Having your cake and eating it – interim reinstatement in NZ

If you are dismissed because you are overheard by your boss badmouthing your employer to an important business partner, should you be allowed back into the workplace pending the substantive decision of the courts as to the fairness of your dismissal? Most would say no, and that was the approach taken by the Auckland Employment Relations Authority in December 2010 (Steel –v- Steelpipe Limited).

New Zealand law allows a dismissed employee to apply for interim reinstatement pending the substantive determination of the fairness of the dismissal. It’s obviously a useful tactic, if the employee has the funds to launch an application. To be reinstated on an interim basis the ex-employee needs to persuade the Employment Relations Authority or Employment Court of the following:

1 That there is an arguable case.

2 If there is, that an adequate alternative remedy is not available to the ex-employee

3 If there is not, that the balance of convenience lies in interim reinstatement, and,

4 That the overall justice of the case favours reinstatement.

The Authority in the Steel case decided that there was an arguable case that Mr Steel would win his claim of unjustifiable dismissal (the threshold of showing an “arguable case” being very low) but that monetary compensation would be an adequate alternative remedy to reinstatement.

The Authority also considered that the balance of convenience was with the employer, largely because the employer could no longer trust Mr Steel not to repeat disparaging remarks about it, and that the constant supervision needed to ensure he did not was disproportionate.

Finally, the overall justice of the case favoured rejecting the application. Mr Steel did not dispute that he had said what had been overheard saying (comments which the ERA felt were inconsistent with Mr Steel’s duty of faithful service).

The outcome of this case is not surprising, but it is interesting that Mr Steel thought he could both badmouth his employer on the one hand and ask to be reinstated to its employment on the other. That is wanting your cake and eating it if you ask me.

From 1 April 2011 reinstatement will no longer be the primary remedy in New Zealand, and will only be ordered when it is practicable and reasonable to do so. This change is likely to make interim reinstatement even harder to achieve.