ERA finds company used misconduct allegations as pretext for terminations
The Employment Relations Authority (ERA) found that two farm workers were unjustifiably dismissed when their employer used alleged misconduct as a pretext to terminate their employment, with the Authority determining that the dismissals were motivated by ulterior purposes rather than genuine disciplinary concerns.
The workers claimed they were dismissed for serious misconduct involving the use of profane language, while the farm company argued that their conduct justified summary dismissal under the employment agreement's provisions.
The ERA found the employer had predetermined the outcome and was seeking to exit both employees before the end of the farming season.
Employment context and relationship breakdown
The farm manager and farm worker signed individual employment agreements in April 2022 and commenced work on a family farm in May and June 2022, respectively.
Their employment agreements contained misconduct provisions including "any rude, abusive, violent, threatening or seriously inappropriate conduct, including bullying towards other employees or towards customers; or employers."
The ERA found that communication issues existed throughout the employment relationship, with all parties using profane language at various times.
The workers had indicated in September 2022 that they would seek alternative employment if working hours did not change, and the company director became concerned about the uncertainty regarding staffing for the upcoming season.
In March 2023, the company issued a letter stating the workers' employment would terminate on 31 May 2023 at the conclusion of the farming season.
The workers disputed this, maintaining they had not resigned and did not agree to termination at the season's end, leading to ongoing tension about their employment status.
Disciplinary allegations and process
The dismissal process was triggered by an incident on 14 April 2023 when the farm manager told the company director to "fuck off" three times during a confrontation about work issues.
The farm manager claimed the director was following him and continuing to raise concerns while he tried to work, while the director disputed this version of events.
On 17 April 2023, the company issued a disciplinary letter addressed to both workers, alleging the farm manager's conduct and claiming the farm worker had previously called the director a "cunt" and made other inappropriate comments.
The letter indicated both workers could face summary dismissal for serious misconduct and scheduled a disciplinary meeting for 26 April 2023.
At the disciplinary meeting, the farm manager admitted his conduct but argued it did not constitute serious misconduct, while the farm worker denied the allegations against her except for one incident in November 2022.
The same day, both workers were dismissed for serious misconduct, with the company concluding their behavior was irreparable and made the directors feel unsafe.
ERA findings on procedural and substantive fairness
The ERA found significant procedural defects in the disciplinary process, particularly regarding the allegations against the farm worker.
The Authority determined the allegations were "problematically lacking in detail" and did not specify dates or circumstances, making it impossible for the worker to properly respond and for the company to establish that the alleged conduct occurred.
The ERA concluded the farm worker's dismissal was an "afterthought" only raised when the company thought it might have grounds to dismiss the farm manager.
The Authority found the allegation was made for an ulterior purpose - the company's desire to have both workers leave the farm before the next season, rather than genuine misconduct concerns.
For the farm manager, while the ERA acknowledged his conduct was inappropriate, the Authority found the dismissal was predetermined and motivated by the company's frustration with the employment situation.
The ERA determined the company director was "hopelessly conflicted" as he was simultaneously seeking to exit the farm manager for other reasons while purporting to exercise fair judgment on misconduct allegations.
Ulterior motives and good faith breaches
The ERA found both dismissals were substantially motivated by the company's erroneous belief that it could terminate the workers' employment at the end of the season.
The Authority determined the company had been actively seeking to replace both workers despite being told they had not resigned and did not agree to termination.
The ERA concluded the company breached its duty of good faith by deliberately seeking to end the employment relationships through the termination letter dated 23 March 2023, and by raising disciplinary allegations in a manner designed to achieve the predetermined outcome of removing both workers from the farm.
The Authority found the good faith breaches were "deliberate, serious, and sustained" and that the company's actions were intended to undermine the employment relationships.
The ERA noted the disciplinary process was initiated and followed through because the company "wanted Ms Mitchell and Mr Jenkins gone" rather than for genuine misconduct reasons.
Compensation awards and penalty assessment
The ERA awarded each worker $20,000 compensation for humiliation, loss of dignity and injury to feelings, finding both were significantly impacted by the sudden dismissals and requirement to vacate their farm accommodation within two weeks.
The Authority accepted evidence about stress, sleep difficulties, and financial pressures following the dismissals.
For lost wages, the ERA calculated that each worker lost $12,109.38 based on their obtaining alternative sharemilking work five weeks after dismissal, but at reduced rates compared to their farm employment.
The Authority found they took appropriate steps to mitigate their losses by securing alternative work promptly.
The ERA declined to reduce remedies for contribution, finding neither worker's conduct contributed to their dismissals in a blameworthy sense, given the ulterior motivations and procedural unfairness.
The Authority imposed a $4,000 penalty for good faith breaches, with $2,000 paid to the Crown and $1,000 to each worker, and ordered payment of $432.69 to each worker for unpaid public holiday entitlements.
