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Re-instatement – does it have teeth as a remedy

Since 2018, re-instatement has once again been the primary remedy that the Employment Relations Authority may award. In practice, permanent re-instatement is not a common remedy – either because it is not asked for, or the circumstances do not meet the criteria that it must be “practicable and reasonable”.

Reinstatement 4It is more common, but still not common, to apply for interim-reinstatement to preserve an employee’s position before the merits of the case are decided. It is also perceived as a way to increase an employee’s bargaining power to try and achieve a settlement in the event that they are dismissed.

The recent case in the Employment Court of Humphrey v Canterbury District Health Board illustrates that interim-reinstatement is not a remedy that should be overlooked or taken lightly.

Background

Dr Humphrey is a public health physician and was employed by the Canterbury District Health Board as a Medical Officer of Health. A number of issues arose towards the end of 2019 which ultimately led to Dr Humphrey’s dismissal for incompatibility.

Dr Humphrey filed proceedings challenging his dismissal and seeking remedies including re-instatement. It was accompanied by an application for interim re-instatement which was for Dr Humprey to return to his position pending a decision on his substantive claim. The Court recently gave its judgment on the application for interim reinstatement The decision does not decide whether Dr Humphrey was unjustifiably dismissed.  

The law

The approach to interim-reinstatement is quite different to that of deciding whether permanent reinstatement is an appropriate remedy. The approach is well established and can be summarised as follows:

  • An applicant must establish that there is a serious question to be tried (a relatively low threshold to overcome);
  • Consideration must be given to the balance of convenience between the parties;
  • The overall interests of justice are considered, standing back from the detail required by the earlier steps.

Background

In November 2019, a number of managers and clinicians from the DHB wrote to the then Chief Executive. They raised concerns about various public statements made by Dr Humphrey and working relationship issues. An external investigator was appointed.

The independent investigator’s report (the Report) was delivered in August 2020. The Report concluded that some of the allegations had been established; others had not. The Report was critical of the DHB’s inaction in addressing the relationship issues earlier. Relevantly, the Report concluded that the relationship between Dr Humphrey and a number of colleagues had become untenable but that it could not fairly or reasonably conclude that the breakdown was irremediable.

The DHB decided to commence a disciplinary process based on concerns with incompatibility and bringing the DHB into disrepute. The parties met and Dr Humphrey advised that he wanted to look at ways in which relationships between himself and his colleagues could be improved and set out a range of options that he considered might assist. One of the options he identified was the one identified in the Report, namely seeking professional support and assistance to rehabilitate the workplace relationships.

There was no evidence before the Court that the DHB took any further steps to identify for itself what actions it might have taken to remediate the relationship. Rather, the DHB wrote to Dr Humphrey in October 2020 confirming its decision to dismiss him on notice.

The decision

In reaching its decision to reinstate Dr Humphrey’s on an interim basis, the Court referred to its earlier decisions that that an employer cannot justify a dismissal on the basis of an irreconcilable breakdown if it was itself substantially the cause of it. The Court notably also referred to dismissals in such circumstances only being available in an “unusual and rare case.” The Court said that it appeared, on the untested evidence currently before it, that the DHB may shoulder much of the responsibility for the breakdown in the relationship.

The parties were directed to attend urgent mediation to identify and implement the necessary steps to ensure a managed transition back into the workplace, including one which recognises and appropriately safeguards the interests of Dr Humphrey’s colleagues.

Conclusion

The threshold for interim re-instatement is relatively low, particularly where there are incompatibility issues between the employer and/or staff and the dismissed employee. While it may be that the dismissed employee would never like to go back to work for that employer, there will be circumstances where the dismissed employee wants to return. That threat may assist with negotiations, but it may also be a real threat in some circumstances.