New Zealand: Two Similar Cases - Two Different Outcomes - constructive dismissal before the Employee Relations Authority

A few weeks ago the Southland Times ran an article about a decision of the Employment Relations Authority (ERA) (that was actually a case run by my office). The case involved Ms K. who claimed that she had been constructively dismissed due to a number of actions of her former employer.

The ERA member determined that Ms K. had not been constructively dismissed. She did find that the employer had unjustifiably disadvantaged Ms K. when Ms K. was instructed to move her desk in with her superior. The ERA decided that this was the only unjustified action of the employer and awarded Ms K. $500.00 compensation.

One of the grounds that Ms K. relied on to support her claim of constructive dismissal was that she had been sworn at by her superior. Her evidence was that her female manager told her she was "f%$king useless", that her work effort was "s!@t", and that all she did was "f%$k" around and distract the store men .She was told that when she came into work she looked like she could not be "f%$ked ". The fact that this occurred was unchallenged by the employer. Ms K's. evidence was that this was said to her in the presence of another manager and a fellow employee and left her feeling humiliated.

Interestingly another decision of the ERA, from a different ERA member, was released six days before the decision regarding Ms K. This decision also involved a claim of constructive dismissal.

The case involved a Mr I. who resigned from his job following an altercation with the Managing Director. Mr I. claimed that the altercation arose when he asked why he had not received his wages. The employer informed him that this was because he had not filled out his time sheet properly and what must have been tense discussion developed.

The discussion culminated in, according to Mr I., the employer stating that Mr .I was a "piece of bleep [excrement]" and that he was to do exactly what he was told. According to Mr .I the employer went on to say that if he told Mr I. to "bleep in the corner then he was to bleep in the corner".

At the ERA the employer denied saying this and claimed that he had instead said "if I tell you to sit in the corner then you should sit in the corner". However, the ERA determined that the employer had said bleep and not sit and ultimately found that Mr I. had been constructively dismissed. The ERA awarded Mr I. $75,000.00 in lost wages and $19,000.00 for hurt and humiliation.

Of interest is the statement from the authority in Mr I's case that "the authority cannot readily conceive of any situation where an employer could be justified in speaking to an employee, no matter what age, gender or position, in those terms. There is no suggestion that, on this occasion, the words were used in jocular banter between two people engaged in ribbing each other".

Turning back to the case of Ms K. As I said above one of the incidents that Ms K. claimed had lead her to resignation, and thus amounted to constructive dismissal, was that her employer had sworn at her in front of another employee . The ERA member in this case accepted that the employer had sworn directly at Ms K, rather than using swear words generally. However, the member found that as the use of such coarse language was commonplace within the workplace and she did not consider the swear words, even directed directly at Ms K., would have unduly concerned or upset her.

The two decisions appear difficult to reconcile and this is why I tell clients before they go to the ERA that it is very difficult to predict whether they will be successful or not.

In one case an authority member states that he could not conceive of any situation where an employer would be justified in speaking to an employee in such a manner (swearing at him or her). On the other hand another member said that, although she determined that someone has been sworn at directly, this did not unjustifiably disadvantage the employee - as the use of such coarse language in the workplace was common.

This is a reason why mediation is such a valuable tool. The vast majority of employment cases settle in mediation assisted by a professional mediator supplied by the Department of Labour free of charge. At mediation the parties have the power – they decide their fate at a fraction of the legal cost of going to the ERA.

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