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Unjustified Dismissal of a Contractor Employee Case Study

Written by Glenn Finnigan, PARTNER on October 7th, 2013.    

A fishy tale

We all know that recreational fishers guard their “spot x” jealously. Apparently, the captains of commercial fishing boats are just as secretive when they suspect one of their crew is telling competitors where to fill  their nets.

Employment - Unjustified Dismissal of a Contractor Employee Case Study-946

A former employee of Sealord has been awarded over $80,000.00 in lost wages, compensation for humiliation and interest following his dismissal by Sealord. The dismissal followed the suspicion of the captain that the employee, Mr Pickering, had been drinking with a rival boat’s captain and provided him with the coordinates of rich fishing grounds. The case highlights two important issues at the start and end of an employment relationship.

Contractor vs. employee

The first issue the Authority had to consider was whether Mr Pickering was an employee of Sealord or an independent contractor engaged by a separate company. While the Authority considered all the features of the relationship, the main stumbling block for Sealord was that they did not have a written contract setting out the nature of the relationship. In the absence of a clear document, and with all the other factors being largely neutral, the Authority found that the relationship was one of employment, in line with a short-term agreement from more than three years earlier.

Termination process

During the course of Mr Pickering’s employment a number of issues developed between him and the captain and other crew of his boat. It was suspected that Mr Pickering was slacking off, leaving work to other crew members, had a poor attitude and, perhaps most importantly, had told the captain of a rival company’s boat where the Sealord boat had been finding their fish.

Before the boat headed out on a trip, a meeting was held on the deck of the boat to discuss the issues with Mr Pickering, all of which he denied. Sealord’s representative then had quick discussions with several people and, upon returning from that trip, Mr Pickering was told that he would not be needed for the next trip to sea. While it was acknowledged that Sealord’s representative thought that Mr Pickering was a contractor and could simply be “let go”, the Authority said it was a dismissal with significant procedural issues. These included the insufficient investigation into the allegations and the lack of information provided to Mr Pickering among other things. All of these factors contributed to a finding that dismissal was not a decision a fair and reasonable employer would have made.
Because the dismissal was unjustified, Mr Pickering was awarded over $70,000 in lost wages plus interest and a relatively high award for hurt and humiliation - $8,000. The humiliation payment was based on his evidence that he was depressed and had begun drinking heavily following his dismissal.
Despite Sealord’s genuine belief that Mr Pickering had been conspiring with competitors, the Authority did not consider that this was sufficient to reduce the award due to Mr Pickering’s behaviour.

How we can help

Jackson Russell is experienced in dealing with all aspects of employment law. We regularly assist employers to ensure that their documentation is in order before engaging employees. We also assist employers and employees who are  faced with an  employment relationship  problem  or a dismissal situation. If legal advice is sought before important decisions are made, you can often avoid expensive results like Sealord’s.

If you would like further information about an employer/employee relationship or require advice on anything related to employment matters, please contact your usual Jackson Russell advisor or our Employment Law specialists


The information contained in this publication is of a general nature and is not intended as legal advice.  It is important that you seek legal advice that is specific to your circumstances.
All rights reserved © Jackson Russell 2013

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