Recruitment agency claims no process needed for casual staff, ERA disagrees
The Employment Relations Authority (ERA) recently dealt with a case involving the summary dismissal of a casual worker employed through a recruitment agency.
The worker had been placed with a client company for nearly seven months before receiving an unexpected email terminating his employment with immediate effect, citing serious misconduct including threatening behaviour and dishonesty.
The worker challenged the dismissal, arguing that proper procedures had not been followed and that the allegations against him were unfounded.
He maintained that despite being classified as casual, he had worked regular hours and deserved fair treatment in any disciplinary process. The recruitment agency defended its actions by claiming that as a casual worker, no formal dismissal process was required and they were entitled to end the engagement without due process.
The worker began employment with the recruitment agency in June 2023 as a labourer and forklift driver. Initially undertaking casual labouring work at a food distribution centre, he was offered a position at a transnational logistics company through the recruitment agency. The worker understood this arrangement to be a trial period for three months, after which permanent employment might follow.
The employment relationship started on 16 June 2023 and continued until 4 January 2024. Throughout this period, the worker maintained regular hours of 40 per week, working the 10am-6pm shift at the logistics company.
Despite being employed through a recruitment agency, he took instructions directly from a supervisor at the host company, with minimal contact from the agency's sole director.
The employment was governed by a formal individual employment agreement signed on 19 June 2023, titled "Casual On-Hire Individual Employment Agreement."
The contract specified that the employer was "in the business of providing temporary workers to Host Clients" and was "offering a position of service on a casual on-hire basis."
Under the agreement's definitions, assignments were described as work where "each assignment may be performed at various work sites for varying lengths of time and for varying hours, generally without regularity or continuity."
However, the reality of the worker's placement showed consistent hours and location, creating tension between contractual terms and actual working arrangements.
The agreement also contained termination provisions stating that "after following a fair and reasonable process the Employer may terminate your employment without notice or without payment in lieu of notice" for various reasons including misconduct.
This clause would later become central to the ERA's analysis of whether proper procedures were followed.
On 4 January 2024, without any prior warning or discussion, the worker received an email at 3:59pm that immediately terminated his employment. The dismissal email carried the subject line "Re: Termination of Employment – Serious Misconduct" and began by stating:
"I am writing to inform you that your employment with [the recruitment agency] is terminated with immediate effect, effective from 04/01/2024. This decision has been made in accordance with New Zealand employment laws due to your serious misconduct, which includes threatening behaviour and dishonesty."
The company director outlined two specific allegations against the worker. The first concerned a text message that the director perceived as threatening, which had been sent by the worker on 16 October 2023.
The second allegation suggested that the worker had not accurately recorded his working hours on a timesheet dated 22 December 2023 whilst working at the logistics company.
Despite the serious nature of these allegations, no process was followed to investigate the claims or provide the worker with an opportunity to respond. The dismissal email concluded by asserting:
"Your termination is in accordance with the disciplinary procedures outlined in our company policies and complies with New Zealand employment laws." However, no evidence was provided to demonstrate that any disciplinary procedures had actually been followed.
Following the dismissal, the worker's advocate raised a personal grievance for unjustified dismissal on 8 January 2024.
The employer's legal counsel responded on 24 January 2024, denying the personal grievance and introducing an additional ground for dismissal, suggesting that the host employer had determined the worker was not performing to acceptable standards and intended to terminate the placement.
The company director maintained throughout the dispute that the casual nature of the employment meant no dismissal process was required. In correspondence with the ERA, he argued:
"[The worker] was employed on a casual, when required basis. He was not employed on a full time, basis. This meaning, i am not required to offer him continuous on-going employment. I do not need a reason to stop offering him employment. Just the same as he did not need to accept offer of any employment i offered him."
The director's engagement with the ERA process became increasingly sporadic over time. After initially filing a statement in reply through legal counsel in April 2024, he failed to participate in scheduled mediation and later missed a teleconference in July 2024.
By September 2024, the director had claimed pressing health issues and stated that the recruitment agency was no longer trading, though the company remained on the New Zealand Companies Register.
The worker provided evidence to counter the allegations made against him. Regarding the timekeeping issue on 22 December 2023, he explained that this was the last day before Christmas break and all staff, including supervisors, finished early to have drinks together on site. He maintained that this was a sanctioned early finish and denied any dishonesty in his time recording.
The ERA concluded that the dismissal was unjustified on both procedural and substantive grounds. The Authority stated: "In the absence of any adherence to basic procedural fairness steps, including not giving [the worker] an opportunity to be heard, I find this was an unjustified dismissal."
The ERA noted that whilst the worker was engaged for temporary assignments, "he was dismissed by [the employer] and not because his assignment with [the host company] was terminated by them." This distinction proved crucial in establishing that proper dismissal procedures were required rather than simply ending a casual assignment.
Regarding the alleged threatening text message from October 2023, the ERA found this issue "should have been dealt with at the time" if it was genuinely concerning. The timing of raising this complaint months later suggested it was not considered serious when it occurred.
The ERA awarded the worker $9,000 in compensation for distress, hurt and humiliation under section 123(1)(c)(i) of the Employment Relations Act 2000. For lost wages, the ERA awarded $4,320 representing four weeks of work at 40 hours per week at $27 per hour inclusive of holiday pay.
The ERA also found no contributory conduct that would reduce the remedy, stating: "I have not found any factors that could lead to a conclusion [the worker] contributed to the way in which his employment was abruptly terminated."
