Question

Topic: Section 103 of the Employment Relations Act (ERA) 2000 contains a provision against employees being unjustifiably dismissed. As former Chief Judge of the Employment Court Tom Goddard pointed out, dismissals may comply fully with the terms of the employment agreement but nevertheless be ‘unjustified’ because they are unfair or unreasonable. Employers frequently ask, though, why New Zealand should have the concept of ‘unjustified dismissal’ at all. In family law, for instance, we have moved away from ‘divorce for cause’ to ‘no fault divorce’, so why not have ‘no fault dismissal’? In other words, so long as an employer gives proper notice of termination or pays wages in lieu as provided for in the employment agreement, then why should that not be an end to the matter?

What do you think? Should employers have the right to hire and fire workers without the threat of having to defend against an unjust dismissal claim should they decide to discontinue that employment relationship? Why or why not? What are the trade-offs for the employment relationship (e.g., in terms of employment rights and management flexibility) of a ‘for cause’ rule, as enshrined in the ERA 2000 and New Zealand common law? Discuss and support your arguments with evidence derived from your researching (i.e., not simply by regurgitating lecture notes) of this topic.

Answer 1

The decision to dismiss an employee carries with it the risk of a possible legal challenge. An employee can make a claim for unfair dismissal. Employers have a legal obligation to provide employees with written procedures to be followed before dismissing an employee. Unfair Dismissals Acts 1977-2001 gives most employees the right not to be unfairly dismissed. An employer must be able to show substantial grounds for dismissal and also the fair dismissal. the employer must give employees the reason for dismissal in wiritng, if the employer does not provide the reasons for dismissal in writing to the employees who have been working for more than 6 months then the employer will be required to pay the employee what he would have earned during the applicable notice period and the dismissal becomes a termination