Employee axed for not returning signed employment contract

The Employment Relations Authority (ERA) recently dealt with a case involving an unjustified dismissal claim by a worker against his former employer, a concrete resurfacing company.

The worker, who was employed as a labourer, alleged that he was unjustifiably dismissed from his employment and sought compensation for lost wages and humiliation, loss of dignity, and injury to feelings.

The worker started employment with the company on 11 November 2021 and had an individual employment agreement that included a 90-day trial provision.

The worker's uncle, who is a director of the company, provided evidence that the provision regarding a new employment agreement after the trial period was put in place due to an agreement with a third-party organisation.

The organisation was to provide support to the worker in the form of a wage subsidy and tools, conditional upon a signed employment agreement being provided to them.

The parties’ arguments

The employer denied the worker's claims and asserted that the dismissal was justified due to the worker's conduct.

The director provided evidence of numerous issues with the worker's conduct during his employment, including the worker's failure to report for work on time on 14 April 2022, which had significant potential consequences for the company's business.

The employer also argued that the worker failed to sign and return a copy of a second individual employment agreement, which was a condition of his continued employment.

The director stated that he should have dismissed the worker during the 90-day trial period.

On the other hand, the worker claimed that he was unjustifiably dismissed from his employment when he received an email advising that his employment was being terminated, effective from the following day, because he had failed to return a signed copy of the second individual employment agreement.

The worker sought compensation for humiliation, loss of dignity, injury to feelings, and lost wages.

The ERA's findings

The ERA found that the dismissal was both substantively and procedurally unjustified. The authority accepted the director's evidence regarding the second individual employment agreement but determined that the worker not providing a signed copy of the document did not amount to misconduct and did not provide a sound substantive basis for dismissal.

The ERA also found that the employer had already dealt with the worker's previous conduct by issuing a final written warning or various verbal warnings, and it was not open to the employer to dismiss the worker for conduct that had already been the subject of a previous warning.

The ERA emphasised the importance of procedural fairness in dismissal cases. The authority found that the worker was not put on notice of the allegations prior to disciplinary action being taken, nor was he afforded an opportunity to respond to the concerns before the dismissal.

"Raising concerns and providing a reasonable opportunity to respond are steps required prior to the relevant action being taken. What occurred here is that a conclusion was reached absent investigation, without notice of the concerns being given, and without an opportunity to respond being given. That is not an approach that would have been open to a fair and reasonable employer," the ERA said.

The ERA also noted that while the nature of the business might explain the lack of formal investigation processes, the absence of basic procedural fairness was a significant issue.

The authority also found that the reference to the employment agreement issue in the final written warning did not justify the dismissal from a procedural standpoint, as the worker was already working on a permanent basis.

Consequently, the ERA found that the dismissal was both procedurally and substantively unjustified. The authority ordered the employer to pay the worker $2,983.50 as compensation for lost wages, based on an average of 15 hours per week at $22.10 per hour for a total of nine weeks between the dismissal and the worker finding alternative employment in July 2022.

The ERA also ordered the employer to pay the worker $7,000 as compensation for humiliation, loss of dignity, and injury to feelings. While the authority accepted that the dismissal had some impact on the worker, it found the worker's evidence regarding the extent of the impact to be unsatisfactory.