News Article

latest news in employment law

Alternative Employment Ends Employment Relationship

Published 01 May 2014

In a recent case before the Employment Relations Authority, it was held that an Employee "terminated his own employment" with an Employer when he verbally accepted an offer of employment from another company. The Employer was held therefore not to have unjustifiably terminated the Employee's employment.


The Employer decided to have an informal chat with the Employee, because the Employee had had a significant amount of time off work and there had been some recent quality issues with his work. The Employer decided to hold the meeting in an open plan office area and within hearing distance of two Employees. At the meeting, the Employee agreed that he had had numerous job interviews in the preceding 12 months prior to the meeting and he indicated to the Employer that he had a job interview the following Tuesday. The Employer suggested to the Employee that he be moved onto a casual employment agreement where the Employee could attend interviews as he wished and the Employees could be called upon. The Employee appeared to be in agreement, however he had the impression that his full-time employment had been terminated.

After the Employee had left, he told other Employees that he had been laid off. The Employer called the Employee to ask what was going on and asking why he was not at work the following day. The Employer paid out the Employee’s accrued holiday pay and the Employee said this confirmed that his employment had been terminated. The Employee raised a personal grievance the day after his job interview with a different Employer. The Employee verbally accepted a job offer from that different Employer two days later. The Employer then proceeded to call a meeting to discuss a proposal for a redundancy and this was confirmed in a letter of termination due to redundancy in the following week.


The Employment Relations Authority (ERA) held that there was an unjustified disadvantage in the meeting because the Employee should have been advised in advance of the meeting of the allegations against him, have been given the opportunity to obtain representation, and to have been provided with a full opportunity to provide an explanation after having duly considered the allegations. The meeting which was considered disciplinary in nature and privacy should have been afforded.

However, the ERA found that the Employee’s employment had not been terminated. To the contrary, the Employeee was presented with the option of continuing full-time employment or transferring to casual employment. The ERA stated it was significant that the personal grievance letter did not seek reinstatement and requested the parties attend mediation rather than meeting together to see if the matter could be resolved. The Employee sought legal advice rather than seeking a meeting with the Employer so as to resolve the personal grievance as quickly as possible at the place of work.

The ERA was guided by the reasoning that while there is no duty on Employees to disclose an intention to leave the Employer’s service, once an offer of employment has been made by a third party and accepted by the Employee, the situation changes. Although in accordance with the Employment Relations Act 2000 a written employment agreement is required, it is accepted that new employment can start with an oral agreement. That is, this oral agreement acted to terminate his employment with the Employer even though he had not informed the Employer or offered notice in accordance with the employment agreement.


After receiving a personal grievance, Employers should formally request that the Employee discloses whether they have obtained another job. Often Employees raise personal grievances even though they are able to or have secured employment elsewhere. The submission of personal grievances in such circumstances in order to gain extra compensation through the provisions of the Employment Relations Act 2000 need to be carefully checked. We recommend that Employers in this situation contact us for guidance.