In New Zealand Employment Law, a “disadvantage” is a detriment or loss that an employee suffers during their employment. A disadvantage could arise out of being given an unjustifiable warning by the employer, or where an employee suffered harm arising out of a failure by the employer to provide a safe working environment.
A disadvantage requires that there be some detriment to the employee’s employment or the conditions of the employee’s employment, by some unjustifiable action of the employer. What can constitute a ‘disadvantage’ is broad. It includes detriment to the rights, benefits, and obligations arising out of the employment relationship. The loss is not limited to financial loss; for example, an employee might suffer a disadvantage where the employer unjustifiably removed an employee’s key responsibilities or where the employer’s action or inaction harmed the employee’s job satisfaction. Once an employee establishes a disadvantage, the onus is on the employer to justify it.
An employee will only have a valid personal grievance if the disadvantage suffered was unjustifiable. The test for whether the disadvantage was justified is whether what the employer did and how it did it was what a ‘fair and reasonable employer could have done in all the circumstances.’ If the employer can show that its actions were justified, then there is no claim for disadvantage.
So, what might make a disadvantage unjustifiable? An employer’s action may be unjustifiable if it was:
Procedurally unfair (such as where relevant information was not disclosed to the employee, or a genuine opportunity to respond was not provided);
Inconsistent with, or disproportionate to, the employer’s treatment of other employees in similar circumstances; or
Lacked good reason (such as where a warning is issued without a clear basis).
This is by no means an exhaustive list. What is unjustifiable in some circumstances may be justifiable in others.
So, what might a disadvantage look like? Imagine an employee was offered a promotion, and that promotion came with an increase in pay. The employee accepted the offer, but the offer was withdrawn at the last minute by the employer. When asked why the offer was withdrawn, the employer cited an allegation that the employee had been taking long breaks two years ago. The employer did not give the employee an opportunity to respond.
Whether the allegation is true or not, the employee was disadvantaged by the employer. The loss to the employee is both financial and reputational. In this situation, the disadvantage was unjustified because the employee was not given the opportunity to respond to the allegation. It was a procedurally unfair process as a result. Even if the allegations were true, and procedural requirements were met in the investigation, it does not necessarily mean that an employer would be justified in withdrawing a promotion.
What does this mean for you?
If you are an employer and are considering some action that may affect your employees, it is best to seek legal advice on what your obligations are, to avoid costly litigation or valid personal grievances to respond to. More than that, fulfilling your obligations as an employer can maintain a positive relationship within the workplace.
As an employee, if you are concerned about something your employer is doing, has done, or is proposing to do, you should seek legal advice.
The first step in getting support is to talk with a lawyer from Frontline Law about your situation and see what options we can offer you. Contact Frontline Law for a free initial consultation.
*The information in this blog post is general in nature and is not legal advice. If you need advice, you should contact us about your specific situation.
