‘Toxic’ workplace leads manager to resign, claims ‘unjustified suspension’

The Employment Relations Authority recently dealt with a case involving a worker who claimed to have been subjected to bullying, psychological abuse, and an unjustified suspension by his employer.

The worker, who had been employed as a manager for almost 12 years, sought remedies for unjustified actions causing disadvantage, constructive dismissal, and breach of contract.

In a case spanning several years, the worker alleged a series of troubling incidents and a toxic work environment that ultimately led to his resignation.

The Authority examined his claims, including the worker's entitlement to unpaid bonuses, alleged promises of a retirement gratuity, and the employer's failure to provide a safe workplace.

Alleged bullying and psychological abuse

According to records, the worker commenced employment with the employer in 2008 or 2009. The parties signed a written employment agreement on or about 14 July 2009, which recorded the worker's salary and included an addendum stating that he would be paid an annual bonus based on annual profit before tax (APBT).

Over the years, the worker's role titles and duties changed, and his salary increased. The parties agreed that the worker received various goods and services instead of cash bonuses, although they disputed who had suggested this arrangement.

The worker claimed that the employer's director subjected him to bullying and psychological abuse, particularly after another director exited the business in 2012.

The alleged behaviour included excessive personal criticism, verbal abuse, threats to job security, public humiliation, and manipulative conduct.

Several former employees gave evidence supporting the worker's claims, describing the workplace culture as "toxic" and the director as "unapproachable," "rude," and "verbally aggressive."

The worker's daughter, who had also worked for the employer, described the director as a "bully and psychopath" who would go through "cycles of abuse."

Manager’s deteriorating health

The worker described several specific incidents that he claimed were particularly distressing, including being accused of working for his family's café on the employer's time, being told he was "useless," and being informed that his job was on the line.

The worker's health deteriorated significantly during this period, with him experiencing panic attacks, heart issues, and an abscess that required surgery.

He claimed that the director's behavior, particularly during a phone call on 19 September 2021, caused him to suffer a panic attack that ruptured his surgical incisions.

Suspension and resignation

In October 2021, during the pandemic, the worker was instructed not to work from home despite medical advice and Alert Level 3 restrictions in Auckland. The Authority found that this amounted to an unlawful suspension.

Following a series of exchanges between the parties' counsel and an unsuccessful mediation, the worker resigned with immediate effect on 14 December 2021, claiming constructive dismissal.

The Authority found that the worker had been subjected to bullying, which was reasonably foreseeable, and that the employer had failed to provide a safe workplace. It also found that the worker's suspension was unjustified and disadvantageous.

The Authority concluded that the employer's actions constituted a breach of duty sufficient to cause the worker to resign, and that he had been constructively dismissed.

The worker was awarded $50,000 in compensation for the bullying disadvantage grievance, among other awards.