Fired for stealing a bag of chips

It is commonly understood that to justify terminating an employee’s employment you have to tick two boxes:

  1. Follow a fair and proper process; and
  2. The termination of their employment has to be substantively justified i.e. the “thing” the employee did has to be bad enough to terminate their employment.

The case of Gillan v Birchleigh Management Services Ltd [2018] NZERA Christchurch 142 highlights that theft isn’t always theft.  The Employment Relations Authority (ERA) deemed the employer as “unnecessarily severe” when they dismissed a long-serving employee who was employed as a caregiver with them for over 12 years.

On 17 June 2016 the employee took a small bag of potato chips from a cupboard where the employer kept refreshments for residents of the rest home. She ate a chip, realised they were stale and threw away the rest of the packet.

She was invited to a meeting where she denied dishonest intent but accepted taking the chips. The employer had strict policies with regard to the security of residents’ property. With this in mind they dismissed her for serious misconduct.

The ERA concluded that as a fair and reasonable employer the taking of the chips amounted to serious misconduct, even if she lacked any intention to steal them. This was in line with the Care Centre rules which referred to unauthorized possession of property belonging to residents as being serious misconduct. However, a dismissal for serious misconduct must show the employee has significantly damaged the foundation of the employment relationship, one of trust and confidence. The ERA found that this threshold had not been reached; there was a significant difference between the employee taking a small bag of chips and any risk of her taking resident’s personal possessions or money.

The Authority highlighted the issue was with the severity of escalating a finding of serious misconduct to a dismissal, without first carrying out a proper investigation of the incident. All the circumstances needed to be weighed up before an informed decision could be made. The ERA considered that Birchleigh had taken a zero-tolerance approach, meaning a dismissal was the only option. The ERA held that this indicated a pre-determination of the outcome.

The ERA awarded the employee $18,750.00 compensation for humiliation, loss of dignity and injury to feelings, after a reduction of 25 per cent for her contribution to the incident. She was also awarded three months’ lost wages.

Workplace Law Team

If you have any queries in respect of the above, or any other workplace law issues, please contact a member of Lane Neave’s Workplace Law Team:

Employment: Andrew Shaw, Fiona McMillan, Kathryn McKinney, Siobhan Rastrick, Hannah Martin; Holly Struckman; Anna Needham
Immigration: Mark Williams, Rachael Mason, Nicky Robertson, Hetish Lochan, Daniel Kruger, Julia Strickett, Rita Worner, Lavinia Shanks, Winnie Chen, Caroline Edwards, Ken Huang, Sally Stone, Mary Zhou, Sarah Kirkwwood, Lingbo Yu
ACC: Andrew Shaw
Health and Safety: Andrew ShawFiona McMillan


Andrew Shaw
Partner, Lane Neave

t +64 3 353 8014
m +64 29 244 9001

Fiona McMillan
Partner, Lane Neave

t +64 9 300 6264
m +64 27 351 2000

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