Employment Relations Authority orders Defence Force to pay former employee $25,000

The Defence Force was found to have breached its obligation to the employee in relation to concerns around her performance. Photo / NZDF

The Defence Force has been ordered to pay a former employee more than $20,000 in damages for failing to tell her about concerns it had about her work - instead issuing a directive to manage her performance.

The Employment Relations Authority found the NZDF had breached its obligation to fairly treat the employee in relation to concerns it had about her performance.

Juliette Darnley, a former human resources site lead for the force, took the matter to the authority claiming she was constructively dismissed from the force and seeking compensation.

In February 2019 Darnley was told she was being formally investigated for allegedly breaching a directive in relation to a settlement involving another NZDF employee and the Defence Force.

The terms of that employee's settlement had allegedly included a payment of an employee's salary instead of notice - but the Defence Force alleged Darnley had dodged the approval process for the payment, which was more than the NZDF was allowed to pay.

Darnley's actions amounted to serious misconduct, according to the investigation, and was told she would be dismissed without notice.

She told the authority she was devastated to discover in the investigation report into her conduct that the Defence Force had introduced a directive regarding "ex gratia and compensation settlement payments" (the CPO directive), in response to concerns it had over her approach to settling employment disputes.

"No one had raised performance issues with her about her practice in these matters," the recent ERA decision read.

"Ms Darnley was unaware until she read the investigation report that her employer had
concerns dating back several months about her performance in that particular aspect of her HRSL role. She therefore had no opportunity to address those concerns and, if necessary, modify her actions to meet her employer's requirements.

"She was not aware the purpose of the CPO directive was to effect a change to her practice in managing employment settlements."

The investigation report also noted that following the introduction of the CPO directive, no one at the Defence Force had actually followed up with Darnley to ensure she fully understood the directive that, "unbeknownst to her, had been formulated as
a tool to manage her performance".

Adjudicator Trish MacKinnon found the Defence Force breached its obligation to treat Darnley fairly and reasonably "by addressing a performance issue it had identified by the indirect means of promulgating a CPO directive rather than directly addressing the issue with her," she wrote in a recent decision.

"It was also a breach of the employer's obligation to be active and constructive in establishing and maintaining a productive employment relationship, and the requirement for parties to such relationships to be, among other things, responsive and communicative."

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MacKinnon ruled that Darnley had been constructively dismissed and ordered the Defence Force to pay $25,000 in compensation.

"NZDF breached its obligation to treat Ms Darnley fairly in relation to the performance concerns it had about her," MacKinnon said.

"That breach was so fundamental that her resulting resignation was foreseeable."

Darnley was found to have acted in bad faith, however, when she failed to tell the Defence Force that she planned to take up - and later started - a new job elsewhere.

"She was still employed by NZDF when she commenced the new employment although, unbeknownst to her at the time, she was being paid by way of her remaining annual leave entitlement," MacKinnon wrote.

Darnley was also required to pay back three days of her salary she had been mistakenly paid.