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‘Fatal’ contract mistakes

Wairarapa employers falling foul of their own employment agreements stand to lose thousands of dollars in personal grievance claims.

Wairarapa barrister Jills Angus Burney has spoken out on what she calls “fatal mistakes” made by employers after the Times-Age became aware of an allegation of unfair dismissal relating to a well-known business in the region.

Angus Burney said employers’ ignorance of their own employment agreements could cost businesses in the region thousands of dollars in personal grievance claims – and the number of cases is rising.

“There have been some blatant and really avoidable situations developing in Wairarapa,” she said.

“I’ve done a lot of cases over the years here, and it’s not so much about the substance of the dismissal, but, procedurally, employers are not giving much thought to it.

“You can make fatal mistakes in procedure.”

Wairarapa Community Law manager Murray Henderson confirmed that cases coming through the centre largely concern basic failures, with employers not following due process.

“It’s employers not following their own employment agreement for a start, not knowing what their employment agreement says.”

 Barrister Jills Angus Burney says there are blatant and avoidable employment issues developing in Wairarapa. PHOTO/SUPPLIED

Barrister Jills Angus Burney says there are blatant and avoidable employment issues developing in Wairarapa. PHOTO/SUPPLIED

He estimated the centre receives three to four claims a week regarding employment issues, with at least one that could give rise to a personal grievance.

Henderson said there had been a measurable increase in claims since covid, but could not say whether it was due to increasing cognisance of employee rights, or Employment Relations Act 2000 breaches.

Angus Burney said the cases she’s received showed employers are failing to take into account consultation or the notice period for dismissal.

“Often what happens is someone gets notice of termination, but they get less notice than what is in their contract.”

The Employment Relations Act 2000, which governs the personal grievance process, allows for a raft of claims, some of which include unjustified dismissal or disadvantage, discrimination, and breaches around hours and shifts.

The Act promotes mediation as the first step to resolving an employment relationship problem, but it was costly when that failed, Angus Burney said.

The Act protects the need for people, who rely on an income, to be treated with dignity, and Angus Burney noted the average payout by the Employment Relations Authority [Authority] for humiliation and distress caused by incorrect processes is $15,000.

However, she said that does not take into account the accumulation of lost wages [three to four months on average], which the Act also provides for.

“Employers that make mistakes could be facing $20-30,000 in remedies, not counting legal costs.”

In July 2020, a Nelson forklift operator – wrongfully dismissed for telling his boss to go “f*** himself” – was awarded $5600 for humiliation, loss of dignity and hurt feelings, with the authority stating he also deserved three months’ lost wages.

Angus Burney said employers seeking to dismiss an employee first need to identify legitimate grounds for dismissal to protect themselves from claims.

“You have to identify the problem before you get to dismissal. Identify it and the options to resolve it,” she said.

“Most contracts have prescriptive clauses to follow when something is not going right – if you’re not following your own process, what’s the point in having one?

“For example, knowing your employees’ notice period is first and foremost.”

Angus Burney said she understood that businesses are operating in difficult circumstances – but so too are employees.

“Personal grievance cases are pretty much the mainstay of what employment advisers are doing,” she said.

“Lawyers aren’t complaining, because we get plenty of work out of it.

“But it’s deeply distressing for someone that is vulnerable, or on a minimum wage.”

Henderson said issues were not always “one-sided” and noted the Ministry of Business Innovation and Employment’s free early resolution service – implemented at the end of 2020 – could nip problems in the bud before they become major.

www.employment.govt.nz/resolving-problems

Mary Argue
Mary Argue
Mary Argue is a reporter at the Wairarapa Times-Age with an interest in justice and the region’s emergency services, regularly covering Masterton District Court, Fire and Emergency and Police.

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