Constructive Dismissal

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Constructive dismissal arises where:

a) an employer gives an employee a choice between resigning or being dismissed,

b) an employer follows the course of conduct with the deliberate and dominant purpose of coercing an employee to resign, or

c) a breach of duty takes place by an employer which causes the employee to resign (in circumstances where resignation would be reasonably foreseeable).

A claim for constructive dismissal will usually revolve around an analysis of the events that took place just prior to the employee leaving their employment. The focus is on the employee’s main motivation for their decision to leave, and whether the motivation arises from a breach or breaches of the employer’s duty or other actions by the employer.

What conduct would be sufficient to amount to “a breach of duty” by an employer?

In deciding whether an employer’s conduct amounts to a constructive dismissal it is essential to closely examine the facts and circumstances of the case to ascertain whether the conduct of the employer can fairly and clearly be said to have crossed a line between media inconsiderate conduct causing some unhappiness from dismissive or repudiatory conduct reasonably sufficient to justify termination of the employment relationship.

In a recent Employment Relations Authority decision (Taputoro v Healthcare Horizons Limited (In Liq) [2020] NZERA 29), it was found that this line was crossed in that the employer had committed a serious breach of duty which “completely repudiated” the employment of the employee.  Cumulatively, this was comprised of the following actions taken by the employer:

(i) failure to pay wages, holiday pay, sick pay and public holiday pay;

(ii) unlawful deprivation and retention of wages; including minimum wages; and

(iii) unlawful suspension;

(iv)failure to properly particularise allegations of misconduct;

(v) subsequent failure to investigate allegations of misconduct, regardless of their obvious deficiencies; and,

(vi)failure to rescind an unlawful suspension.

This article is not a substitute for legal advice about your own individual situation. Every case can be different so please seek legal advice or contact me direct for advice that applies to you.