The Cost of Unilaterally Changing an Employee’s job

If you have ever thought of reducing an employee’s standard hours of work, days of work, normal responsibilities or any other term in their Employment Agreement, please remember that you can’t do this unless you have their agreement. It can be costly.

Mr Keighran was a Restaurant Manager at Kensington Tavern. In September 2020 he was told he would no longer be managing the restaurant, instead he would be managing the bar. Mr Keighran left the workplace and did not return.

This case went to the Employment Court after the Employment Relations Authority found that Mr Keighran had been unjustifiably disadvantaged and ordered $5,000 compensation but dismissed his claims for constructive dismissal and breach of good faith. Mr Keighran challenged the decision.

The background to the change in duties was complicated. They involved a non-work incident with a teenage colleague which resulted in Mr Keighran being charged and convicted (well after Mr Keighran left his employment), angry family members, time off work for safety reasons, and a request for a pay increase which was declined. This all culminated in a team meeting when Mr Keighran was told by the owner/manager, Mrs McLean-Woods, that he was more comfortable and better behind the bar, senior staff had lost confidence in him while he was away and starting that evening he would now manage the bar. His position, she said, was redundant.

Mr Keighran went to his car, upset. Mrs McLean-Woods followed him and apologised for the way things had unfolded. Mr Keighran remained upset, left and sent a message saying he was unwell but would return to work on Thursday his usual ‘cherry self’. He did not return to work. He went on sick leave. The next roster had him working 20 hours, which was less than he normally worked. Mr Keighran took this as further evidence the employer no longer wanted him and did not return to work, raising a personal grievance.

The focus, in this case, was whether a breach of duty by the employer led Mr Keighran to resign, thereby establishing he had been constructively dismissed. The Court determined this to be the case. The result was a compensation payment of $14,000 (less the $5,000 the ERA had awarded and had been paid), plus three months lost wages and a $500 penalty for not providing a written Employment Agreement.

The moral of the case – do not unilaterally change terms and conditions and make sure you have a written (and signed) Employment Agreement.