The New Zealand Defence Force has been ordered to pay a former employee $25,000 after a flawed dismissal process.

The Employment Relations Authority in Wellington was told former human resource site lead Juliette Darnley worked with the force between July 31, 2017, until June 24, 2019.

Her role as human resource site lead included representing the Defence Force in employment relationship problems involving its personnel.

At times, this role included the negotiation of settlement agreements with departing staff.

In December 2018, the chief people officer of the Defence Force issued a directive that provided policy guidance for the control and management of payouts being made to departing staff.

In January 2019, Darnley was in charge of a settlement agreement with a former staff member.

The settlement included the employee resigning and being paid salary in lieu of notice for a longer period than was required by the employee’s contract.

The payment was queried by payroll, but Darnley said the nature of the settlement meant it didn’t fall under the December directive.

A month later, Darnley received notice that she was under formal investigation for failing to follow the directive.

The allegations against Darnley included the claim that she had circumvented the approval process and had told payroll staff that approvals were not required.

It was also claimed that the settlement sum agreed to was in excess of Defence Force’s financial obligations.

Darnley was told that if the allegations were proven, it could constitute serious misconduct and be in breach of her employment agreement.

The investigation concluded in March 2019 and Darnley was informed that the allegations had been proven in April.

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The report identified a number of mitigating factors but made no recommendations on whether Darnley’s actions amounted to misconduct or serious misconduct.

On May 14, Darnley was told that she would be dismissed from her role, unless she could provide reason for a different punishment.

She never returned to the office, and instead took sick leave and annual leave.

On June 24, Darnley accepted a job elsewhere while the disciplinary process was ongoing, and she was officially still employed with the Defence Force.

During the course of the investigation into her work, it was revealed that the directive made in December 2018 was directed at Darnley specifically.

Darnley’s superiors had discussed concerns relating to the settlement agreements that she oversaw.

However, at no point did any of Darnley’s superiors give her the opportunity to address concerns with her work.

Authority member Trish MacKinnon said the Defence Force breached its obligation to treat Darnley fairly by failing to address the performance issue directly.

As such, Darnley’s resignation could be viewed as constructive dismissal, Mackinnon said.

The Defence Force claimed that Darnley had failed to act in good faith when she accepted a new position on June 24.

While Mackinnon agreed Darnley had failed to act in good faith by not informing the Defence Force about her new role, considering the circumstances and her uncertainty over the future, this was not sufficient to impact the authority’s findings.

The Defence Force was ordered to pay $25,000 in compensation for constructive dismissal minus three days’ worth of wages mistakenly paid to Darnley after she had ended her employment.

Costs were reserved.