Dismissing an employee for inappropriate or serious misconduct may be unjustified where the employer failed to follow a fair process. However, an employee’s contributory conduct can significantly reduce or eliminate the remedies available to an unjustifiably dismissed employee.
This article explores the legal principle of contributory conduct and how it applied in Stewart v OCDL [2025] NZERA 330, where a senior employee’s actions ultimately led to a 100% reduction in available remedies, despite procedural flaws in the employer’s dismissal process.
Background
Mr Stewart had been employed with OCDL since 2013 and was promoted to Group Market Manager in 2021. He was a senior and trusted employee responsible for key customer relationships and pricing in two geographic territories. His role gave him access to sensitive commercial information.
In 2018, while still employed by OCDL, Mr Stewart established a private consultancy company. Through this company, he provided dairy market predictions to at least one of OCDL’s own customers. He received $100,000 USD in payments, including requests for cash or direct deposits, none of which he disclosed to his employer.
Further, during a workplace investigation triggered by a report from a colleague, OCDL uncovered that Mr Stewart had been sending emails to representatives from Company A and Company B (customers of OCDL), in which he allegedly disclosed confidential pricing information. It was further alleged that there were WhatsApp messages showing he may have arranged payments to himself from a customer and that he accepted a watch as a gift from a company within one of his territories.
This led OCDL to conduct an internal investigation and ultimately proceed to summarily dismiss Mr Stewart from his employment for serious misconduct.
The Employment Relations Authority’s Findings
The Authority acknowledged several procedural flaws in OCDL’s process, including not giving Mr Stewart a genuine opportunity to respond to the allegations and not complying with its own policies for undertaking a disciplinary process. The procedural flaws were deemed to not be minor and resulted in Mr Stewart being treated unfairly. As a result, the dismissal was found to be procedurally unjustified, and Mr Stewart had a personal grievance.
Contributory Conduct: 100% Reduction of Remedies
Despite finding that Mr Stewart had a personal grievance, the Authority went on to consider section 124 of the Employment Relations Act 2000. Section 124 of the Act allows the Authority to reduce remedies that would have otherwise been awarded, due to the contributing behaviour by the employee.
The Authority found that Mr Stewart breached confidentiality obligations by sharing sensitive pricing information, acted in his own financial interest while still employed by OCDL, did not disclose the conflict of interest created by his consultancy business with OCDL’s customers, all while being a senior employee who should have known better and understood the implications of his actions.
Because Mr Stewart’s own conduct was the primary cause of the situation (i.e., the serious breaches of trust, confidentiality, and undeclared financial dealings), the Authority awarded no remedies under section 123 (compensation) of the Act and applied a 100% reduction to the lost wages claim under section 128 of the Act.
In short, Mr Stewart’s behaviour was so serious that even though OCDL failed to follow a fair process in dismissing him for serious misconduct, Mr Stewart was not entitled to any monetary compensation or lost wages – awards that he would have otherwise been entitled to. Costs were reserved pending resolution of all matters before the Authority.
Why this case matters
This case is a clear example of how employee misconduct can outweigh employer mistakes in disciplinary processes. For employers, the case serves as a warning not to rely solely on the strength of an employee’s misconduct and to adhere to good faith obligations under the Act which requires that employer’s follow a fair process.
For employees, it is a reminder that engaging in dishonest or conflicted conduct can eliminate (or substantially reduce) your right to remedies even where your employer may not have followed a fair process.
If you are an employer or employee seeking advice about on employment matters, please do not hesitate to contact our employment experts, Jaesen Sumner, Nikita Govind, Maisie Guy, or Eloise Sharpe for more information
Disclaimer
Information on this webpage is not business, tax, or legal advice. You should take specific, professional advice before taking any action based on this information.
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Frequently Asked Questions
- Can an employee receive no remedies for unjustified dismissal under NZ employment law?
Yes. Even when a dismissal is found to be unjustified due to flaws in the employer’s process, the Employment Relations Authority may still award no remedies if the employee’s behaviour significantly contributed to the situation. In this case, the Authority found that the employee’s breaches of trust and confidentiality overshadowed the employer’s lack of procedural fairness. This demonstrates how employment law in New Zealand balances employer process failures against employee misconduct. - What types of behaviour qualify as contributory conduct in employment law?
Contributory conduct can include breaching confidentiality, acting in personal financial interests, failing to disclose conflicts of interest, or misusing company information. In Stewart v OCDL, the Authority considered the employee’s undisclosed consultancy income, sharing of confidential pricing information, and acceptance of gifts as serious misconduct. These actions justified a 100% reduction in remedies, reflecting how employment law emphasise that when senior employees undermine trust, it can outweigh an employer’s procedural mistakes. - Does procedural fairness still matter in employment law if contributory conduct is found?
Absolutely. Employers must still follow a fair process, as required by the Employment Relations Act 2000. In this case, OCDL failed to give the employee a genuine opportunity to respond and did not follow its own policies, leading to a finding of unjustified dismissal. However, because the employee’s conduct was the primary cause of the breakdown, remedies were eliminated. This reinforces the importance of procedural fairness in employment law for employers and employees, even when contributory conduct becomes a decisive factor.