Equipment dispute sparks ERA ruling on proper dismissal steps
The Employment Relations Authority (ERA) recently dealt with claims of unjustified dismissal where a worker argued she was told to "get out" of her workplace following a disagreement about equipment maintenance.
The worker said her employer didn't follow any dismissal process, failed to pay her for all hours worked, and made unauthorised deductions from her final pay.
The case raised important questions about workplace communication, proper dismissal procedures, and when an employer can conclude that a worker has abandoned their employment. It also highlighted the obligations of employers when making deductions from final pay.
The dispute took place at a Wellington café where the worker had started her employment on 3 January 2022, working between 30 to 35 hours per week.
The employment ended after an incident on 11 February 2023 involving disagreements about coffee machine maintenance procedures.
Around 12:30 pm on that February day, the worker noticed issues with the coffee machine and approached her employer about cleaning procedures, specifically about rinsing the machine heads after use.
The worker told her employer that she felt he needed to rinse the heads on the machine after using it. When the employer replied that he did clean it, the worker disagreed, saying there were coffee grinds in the machine heads in the morning.
Both parties presented different versions of what happened next. The worker said her employer yelled at her, stating that "he does what he does and that he's the boss," and told her to "get the fuck out of here" when she questioned the procedures.
The employer, however, said he gave the worker a choice, telling the ERA: "I asked her if she's going to follow the instructions that I give her or is she going to leave, and she chose to leave the job."
Following her departure from the workplace that day, the worker was scheduled to work the next day but didn't attend, saying she was still shaken by the previous day's events. On 14 February, she texted her employer asking: "Do you want me to come to work tomorrow?"
The employer responded: "Hi, my understanding is that I said if you don't want to follow the instructions I give you then you have the choice to stay or leave and my understanding is you made the choice to not follow instructions and leave with no intention of coming back so I've gotten a replacement for the position."
The ERA noted: "It is telling that he replaced [the worker] within two days and then deducted the contractual notice period on the basis she was refusing to work it out. Accordingly, even on [the employer's] narrative, he would have needed to contact [the worker] regarding her intentions during the notice period. No such contact occurred."
On 22 February 2023, the worker received her final payslip showing a deduction of $1,725.00, which the employer said was for an unworked notice period. The employer argued this deduction was justified because the worker had abandoned her employment.
The ERA disagreed with this position, stating: "To do so would be in the nature of a penalty and in any event it could be said it was [the employer's] own action which prevented [the worker] from working out any notice period."
The Authority examined the case under section 103A of the Employment Relations Act 2000, which sets out the test for justification in dismissal cases. This section requires employers to act as a "fair and reasonable employer" would have done in all circumstances.
In its analysis, the ERA stated: "It was not open to [the employer] as a fair and reasonable employer to assume as it did, that [the worker] either abandoned her employment or resigned. It took no steps to clarify the position."
The Authority found: "[The worker] did not resign and nor did she abandon her employment." The ERA ordered the employer to repay the $1,725.00 unlawfully deducted from final pay, pay an additional $1,725.00 for the contractual notice period, and pay $15,000.00 as compensation for humiliation, loss of dignity and injury to feelings.
The case reminds employers to clearly communicate with workers about their employment status and follow proper procedures before concluding a worker has abandoned their job. The decision also emphasises that proper dismissal procedures must be followed even during workplace disputes, regardless of workplace size or the nature of any disagreement.
