Why our IR laws still need changing

January 30th, 2012 at 3:00 pm by David Farrar

Jo McKenzie-McLean at The Press reports:

A Christchurch retail manager who told her employer: “F..k you, I am going”, has been awarded $8000 for unjustifiable dismissal.

Yes, the $8,000 went to the employee not the employer.

The authority’s written findings state that Sullivan’s employer had “seized the opportunity” to be rid of Sullivan after a “troubled” employment relationship, including four warnings the employer says it issued for Sullivan’s abusive conduct and quality of work.

So there were four previous warnings!

“Ms Martin was negative in the way that she approached me, being abrupt. I accept I threw the rosters on the floor. I said I was sick and in my frustration I said: `F..k you, I am going!’ I picked up my bag and left. I left crying and upset.”

By her own admission, she told her boss to get fucked, she threw the rosters on the floor and she stormed out of work, not returning that day. And just because she thought her supervisor was abrupt?

Sullivan did not show up for work the following day, with her employer denying Sullivan’s claims she had been granted a sick day.

So she took a second day off also.

“There was … no raising of concerns, no discussion or real attempt to ascertain Ms Sullivan’s views about what had occurred and therefore no consideration of those views.”

The authority granted her $5053 in compensation for loss of income, and $3000 for humiliation, loss of dignity and injury to feelings.

So the employer ends up $8,000 out of pocket, because they didn’t consider Sullivan’s views enough after she had stormed out, saying “fuck you, I am going”, and after four previous warnings.  You have to feel sorry for the employer.

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42 Responses to “Why our IR laws still need changing”

  1. RRM (9,769 comments) says:

    You have to feel sorry for the employer.

    No, I think we need to read more about that bit about the supervisor who was “negative and abrupt” before we come to conclusions about whose fault this is and who we should feel sorry for.

    People don’t often just lash out with the F bomb for no reason…

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  2. Fisiani (1,023 comments) says:

    Hell I thought the law had been amended to stop exactly this type of legalistic rort and rely on what a reasonable employer should do. Luckily I was just about to hire someone. I’ll wait.

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  3. PaulL (6,015 comments) says:

    The employer probably thinks they got off lightly, and is happy. I have plenty of staff that I’d pay $8K to be rid of.

    But to your point, yes, the system is heavily biased against employers. Nowhere is there a right for an employer to get $8K damages if someone that they’ve invested training in just up and quits, even if they do it in breach of their employment conditions (say, without giving notice).

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  4. Nostalgia-NZ (5,090 comments) says:

    We’ve only got a selective part of the situation here, not enough. There was obviously a lot more to it for a senior staff member to be exasperated to the point of telling the boss to ‘f off.’ In the overall scheme language doesn’t play a big part, additionally there was obviously some provacation by the employeer and we see part of that by rosters being thrown on the ground.
    That said, it is hazardous grounds these days. Some will recall the empoyler that needed to pay out to a employee guilty of theft last year. I think it was in Nelson.
    The prevailing wisdom is have witnesses, keep records of warning and so forth but it becoming apparent that the ‘blow your top’ and spit the dummy type of dismissal can land an employer in trouble.
    I know of a current one, a foreman dismissed for theft (stolen property recovered from his home.) Now comes back with an employment lawyer. I’ve suggested a letter from the employer’s lawyer recording that the employer has retained the evidence, that there is no statute of limitations on theft, and asking if the employee might wish it to be solved that way before they look at the employment ‘issue.’ However chances are he’ll have some excuse with merit, that he was going to return the goods, that another staff member removed them from the truck, no search warrant, no overall consideration of all the circumstances, not thoughtfully investigated, and it will become the next usual blunt advice – pay out to compromise and remove the issue.
    It’s hazardous ground, but the shift is toward non-inflamatory solutions to employment issues – generally that’s a good thing for both sides.

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  5. PaulL (6,015 comments) says:

    Nostalgia-NZ, the problem is that we assume with reasonable people that there must have been some provocation. Reasonable people don’t just tell their boss to f off. But, funnily enough, there are lots of unreasonable people out there, and many of them have jobs. And when you have one of those working for you, it’s a nightmare. Nobody really believes that anyone could be that crazy, so as you do they discount it “you must have done something to cause that.” The reality is that sometimes people are that crazy, and if you’re unlucky enough to have employed one of them, it’s very hard to do something about it. Far easier to give them some money and ask them nicely to go away.

    What would be a nice addition to NZ law is a provision that allows an employer to just cite “irreconcilable differences” and terminate someone, with some appropriate payment.

