Learn why an employer was ordered to pay $22,700 for unjustified dismissal due to an employee’s health. Expert legal advice from Core Legal helps employers and employees understand their rights and obligations in employment law.

Unjustified Dismissal for Health Reasons Costs Employer $22,700

A recent decision by the Employment Relations Authority (ERA) serves as a critical reminder to employers in New Zealand about their obligations under employment law. A business was ordered to pay $22,700 to an employee who was unjustifiably dismissed due to his medical condition—a costly mistake that could have been avoided with legal guidance.

The employee had only been with the employer for a few months when he disclosed a medical condition that could impact his job performance. In response, the employer agreed to reduce the employee’s working hours and assign lighter duties. However, just six weeks later, the employer dismissed the employee, citing concerns about his deteriorating health and the risk it posed to safety in the workplace.

Key Legal Issues: Employment Status and Process

One of the first issues the ERA had to resolve was whether the employee was casual or permanent. No written employment agreement was signed, leaving the Authority to assess other factors.

The employee worked consistent hours, accrued annual leave, and was expected to work as scheduled—conditions more aligned with permanent employment. Casual employees typically don’t accumulate leave or have guaranteed shifts. Based on this, the Authority ruled that the employee was, in fact, a permanent staff member.

Next, the ERA evaluated whether the dismissal process was legally justified. It concluded that the employer had failed to follow a fair and reasonable process. The employer had not formally raised concerns, provided an opportunity for the employee to respond, or considered alternatives to dismissal—steps required by law when addressing issues related to an employee’s health.

The Outcome and Employer Obligations

The employer was ordered to pay:

• $15,000 for emotional harm (hurt and humiliation)

• $6,600 for lost wages

• $1,100 in wage arrears

This case highlights the serious financial consequences of not understanding employment law or making assumptions about an employee’s work status. Whether you’re an employer or employee, taking early legal advice is crucial—especially when dealing with issues like performance, health, and contract terms.

Talk to Core Legal Before Making Employment Decisions

At Core Legal, we help both employers and employees navigate the complexities of New Zealand’s employment law. If there is uncertainty around employment status, dismissal procedures, or managing medical conditions in the workplace, we offer fixed-fee consultations to ensure you understand your rights and obligations before taking action.

Contact our team in Masterton or Wellington today for practical, affordable legal support.