Editorial: Employment rules review welcome

17:07, Feb 28 2010

Four years ago, a Tauranga company concerned about the theft of company property installed motion-sensitive cameras on its premises.

The cameras filmed a worker placing a cardboard box containing cakes of soap under a bench. Another worker, who subsequently admitted stealing company property, was filmed taking a box from under the bench and putting it in his car. The company believed it was a clear case of theft. It asked the worker who had placed the box under the bench to explain his actions. He refused. The company sacked him.

End of story? No. The worker took his case to the Employment Relations Authority. The authority found in favour of the employer. The worker appealed to the Employment Court. It took a different view.

It found the worker had been unjustifiably dismissed because his employer had not followed proper procedures. It had given him only selected portions of the surveillance tape, it had not put in writing the misdeeds of which he was accused, and it had wrongly concluded that the worker's representative was stalling when he put off meetings because of other commitments. The company was ordered to pay the employee $12,000 for lost wages and $7000 for distress.

The case is one of several that have shaped case law and turned the dismissal of staff into a legal minefield for employers. If they do not dot every i and cross every t, they expose themselves to significant costs even when they have good reason for acting as they did. So fraught is the process that some employers choose to settle personal grievances before they go to court.

That, in turn, has provided an incentive for some industrial advocates to offer their services to aggrieved workers on a "no-win, no-fee" basis. They know employers have to weigh the cost of a settlement against the cost of going to court and the risk of being found to have committed procedural errors.


Mediation typically costs an employer about $2000 in legal fees. A two-day hearing before the Employment Relations Authority can cost up to $20,000.

The risks are particularly big for smaller employers who do not have human resources departments to steer them through the process. Hence, Labour Minister Kate Wilkinson's plan to canvass changes to the Employment Relations Act in a discussion document and questionnaire is welcome.

Not every employer who falls foul of the courts is a victim of procedural errors. Some are simply ratbag employers.

But both employers and employees would benefit from a regime that attached more weight to the substance of dismissals and less to legal technicalities.

Workers could be fairly compensated for a perceived reduction in their rights by increasing the compensation awarded to them when they are found to have been unjustifiably dismissed and by requiring closer scrutiny of employers who use restructuring as an excuse to get rid of unwanted staff.

The Dominion Post