New legal test for justified dismissal of employees 21 May 2012
EMPLOYEES who have been dismissed can raise a personal grievance against their employer for unjustified dismissal. They might have been accused of serious misconduct, made redundant after a restructuring or been medically incapacitated.
The dismissal must be justified, or the employee is likely to be entitled to financial and other compensation. The legal test for justification is in section 103A of the Employment Relations Act 2000. This section was amended in April 2011, and we now have the Employment Court’s interpretation of those changes (in the case of Angus v. Ports of Auckland Limited, Employment Court, 2 December 2011).
This is important because it sets the standard for how employers must treat employees whenever an employment relationship is terminated – for any reason.
We aren’t going to describe the facts of the Employment Court case, as what matters is what it means for employers and employees. It means that whenever an employer terminates an employee’s employment the employer must follow a fair process before the termination, and the outcome must be one that a reasonable and fair employer could have reached in all the circumstances.
Briefly, this involves:
  • A fair investigation by the employer into the allegation/matter of concern, consistent with its resources and complying with its policies/procedures.
  • Good faith, including the employer disclosing all relevant information.
  • The employer raising its allegation/matter of concern before the dismissal.
  • The employer giving the employee a reasonable opportunity to respond and genuinely considering that response.
  • Checking and considering the employee’s employment history and personal circumstances.
  • Considering the employer’s circumstances, the industry, industry practices and any health and safety risks.
  • Assessing the gravity of any consequences of the employee’s behaviour.
  • The outcome being consistent with how the employer has treated other employees in similar circumstances.
Dismissing an employee is complicated, so generally it’s prudent to seek advice from your lawyer if you are in this situation – or about to be.
This article is provided by Bartlett Law, Specialists in Workplace Law. They can be contacted on (04) 472-5579, at


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