Dismissed or Resigned?

A recent Employment Relations Authority (ERA) determination is a reminder about the importance of clear communication, procedural fairness, and not making assumptions.

Background

Deivid Da Silva was employed as a joiner by DSJ Joinery Ltd in April 2023. Initially, the employment relationship was positive, with Mr Da Silva describing a supportive workplace culture with his boss Mr Milne.

Things changed after Mr Milne’s return from surgery in August 2023. He was around the factory more, and the business picked up a high-end kitchen job that brought extra pressure. During this period, a health and safety incident occurred: a sawblade was damaged after hitting a screw in a piece of wood. Mr Milne found the damaged blade and sent Mr Da Silva a photo but didn’t explain why.

The following Monday, Mr Milne called Mr Da Silva into the office to discuss what happened. Accounts of the meeting differed, but what is clear is that it was brief and left Mr Da Silva upset. He left the workplace, believing he’d been dismissed. Later that day, he texted Mr Milne asking about his final pay. Mr Milne responded as if Mr Da Silva had resigned and arranged for his tools to be collected and final pay processed.

Over the next couple of days, there were more texts and emails. Mr Da Silva repeatedly asked if he’d been fired and said he hadn’t resigned. Mr Milne didn’t directly answer these questions, and the business moved ahead with ending the employment.

The Authority’s Findings

The ERA found that although there was no explicit dismissal during the meeting, DSJ’s failure to clarify the situation and respond to Mr Da Silva’s repeated assertions that he had been fired amounted to a constructive dismissal. The Authority emphasised that employers have a duty of good faith, which includes being “active and constructive in maintaining the employment relationship.”

The process around the meeting and the follow-up was also found lacking. There was no proper investigation, no advance notice, and no opportunity for Mr Da Silva to respond or have a support.

As a result, the ERA ruled that Mr Da Silva was unjustifiably dismissed and awarded him $13,500 in compensation for humiliation and $760.32 in lost wages (after a 10% reduction for his contribution to the breakdown). DSJ was also fined $500 for failing to provide wage and time records upon request.

Key Takeaways for Employers

1. Clarity is Crucial: Always communicate clearly and promptly, especially when addressing performance or disciplinary issues.
2. Follow Fair Process: Ensure employees are informed of the purpose of meetings, given time to prepare, and allowed representation.
3. Maintain Good Faith: Engage constructively with employees, particularly during conflict. Ignoring communications can be seen as a breach of duty.
4. Document Everything: Keep accurate wage and time records and provide them promptly when requested.

This case underscores that miscommunication and procedural errors can lead to costly outcomes. If you have a concern, ask for advice early.