26.09.2019

Ending Employment – Process is Key!

Even when employment has lasted for a very short time, an employer is still required to follow the law, and the consequences of failing to comply can end up being very significant.  So it was for a Christchurch employer which found itself on the wrong side of an Employment Relations Authority award of $26,500, after dismissing an employee after just a week of employment.

In May 2018, Adam Baxter offered Jerome Holwood a job, paying him $25 per hour to help across Mr Baxter’s various business ventures.  Mr Holwood was initially reluctant as he already had a job and was about to go on holiday.  However, he eventually decided to take the job.  The employment relationship didn’t start well (from a legal perspective) as Mr Holwood was not given a written employment agreement.  Mr Holwood worked for two days, then took a pre-arranged holiday that Mr Baxter had agreed to, before working for another five days.

Mr Holwood then texted Mr Baxter to say he was sick, and would not be coming to work the next day.  Mr Baxter replied by text “Okay mate.  I am going to take over your position mate sorry it’s not worked out the place is on its last legs and I need to get involved full-time now I will sort your pay out on Wednesday”.  He duly paid Mr Holwood his final pay, and the employment relationship was over, a mere seven working days after it had begun.

Mr Holwood raised a personal grievance, alleging that he had been unjustifiability dismissed, and filed a claim with the Employment Relations Authority.  While Mr Baxter initially indicated that he would defend the grievance, he didn’t turn up to the Authority investigation.  In his absence, the Authority member considered whether Mr Baxter’s actions were what a fair and reasonable employer could have done in all the circumstances, and found that:

“… there is no evidence of any process being undertaken by Mr Baxter before effecting his dismissal, let alone one that would satisfy the requirements of s 103A of the Act.

 I further agree with Mr Holwood that he: 

  • was not put on notice by Mr Baxter that his job was in jeopardy;
  • was not provided with any allegations (assuming such existed and there is no evidence to suggest they did) warranting his dismissal;
  • was not provided with any tangible information about Mr Baxter’s business ventures being on their “last legs” (other than, perhaps, a perfunctory and grammatically bereft text message); the effect that such “last legs”, whatever this actually means, might have on the future of his employment; and
  • was not given an opportunity to answer or comment on any of the forgoing.”

In other words, the employer failed at every hurdle, and there had been no process whatsoever.  It was not even clear why exactly Mr Holwood had been dismissed, except for the vague explanation of the business being on ‘its last legs’.  As a result, the dismissal was unjustified.

Mr Holwood gave evidence that he had been “degraded, demeaned and diminished” as a result of his unjustified dismissal, and found it particularly humiliating to have to go back to his previous employer and beg for his job back.  The Authority awarded $15,000 compensation for injury to feelings, together with $5,000 lost wages (the wages that Mr Holwood lost before he was able to get his previous job back) and a contribution to Mr Holwood’s costs in the sum of $4,500.  The Authority also awarded a penalty of $2,000 for the failure to provide a written employment agreement, and ordered the penalty to be paid to Mr Holwood.

What have we learned?

The case illustrates the significant damages that an employer can face when it neglects its basic employment law obligations.  In this case, the employer failed on just about every aspect of its duty, and the consequences were significant.  It is trite but true that a little advice early on can save a whole lot of time and cost down the track.

If you need help with employment processes, please get in touch early – we can steer you in the right direction, and help you avoid a costly employment disaster.

If you want to improve your skills and learn real-world techniques to deal with difficult employees, Hesketh Henry is running its final workshop of the year, on the Disciplinary Process.  Click here to register.

Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
Kerry
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

Related Articles / Insights & Opinion

Deciding to Wind Up? Observations on winding-up a trust from a recent High Court case
A trust can be a hassle and expensive to maintain.  So, it is not unusual for clients to reflect on whether a trust should be maintained. When settlors, Bert and Diana Queenin, decided to wind up the...
24.03.2025 Posted in Private Wealth
Mediation wide BW
Employment Law’s Dispute Resolution Process – Mediation
Navigating the dispute resolution process in the employment jurisdiction can be tricky. This article aims to spell out the key considerations for those involved in or contemplating mediation, which is...
24.03.2025 Posted in Employment
empty wallet finance concept
Amendment to the Crimes Act 1961: Intentionally not paying employees their wages now deemed theft
An amendment to the Crimes Act 1961 (Crimes Act) – the Crimes (Theft by Employer) Amendment Bill has been passed by Parliament and received Royal assent. It is now an enforceable provision of th...
14.03.2025 Posted in Employment
Time’s Up: Late Redelivery and the Assessment of Damages in Hapag Lloyd AG v Skyros Maritime Corporation and Hapag Lloyd AG v Agios Minas Shipping Company
The English Commercial Court gave an instructive judgment on the assessment of damages in Hapag Lloyd AG v Skyros Maritime Corporation and Hapag Lloyd AG v Agios Minas Shipping Company; an appeal brou...
11.03.2025 Posted in Trade and Transport
Team Hands in small
Cartel conduct: Do not pass “GO”, go directly to jail
Until 8 April 2021, cartel conduct was punishable only by civil penalty in New Zealand.  In R v Kumar [2024] NZHC 3955 the High Court imposed the first criminal convictions and sentences for cartel c...
06.03.2025 Posted in Construction & Disputes
Employment
2025 Insights: Proposed Legislative Changes and Employment Team Update
Team update and proposed legislative change – hello from the Hesketh Henry Employment Law Team 2025. Click here
20.02.2025
photo  dbe
When Sweet Turns Sour: The Costly Consequences of Contamination
The New Zealand Sugar Company (NZSC), trading as Chelsea Sugar, recently found itself in hot water after being fined nearly $149,500 by the District Court due to a prosecution brought by the Ministry ...
19.02.2025 Posted in Insurance & Trade and Transport
SEND AN ENQUIRY
Send us an enquiry

For expert legal advice, please complete the form below or call us on (09) 375 8700.