'Conduct represents a breach of loyalty,' argues employer
The Employment Relations Authority (ERA) recently dealt with a case involving a worker who was summarily dismissed for allegedly breaching his employer's code of conduct and loyalty obligations.
The case revolved around a handwritten note left by a senior economic development officer at a district council, which read, "I still DON'T trust my CEO."
This simple act sparked a series of events that led to the worker's dismissal and subsequent legal challenge. The worker argued that the dismissal was both procedurally and substantively unfair, claiming that the employer had rushed to judgment without properly considering the context of his actions or his ongoing grievance against the CEO.
The worker's defence raised several points: Was the note truly a breach of loyalty, or merely part of a previous feedback exercise? Did the employer follow proper disciplinary procedures? And how did the worker's existing grievance against the CEO factor into the situation?
The worker, employed as a senior economic development officer at a district council, left a handwritten note on his desk that read, "I still DON'T trust my CEO." This action led to a swift disciplinary process that culminated in his dismissal for serious misconduct.
The note was discovered on a feedback form from a previous 'trust' exercise conducted by the employer. The worker had found the form in his desk while preparing for a scheduled mediation related to a separate grievance he had raised against the CEO.
The employer argued that the worker's actions breached their code of conduct and the employee's obligation of loyalty. They claimed the incident had damaged the relationship of trust and confidence necessary for the worker's senior role.
However, the worker argued that the dismissal was both procedurally and substantively unfair. He sought compensation and lost earnings as a result.
The employer initiated a disciplinary process shortly after discovering the note. They sent a letter to the worker outlining their concerns and inviting him to attend a disciplinary meeting. The letter stated:
"Your conduct represents a breach of loyalty which you are obliged to show towards your employer and directly impacts the relationship of trust and confidence which we must hold in you as a senior employee."
Two meetings were held as part of the disciplinary process. In these meetings, the worker explained that the note was part of an earlier feedback exercise and that he had inadvertently left it visible while preparing for the mediation. He also expressed his ongoing concerns about the CEO's decision-making regarding his economic development role.
Following these meetings, the employer decided to summarily dismiss the worker. They cited breaches of the code of conduct and a breach of the duty of loyalty as reasons for their decision.
The worker, however, felt the process was unfair and that he didn't fully understand the reasons for his dismissal.
He claimed the decision was made too quickly and without proper consideration of his explanations or the context of his ongoing grievance against the CEO.
The ERA found that while the employer had followed some steps in their disciplinary process, there were significant flaws that rendered the dismissal unjustified. The Authority noted:
"I find that while [the employer] took steps to provide [the worker] the opportunity to explain his actions (relating to the 'sign') and the reasons behind them, it did not then find out what he wanted to say about [the employer] finding this was then a matter of serious misconduct because it related to the three breaches it had foreshadowed in its originating 1 June 2023 letter."
This lack of opportunity for the worker to respond specifically to the allegations of serious misconduct was deemed a significant procedural flaw.
The Authority also raised concerns about potential conflicts of interest in the decision-making process. The worker had an ongoing grievance against the CEO, who was involved in the disciplinary process.
Additionally, the general manager who led the disciplinary process had attended the unsuccessful mediation for the worker's grievance against the CEO just one day after the 'sign' was discovered.
The Authority suggested that:
"A more transparent and independent process may well have supported [the employer] to carry out a fair process that did not get derailed when [the worker] rallied against those in the room at the 12 June 2023 meeting."
Ultimately, the ERA found that the worker had been unjustifiably dismissed. The Authority awarded compensation and lost wages, stating:
"Based on the above, I find a fair compensation is $8,000.00... I find that [the worker] was likely impaired from gaining further employment in the same type of senior role due to the unjustified dismissal. Accordingly, I find [the worker] is to be paid three months of wages from the date of his dismissal on 13th June 2023."
However, the Authority also considered the worker's contribution to the situation, noting his unprofessional behaviour during the disciplinary process:
"[The worker's] decision to level highly personalised criticism at [the managers] in that meeting was likely a contributory factor towards the grievance not resolving in a more positive way."
As a result, the awarded remedies were reduced by 15%.
This case serves as a reminder to employers about the importance of thorough and fair disciplinary processes, even in cases of apparent serious misconduct.
It also highlights the need to consider potential conflicts of interest in decision-making processes, particularly when there are ongoing grievances or disputes between the parties involved.
