It probably started with a simple misunderstanding. Someone forgot to tell someone else that an employee had resigned, giving a month’s notice. And wouldn’t consider a counter offer. Whatever.
Somehow this ended up in the ERA.
In Access Solutions v Rapana http://www.nzlii.org/nz/cases/NZERA/2019/705.html , Mr Rapana, disappointed that he had not been provided with a work truck as promised, let the job market take care of that issue, found another job and gave a month’s notice of resignation.
Mr Rapana’s Employment Agreement was perhaps a little unusual in that it didn’t require notice of resignation to be in writing; he gave verbal notice to his line manager Mr Joseph on 3 April 2019 and started at his new job on 6 May as agreed with his new employer. By the time he finished up on 3 May it was a well known fact that he was leaving, despite the lack of a resignation letter.
Mr Joseph had made an early attempt to talk Mr Rapana out of resigning, which suggests he was a good worker. Unfortunately the HR Advisor Ms Kumar had not been told about Mr Rapana’s resignation until his last day – oops! But no big deal, final pay can be processed as normal, right?
Ummm, no. The following Monday Mr Joseph threatened Mr Rapana - during his first day in the new job - with legal consequences for “abandoning” his employment if he didn’t return to Access Solutions. Abandonment of employment means an unexplained absence of three days but this did not apply because he had correctly resigned. An unauthorised deduction was also made from his final pay as if he had abandoned his employment with Access.
Nonetheless, Mr Rapana was afraid of legal consequences, however groundless such a claim would be, and under duress he returned to Access who treated the period of notice as starting from 3 May which in fact had been his final day. Access then held a meeting with him on Thursday 9 May and demanded that Mr Rapana sign a form, acknowledging that he owed Access money (possibly for the consequences of what Access falsely claimed was “abandonment”). Mr Rapana refused.
It was noted that “Access Solutions’ high handed and unlawful actions could have destroyed Mr Rapana’s new employment relationship”, which implies, fortunately, that Mr Rapana had been with his new employer at least until the day of the Investigation Meeting, 26 September.
Let’s get to the outcome. Access Solutions made a meritless claim against Mr Rapana for a penalty and damages for financial losses it claimed to have incurred from his alleged “abandonment”, lost, also lost on Mr Rapana’s cross claim and were ordered to pay Mr Rapana a $6,600 penalty plus $7,000 costs, and a further $2,000 penalty to the Crown.
Anyone who has ever swung a paintbrush knows that having a DIY ethic can usually save money – but not always. Access Solutions was represented not by a lawyer but by its General Manager Mr McKenzie.
The company may have got off lightly on the penalties and costs - maybe around $20,000 including its own costs, but the reputational harm as a result of bringing a spurious claim against a “young, low paid” former employee who had actually done everything he was obligated to do will probably be reflected in the company’s future ability to attract and retain employees. Goodwill is an asset that often appears on company balance sheets – that goodwill will almost certainly be devalued.
The implied costs over the next couple of years could run well into six figures. I don’t want to tell the GM and MD of Access how to run their business but considering this type of action without legal advice was not the smartest idea!