Employee Justifiably dismissed even though not? Employment Lawyer – Dukesons Business Law

November 2018

This Blog isn't legal advice – if you need legal advice on any employment law issue or any other business law or commercial law issue, please contact me. I'm a business lawyer (commercial lawyer) who provides advice on a wide range of business law or commercial law issues including employment law issues.

You be the Judge

After trying to assist an employee, Mrs Johnson, to meet budgets, and after discussions with her, Fourth Estate Holdings (2012) Limited (“NBR”) dismissed her.

Mrs Johnson had been confident that she would meet her budgets but this didn’t happen. NBR advised her that it couldn’t sustain a decline in advertising revenue and that it would prefer to make an exit offer than to go through a performance management process (given that substantial efforts had already been made to assist Mrs Johnson to meet her budgets). NBR had adopted a similar exit approach in the past in relation to some employees.

NBR met with Mrs Johnson with a prepared termination letter, advising her that she could choose to adopt the exit approach or go through a performance management process. These options had been informally discussed with her over a coffee the day before.

Mrs Johnson apparently didn’t make any choice at that time. She left the meeting, started to pack up, and told staff that she had been fired.

NBR met with staff and advised that Mrs Johnson had been given two options, that she had refused to resign, and for that reason, she had been let go. NBR’s representative said that Mrs Johnson hadn’t been doing a good job, despite being given support and the chance to improve. At a later meeting, NBR’s proprietor told staff that Mrs Johnson had been sacked and deserved to be fired.

Subsequently, NBR learned that Mrs Johnson had sent a number of emails from NBR’s email account to her personal email account. It would appear that this concerned confidential information belonging to NBR about its business. NBR obtained an interim injunction in the High Court prohibiting Mrs Johnson from dealing with NBR information and requiring her to provide details of all NBR information that she had taken or retained. A settlement agreement was entered into between the parties in relation to that matter.

Mrs Johnson’s claim for unjustifiable dismissal was upheld. It was held that there was no fair investigation into the concerns about performance issues and those concerns weren’t specifically discussed with her, with the consequence that she had no opportunity to address them. On the other hand, Mrs Johnson’s claims that she had been unjustifiably disadvantaged by increases in her budget weren’t upheld. The reasons for the increases had been discussed with her, they were legitimate, and she had considered that the targets were achievable.

As to remedies, this aspect of the case was complicated by further facts. After having her employment with NBR terminated, Mrs Johnson secured new employment with Conferenz. However, Conferenz terminated her employment. This was because Mrs Johnson had misrepresented the reason why her employment with NBR was terminated and because Mrs Johnson provided Conferenz with extensive information that belonged to NBR. Conferenz wasn’t impressed that Mrs Johnson had this information in the first place, let alone that she had provided it to Conferenz. Accordingly, Mrs Johnson received a sum on account of lost wages only for the time from termination by NBR until she gained employment with Conferenz. The amount was $1,666.67 (gross).

As to compensation for hurt and humiliation, it was held that Mrs Johnson was to some degree the author of her own misfortune. She chose to advise colleagues that she had been dismissed. Although comments were later made by NBR to staff about the termination, Mrs Johnson was apparently unaware of them at the time. Further, any distress caused by the High Court proceedings resulted from her actions in misappropriating NBR information.

In addition, Mrs Johnson’s misappropriation of NBR confidential information constituted “truly significant” misconduct that warranted a reduction in any compensation that would otherwise be payable. The award was for $8,000.00.

As to Mrs Johnson’s misappropriation of confidential information, this was in clear breach of provisions in her employment agreement. Mrs Johnson was ordered to pay a penalty of $9,000.00 in that regard (pursuant to s134 of the Employment Relations Act).

Mrs Johnson was awarded a total amount of $9,1666.67 and was ordered to pay a penalty of $9,000.00. It would appear that her legal costs, in relation to the High Court matter and the employment matter, were in the vicinity of $96K.

Objectively, it’s difficult to see that Mrs Johnson would ever have come out of the employment proceedings matter with a substantial award. Apparently, she considered that principle was at stake. That might seem odd given the findings as to “truly significant” breaches of fidelity in misappropriating NBR’s confidential information.

It remains to be seen whether Mrs Johnson appeals.

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