Discrimination claims at work: why they may be the new battleground
Recent changes to the Employment Relations Act 2000 have reduced the ability of some employees to bring a personal grievance for unjustified dismissal. In particular, employees earning over $200,000 a year cannot raise an unjustified dismissal grievance, unless they have opted out of the income threshold regime. This adds to the existing category of employees who cannot raise unjustified dismissal claims because they are employed under a valid trial period.
However, these changes do not remove an employer’s exposure to other claims. In practice, we expect to see a shift towards alternative claims, including claims for unlawful discrimination.
“Discrimination” in the employment context
Under the Employment Relations Act 2000, an employee can raise a personal grievance if they are directly or indirectly discriminated against because of a prohibited ground. Prohibited grounds include sex or gender, marital status, race, age and disability (which is defined broadly and can include most physical or mental conditions or impairments).
When an employee may say they have been discriminated against
Broadly, the employee must show they were treated differently (or worse) because of a prohibited ground. This can include where an employer:
- does not give the employee the same terms and conditions, benefits or opportunities as comparable employees; or
- dismisses the employee or otherwise disadvantages them in circumstances where other employees would not be treated the same way; or
- retires the employee or requires (or causes) them to resign.
Defences for employers
There are statutory exceptions and defences. For example, there may be genuine occupational requirements (including safety requirements) that mean a person with a particular characteristic cannot perform the role, or cannot do so safely.
Even where an exception might apply, employers will generally need to turn their mind to whether “reasonable adjustments” can be made, so long as the adjustments do not involve unreasonable disruption to the business.
Discrimination as an ERA personal grievance or a Human Rights Act claim
Discrimination can be pursued as a personal grievance under the Employment Relations Act 2000, or as a claim under the Human Rights Act 1993. The right pathway for an employee will depend on the facts and the strategy in the particular matter.
How discrimination may arise
Age discrimination
McGearty v Air New Zealand Ltd: The Employment Court found that Air New Zealand did not undertake a proper, individual assessment of whether the pilot could continue flying with reasonable adjustments. The Court held the pilot could have been accommodated without unreasonable disruption, and the failure to do so amounted to unlawful age discrimination.
Sex discrimination
Talleys Fisheries Ltd v Lewis: The High Court upheld a finding of unlawful discrimination where a woman was placed into a lower paid role. Although the employer did not deliberately set out to pay women less, the Court found the employer’s job allocation practices were influenced by gender-based assumptions about women’s suitability for certain roles.
Ethnic or national origin discrimination
Goel v Barron: the Human Rights Review Tribunal found an employer unlawfully discriminated by declining to consider an otherwise qualified applicant after learning he held a work visa and was not a New Zealand resident. The applicant’s nationality/citizenship status was found to be a material factor in the decision not to consider him for employment.
Key takeaways for employers
The changes to the Employment Relations Act may limit some employees’ ability to challenge dismissal, but they do not reduce employers’ exposure to discrimination claims. In practice, we expect discrimination arguments to feature more prominently in disputes where traditional dismissal claims are not available.
To reduce risk, and to be well placed if a decision is challenged:
- Be clear on the reason for the decision (including termination decisions) and keep a record that ties the decision to the role and the individual circumstances;
- Check your reasoning for assumptions (even unintentional ones) linked to age, health, gender, ethnicity, or other prohibited grounds;
- Where a protected characteristic is in play (for example, a health issue), consider reasonable adjustments and document what was considered and why;
- Apply consistent criteria and, where you are making comparisons, ensure you are comparing like with like; and
- In recruitment, focus on whether the person is lawfully entitled to work and whether they can do the role – avoid decisions influenced by nationality or citizenship status.
If you would like help sense-checking a decision, updating templates and processes, or managing a discrimination allegation, contact our employment law team.
Special thanks to Partner Scott Wilson and Senior Associate Jonny Sanders for preparing this article.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
