Spying on employees a costly mistake

Now and then I read an employment case which involves conduct that is truly shocking.

Recently, the Employment Relations Authority (ERA) released a decision that involved an employer acting in such a way that I struggle to believe the employer could ever have thought was appropriate.

The case involved a Ms S who was employed as a national service delivery team leader for a kitchen supplier. After only a short time with the company Ms S had her employment terminated because of what the employer claimed was redundancy. To the ERA, Ms S claimed her employer had made two errors. The first was that the employer failed to pay her a bonus that was provided for her in her Individual Employment Agreement (IEA). The second was that her dismissal was unjustifiable.

Her IEA provided that she would be remunerated a set salary and if certain targets were met, she would also be given a $5000 bonus. The issue appears fairly straightforward from the outset - if Ms S had reached her target she was entitled to the bonus and if she failed she was not.

It got a little tricky because the employer had failed to install a new tracking system that was to be used in assessing whether the bonus targets had been met. Therefore, when Ms S asked her employer whether she would be getting the bonus, they responded that she would not as the terms of the bonus conditions had not been met. The ERA determined that the employer could not rely on the fact that they had failed to install a tracking system, and that on the evidence before it Ms S had reached the target. Accordingly, the ERA held that Ms S was entitled to the bonus and ordered the employer to pay $5000.

It is on the issue of whether Ms S' dismissal was unjustifiable that the case gets really interesting. A couple of months before Ms S was dismissed, she was brought into the boardroom with her superiors and introduced to a man, Mr K, whom she was told was a student doing a thesis on service delivery. Ms S was told by her employer that Mr K would be floating around the office, asking questions and that she should be honest and open in her responses.

As the weeks passed, Mr K spent a great deal of time around the office and asked Ms S and her colleagues a significant amount of questions. Ms S attempted to be forthcoming with her answers and even said that she was looking forward to reading the outcome of the research once it was complete.

On the day of Ms S' dismissal she was again called into a meeting with her superiors and Mr K. It was at this time that Ms S was told that Mr K was not in fact a student writing a thesis. Mr K was actually a consultant engaged by Ms S' employer to review the department and recommend changes.

Ms S was surprised by this revelation but was probably more surprised by the fact that Mr K had determined that a restructure was appropriate and this restructure included making Ms S' position redundant.

Ms S was told that she was to be placed on garden leave immediately until the end of her notice period and then her employment would be at an end.

Not surprisingly, the ERA determined that Ms S' dismissal was unjustified and accordingly awarded her more than $15,000 in lost wages and $10,000 in compensation for hurt and humiliation.

Normally at this stage of an article I like to provide some words of wisdom that I've gleaned from the case, but I think most people would find it fairly apparent that you should not hire a spy to gather information about your employees and report the findings back to you.

Mary-Jane Thomas is a partner at Preston Russell Law.

The Southland Times