Yang v Te Whatu Ora - Health New Zealand

Ms Yang worked as a scientist in Whāngarei Hospital’s laboratory, which is subject to strict accreditation requirements. In 2020, the laboratory faced accreditation risks, prompting a restructuring. Ms Yang moved into Microbiology, a demanding area operating around the clock.

After ongoing concerns about her competency, Ms Yang was placed on a six-month supported training plan. The plan involved supervision, feedback, and training, but at the end of the period, Health NZ decided the issues had not been resolved. Ms Yang was dismissed for serious misconduct. She filed a personal grievance, seeking reinstatement and compensation for lost wages and humiliation.

The Employment Court reviewed the Authority’s findings and Ms Yang’s challenge. The Court agreed that Ms Yang had been unjustifiably dismissed and disadvantaged, but focused on whether reinstatement was practicable and how compensation should be calculated.

The Court found that reinstatement was not reasonable due to ongoing competency concerns and the requirement for Ms Yang to work under supervision. It increased lost wages to three months and reduced compensation for hurt and humiliation by only five percent, finding Ms Yang was not properly informed about the risks and could not reasonably mitigate her losses.

Employers should ensure that any performance management process is clear, fair, and well documented. Supported training plans must specify expectations, supervision arrangements, and feedback mechanisms. Employees should be informed about the consequences of failing to meet standards, including the risk of dismissal.

If dismissal is considered, employers must give employees a genuine opportunity to improve and mitigate losses. Communication should be direct and documented, especially in safety-sensitive roles where ongoing supervision or competency issues may affect reinstatement.

This case is especially relevant for businesses in regulated or safety-sensitive sectors. If you manage staff whose roles require accreditation or ongoing competency, you must be proactive in addressing performance issues and documenting all steps.

Dismissal should not be a surprise. Employees must understand the risks and have a fair chance to respond. If you are considering restructuring or changing roles, ensure new requirements are communicated and support is provided. Courts will look at whether employees were blindsided and whether mitigation of loss was possible.

The Employment Relations Act 2000 sets out the framework for personal grievances, unjustifiable dismissal, and remedies. Section 123(1)(c)(i) allows compensation for humiliation, loss of dignity, and injury to feelings. Section 183 requires the Court to make its own decision on a challenge, not limited to the evidence before the Authority.

Remedies can include reinstatement, compensation, and reimbursement of lost wages. Courts may reduce compensation for contributory conduct, but only if the employee was properly informed and had a chance to mitigate losses. Practical difficulties and safety concerns may weigh against reinstatement, especially in regulated workplaces.