Worker argues employer had poor communication and confidentiality violations
The Employment Relations Authority (ERA) recently dealt with a constructive dismissal claim brought by a project manager against his former employer.
The worker had been employed from June 2019 until his resignation in December 2023, initially as a joiner before being promoted to project manager.
The worker argued that his resignation should be treated as a constructive dismissal because the way his employer treated him meant he could not have been expected to continue working under such circumstances.
He claimed that a series of workplace changes, performance management issues, and breaches of confidentiality had created an untenable working environment that forced him to resign.
The employer disputed these claims, acknowledging there were issues at work between the parties but arguing these were mostly manufactured by the worker to attempt to justify a constructive dismissal claim.
The worker's troubles began when significant changes were made to the project management team structure at the cabinet making and joinery company.
The business had three project managers working relatively independently, with the worker primarily taking overflow work from a senior colleague who decided to semi-retire in 2023.
The managing director then promoted another project manager to a leadership role and decided to advertise for an additional project manager position.
However, the worker was kept in the dark about these developments. The situation came to a head in October 2023 when the worker discovered a job advertisement for a project manager position.
A staff member showed him the advertisement and asked if he had handed in his notice. At that point, he was the only other full-time project manager besides the newly promoted senior project manager, and he became concerned he was being replaced.
The managing director later acknowledged that the worker "was not told that was happening or the business reasons for it."
This lack of communication became a central issue, as the ERA found that what was actually planned involved far more than what was communicated.
The changes included making all designers and clients go through the senior project manager so the managing director could have more control over the business.
The worker would no longer receive just overflow work and could no longer be a point of contact for clients. The ERA noted these changes "would undoubtedly impact on [the worker's] employment" and required proper consultation under good faith obligations.
The employment relationship deteriorated significantly following two heated phone calls on 23 November 2023.
The managing director had been frustrated that the worker was not attending sites with senior project managers for what he described as retraining purposes.
However, the worker had not been properly informed about these expectations or the reasons behind them.
During the first phone call, the managing director asked where the worker was, and when he replied he was almost back at the factory after a client walkthrough, the managing director became angry.
According to the worker's evidence, the managing director said he was "on his last chance" and asked why he was not with the senior project manager.
When the worker questioned this, the managing director "got very angry and raised his voice and said 'I want people to do what I fucking tell them to do' or words to that effect."
The worker then immediately called the senior project manager to ask why he was in trouble. According to the worker's account, the senior project manager "said that if he did not like it, he could hand in his notice."
Following these calls, the managing director sent an email attempting to clarify: "Firstly I want to make it abundantly clear that we do not wish you to resign from your employment. You are a valuable team member." However, the email then outlined specific performance concerns.
The ERA found the worker "was not informed about the list of jobs [the managing director] had concerns about, why there were those concerns or what the overall plan to remedy the concerns actually was."
The ERA identified multiple breaches of the employer's good faith obligations. The authority found that the company had failed to be "responsive and communicative" as required by law, and that the tone and timing of the phone calls was not consistent with an employer seeking to be "active and constructive in maintaining a productive employment relationship."
A particularly serious breach occurred when the HR manager shared confidential information about the worker's employment concerns with other staff members.
The worker had been discussing his situation with the HR manager, seeking support and guidance.
However, the HR manager told at least one other employee about the worker's potential personal grievance claim, saying he was "going to take a personal grievance against the company."
This breach of confidentiality significantly damaged the employment relationship. The worker was very upset about this disclosure, considering it a breach of his privacy.
The ERA emphasised: "It is fundamental to the personal grievance process that employees are able to raise employment relationship problems confidentially."
The situation was further compounded by other actions including removing the worker as a client contact without explanation, staff members stopping talking to him, revoking his invitation to a social event, and giving him no work when he returned from sick leave.
The ERA found that the employer's actions amounted to constructive dismissal and awarded significant remedies to the worker.
The authority concluded that "the decisions made and process [the employer] followed in relation to the events leading up to [the worker's] resignation were not how a fair and reasonable employer could have acted in the circumstances."
The worker was awarded $20,000 in compensation for humiliation, loss of dignity and injury to feelings.
The ERA found that he had "suffered a significant loss of trust and humiliation and injury to feelings by the way in which [HR] dealt with the issues he was raising."
The authority also considered the impact on the worker's mental health, noting that he sought medical advice and received treatment as a consequence of the employer's actions.
The manner of the worker's final departure significantly contributed to the compensation awarded. On 13 December 2023, after the worker had raised a personal grievance and resigned, the managing director came to the office and handed him a letter stating he was not required to work out his notice period and had to leave immediately.
The ERA noted this departure was "particularly embarrassing and contributed to his loss of dignity in front of his former colleagues."
In addition to compensation, the ERA awarded the worker 13 weeks' lost wages, finding that he "was deliberately not provided with information about matters that impacted on him at work" and was "on the receiving end of an aggressive phone call and a management style that generally also featured poor communication."