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  6. kowtow (8,152 comments) says:

    All part of the all pervasive “human rights ” culture that has swept common sense before it and resulted in all sorts of nonsense.

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  7. ben (2,418 comments) says:

    I feel sorry for productivity and growth. Oh and freedom of contract and association.

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  8. redqueen (552 comments) says:

    Ben, here here.

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  9. Bevan (3,965 comments) says:

    No, I think we need to read more about that bit about the supervisor who was “negative and abrupt” before we come to conclusions about whose fault this is and who we should feel sorry for.

    People don’t often just lash out with the F bomb for no reason…

    Ive got to agree. It sounds like there is more to this case than the article suggests.

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  10. F E Smith (3,324 comments) says:

    kowtow,

    this has nothing to do with human rights and everything to do with poorly drafted industrial relations law.

    There is a real and significant difference between the two.

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  11. Dave A (61 comments) says:

    It would be very unwise to jerk your knee based on a newspaper account of the findings of a case before the authority, which would actually have heard the evidence before writing a decision based on the evidence, the law and case law.

    But hey, who cares?

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  12. Nostalgia-NZ (5,090 comments) says:

    PaulL

    Yes there are unreasonable people, both employers and employees. I’m aware of some situations that are seemingly ridiculous given weight in the employment courts. I agree with this ….

    ‘Far easier to give them some money and ask them nicely to go away.
    What would be a nice addition to NZ law is a provision that allows an employer to just cite “irreconcilable differences” and terminate someone, with some appropriate payment.’

    It would be very helpful for someone I know, and help him avoid having to have everyone and their dogs, six witnesses and the tea lady present, while he transverses not only a particular ‘fat bastard’ driver’s employment indiscretions, but also that of the other ‘fat bastard’ employees of the past, give a general run down on the economy, who is paying and who is not, his own youth, and his views on what is wrong with NZ these days. He’d simply be able to say ‘I divorce you.’

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  13. Pauleastbay (5,035 comments) says:

    This is something I know a wee bit about have worked in this field from 2004 until 2011, that is sacking staff for employers.

    If you don’t follow the procedures you pay, its that simple, thats why the firm I worked for was busy because we had good systems in place and gave good advice to the business owner.

    Some of our more usual negative commentators here are right, there is only ony side, if the employer didn’t follow guide lines an employee’s advocate will exploit them. This woman could have been the devil incarnate and mad as a meat axe but yo have to do things correctly and fairly, thats the way it is, its not always right but thats the rules. There is a whole industry out there dealing with this.

    PaulL is right, anything in the $6 – 8 k is a good result because, it can cost thousands (6 figure) if it actually went to the Employment Court. Thats why you have insurances.

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  14. m@tt (630 comments) says:

    All they employer had to do to was follow up afterwards that the resignations was in fact a resignation. If the employee said ‘no, I am coming back’ they then could have started a termination process over the employees obvious issues. I have no doubt they would have been able to terminate the employment cheaply and easily given the circumstances.
    I have no sympathy for the employer at all.

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  15. Pauleastbay (5,035 comments) says:

    and

    this wasn’t a gross misconduct issue , most contracts now have a gross misconduct clause for theft, drugs ,violence in the work place, those ones are grounds for immediate dismissal.

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  16. wat dabney (3,755 comments) says:

    Abolish all employment law. Simples.

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  17. plebe (271 comments) says:

    Get over it david why stress out, have another holiday in Otara and send pictures please.

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  18. annie (540 comments) says:

    Employment law is very procedure-focused.

    If you don’t do it exactly right, you are vulnerable. The bottom line is to hire an employment lawyer fast to make sure you are following all the procedures you need to before dismissing someone.

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  19. kowtow (8,152 comments) says:

    FES

    ……humiliation,dignity and injury to feelings…….

    and employment is considered a “human right”.

    There may be a real and significant difference between the two types of law,but the pro employee/anti employer stance is underpinned by the human rights culture that the west is currently in thrall to.

    Common sense has been swept away and lawyers are the principal beneficiaries.

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  20. Pauleastbay (5,035 comments) says:

    kowtow

    for little ones like this, lawyers very rarlely get involved, usually the employee gets an advocate, normally the union throws one in or there are private ones out there and the employer gets in his insurance company.

