A costly mis-steak?

It almost sounds like something out of Ramsay’s Kitchen Nightmares. Mr H was employed as a chef at a family run hotel. It was owned by Mr and Mrs D, and their daughter, S, and S’s partner T also helped manage the hotel. T often helped in the kitchen.

Tense relationship

The relationship between Mr H and T soured. Mr H thought T was obstructive and uncooperative, and T thought Mr H wouldn’t take feedback and direction. Mr H raised issues with Mr and Mrs D from time to time, so they were aware things were getting difficult between the men.

Don’t tell me how to cook steak!

The final straw though was when Mr H was cooking a steak for a customer, and T intervened with the cooking process. Now to be fair to Mr H, and having done my fair share of waitressing, I know that interfering with a chef’s steak cooking is one of the cardinal sins of the culinary world. As ever with employment matters though, it was what happened next that led to problems.

He goes or I do

Mr H felt that it was impossible to do his job given T’s involvement in the kitchen, and spoke to Mr D about this. Both sides disagreed about exactly what was said at the meeting, but the Employment Relations Authority (ERA) found that what was most likely is that Mr H raised his issues at the outset, including the ultimatum that he could not continue to work with T in the kitchen. Mr and Mrs D responded that T would definitely be staying in the kitchen to do quality control. So there was clearly an impasse.

“I guess I’ll leave then”

In response, Mr H said something along the lines of “I guess I’ll leave then”. This is the crux of the matter. Mr and Mrs D basically seized on that comment as a resignation, and straightaway started looking for a new chef. When they found one shortly afterwards, they immediately told Mr H that the new chef was starting and Mr H could go home (albeit they paid him three weeks in lieu of notice).

The ERA decided that a fair and reasonable employer would not have relied on those words as a resignation. The employer should have clarified with Mr H when everyone had calmed down, and made sure that he actually wanted to leave. They should have got him to confirm this in writing.

This is a key lesson for employers. Spoken statements, especially those said in the heat of the moment, should rarely be relied on in employment matters.

Even an apparently unequivocal “I quit” followed by the employee storming out of the workplace shouldn’t be taken for granted as a resignation that can be relied upon if challenged by the employee. The law recognises the need for a cooling off period in such circumstances, and the employer should follow this up with the employee and check what they want to do. Generally if they say they didn’t mean it and want to stay after all, they should be allowed to (subject of course to any related disciplinary processes that may need to happen).

It was also held that, although Mr and Mrs D had performance concerns about Mr H, and even though Mrs D had raised issues with Mr H from time to time, these should have been put to him in a formal process that gave him an opportunity to respond.

An expensive dismissal

It was held that Mr H had been unfairly dismissed. He was awarded 8 weeks lost wages (less the three weeks already paid to him), as well as $7000 compensation for embarrassment and humiliation. This last compensation arose because the “resignation” meeting had been held in front of other people at the hotel bar, and the dismissal had affected his career prospects and raised unfounded challenges to his professionalism, including an allegation that Mrs D had contacted his referees in a way that suggested he was dishonest. Employers, don’t do this. It’s expensive.

Overall then, another reminder for employees to take care with dismissals, even (or especially) when it looks like a resignation. You might just face a Nightmare otherwise.