You’re not alone.
For many employees, unjustified dismissal is a significant concern. It can reshuffle your life by disturbing your wellbeing, finances, career, and overall security. Luckily, under the Employment Relations Act (2000), you are protected from being dismissed without a valid reason and fair process.
In this article, we’ll explore what constitutes an unjustified dismissal, the rights and responsibilities of the parties involved, and the steps you should take if you believe you’ve been unfairly dismissed.
What Is an Unjustified Dismissal?
An unjustified dismissal occurs when an employer terminates an employee’s employment without having both:
A justifiable reason – The employer must demonstrate a valid reason for dismissal, such as serious misconduct, continuous poor performance, or redundancy.
A fair process – The dismissal process must follow procedural fairness, including proper communication, investigation, and an opportunity for the employee to respond.
If either the reason or the process is lacking, the dismissal may be deemed unjustified by the Employment Relations Authority (ERA).
When is Dismissal Unjustified?
Some common scenarios where a dismissal might be considered unjustified include:
Lack of cause: Terminating employment without clear, recorded evidence of misconduct or poor performance in the workplace.
Procedural flaws: Dismissing an employee without a formal warning(s), proper investigation, or chance to advocate for themselves.
Redundancy misuse: Claiming redundancy as a reason for dismissal without following consultation requirements, or proving the role is genuinely no longer needed.
Discrimination: Dismissals influenced by race, gender, age, disability, or other prohibited grounds under the Human Rights Act 1993.
Example Scenario
Sarah has been working as a retail sales assistant in Auckland for 2 years.
One day, her manager, David, calls her into his office and tells her that she is being dismissed immediately due to ‘poor performance.’ This is unexpected, as Sarah has never received any warnings, or feedback indicating her performance was an issue.
She asks for an explanation, but David refuses to provide specific details or show any documentation supporting his claim.
Sarah also realises that she was not given a chance to improve, or respond to the concerns. Her final pay check does not include notice pay, and she is told to leave immediately.
In Sarah’s case, the dismissal is likely unjustified because:
1. No proper process was followed – She was not given formal warnings, an opportunity to improve, or a fair chance to respond to the concerns.
2. No valid justification – The employer did not provide clear, documented reasons for her dismissal.
3. Lack of notice or payment in lieu – Unless the dismissal is for serious misconduct (which must still be properly investigated), she is entitled to notice or payment instead.
Sarah could raise a personal grievance with her employer within 90 days and, if unresolved, take the case to the Employment Relations Authority (ERA). If successful, she might receive compensation for lost wages and emotional distress.
What does a Fair Process look like?
A fair dismissal process involves the following steps:
1. Notification: Informing the employee of the concerns or issues leading to possible dismissal.
2. Investigation/Performance Improvement/Restructuring: Conducting a fair and unbiased process.
3. Opportunity to Respond: Giving the employee a chance to explain their side before any decisions are made.
4. Consideration: Weighing the employee’s explanation fairly before deciding.
5. Outcome and Notice: If dismissal proceeds, providing written notice in accordance with the employment agreement.
Failing to follow these steps, even if the reason for dismissal is valid, can lead to a finding of unjustified dismissal.
Employee Rights and Remedies
Employees who believe they have been unjustifiably dismissed can raise a personal grievance within 90 days (or 12 months for sexual harassment claims) of the dismissal, unless they were dismissed during a trial period and have no grounds to take action for any other factors.
If the grievance cannot be resolved through direct discussion or mediation, the case may be taken to the ERA.
Possible remedies include:
1. Compensation: For lost wages and emotional distress.
2. Penalties: Employers may face fines for breaching employment standards.
3. Reinstatement: Returning the employee to their former position, though this is less common.
Trial Periods
According to Employment New Zealand, If an employee is unjustifiably dismissed during a trial period, they can not raise a personal grievance for the dismissal itself. However, action can be taken if:
1. The employer did not state the amount of notice in the employment agreement.
2. The employee started working before the agreement was signed.
3. The employee was not given a reasonable opportunity to get independent advice on the employment agreement.
4. The employment agreement does not mention there is a trial period.
Employees can also raise a personal grievance if dismissed on the grounds of discrimination (under the Human Rights Act 1993), sexual harassment, pressure about union membership, and/or unjustified disadvantages.
The Bottom Line
Unjustified dismissal is a complex and stressful process for many people, and has a significant impact on their livelihoods. Understanding the principles of procedural fairness is crucial to ensuring that you’re legally protected, and know what to do if this happens to you. If you suspect you’ve been unfairly dismissed, seek advice promptly to ensure you are properly compensated for your hard work.
Mahi Law can Help!
Our expert team will help you understand your employment rights, and pursue resolution (including compensation) through various channels, such as: Without prejudice negotiations, mediation, the Employment Relations Authority, or Employment Court if required.
We also work on a no-win, no-fee basis – if we win your case, your employer covers the costs.
Get in touch for a free consultation! You can fill out this form – or contact us at [email protected], or 0800 450 032.
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