    If the dismissal is from an investigation on site the employer usually uses the firms investigator in conjunction with the companies HR people

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  21. labrator (1,892 comments) says:

    I know of companies where the employee has come to the boss and said “I want a payout to leave”. They know full well that they can milk the system with anything they want and just drag it out. Going to lots of mediation hearings is expensive, productivity wise, for small business owners.

    I have no sympathy for the employer at all.

    The assumption that all business owners are skilled in all aspects of business is flawed. A recent study, sorry no link, stated that one of NZ’s biggest preventers of growth was that we are a nation of mum & dad businesses who won’t hire staff. The difference between running a small company that hires and doesn’t hire is massive and it’s stories like this that prevent a lot of people expanding. “Why risk it?” is the question they ask themselves and so NZ squanders opportunities.

    If we could just make a person redundant without making the position redundant and let the person take the appropriate payout I’m sure businesses could be more productive.

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  22. dime (9,796 comments) says:

    sounds like 8k is a small price to pay.

    its bullshit though. its lamost like employees can do no wrong and employers are evil.

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  23. Nookin (3,260 comments) says:

    I have set out a fuller section of the decision to illustrate the reasoning. The case is old. The decision has been delayed because of the earthquakes etc. The adjudicator notes that the file was inaccessible for a while. The law has been changed since. Section 103, as it was, required the employer to prove that the decision was one that a reasonable employer would have made. That is no longer the test. The test is whether the decision was one that a reasonable employer could have made.

    FES. I am not sure that I agree with you that the problem is the legislation. A lot of the problem is that many people have no training or skills in problem solving and conflict management. The spirit of 1951 still lives on in the minds of many employees and the attitudes of many employers hark back to the feudal system.

    It never ceases to amaze me that some employers do not familiarise them selves of their obligations and end up fucking about with someone else’s life and I say that having spent most of the day dealing with two separate employment problems and having spent last week explaining to an an employee that after two years regular employment, yes, she is entitled to paid sick leave, is entitled to be paid for stat days and is not a casual employee and is entitled to paid holidays.

    For those who argue that the Act is one-sided, I invite you to look at the cases where the ERA has made awards against employees (ie made them pay money)

    The ERA may not be perfect but its paradigm is one which we need to develope and grow into.

    “[44] These is a situation clearly analogous with that discussed in Kostic v Dodd,
    and I must conclude that an employer with the knowledge Mr Johannink had by the
    afternoon of 24 February should not have simply accepted that a resignation had been
    tendered. In such circumstances a fair and reasonable employer would have allowed a
    cooling down period and then discussed the matter with the employee.
    [45] Mr Johannink accepts he didn’t. He concedes he never questioned
    Ms Martin’s conduct during the discussion but simply accepted her view of what had
    occurred. He also accepts that he never discussed the issue in any depth with
    Ms Sullivan but puts this down to an inability to do so given what he says was her
    unacceptable conduct during the two conversations he had with her. That is, in itself,
    a damning admission in that it again confirms an element of heat which would
    mitigate against immediate acceptance of the alleged resignation.
    [46] I must conclude that Mr Johannink seized the opportunity to be rid of
    Ms Sullivan. In this respect I note the history outlined by the company and various
    answers Mr Johannink gave. For example he observed he, the supervisors and staff
    had had enough of Ms Sullivan and when asked by Ms Tucker why not wait and
    clarify the issues the answer was No chance.
    [47] Given the above I must conclude this was a dismissal. It was affected by
    Mr Johannink’s advice, during the conversation of 24 February, that he was accepting
    the resignation in circumstances where a fair and reasonable employer would not have
    done so.
    [48] If the dismissal was not affected at that point, it occurred when the final pay
    was prepared. Mr Johannink says this occurred as Ms Sullivan did not return as she
    had advised she would. I dismiss this as a justification for the following reason.
    There is, in my view, some correlation between what occurred here and the rules that
    apply when an employer claims an employee has abandoned their employment. There
    is, in the later scenario, a requirement that the employer attempt to confirm whether or
    not abandonment (read cessation or resignation) has actually occurred. I consider that
    in these circumstances and given the information available to Mr Johannink he should
    have attempted to confirm the situation before simply acting.”

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  24. Nookin (3,260 comments) says:

    It is not often I agree with m@tt but I do in this case. The boss stuffed up. He wont do that again and, hopefully, enough people will read the decision and learn from it. Pigs, of course, might also fly.

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  25. PaulL (6,015 comments) says:

    m@tt: clearly you’re not living in the same world those of us who have employees live in. “All they had to do” indeed. Let alone “cheaply and easily.”

