Post by michaelquigg on Nov 30, 2006 12:02:48 GMT 12
This post concerns the new test for justification – the statutory standard for what an employer can and cannot do in relation to their employees.
Dissatisfied with how case law was developing in relation to acceptable standards for employers’ actions, the government in 2004 enacted the new section 103A of the Employment Relations Act.
That section means that when an employer’s actions in relation to an employee, including dismissing an employee, are assessed, the courts will ask:
Were the employer’s actions, in all the circumstances, what a fair and reasonable employer would have done?
If the answer is ‘no’, then the action or the dismissal will often be found to be unjustified. This in turn may result in the employer being ordered to pay the employee damages, or to reinstate them to their position.
The Employment Court has recently issued to decisions in relation to the new test – Air New Zealand v Hudson in relation to an employee’s dismissal for misconduct, and Simpsons Farms v Aberhart in relation to redundancy cases.
While some employers and employers groups had feared that the new test for justification would make employers’ lives considerably more difficult, these two decisions suggest that those fears were unfounded.
Put briefly, the two cases took similar approaches to cases decided under the new section have very much followed the approach taken in previous cases.
The minor aspects of difference are perhaps that employers will be allowed a smaller margin of error in respect of their actions – earlier cases had held that an action could be ‘harsh’ but nevertheless justifiable – and a perhaps stronger focus on process, especially as regards consultation with employees.
Dissatisfied with how case law was developing in relation to acceptable standards for employers’ actions, the government in 2004 enacted the new section 103A of the Employment Relations Act.
That section means that when an employer’s actions in relation to an employee, including dismissing an employee, are assessed, the courts will ask:
Were the employer’s actions, in all the circumstances, what a fair and reasonable employer would have done?
If the answer is ‘no’, then the action or the dismissal will often be found to be unjustified. This in turn may result in the employer being ordered to pay the employee damages, or to reinstate them to their position.
The Employment Court has recently issued to decisions in relation to the new test – Air New Zealand v Hudson in relation to an employee’s dismissal for misconduct, and Simpsons Farms v Aberhart in relation to redundancy cases.
While some employers and employers groups had feared that the new test for justification would make employers’ lives considerably more difficult, these two decisions suggest that those fears were unfounded.
Put briefly, the two cases took similar approaches to cases decided under the new section have very much followed the approach taken in previous cases.
The minor aspects of difference are perhaps that employers will be allowed a smaller margin of error in respect of their actions – earlier cases had held that an action could be ‘harsh’ but nevertheless justifiable – and a perhaps stronger focus on process, especially as regards consultation with employees.