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JUNE 2013

Dismissal Unjustified

But no remedies awarded

A recent decision in the Employment Relations Authority (“ERA”) highlights the difficulties that can arise in circumstances where the employee leaves the workplace and there is uncertainty as to whether they have resigned but no steps are taken to clarify the position.

The employee commenced her employment on 17 February 2011 with her last day of work being approximately two weeks later, 2 March 2011. The circumstances in which her employment came to an end where very much at issue.

The employee’s description of what occurred

The employee claimed that on 2 March 2011 she was called to see the employer at the end of her shift and was immediately told by the employer “I have to let you go”. The employee says that she then became distressed and asked why. She said that she was told that other staff who had been working in the business for a number of years were not happy with her but did not otherwise elaborate. The employee says that she was told by the employer would “sort out” her final pay and she then left the premises and never returned.

The employer’s description of what occurred

The employer says that he asked the employee to stay behind at the end of the day as he had to discuss some things with her. The employer explained that he had some concerns regarding excessive food waste and that the employee needed to “keep an eye on it” (the business was a café). The employer also said that he then advised the employee that he had received complaints from two other staff members that the employee was “bossy” towards them and they did not like the way she treated them. The employer further informed the employee that the other staff had indicated to him that if the behaviour continued, they would consider leaving. At that point the employee became distressed. The employer said that upon seeing that the employee was upset he decided not to continue the meeting further at that point and said to the employee “we’ll leave it at that then”. The employer said that at that point the employee “stormed out” of the office went downstairs and left the building and whilst they were expecting her to return to work the next day, she never returned. She was therefore paid her final pay a few days later.

The issues in the case

The employee claimed that in the circumstances, she had been unjustifiably dismissed from her employment and sought reimbursement of lost wages and compensation for humiliation, loss of dignity and distress of $10,000.

On the whole, the ERA preferred the Employer’s version of events and came to the conclusion that the employee was not dismissed but had left the workplace in an upset and emotional frame of mind. However, that was not the end of the matter. The ERA went on to determine whether or not the employer was entitled to treat the departure of the employee as a termination of the employment relationship by her.

The employer took the position that because the employee did not return to work the following day (or indeed at all) they simply accepted that she had left, effectively terminating her employment. However, the ERA found that the employer was not entitled to adopt that stance. This was because the employment agreement contained a provision that provided for the employment would be deemed to have been abandoned in certain circumstances. However, the relevant provision required the employer to have made “reasonable efforts to contact the employee”. There was no dispute that the employer had made any effort to contact the employee to clarify her intentions.

The ERA further concluded that a fair and reasonable employer would have taken steps to contact the employee as required by the abandonment provision in the employment agreement before concluding that the employment had been terminated. The ERA further observed that even if there was not an express provision to that effect, there was substantial force in an argument to the effect that the obligation of trust and fair dealing in the employment relationship would normally require the employer to take steps to clarify the employee’s intentions. In the circumstances it was found that a fair and reasonable employer would have contacted that employee and put it to her that it appeared that she had terminated her employment and given her an opportunity to confirm or refute that position.

The ERA also noted that the obligation to be “active and constructive” and “responsive and communicative” were a core part of the mutual obligation of good faith set out in the Employment Relations Act (“the Act”). The ERA had concluded that because the employer failed to comply with the terms of the abandonment provision in the employment agreement, or to be active and communicative as required, the employer’s actions were not those of a fair and reasonable employer and the termination of the employee’s employment was unjustifiable.

Remedies

The ERA then went on to consider the issue of remedies and concluded that because of the actions of the employee no remedies would be awarded to the employee. Firstly, it was determined that she had abandoned her employment after being employed for only two weeks. In addition, the ERA also noted that the obligation to be “active and constructive” and “responsive and communicative” was a mutual obligation and applied to both employer and employee alike. In failing to communicate with the employer at all following her leaving the work place on 2 March 2011, the employee had failed to meet this obligation. The ERA did not make an award of costs in favour of either party.

Some comments

Firstly, it is respectfully submitted that there is some inconsistency in the findings of the ERA that the circumstances amounted to an unjustifiable dismissal. In order for there to be a personal grievance of unjustifiable dismissal, there must first be a dismissal. However, the ERA expressly concluded in its determination that the employee was not dismissed on 2 March 2013 but left the workplace in an upset and emotional frame of mind and never subsequently returned. The ERA also expressly concluded in its determination that the employee had in fact abandoned her employment.

In the above circumstances, the conclusion is somewhat surprising that the employee could have a personal grievance of unjustified dismissal is perhaps surprising in light of the fact that the ERA appears to have concluded that there was not a dismissal at all, but rather an abandonment of the employment by the employee. Therefore, were it not for the ERA’s conclusions in relation to remedies, the employer may have felt somewhat aggrieved at the outcome. In any event, irrespective of the fact that no remedies were awarded, in the ordinary course of events if the ERA had found that the personal grievance was not established, an award of costs would have been made in favour of the employer as the successful party.

Secondly, there are two relatively straight forward steps that the employer could have taken, either of which would have avoided the situation:

  • The employer could (and should) have contacted the employee to clarify the employee’s intentions. In all probability the employee would have confirmed that she would not be coming back. However, even if they had been unsuccessful in contacting the employee, the fact that they had made reasonable efforts to have done so may well have entitled the employer to rely on the abandonment provisions in the employment agreement.
  • The Act permits a trial period of up to 90 days. If the employer had employed the employee subject to satisfactory completion of a trial period, the employee could not have brought a personal grievance for unjustified dismissal if she was dismissed within that trial period. Had such a trial period been utilised it is likely that it would have been effective in view of the fact that the employment was of only 2 weeks duration.