    In the USA you can just call staff into your office, give them a pink slip and 2 weeks pay, and they go away. Not saying we should have exactly that, but it makes a certain amount of sense that if an employer doesn’t really want an employee any more, they should be able to exit them.

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  26. gump (1,614 comments) says:

    The complainants in these cases have their names and case details published on the web.

    Any prospective employer can do a google search for “Koren Sullivan” and find out all of the details. I’d say that negates any monetary compensation received.

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  27. orewa1 (428 comments) says:

    Annie says “Employment law is very procedure-focused. If you don’t do it exactly right, you are vulnerable. The bottom line is to hire an employment lawyer fast to make sure you are following all the procedures you need to before dismissing someone.”

    Exactly!

    The issue is that employment law is no longer designed to get a fair outcome from disputes between employers and employees. It’s become designed, by lawyers, to make sure that lawyers have to be involved deeply in every case, no matter how small.

    That’s symptomatic of NZ’s structural problem. We train too many professionals, especially lawyers and accountants. Then they manipulate the systems to make themselves rich – to guarantee their indispensibility.

    That’s the mould we have to break. NZ’s ratio of “support” people to “productive” people is way out of whack. Fixing it would be the biggest boost to productivity imaginable.

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  28. kowtow (8,152 comments) says:

    PEB,
    Thank you for that elucidation. I got carried away threw the lawyer bit in as a bit of a dig at FES.Mind you I still stand by the notion that the prime beneficiaries of human rightism are lawyers (not to mention their clients). It certainly isn’t the citizen taxpayer.

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  29. Nookin (3,260 comments) says:

    @Annie

    “Employment law is very procedure-focused.

    If you don’t do it exactly right, you are vulnerable. The bottom line is to hire an employment lawyer fast to make sure you are following all the procedures you need to before dismissing someone.”

    Not quite correct. I have cut and pasted below the relevant section of the Employment Relations Act dealing with procedure. This came into effect in April 2011. The focus now is on whether any deficiency in the procedure resulted in the employee being dealt with unfairly. I do not find that an objectionable criterion. It may well be that some people do take the view that all is fair on the factory floor. I do not consider that to be a workable solution.
    I do however commend Annie’s recommendation to get advice before shooting from the hip.

    “The Authority or the court must not determine a dismissal or an action to be unjustifiable under this section solely because of defects in the process followed by the employer if the defects were—
    (a)minor; and
    (b)did not result in the employee being treated unfairly.]”

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  30. Nookin (3,260 comments) says:

    Orewa1
    You may well be correct that there are some lawyers who dive into an employment dispute like a pig in mud. Litigation in the employment arena is not the exclusive domain of lawyers, however. Some advocates work on a contingency basis and this simply exacerbates litigation. You also have to remember that the first port of call is mediation (assuming that the problem cannot be dealt with between employer and employee) and that mediation is non-adversarial. A mediator is likely to point out to a litigious advocate, in the presence of the client, that advancing the claim might be likened to pushing a soft substance uphill with a sharp stick. I think it very easy to generalise. You get bad employers, bad employees, bad lawyers and bad blog posters. That is part of life.

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  31. plebe (271 comments) says:

    The boss sounds like a well known poster on this blog, step forward you nasty right winger and admite you lustered after her body.
    guess which nasty poster employered her

    [DPF: 20 demerits]

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  32. PaulL (6,015 comments) says:

    plebe – are you drunk on a Monday afternoon?

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  33. labrator (1,892 comments) says:

    plebe – are you drunk on a Monday afternoon?

    Hoping it’s because it’s a public holiday from Taupo north…

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  34. lilman (949 comments) says:

    Easy answer here,the employer upon hearing the $8000 fine should have straight away said to the judge”FUCK YOU -IM OFF”
    Come back 2 days later and sued for costs plus hummiliation and stress for $30000 dollars.
    Now thats justice New Zealand style.

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  35. tas (608 comments) says:

    I know a guy who ran a small fruit and vege store. He hired a part-time employee to run the store. Money started disappearing from the register. He couldn’t just fire her, because that would be a violation of her rights. So he forked out for a security camera. She quit the day it was installed. He didn’t hire again.

    Our employment law is fine for large corporations with a dedicated HR department. They have specialist staff that can handle the complexities of the law. Handling the occaisional dispute just becomes a cost of business.

    But, for a small business, it is a big barrier. It is a huge time investment just to understand the law. It takes time to deal with the paperwork. And there is a big risk of things going wrong. A 10k settlement can be a big financial strain on a small business. And you have to close your business (or hire someone else) to make time to attend hearings.

