirming that she had paid for her friends' drinks on one of the occasions that she was alleged to have given drinks away.
The Authority was accordingly left with a difficult question of the fair way to address the outcome of the employer's decision to dismiss.
On one hand, it accepted that the employer had been in breach of certain of its obligations and had failed to follow the procedures which the law prescribed to ensure fairness.
On the other hand, the employee had contributed to her own demise by confessing to having committed some of the breaches that had been alleged.
The Authority decided to award the employee $2,000 to compensate her for hurt and humiliation – but that this amount should be reduced to $1,333 to reflect her contribution to the outcome.
This case serves as a reminder to employers about the consequences that may follow a failure to adhere to the rules of procedural fairness. If the rules of procedure are not followed properly it can result in a negative outcome, even where an employer is justified in reaching a decision to dismiss.
