An Employee has been awarded just over $15,000 in the Employment Relations Authority after being unjustifiably dismissed by her Employer. The dismissal occurred because the business closed down, but the Employee was not paid correctly and was not given sufficient notice of the closing, or dismissal.
The Employer had a valid reason for ending the Employment relationship as there were insufficient funds to continue the operation, but it was found that even though the Employee knew of the financial difficulties, she was not sufficiently informed that there was a possibility the business may close down. The reason the dismissal was justified, was the way in which the process was managed by the Employer and it was viewed by the ERA to be unfair.
Unfortunately, the Employer tried to rely on the trial period in the Individual Employment Agreement to prevent the Employee from raising a personal grievance. However, the trial period did not meet the criteria of the New Zealand Law. This is because the Employee only signed her Individual Employment Agreement after she had started work and did not receive a copy until she requested one.
The outcome of the personal grievance claim raised by the Employee, resulted in the Employee receiving an award from the Employer of $15,250.
This could have been avoided. Had the correct wording and processes been followed, it would have resulted in a fair dismissal. It pays to ask for advice before relying solely on any provisions to dismiss an Employee.
If you feel like you are in a similar position as an Employer, please feel welcome to contact Lynda Mathieson at Mathieson’s Chartered Accountants. Lynda is more than equipped to help navigate you through the sometimes-challenging changes in our New Zealand Employment Law.