How procedural errors led to costly $20K payout for NZ employer

Published 14 February 2025 | 2 min read

Dismissing an employee for serious misconduct is a high-stakes decision for any New Zealand business. Employers must ensure their processes are fair, well-documented, and legally sound.

When a dismissal is mishandled, it can result in costly legal battles, compensation payouts, and reputational damage.

The recent case of a former animal welfare employee, awarded $20,000 by the Employment Relations Authority (ERA) for unjustified dismissal, highlights the risks of getting it wrong.

Where it went wrong

The animal welfare organisation dismissed the employee for serious misconduct, alleging they had failed to administer and record critical treatments for animals in their care.

This included missing doses of flea and worm treatments and neglecting to give a prescribed medication to a dog, resulting in prolonged pain. The organisation claimed these failures breached trust and justified immediate dismissal.

However, the employee disputed these allegations, arguing that the disciplinary process was flawed and that they had not been given a fair chance to respond.

They took their case to the ERA, which found multiple procedural errors in the animal welfare organisation’s handling of the situation.

The key legal issues

The case hinged on whether the animal welfare organisation had followed a fair and reasonable process before making the decision to dismiss.

The ERA found that the employer failed to conduct a thorough investigation and did not provide the employee with enough time or information to respond to the allegations.

Furthermore, the animal welfare organisation placed undue weight on initial responses rather than considering later clarifications. This led to the ERA ruling that the dismissal was unjustified, resulting in significant financial consequences for the organisation.

ERA’s findings for NZ employers

• Lack of a fair investigation: The animal welfare organisation did not provide the employee with a full list of alleged missed treatments in a timely manner.
• Failure to investigate serious allegations thoroughly: The ERA found that key details, such as medication records and responsibilities, were not properly verified.
• Unfair reliance on preliminary responses: The organisation relied too heavily on the employee’s initial statements rather than considering their later explanations.
• Insufficient information for a fair response: The employee was not given enough details to adequately respond to the allegations against her.
• Procedural flaws undermined the decision: Multiple errors in the disciplinary process made the dismissal legally unjustified, leading to a compensation award of $20,000 plus lost wages.

How employers can get it right

This case serves as a crucial reminder that serious misconduct must be handled with care and precision. Employers should always conduct a thorough and impartial investigation, ensuring employees have a genuine opportunity to respond to allegations.

Decisions must be based on verified evidence rather than assumptions or preliminary statements. Following a fair and legally compliant disciplinary process is essential to avoiding costly legal consequences.

By taking the right steps, businesses can protect both their organisation and their employees, ensuring fairness and compliance with New Zealand employment law.

Note: This information is based on official details from Employment New Zealand and is subject to change. Always refer to the latest guidelines for the most accurate information. Visit Employment New Zealand here.