$25,000 award against Fonterra

Some of you may have seen the reports of the ERA’s award of over $25,000 to a former forklift driver (Ms Milner) who was dismissed by Fonterra following illness which she attributed to an accident at work. The report I’ve read suggests that the dismissal was found to be unjustified because the illness was caused by work. This is not what the actual decision says though.

The employee was a party to a collective employment agreement that gave her certain rights if injured at work. These included the right to have her position preserved until signed back as fit to return and the right to a severance payment if declared by her doctor as permanently unfit to return to her original position as a result of that accident and another suitable position could not be offered.

The illness was originally declared by Fonterra’s insurers not to have resulted from an injury at work. Ms Milner was challenging this when she was dismissed, the reason given by Fonterra being that it was not known when she would be able to return to work. The insurer eventually agreed that the illness was caused by an accident at work.

The dismissal was found to be unjustified because Fonterra did not wait for resolution of Ms Milner’s challenge that her illness had been caused by her accident. If they had waited, they would have been obliged to follow the terms of the collective agreement. The reason Ms Milner was awarded over $25,000 is that she was entitled to $17,560 as a result of her rights to a work related severance payment.

So, just because someone is injured at work does not, of itself, mean that the employer can never dismiss. However, waiting for resolution of an outstanding issue and complying with contractual obligations are always good ideas.