The Test of Justification (Dismissal)

Section 103A of the Employment Relations Act 2000 (“ERA”) has been amended so that the test for justification for dismissal will be “whether the employer's actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal or action occurred”.

In other words, if an employer's decision to dismiss an employee is one which the employer can take, considered objectively, then the Authority or Court cannot substitute its views for the actions taken by the employer.

This change, replacing the word “would” for “could”, recognises that there are a range of options for action open to an employer, rather than only one correct option. The changes also set out the minimum requirements for fair process in taking disciplinary action. In unjustified dismissal cases, the Authority or Court will still have to determine, on an objective basis, whether the misconduct in question amounted to serious misconduct (being a "sackable" offence). However, the Authority or Court will have less say over whether the employee should have been dismissed in all the circumstances.

Time will tell whether this adjustment will change the approach taken by the Authority or the Court