Unjustified Dismissal

An employee’s employment cannot be terminated simply because the employer dislikes them, considers them a “poor cultural fit”, or believes their performance could be better without more.

Under the Employment Relations Act 2000, an employer must have substantively fair and reasonable grounds for dismissal, and must also follow a fair process. Substantive reasons for dismissal can include (depending on the circumstances):

• A material breach of an employment agreement

• Serious misconduct

• Ongoing or repeated misconduct after proper warnings

• Relevant criminal behaviour

• Bullying, harassment, or other conduct undermining trust and confidence
   

Even where such concerns are alleged, the employer must be able to show that:

1. The concerns were genuinely held and based on sufficient investigation; and

2. The decision to dismiss was one that a fair and reasonable employer could have made in all the circumstances, as required by the Employment Relations Act 2000.
    

If the employer cannot demonstrate this, the dismissal may be unjustified.
 

In addition to having proper reasons, employers must carry out any disciplinary or dismissal process in a way that is procedurally fair, open-minded, and not predetermined. This generally includes:

• Telling the employee what the concerns are and what potential outcomes are being considered (including possible dismissal)

• Giving the employee a real opportunity to respond and to seek advice or representation

• Genuinely considering the employee’s explanation and any supporting information before making a decision

• Communicating the decision and the reasons for it
   

Under section 120 of the Employment Relations Act 2000, an employee who has been dismissed may, within 60 days of the dismissal, request a written statement of the reasons for their dismissal. The employer must provide that written statement within 14 days of receiving the request.
 

Employees should also be aware that some disciplinary or “performance management” processes can, in practice, be used as a pathway to dismissal rather than a genuine attempt to address issues. For example, a Performance Improvement Plan (PIP) or similar programme may sometimes be implemented in a way that suggests the employer has already formed a view that the employment relationship should end, and is now documenting alleged shortcomings or exerting pressure on the employee to resign. In some circumstances, this may contribute to a claim of unjustified dismissal or constructive dismissal under the Act.