Just as it is important for employers to handle employment disputes carefully and fairly, it's just as relevant for employees to know the rules. This recent case shows how things can go awry and how both parties can end up paying for it.
In 2001, Mr H was interviewed for a herd manager position. At his interview in February Mr H and his wife believed they would get a four bedroom house as part of the remuneration package in this job. This house was to be built on the property by the owners. There was also discussion about a motor bike allowance.
It was arranged that Mr H would begin work in June 2001. In May 2001, Mr H was told the farm accommodation would have three bedrooms and not four. There was no employment agreement available for H to look at when he commenced employment. Eventually one and a half months after starting work an agreement was signed that did not include a motorbike allowance.
The employment relationship started off badly when the H's had to move in with their employer because their now three-bedroom house was not ready. The H's rented another home after about a fortnight.
Things kept going downhill from then on. In July 2001, about a month after beginning the new job, Mr H was issued with a formal written warning over certain aspects of his performance. Following a discussion with his employer on 1 August 2001, Mr H said he believed his employment had been terminated. His employer denied this.
Two weeks later, after another discussion with his employer, Mr H indicated he was resigning.
One of the issues for the Employment Relations Authority was whether Mr H had been constructively dismissed.
Constructive dismissal is where an employee resigns but says that he or she was forced to do so because of the unfair actions of the employer. Constructive dismissal takes many forms but includes the following:
- where an employer gives an employee a choice between resigning or being dismissed
- where an employer has followed a course of conduct with the deliberate and dominant purpose of coercing an employee to resign, and
- a breach of duty by the employer leads an employee to resign. This can include an employer conducting themselves in a manner likely to destroy or damage the relationship of trust and confidence.
In this case the Employment Relations Authority held Mr H had resigned from his position, and had not been constructively dismissed. A win for the employer - so it seemed.
On the other hand Mr H was awarded compensation for having to use his own farm bike from the start of his employment until when the agreement was signed since he was led to believe at the interview that he would get an allowance. The employer also had to pay $3,500 for the disadvantage and stress caused by the lack of accommodation and motor bike allowance issue.
What this case illustrates is that no matter what happens in an employment relationship, both sides have to follow the law.
Mary-Jane Thomas is Preston Russell's employment law partner. You can contact her by clicking here.
