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Covert dismissal: Can I be dismissed without my knowledge? 

Covert dismissal: can I be dismissed without my knowledge? 

Have I been dismissed without my knowledge? This seems like a straightforward question, as surely you would know if you had been fired. However, sometimes it is not clear whether a dismissal has occurred. The definition of a dismissal, and whether it requires the parties subjective knowledge was recently considered by the Employment Court in the case of Concrete Structures NZ v Ward.   

Mr Ward was a long serving employee of Concrete Structures. His job required working away from home on large projects for extended periods of time. Unfortunately, Mr Ward began to experience health problems and could no longer travel away from home. This created operational issues for the company.

The company called a meeting on 7 November 2016 to discuss the problem.  During this meeting it asked Mr Ward to sign a document confirming a finish date 11 November 2016 (which he refused to sign); demanded the immediate return of company property and his work vehicle and uplifted company property in his possession. Following the meeting it also processed his final pay, paying out his notice period and holiday pay. 

Despite these actions there was confusion from both parties about if and when a dismissal had occurred. Mr Ward admitted that, at the time, he did not think he had been dismissed in the meeting of 7 November. Concrete Structures argued that Mr Ward had not been dismissed at all, stating that it had placed him on sabbatical leave for a year (an option that had previously been suggested to Mr Ward). 

The Court confirmed that the test for dismissal is an objective one: would a reasonable person in Mr Ward’s position have believed they had been dismissed? Because the test is objective, a dismissal can occur even if the employee or employer did not subjectively believe it to be so.  On the facts of this case, the Court held Mr Ward had been dismissed on 7 November. Regardless of the parties’ subjective beliefs, the objective steps the company had taken (like uplifting property and paying out his final pay) were consistent with a dismissal.

This case is another example of employment law looking at substance over form. Although the employer did not use the words “you’re fired!”, they did all of the other actions usually seen when an employee is dismissed.  As the saying goes: if it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.

If you have any questions or queries in relation to this topic, please get in touch with the Watermark team directly. We are happy to advise you.

Kylie Hudson

Associate

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