'Person intending to work' claims unjustifiable dismissal
The Employment Relations Authority (ERA) recently dealt with a case involving a worker who claimed she was unjustifiably dismissed by her employer, a charitable trust. The worker sought compensation, lost earnings, and penalties against her employer for various breaches of employment law.
In this case, the worker argued that she was offered and accepted a job posting social media posts for the employer, signing an individual employment agreement (IEA).
The offer was made by the employer's "president/chief executive" via text message, stating, they were looking "for anyone to work from home, casual contract; 2 hours/ day, 6 days/week = Total 12 hours/Week for $120 Pay Monday – Saturday (not Sunday)."
However, the worker claimed that she was subsequently told the position was either not yet approved or the contract was cancelled before she commenced work.
The worker contended that she was a "person intending to work" under the Employment Relations Act 2000 and, therefore, an employee entitled to bring a personal grievance for unjustified dismissal.
The parties’ arguments
The employer's limited responses, primarily from its "president/chief executive," were that the claims should be denied because there was no employment relationship.
The employer argued that the worker's employment was conditional on the approval of its Board, which was not obtained.
However, the worker maintained that the offer of employment was unconditional, as evidenced by the signed IEA and the lack of any mention of Board approval in the parties' communications.
The worker's representative submitted that she relied on the authority of the employer's "president/chief executive" to finalise the offer and acceptance without understanding that there was a need for further approval.
The ERA's findings
The ERA conducted an investigation meeting lasting approximately half a day, during which the worker, her former partner, and daughter provided witness statements and were questioned on oath.
The employer did not attend the meeting or provide any evidence to support its position, despite being given opportunities to do so.
Based on the evidence before it, the ERA found that there was an offer of employment made by the employer's "president/chief executive," which was accepted by the worker.
The ERA was satisfied that an IEA was signed, although the worker did not retain a copy, and the employer failed to provide one upon request. The worker's former partner and daughter, who were present when the IEA was signed, provided credible evidence supporting the worker's account.
The ERA rejected the employer's argument that the employment was conditional on Board approval, finding no evidence to support this claim.
The Authority noted that the employer's "president/chief executive" had suddenly changed her position from claiming the employment was conditional to stating the contract was cancelled when the worker challenged her about starting the job.
The unjustified dismissal and remedies
Having determined that the worker was a "person intending to work" and, therefore, an employee, the ERA then considered whether she was unjustifiably dismissed.
The Authority found that the employer's "president/chief executive" had clearly terminated the worker's employment by stating, "There is no contract now it is CANCELLED," without following a fair process or providing a justifiable reason.
As a result, the ERA ordered the employer to pay the worker $6,000 in compensation for humiliation, loss of dignity, and injury to feelings.
The Authority noted that while the worker was seriously disappointed and humiliated by the dismissal, having hoped the job would help her improve her family's circumstances, it did not find sufficient evidence to support a higher award of $15,000 as claimed.
The ERA also awarded the worker $817.20 in lost wages for a period of three weeks, calculated at the adult minimum wage rate at the time, which was $22.70 per hour.
This was based on the agreed terms of 12 hours per week and the reference in the employer's messages to a potential review of the arrangement after 3-4 weeks.
Penalties for breaches of employment law
The ERA also considered the worker's claims for penalties against the employer for various breaches of employment law. While the Authority declined to award penalties for some of the alleged breaches, it found that the employer was liable for penalties in two instances.
Firstly, the ERA determined that the IEA signed by the parties contained a term contrary to law, as it provided for payment below the adult minimum wage at the time. The Authority emphasised the seriousness of this breach, stating:
"Providing an IEA to an employee and then signing up to this with the employee on pay less than half the adult minimum wage per hour is something that should be deterred. This is consistent with the Authority's role as contained in the objects of the Act that recognises this includes enforcement of employment standards."
The ERA considered the vulnerability of the worker, noting that the employer's "president/chief executive" would have been aware of the worker's circumstances and her excitement about the opportunity to improve her family's situation.
The Authority found the breach to be deliberate and serious, warranting a penalty of $2,000 against the employer, with $500 to be paid to the worker.
Secondly, the Authority found the employer liable for a penalty of $1,000 for failing to provide the worker with a copy of the IEA when requested, with $200 to be paid to the worker.
‘Persons intending to work’
The ERA stressed the importance of employers providing signed IEAs to employees to ensure clarity on what has been agreed upon, noting that the failure to do so made the worker's employment relationship problem more complicated than it should have been.
The ERA's decision highlights the protections afforded to "persons intending to work" under the Employment Relations Act 2000 and the consequences for employers who fail to follow fair processes and comply with their legal obligations. As the Authority noted:
"The Act includes an object focusing on an employment relationship where there is trust and good faith in the context of an 'inherent inequality of power in employment relationships.'"
This case serves as a reminder to employers to ensure that their employment practices are lawful and fair, particularly when dealing with vulnerable workers.
Employers must maintain open communication, provide the necessary documentation to their employees, and follow proper processes when making decisions that affect the employment relationship.
