Manager dismissed for gross negligence and argues that the investigation was inadequate
A restaurant manager was summarily dismissed for serious misconduct after she mistakenly confirmed a helicopter booking that caused her employer to exceed its resource consent limits for landings and takeoffs.
The worker apologised and took full responsibility for the error, but the employer determined her actions amounted to gross negligence that caused significant damage to the business.
The worker claimed she was not given adequate opportunity to respond, was not properly trained on the requirements, and that the employer made a predetermined decision to dismiss her without exploring alternatives.
The employer argued to the Employment Relations Authority (ERA) that it maintained that it followed the correct investigation and disciplinary processes to reach its decision.
Background and booking error
The employer operated a winery, restaurant and accommodation business on Waiheke Island with resource consent setting strictly limited numbers for permitted helicopter landings and takeoffs.
Helicopter traffic and noise issues had caused controversy with some neighbors, so the company had a procedure to check that helicopter bookings were kept within those limits, concerned that further complaints would cause legal costs, bad publicity and potentially affect its license and business viability.
The office manager was primarily responsible for approving and recording helicopter bookings on a spreadsheet specially designed to enable running checks that bookings were within resource consent limits.
Requests for bookings were received at two email addresses for the company that the worker managed as restaurant manager. Under the established procedure, enquiries for helicopter bookings were referred to the office manager to check, who entered party details and landing times on the spreadsheet with an algorithm identifying whether the booking was within permitted limits.
On 19 January 2024, the office manager confirmed a booking for a helicopter landing for lunch on 10 February, recorded as involving four movements.
On 7 February, the worker received an email from the same helicopter company asking for a landing booking for a guest who was the father of the person with the 19 January booking, with an arrival time half an hour after the earlier booked landing. The subject headings of both emails used the respective first names and shared family name of each man.
The worker responded six minutes after receiving the booking request, stating, "The booking is confirmed." According to her later evidence, she responded after asking the office manager about the booking, as they were both working in the office that day.
The available email record showed the worker had not followed the usual procedure of forwarding such booking requests to the office manager for checking.
Discovery and apology
The employer's director spent time at the premises on 10 February and noticed the number of helicopter landings around lunch time, saying it was obvious those landings exceeded consent limits. He asked the general manager to check what had happened.
The general manager contacted the helicopter company directly and confirmed it had an email from the office manager for the first landing and an email from the worker approving the booking of the second landing.
On 12 February, the general manager met with the worker and the office manager to talk about what happened. According to the general manager's account, it was clear the worker had misunderstood the email message as applying to the existing booking because the customer referred to had the same family name.
The worker said she "felt silly" when she looked at the 7 February email again and thought she should have read the email better.
In an email to the director on the evening of 12 February with the subject heading "Apologies," the worker said she was truly sorry for her mistake, understood how bad this could impact the business, and took full responsibility for what happened. The director did not respond to the worker's apology email or talk with her about the incident during the following week.
Director's predetermined dismissal direction
The director forwarded the worker's email to the general manager on 13 February with a message about steps he wanted taken. He said the worker was well aware of the process for approvals and had otherwise always followed the correct process until this time.
He said she had "acted in gross negligence and chosen not to follow the established process," and he could not ignore the "significant" damage to the company. His message concluded that he considered this to be gross misconduct, and the appropriate disciplinary action must be followed, and her employment must be terminated.
On 17 February, the director sent the general manager a lengthy email setting out 18 observations, including asking, "Why is [the worker's] employment not terminated yet as requested?" His email ended with six action points, with point two being "Proceed with immediate termination of [the worker's] employment."
Three days later, the general manager told the director she had spoken with a Restaurant Association advisor about the need to hold "a formal, recorded meeting" with the worker, even though it is gross misconduct."
The director initially questioned the need for any further meeting but agreed later that day that they needed "to follow the correct process."
Disciplinary meeting and modified outcome
The general manager sent the worker a letter calling her to a disciplinary meeting on 28 February to answer an allegation of serious misconduct relating to confirming a booking for four helicopter activities without following the correct process.
After getting independent advice, the worker attended the meeting on 28 February with a coworker as a support person. The notes recorded that the worker said she was not adequately trained on the process, some other resource consent requirements were not followed by the business, and she was expected to cover different roles in addition to her restaurant manager duties.
The notes recorded that the general manager ended the meeting saying she would consider everything and provide a preliminary decision by the next day, with the worker then having the opportunity to give feedback.
After the meeting, the general manager prepared a draft letter dated 29 February with the heading "Preliminary decision," saying the proposed decision was to instantly dismiss for serious misconduct and asking the worker to provide written feedback or attend a further meeting on 1 March.
The general manager sent her draft to the director for approval, who responded with significant amendments and additions. The opening paragraph of the director's amended version removed the reference to a "proposed" decision, instead telling the worker that the company had decided to terminate her employment with immediate effect for serious misconduct.
