Dismissed too early?

A worker recently filed a dismissal claim before the Employment Relations Authority, alleging that he was “misled” that his employer would close down due to financial issues. He said that he was notified that there was “limited work” via We Chat and that forced him to find alternative employment.

Meanwhile, the employer argued that it was being “transparent” when it decided to warn the worker “in advance” that it was facing hardships after suffering the loss of a contract. It said it also didn’t anticipate that it would continue its operations after warning the worker.

The worker, Liuju Wang, an experienced builder and joiner, joined Y & L Building Limited (Y & L) in late May 2022. He initially worked on a cash basis at $38 per hour, transitioning to a permanent employment agreement at $40 per hour.

En Cun Ye, the director of Y & L, expressed satisfaction with Wang's work, leading to the offer of a written employment agreement and the transfer of his visa to Y & L.

Employer’s unexpected financial challenges

The employer, a framing subcontractor, faced unexpected financial challenges, potentially leading to layoffs or company closure.

Shortly after Wang's visa transfer, Ye informed him via We Chat that there would be limited work available at Y & L, advising him to seek opportunities elsewhere due to a reduction in hours after about two weeks.

In response, Wang said he wouldn't be able to find new work quickly and did not return to Y & L. He eventually secured a new job after approximately three weeks.

Wang claimed he was put at a disadvantage and was unjustly dismissed, seeking compensation for lost income, costs, and reimbursement of visa expenses and filing fees.

On the other hand, Y & L denied these claims, with the director arguing that he informed Wang in advance about the employer's inability to offer the agreed full-time hours due to an unexpected loss of a contract. Ye said that this transparency allowed Wang to explore other full-time opportunities.

Was it unjust dismissal?

The Authority found that Wang was dismissed by Ye. “A dismissal includes a situation where the employer sends the employee away,” it said.

“The We Chat message amounted to a ‘sending away’ when Ye as the employer advised Wang that his permanent employment with fixed hours would not continue.”

The Authority accepted Ye’s argument that there was a “sudden and unexpected loss of work leaving him with limited options but to tell his workers that after the conclusion of the current job, there would be no more work.”

“It was fairer of him to warn employees in advance, as he did. However, this is still a dismissal, even if it is done for genuine reasons,” the Authority said.

“Ye, acting on behalf of Y &L, did not fulfil his obligations in two ways. First, it is arguable that he did not sufficiently investigate all the circumstances before telling Wang that his job was about to end.”

Dismissed too early?

“In the end, Ye was able to find more work and did not need to close the business. If Ye had taken more time to investigate, he may have decided not to end Wang’s employment as early as he did.”

“Ye [also] did not raise the concerns he had with Wang before deciding to dismiss him. Instead, he told Wang of his concerns, that there would be no more work after the conclusion of the current job, and instead of asking Wang to respond Ye immediately moved to dismissal before discussing other possible solutions with Wang.”

“Together, these two things meant that Wang was dismissed before he had time to consider his position or think about what he wanted to do next,” the Authority said.

“It also meant that even though Ye later found more work, by this time, Wang had already been dismissed. Wang was aware that the company had not closed and that others continued to work for Ye, and this also meant that he felt he had been misled and what he had been told was not genuine, which is unfortunate,” it added.

Thus, the Authority found that Wang was unjustly dismissed and ordered the employer to pay compensation.