Worker claims constructive dismissal due to understaffing, delayed salary review
The Employment Relations Authority (ERA) recently dealt with a case involving a worker's claim of constructive dismissal against her former employer, the New Zealand Defence Force (NZDF).
The case highlights the importance of clear communication and following statutory time frames since the ERA was tasked with determining whether the worker had raised her personal grievance within the required 90-day period following her resignation.
The worker, who was self-represented at the time, argued that her claim was lodged in time, while the employer maintained that the grievances were raised outside the applicable time frame.
The worker was employed by the NZDF as a navy portfolio analyst from 30 March 2016 until her resignation on 6 September 2018. She reported to a manager who, in turn, reported to a commander.
During her tenure, the worker raised issues regarding her remuneration and the grading of her position. In a meeting held in October 2017, it was agreed that an external provider would be engaged to conduct an independent assessment and review her position against her role, responsibilities, and current market rates.
The worker also expressed concerns about under-resourcing in her team, which she believed contributed to a complaint made against her by a colleague in June 2018. The worker felt that the issue could have been resolved at a lower level and that the formal investigation process, which bypassed the NZDF complaint process and her individual employment agreement, was unwarranted.
The stress levels, under-resourcing, increased workloads, and deadlines at the time were exerting pressure in the workplace, and the worker believed this was relevant to the complaint made against her.
On 8 August 2018, the worker emailed her manager, stating her intention to terminate her employment with the NZDF. In the email, she mentioned that she had consulted with her employment lawyer and would provide a formal resignation and a detailed exit report.
In a subsequent text message to the commander on 10 August, she outlined several breaches related to the handling of the complaint against her, failure to address resourcing issues, discrepancies in pay rates, and the lack of response from the NZDF regarding her request for an answer about pay rates.
The worker's formal resignation email on 14 August 2018 referred to constructive dismissal:
"Further to my text message of Monday, 13 August providing the below in email format to be held on my NZDF HR file and test email from my personal email.
1. Confirming formal resignation as per my email [on] Thursday 9th August (constructive dismissal).
2. Please ensure my manager actions my request that all information in the email (this in addition) is to be kept in my NZDF HR file for any future recall purpose."
Following her resignation, the worker provided three exit reports dated 18 October, 29 October, and 7 January 2019, in which she elaborated on her reasons for resigning and reiterated her position that she had been constructively dismissed.
The NZDF responded to the worker's concerns in December 2018, acknowledging some of the issues raised, such as the untimely completion of the investigation into her conduct and resourcing challenges.
The employer accepted that some positions should have been aligned and benchmarked to other like roles in the organisation, and for some roles, that process had been completed after the worker left. The NZDF also apologised for not completing the investigation in a timely manner.
However, in January 2019, the NZDF informed the worker that her grievances had been raised out of time and that it would not engage in further settlement discussions.
The worker, through her representative, subsequently set out her constructive dismissal claim in writing to the NZDF in 2020, alleging breaches of the terms and conditions of her employment.
The ERA examined the series of communications exchanged between the parties, noting that the worker had referenced breaches related to her employment, the handling of the complaint against her, remuneration issues, and under-resourcing.
The authority found that the totality of the worker's communications constituted the raising of a grievance:
"Although not to level of detail normally expected, I find what was communicated by [the worker] across all of her communications to NZDF about her complaints and concerns was sufficient to inform NZDF of her constructive dismissal claim. Although there were overlaps with other issues, she consistently specified the two matters she raised at the time of resignation that led to her decision to resign and what she wanted to be done to resolve those."
The ERA also observed that the NZDF had potentially consented to the worker raising her grievance, as evidenced by its response to her complaints in the first two exit reports and the undated email from the commander confirming that the NZDF had received her complaints and would investigate them:
"After [the worker] resigned, a series of communications between NZDF HR practitioners and managers at NZDF show NZDF was alive to the issue of whether [the worker] had raised a grievance or not. NZDF could have asked [the worker] for further information about what she was seeking before choosing to respond but it did not."
The ERA determined that the worker had raised her personal grievance claim for constructive dismissal within the required 90-day period.
The authority also found that the worker's breach of contract claims, which were not subject to the same time frame, remained within its jurisdiction:
"The breach of contract claims are subject to a different statutory time frame and remain within the Authority's jurisdiction."
The worker and the NZDF were ordered to attend mediation within 90 days of the determination and attempt in good faith to reach an agreed settlement of their differences.
The decision highlights the importance of clear and timely communication when raising personal grievances.
As the ERA noted:
"The grievance process is designed to be informal and accessible. A personal grievance may be raised orally or in writing. No particular formula of words may be used. Where there has been a series of communications, each communication may be examined as to whether it might constitute raising the grievance, but the totality of those communications might also constitute raising the grievance."
Employers should be aware that a series of communications from an employee expressing concerns or complaints may be construed as the raising of a personal grievance, even if not explicitly stated as such.
The ERA emphasised:
"It does not matter what an employee intended her or his complaint to be, or her or his preferred process for dealing with it in the first instance. It also does not matter whether the employer recognised the complaint as a personal grievance. The issues are whether the nature of the complaint was a personal grievance within the meaning of s 103 of the Act and, if so, whether the employee's communications complied with s 114(2) of the Act by conveying the substance of the complaint to her employer."
The case serves as a reminder for both employees and employers to be proactive in addressing concerns and grievances in the workplace, adhering to statutory time frames, and engaging in good faith discussions to prevent disputes from escalating and preserve the employment relationship.
