Worker was allowed to use facilities after hours, then fired for it. ERA looks into dismissal process
The Employment Relations Authority (ERA) recently dealt with a case concerning a worker who claimed he was unfairly dismissed after using his workplace's kitchen facilities for his personal business.
The worker argued that he had received explicit permission from one of the business directors to use the kitchen outside normal working hours, and that he had used his own supplies rather than those belonging to his employer.
Despite this permission, he found himself suddenly terminated following a brief meeting where he was confronted with allegations.
What followed was a dispute over proper dismissal procedures, with questions about whether a fair investigation took place and whether the worker received adequate opportunity to defend himself before losing his job.
The worker started at a café in Auckland in February 2022 as a sous chef and was promoted to head chef in January 2023. He also ran his own food business selling at markets and community events – a venture that didn't compete with the café. Both café directors knew about this business and were generally supportive.
In early 2023, the worker asked one of the directors for permission to use the kitchen facilities for his own business outside normal hours. The worker offered to pay, but the director agreed without requiring payment. This director later stated he had asked to be informed in advance when the kitchen would be used.
The café was managed by two directors – one handled staff management while the other oversaw accounts. In late 2023, the director responsible for accounts returned from overseas and found that despite increased turnover, profitability had declined. He noticed food consumption had increased without corresponding income growth.
After monitoring kitchen activities, this director observed the worker preparing food apparently for his personal business. After reviewing security footage and invoices with the other director, they concluded the worker had been using café supplies for his own business.
On 9 January 2024, after returning from holiday leave, the worker attended a meeting with the directors. He was shocked to be accused of misusing the café kitchen. He explained that one director had given him permission and that he had used his own supplies, not the café's.
The worker said he didn't speak much during the meeting because he felt anxious. He believed the directors had already decided the outcome. While the directors claimed they offered to show him the footage, the worker said no evidence was presented to him during the meeting.
The ERA identified significant flaws in the employer's approach:
"Although [the director] said he told [the worker] on 8 January 2024 the purpose and subject matter of the proposed meeting the following day, and advised him to have a support person, [the worker] denied this and there was no written confirmation provided explaining the purpose of the meeting of the meeting."
The ERA also noted: "[The worker] was not provided with evidence of the allegations against him prior to the meeting so he could prepare for it: the CCTV footage was not provided, nor were the invoices and timesheets provided to him in order that he could be prepared to offer an explanation."
While the directors claimed they offered another meeting, the ERA found no evidence supporting this. The worker believed his employment ended immediately after the 9 January meeting, evidenced by him taking his chef's knives when leaving and no employer follow-up about his subsequent absence.
The ERA determined that dismissing the worker was not what a fair and reasonable employer would have done. The directors failed to properly investigate their concerns or adequately consider the worker's explanation.
Regarding the seriousness of the allegations, the ERA emphasised: "The more serious the allegation of misconduct, the greater will be the expectation of its proof."
Despite acknowledging smaller employers might lack resources for handling disciplinary matters, the ERA found "major rather than minor flaws in the procedure adopted in terminating [the worker's] employment which cannot be explained merely by the fact that it was a smaller employer."
The worker reported becoming anxious and stressed after his dismissal, requiring counselling and medication for migraines. He also experienced financial difficulties and worried about damage to his professional reputation.
The ERA awarded $18,000 compensation but reduced this amount after finding the worker had contributed to the situation:
"It is not disputed by either party that [the director] had agreed to [the worker] using the [café] facilities in connection with his own business requirements. From the evidence of both [the director] and [the worker] this was to assist on occasion when [the worker] had need of extra preparation area."
The ERA explained: "[The worker] gained commercially from the fact that he was able to use the [café] kitchens for his own business venture, and on that basis I consider that full communication on his part to have been advisable. Had [the worker] discussed the extent of his usage and informed [the director] when he would be using the [café] facilities, this may have been accommodated given the supportive attitude held, and the situation which led to his dismissal on 9 January 2024 might not have arisen."
The compensation was reduced by 17.5% to $14,850. Additionally, the employer was ordered to pay a $2,500 penalty to the Crown for failing to provide wage and time records upon request when formally asked in the personal grievance letter and again during a case management conference.
