Company failed to properly consider worker's verbal responses before termination
The Employment Relations Authority (ERA) recently dealt with a claim of unjustified dismissal involving an IT consultant who was terminated for failing to complete mandatory online training modules.
The worker argued he was unjustifiably dismissed when the technology company failed to properly consider his verbal concerns during disciplinary meetings before terminating his employment.
He claimed the dismissal process was flawed and that he should not have been required to complete the annual training outside work hours without payment.
Meanwhile, the company argued it had followed reasonable processes and given adequate opportunities for compliance with mandatory training requirements.
Employment context and training requirements
The worker was employed as a senior consultant by the global technology company from September 2020, working on-site at a client's premises while reporting to his company manager.
The company operated in 56 countries with over 300,000 employees worldwide, including around 200 staff based in New Zealand.
All company staff at all levels, including the chief executive officer, were required to complete an annual online module called the Smart Awareness Quiz (SAQ).
The quiz was a multi-choice questionnaire designed to ensure staff awareness and compliance with various business policies, including information security, data privacy, intellectual property, business continuity management, sexual harassment, and anti-bribery and corruption.
The worker had successfully completed the SAQ in 2020, 2021, and 2022 without incident.
In 2023, he raised issues about whether he should be engaged as an employee or independent contractor, but ultimately completed that year's SAQ.
The company disputed whether the worker had raised any difficulties about completing the 2023 training module.
Employer's training deadline and escalating reminders
The 2024 SAQ was scheduled to be completed by 6 February 2024. From 10 December 2023 until the deadline, the worker received automated email reminders to complete the training.
Reminders were sent weekly until 21 January 2024, then daily until the deadline, but the worker failed to complete the module by the required date.
Between 6 February and 3 March 2024, the company sent four escalation emails requiring completion to prevent further escalations.
While the company could not produce copies of the first two emails, the third and fourth escalation emails explained that failure to complete the SAQ could lead to disciplinary action, including possible termination of employment.
After receiving the fourth escalation email, the worker was contacted by two separate managers who reminded him about the need to complete the training and asked why he had failed to do so.
The worker confirmed he had not completed the SAQ because he had completed a similar module for the client company and believed this meant he did not need to complete the company's version.
During these calls, he also reiterated his preference for the company to engage him as an independent contractor.
Disciplinary meetings and termination process
On 27 March 2024, the worker received a call from company management in Australia to attend a meeting the following day to discuss an allegation of breach of conduct.
During the meeting, a company representative presented him with a "Show Cause Notice" setting out allegations for failing to complete the SAQ and breaching chapters of the employee handbook.
The notice gave him until 2 April 2024 to respond in writing to the allegations.
During the meeting, the worker again explained his preference to become a contractor, stating he felt he was doing two jobs - one for the company and another for the client.
After the meeting, the worker did not respond to the allegations in writing, so the company scheduled a follow-up meeting for 8 April 2024.
When he was unable to attend, the worker requested the meeting be moved to 9 April 2024, which the company agreed to accommodate.
At the outcome meeting on 9 April 2024, the worker reiterated his views about preferring contractor status.
In response, the company confirmed the allegations were proven and presented him with a termination letter ending his employment.
The dismissal was based on his failure to complete the mandatory training despite receiving 27 written reminders over a 60-day period, including warnings about possible termination.
ERA findings on dismissal justification
The ERA found that requiring staff to complete the SAQ was reasonable for a global technology company with regulatory and client obligations, particularly given the worker's exposure to highly sensitive information at a major financial institution client.
The Authority noted the worker's employment agreement required him to abide by company policies, and the training requirement was part of these policies.
The ERA concluded that failing to complete the SAQ was a valid reason for disciplinary action, noting the worker was aware of his obligations through numerous reminders and had previously completed the training in earlier years.
The Authority found insufficient evidence that the worker had raised prior concerns about completing the training until he attended the disciplinary meeting.
However, the ERA identified a significant procedural defect in the company's disciplinary process.
While the worker was given the opportunity to provide a written response to the Show Cause Notice, the company failed to consider the verbal concerns he raised during the disciplinary meeting.
The Authority found this failure to consider the worker's expressed views was not a minor defect and was not the actions of a reasonable employer, making the dismissal unjustified.
Contributory conduct and reduced remedies
The ERA acknowledged the worker was entitled to remedies for unjustified dismissal, but found significant contributory conduct that warranted a substantial reduction in awards.
The Authority determined the worker was "ultimately the author of his own misfortune" for clearly deciding not to comply with the SAQ requirement despite multiple warnings and considerable time after the deadline to complete it.
The worker had failed to properly inform the company about his concerns regarding completing the training and effectively ignored numerous reminders.
The ERA noted the training could have been completed in parts over time, but the worker did not complete any portion of the 2024 module, making the disciplinary process inevitable.
The ERA awarded $19,230.76 in lost wages for the eight-week period until the worker found new employment, calculated from his base salary of $125,000 rather than his claimed hourly rate.
However, due to his significant contribution to the situation, the Authority reduced the remedy by 75 percent to $4,807.69.
The ERA declined to award compensation for hurt and humiliation, finding that despite some distress from the termination, dismissal was more than a likely outcome given his conduct.
