Senior analyst alleges dismissal was retaliation for protected disclosure
The Employment Relations Authority (ERA) has rejected the interim reinstatement of a senior analyst following his dismissal from the Reserve Bank of New Zealand (RBNZ) in September 2024.
Stephen McCormack, who served as a senior analyst, argued that his termination was unjustified, citing flaws in the performance improvement process (PIP) and alleged retaliation after making a protected disclosure.
However, the ERA determined that while McCormack's claims raised serious questions, the balance of convenience and overall justice favoured the RBNZ, making reinstatement inappropriate at this stage.
McCormack's tenure at the Reserve Bank began in January 2022 when he was hired as a senior analyst in the Financial System Policy and Analysis department.
Over the course of his employment, McCormack's performance was closely monitored after concerns arose about the quality and consistency of his work.
In April 2023, RBNZ initiated an informal action plan to address these issues. Despite some progress, McCormack was placed under two additional informal performance action plans.
By January 2024, after a series of performance reviews and written warnings, RBNZ initiated a formal performance improvement plan (PIP), which continued through multiple review stages. However, McCormack's performance did not improve to the expected level, leading to his dismissal in September 2024.
Throughout the process, McCormack raised concerns about the fairness of the reviews and the adequacy of support he received, particularly in relation to his writing skills, which he claims were never sufficiently addressed by the bank.
He also alleged that his dismissal was retaliatory, as he had made a protected disclosure in January 2024 about potential wrongdoing within the organisation.
McCormack filed a personal grievance for unjustified dismissal and sought interim reinstatement pending the outcome of a formal investigation.
In its ruling, the ERA noted that McCormack had presented a reasonable case for unjustified dismissal, pointing to possible flaws in RBNZ's performance management processes.
"Mr McCormack appeared to have reached the relatively low threshold for an arguable case, with the following tenable arguments that RBNZ's actions and decision to dismiss him failed to meet the statutory standard of what a fair and reasonable employer could have done," the ERA's decision stated.
However, despite the arguable nature of McCormack's dismissal claim, the ERA found that reinstating him would be highly disruptive.
The authority observed that RBNZ had followed a comprehensive, albeit contentious, performance management process that spanned over 17 months and included three separate PIPs.
Additionally, the ERA found that McCormack's allegations of retaliation for his protected disclosure could not be resolved at this stage.
While his case presented serious questions, the evidence was untested, and more investigation was needed.
"These issues cannot be examined in detail or determined on the basis of untested evidence as part of this interim reinstatement application," the decision explained.
In assessing the balance of convenience, the ERA weighed the potential harm to McCormack against the disruption to RBNZ if reinstatement were granted.
The authority concluded that the balance tipped in favour of RBNZ, especially given the potential for ongoing performance issues.
"Reinstatement pending the outcome of the investigation places the parties in the position they would have been in but for the dismissal – balancing the competing tensions of complaints and an investigation in an ongoing work environment," the decision stated.
The ERA also considered the overall justice of the case, noting that while McCormack had a legitimate concern about being retaliated against for raising a protected disclosure, reinstating him could cause significant workplace disruption.
"The overall interests of justice works against Mr McCormack being reinstated on an interim basis," the ruling concluded.
A substantive investigation into his claim of unjustified dismissal will continue, with a hearing scheduled for August 2025.
