Employer says manager failed to send list of conditions to stay
The Employment Relations Authority recently dealt with a former manager’s claim that she was constructively dismissed. However, the employer said that she was the one who initiated her resignation via email.
On September 1, 2020, the worker, Debra Hansen joined Walkers Tourism Limited (WTL) as the motel manager for "Bayview Motel" in Paihia, a property leased by WTL. Her tenure with WTL ended on January 27, 2021.
Hansen alleged that she suffered unjustifiable disadvantage in her employment with WTL and was constructively dismissed. She sought compensation for lost remuneration, wage arrears, and costs arising from her unjustified dismissal.
WTL disputed these claims, asserting that Hansen resigned before the termination of her fixed-term employment agreement and that there are no wage arrears owed to her.
Manager assumes role
Hansen and her employer, Graham Walker, who is the sole director and shareholder of WTL, initially met in early 2020 when she and her father expressed interest in assuming the remaining term of the Bayview Motel lease from Walker, who was seeking to exit the business due to his wife's illness.
However, due to uncertainties in the tourism industry due to COVID-19, Hansen's father withdrew his interest, resulting in no sale. Hansen, having grown up in the motel industry and experienced in motel management, discussed with Walker the possibility of taking over the motel lease herself following the first COVID-19 lockdown. However, lacking the necessary funds to purchase the motel chattels, she explored alternative arrangements.
In late July 2020, with Walker's wife undergoing treatment in Auckland for four months, Walker approached Hansen to manage the motel in his absence. After negotiations and amendments to the employment agreement, Hansen signed a fixed-term individual employment agreement on September 1, 2020.
The agreement stipulated termination at the end of the financial year, reflecting Walker's wife’s uncertain duration of stay in Auckland.
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As the motel manager, Hansen assumed responsibility for daily operations, including bookings, customer service, staff management, and maintenance. She managed the motel during Walker's absence and continued after his return, albeit with challenges arising from differences in management styles and work practices.
Issues emerged concerning cleaning procedures, maintenance, micromanagement, communication, workload, and health and safety practices. On January 5, 2021, Hansen indicated the possibility of resigning in an email to Walker, formalizing her decision on January 14, 2021, with a two-week notice period. Her employment concluded on January 27, 2021.
Manager’s employment agreement
Hansen entered into a fixed-term Individual Employment Agreement (IEA) on September 1, 2020, specifying termination on March 31, 2021, coinciding with the financial year's end. The agreement aimed to secure managerial services for "Bayview Motel" while Walker attended to his wife's illness.
Hansen had previously expressed interest in managing the motel during Walker's absence. The IEA outlined working hours from Tuesday to Sunday, 8 am to 8 pm, although discussions arose regarding actual workdays.
Hansen sought to work seven days a week, but both parties agreed to a six-day workweek, with the seventh day's pay accumulated as leave.
Alleged constructive dismissal
The Authority said that “it is well established that an employee may be constructively dismissed by his or her employer when no explicit words of dismissal have been used.”
“The principles regarding constructive dismissal include:
(a) An employer gives an employee a choice of resigning or being dismissed;
(b) An employer has followed a course of conduct with the deliberate and dominant purpose of coercing an employee to resign;
(c) A breach of duty by the employer causes an employee to resign.”
Was there constructive dismissal?
Hansen alleged constructive dismissal based on events occurring on January 5 and 14, 2021, where she expressed her intention to resign via email, citing her last day of work as January 27, 2021.
Despite alleging a breach of duty by WTL in providing a safe workplace, subsequent email communications reveal her resignation without referencing any alleged breach.
“Hansen alleged that a sequence of events on 5 January 2021, where she raised her intention to resign and then followed by her email of 14 January 2021 when she resigned, are evidence of her constructive dismissal,” the Authority said.
“In her email, Hansen stated ‘I hereby give you two weeks written notice to end my position as manager at the Bayview Motel. My last day of work will be 27th January 2021.’ The email communications show that Hansen gave notice of her resignation without making any reference to any alleged breach of duty by WTL.”
Walker advised Hansen that “he was not happy with her resignation” and asked Hansen to reconsider. On 15 January 2021, Hansen sent an email informing Walker that she did not really want to resign and asking whether a few small changes could be made instead.
Walker then asked her for a list of the changes that she wished him to consider because he was willing to make changes if that would enable her to stay on in the meantime. Despite a written reminder and four verbal requests for the list of conditions, she did not provide Walker with the list of the changes that she wanted him to consider.
Thus, the Authority determined that the circumstances surrounding Hansen's resignation do not meet the criteria for constructive dismissal as there was no breach of duty by WTL leading to her resignation.
The Authority found that the resignation is deemed a delayed decision by a dissatisfied employee, rather than a case of constructive dismissal.