Keighran v Kensington Tavern Ltd

Mr Keighran was a valued employee at Kensington Tavern, promoted to restaurant manager after demonstrating commitment and skill. In July 2020, he requested a pay rise, which was declined. Shortly after, an incident outside the workplace involving a teenage co-worker led to police involvement and heightened tensions among staff and their families.

Management responded by asking Mr Keighran to stay home temporarily, aiming to protect all parties and maintain workplace harmony. After further discussions, his role was changed from restaurant manager to bar manager. Feeling sidelined and unsupported, Mr Keighran left and did not return, later bringing claims against the Tavern for constructive dismissal and related breaches.

The Employment Court found that Kensington Tavern failed to follow fair process when changing Mr Keighran’s role and did not adequately consult him. The Court also noted the absence of a written employment agreement, which is a legal requirement. The Court determined that Mr Keighran had been unjustifiably disadvantaged and that the employer’s actions contributed to his resignation.

The Authority’s earlier compensation award was increased, and the employer was ordered to pay additional compensation for lost wages and emotional harm. A penalty was also imposed for failing to provide a written employment agreement.

Employers must consult with employees before making significant changes to their roles, hours, or duties. This includes discussing the reasons for change, considering the employee’s views, and documenting the process. Acting in good faith means being open, honest, and respectful in all communications.

Failure to consult can lead to claims for unjustified disadvantage or constructive dismissal. The Court expects employers to demonstrate that they considered the employee’s interests and provided opportunities for input.

When a workplace incident involves criminal allegations or heightened tensions, employers must balance safety, fairness, and business needs. Consulting external advisers (such as industry associations) can help ensure decisions are appropriate and lawful.

Temporary measures, such as asking an employee to stay home, should be clearly communicated and reviewed regularly. Any permanent changes to roles or duties must be discussed with the employee and justified by business needs.

New Zealand law requires employers to provide written employment agreements to all employees. These agreements set out terms, conditions, and expectations. Failure to provide a written agreement can result in penalties, as seen in this case.

Employers should ensure all staff have signed agreements before starting work and keep copies on file. Regularly review agreements to ensure compliance with current law and business needs.

Employees who suffer unjustified disadvantage or constructive dismissal may be awarded compensation for lost wages and emotional harm. The Court considers the impact on the employee and the employer’s conduct.

Penalties can also be imposed for breaches such as failing to provide a written employment agreement. Employers should be aware that compensation and penalties can add up quickly, especially if multiple breaches are found.