Ruling a warning to employers on supporting staff

THE DOMINION POST - Saturday 26 February 2011

Last year the Employment Relations Authority ruled on a dispute involving the New Zealand Customs Service and Douglas Alo. Mr Alo was employed by Customs for 22 years. His employment ended in July 2008 when he was dismissed from his position as Customs Liaisons Officer, South East Asia. This was an attaché role attached to the New Zealand Embassy in Bangkok.

During his posting Mr Alo developed post traumatic stress disorder along with a major depressive condition and alcohol abuse. He said these disorders developed after his deployment to the January 2006 tsunami relief effort where he was exposed to traumatic scenes and experiences. He said the events that gave rise to his dismissal wouldn’t have occurred if Customs had provided the appropriate and necessary support after his deployment.

The Authority had to decide whether the dismissal was fair and reasonable and whether Customs provided a safe and healthy workplace for Mr Alo.

Mr Alo finished his Bangkok posting and returned to New Zealand in late 2007. Before his return, he conducted a handover to the incoming post holder. Events around the handover caused the incoming post holder such serious concerns that he wrote a detailed report to Mr Alo’s manager.

An investigation was carried out but the investigator had difficulty contacting Mr Alo and was unable to put any of the issues, which she said amounted to serious misconduct warranting dismissal, to him to comment on. The report set out mitigating factors for the decision maker to consider. The report referred to failures by management in New Zealand to ensure that internal policies and procedures were effectively applied to Mr Alo.

Mr Alo’s lawyer contacted the investigator and said Mr Alo was not capable of reading the draft report and had not done so. The lawyer said that Customs should await a medical report into Mr Alo’s health before it acted on the investigator’s report.

A Consultant Psychiatrist found that Mr Alo suffered from a major depressive illness and that Mr Alo’s experience as part of his job in Thailand had a very significant psychological impact on him.

Despite Mr Alo’s ill health and the difficulty he had engaging with the investigation, Customs journeyed on. It decided Mr Alo’s conduct had irreparably damaged the trust on which the employment relationship was based so as to warrant dismissal. The mitigating factors set out in the investigator’s report only caused the merest ripple in the decision - instead of being dismissed without noticed he was dismissed with notice.

The Authority found that Mr Alo’s dismissal was unjustified for procedural reasons. There was evidence that Mr Alo suffered from a major depressive illness, but Customs did not undertake further investigation into that issue. Although the Employer may fairly cry halt in a disciplinary investigation, the Authority said not so here. There were many factors that meant further investigation should have been carried out. Mr Alo had a very recent diagnosis of serious mental ill health and the implementation of a treatment plan. The Consultant Psychiatrist had promised to provide a more comprehensive report looking at Mr Alo’s mental health at the time of the alleged misconduct (this was provided 6 weeks later). Mr Alo’s had a long service with Customs and until recently an unblemished record. Customs knew that Mr Alo’s previous good health had deteriorated after his involvement in the tsunami relief effort. Customs lacked information as to what, if any, responsibility it had in the causes of Mr Alo’s ill health. For all these reasons the Authority found that Mr Alo’s dismissal was not the action of a fair and reasonable employer.

The Authority also considered substantive fairness. The Authority found that Customs gave little or no weight to the Consultant Psychiatrist’s initial diagnosis of a major depressive episode or his comments that Mr Alo’s condition resulted from his experiences during the tsunami relief effort. Instead Customs marginalized these issues, but did not challenge the diagnosis. Customs did not seek further information to understand how Mr Alo’s ill health could have contributed to the events in question or how Mr Alo’s ill health could have impacted on his ability to participate in the investigation. On this basis, the Authority concluded that Mr Alo’s dismissal was substantively unjustified.

The Authority looked at the questions of whether Customs unjustifiably disadvantaged Mr Alo in his employment. Had Customs failed to provide and maintain a healthly and safe workplace. Had it failed to adequately manage Mr Alo during his posting. The Authority found that Customs’ failure to discharge its duty to Mr Alo caused Mr Alo harm. The Authority found that Mr Alo had made out this claim arising from established breaches of duties owed to him

The Authority awarded Mr Alo $164, 000 for past and future lost wages because he was too unwell to undertake work subsequent to his dismissal. He was also awarded $40,000 for unjustified disadvantage and unjustified dismissal. Mr Alo was reimbursed $21,000 for medical treatment and awarded $20, 000 in general damages. Costs were reserved but no doubt Mr Alo succeeded in getting some of his legal costs back as well.

Interestingly, the Authority took the somewhat unusual step of recommending that Customs develop policies for staff exposed, during the course of their duties, to circumstances or material that had the potential to cause psychological harm. The Authority recommended that in developing such policies particular regard should be had to the support systems in place for Customs staff and their families posted overseas.

My understanding is that Customs appealed the decision and Customs and Mr Alo are currently attempting to negotiate a resolution. It would be interesting to see what sort of policies and procedures Customs has developed to prevent somebody else suffering in the way Mr Alo did.

This case is a very important one. It is a very sharp reminder to employers to handle dismissals with great care, particularly where the employee concerned is mentally damaged. It is also a reminder to employers to protect their employees from harm particularly when the employees are working with material that is likely to damage their health. This sort of risk extends beyond policemen and customs officers.