Understanding Constructive Dismissal in New Zealand

Constructive dismissal happens when an employee resigns because their employer’s actions make the workplace intolerable. This can lead to serious legal consequences for businesses if not handled correctly. Employers must understand the circumstances that could lead to a constructive dismissal claim and how to prevent them.

Common Scenarios of Constructive Dismissal

  • Unilateral Changes: Significant changes to employment terms, such as reduced pay or demotions, without consultation.
  • Bullying or Harassment: Failure to address or prevent bullying or harassment in the workplace.
  • Unrealistic Expectations: Imposing unachievable performance targets without adequate support.
  • Breach of Trust: Disclosing confidential information or undermining an employee’s role.
  • Marginalisation: Isolating or excluding an employee from key meetings or decision-making processes.

Assessing Constructive Dismissal

When an employee claims constructive dismissal, the focus is on whether the employer’s actions were serious enough to make resignation the only option. The Employment Relations Authority will consider the employee’s work conditions and whether any attempts were made to resolve the situation before resignation.

Preventative Measures

Employers should prioritise early intervention and strong communication to prevent constructive dismissal claims. The following strategies are key:

  1. Open Dialogue: Regularly check in with employees and address issues early before they escalate.
  2. Follow Policies: Ensure any changes to employment terms are in line with the employment agreement and carried out with proper consultation.
  3. Respond to Complaints: Act quickly and seriously in response to complaints of bullying, harassment, or unfair treatment.
  4. Seek Legal Advice: When making significant changes, consult with a legal expert to ensure compliance with employment law.

Conclusion

Constructive dismissal claims are complex and potentially costly. By fostering a respectful and legally compliant workplace, employers can avoid these claims and maintain positive relationships with their employees. Prevention is key, but if faced with a claim, seek legal assistance promptly to protect your interests.

With purpose, Persia

Disclaimer: This article is for general informational purposes only and is not legal advice. For advice specific to your situation, please get in touch with me directly.