In further paragraphs written by the director, the letter said previous instances showed the worker understood the correct process but on 7 February she "decided to act without authority and approval to confirm helicopter bookings."
The director's draft described the worker's allegations about her duties as "simply false" and "malicious and unsubstantiated," concluding her actions amounted to gross negligence and the company had "no other option but to terminate your employment with immediate effect." At his direction, the general manager sent the letter with the heading now reading "Final Disciplinary Outcome."
Authority's unjustified dismissal findings
The ERA found the employer's dismissal of the worker for serious misconduct was not justified, determining that the outcome and how the employer reached it were not what a fair and reasonable employer could have done.
The Authority identified six key failures: the outcome was predetermined; circumstances in which the error occurred were not adequately investigated; the company's concerns were not fully put to the worker for response; an ulterior purpose motivated the decision; the director, as the actual decision maker, did not meet with the worker; and alternatives to dismissal were not fairly considered.
The ERA found the evidence from the director's email communications, his query on 17 February about why the worker had not yet been dismissed, and his rewriting of the preliminary disciplinary letter demonstrated that the outcome was predetermined from the outset.
Agreeing to the general manager conducting a formal disciplinary process did not change the reality that the director had already decided what the worker did was serious misconduct and she was to be dismissed for it, with no alternative to be countenanced.
The Authority determined that the process the general manager had followed was, objectively assessed, a charade.
The Authority found the employer's evidence did not establish it had done what it reasonably could have been expected to do to examine the circumstances in which the worker made her admitted mistake on 7 February. The ERA determined evidence indicated they talked about what happened and how it happened, but not why it happened.
The worker's evidence stated she was "very busy this day" with teams asking for her help because they were short-staffed and people had to cover more than one job, and she was "trying to juggle emails and help the front of house team" when she made the mistake.
Investigation inadequacies and ulterior purpose
The ERA found that a fair and reasonable employer could not, as part of its justification for a dismissal, say an employee had failed to provide an explanation for their actions if the employer did not do what it reasonably should have done to get one at the time.
The Authority determined the employer's evidence did not establish it had made sufficient inquiries to get an explanation and could not reasonably then blame the worker for failing to provide one.
The Authority found that because the director removed the preliminary stage in the disciplinary process, the worker did not get the opportunity to respond to the allegation that she deliberately chose not to follow the booking process, rather than her oversight happening because she was careless or distracted.
The ERA noted the director's written evidence disclosed a further suspicion not disclosed to the worker, stating he was "left to wonder … if she had accepted payment … or been offered something in return for making this booking."
The Authority found that this serious allegation should have been properly investigated and put to the worker for an answer.
The ERA found the director's evidence also disclosed the disciplinary process, and its outcome was motivated by an ulterior purpose of assisting with the company's defense if any inquiry or litigation arose over excess helicopter landings.
The director explained he was very worried, given the company's previous prosecutions, that they would be prosecuted once again, feeling he would need to demonstrate that disciplinary measures had been undertaken to ensure this did not happen yet again, with his mind focused on saving the business.
Decision maker and alternative failures
The Authority found that a further failure of fairness occurred because the employer did not arrange for the general manager to speak with the director, who was the actual decision-maker, about the disciplinary outcome. While the general manager was nominally responsible for the process and decision, the evidence established that the director, in fact, made all critical decisions.
The ERA determined the defect in the employer's process of not having the director meet with the worker to discuss his own view of events, and the appropriate outcome meant she did not have a real opportunity to address the concerns, which were decisive for him.
The ERA found the employer acted unfairly in not doing more to consider the worker's proposal to end her employment by resignation rather than dismissal. The Authority noted the company had accepted such a resolution on a similar previous occasion but discounted doing so in the present instance because the director considered he needed a more punitive outcome to impress a council or court if a prosecution resulted.
The ERA determined that the alternative of accepting the worker's resignation could have achieved the company's purpose without causing the damage to her future employment prospects that dismissal may have caused.
Remedies and contributory conduct
The ERA found the worker got a suitable new job elsewhere six weeks after her dismissal, so her claim for lost wages was restricted to that period at $8,076.93 on her annual salary of $70,000.
The Authority found the worker's evidence established that how the employer had conducted its disciplinary process and implemented its decision caused her distress, compounded by being shocked to receive a final decision when she was told she would have the opportunity to respond to a preliminary decision, and by being an Italian visa holder whose employment was tied to that company.
The ERA determined that the appropriate amount to award as compensation was $15,000. The Authority found the worker's acceptance of her contribution to the situation had to be recognised in a reduction of remedies awarded, determining that a decrease of 20 percent was a substantial but sufficient measure.
The ERA ordered the employer to pay the worker $6,461.54 as lost wages and $12,000 as compensation for humiliation, loss of dignity and injury to feelings within 28 days.