    That’s why your corner dairy is run by mum, dad, and the kids. It’s too much drama to hire someone.

    The law needs to change. Invariably, is protects bad employees much much more than it ever protects good employees.

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  36. slijmbal (1,229 comments) says:

    Having employment law and its implementation biased to the ‘lesser’ party, the employee, is deliberate and is meant to balance out what is perceived as an unequal relationship. The employer could in theory threaten to fire and/or fire as a means of control of staff. However, the implementation has become ludicrous. I’ve been involved in the dismissal processes of a range of staff from $17 an hour to $100K+ p.a. in remuneration. It’s an absolute bloody minefield and any employee with a modicum of understanding realises they will be paid to go away if they twiddle the right knobs. The system is fraught with potholes for the employer. The employee just need to tell a few porkies and by the time one has spent several K on the legal process one might as well pay a lesser amount to the employee.

    One example brought it home to me. The employee was, frankly, barking. There is no kinder word to describe their behaviour. I was brought in to the process as I had not been involved in their direct management but was familiar with them and we were attempting to avoid confrontation as they blew up with the tiniest reason. They had brought in employment advisers who worked on a success fee. The advisers pretty much had to force the employee to accept a pretty damn good deal as it was cheaper to pay them out rather then pay for the process going to the employment court. We had exceedingly solid evidence that the employee had repeatedly lied and behaved exceedingly poorly in the workplace. So much so, that the other employees volunteered to be witness in any process. Despite all of this they were rewarded financially to go away. They only accepted the deal as I threatened to behave on principal, take the cost and ensure that the employee received nothing by going to the employment court. I showed the advisers the evidence we had of their behaviour. Sadly, we passed the employee on to the rest of the labour pool. They received no reference, which hopefully meant they had difficulty finding employment in the future. The system is f*****d.

    With more highly paid employees we generally offerred an extended notice period and the opportunity to find a job whilst still in employment as frankly, it was the cheapest approach. That said, bad performance or behaviour is not limited to lower paid employees but certainly is in inverse proportion to the remuneration in my experience.

    Cheer up though! When I worked in Holland sacking people was exceedingly difficult. Much more so than here. It could take 2 years to sack someone for poor performance and they were guaranteed a CPI pay rise each year. I had to laugh the year the CPI was -ve and the crappy employees could legally receive a pay cut. If an employee was caught drunk, having sex or stealing at work you could sack them. We were coached to look out for this for employees who were dysfunctional. We used to have to coach some employees in interviewing and CV writing techniques and explain that they would receive all the worst jobs until they left. I understand the rules have been made somewhat more sensible now.

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  37. Nostalgia-NZ (5,090 comments) says:

    Well you certainly ‘f’ upped in that example you gave slijmbal.
    I particularly note how you reward incompentence on behalf of the employer by blaming the employee or some other person.

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  38. slijmbal (1,229 comments) says:

    @Nostalgia – I have no idea where you got that from. The employer’s only mistake was employing the person in the 1st place. They lined up the evidence and used that to exit the relationship with the least cost and least hassle. There are plenty of cases where there are bad employers as well as employees. In this particular case the employee was the problem.

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  39. somewhatthoughtful (461 comments) says:

    So you don’t trust our official employment relations court DPF? You don’t think the people who work there are qualified to do their jobs? Or are you just trying to bring employment law front and centre as that’s next up on the policy agenda?

    Weak sauce is weak.

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  40. BlairM (2,314 comments) says:

    NZ employment laws are such a drag on the economy for employers, and I don’t think they help employees all that much either. If it is easy to fire someone, it becomes very low risk to take someone on and give them a chance. Works just fine here in Texas. And if you get fired for whimsical reasons, you pick yourself up, dust yourself off, and there is always something else just around the corner. The benefits are tremendous. New Zealand needs fire at will laws.

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  41. Paulus (2,594 comments) says:

    Had she not had four warnings for similar behaviour ?
    Employers appear not to have a snowballs whatsoever. Sad.

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  42. kiwi in america (2,495 comments) says:

    BlairM
    Ditto AZ. Right to work laws enable employers to move quickly to downsize when the economy turns sour and to easily expand when things turnaround. If you want the protection of union shops move to Illinois, New York or California. Oh hang on employers are bailing from those high cost high regulation states for…Texas, Arizona, South Carolina, Utah etc. Average growth rates for right to work states easily outstrip those of th unionized states. A lesson for NZ.

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