Can I dismiss an employee for incompatibility?


The three most common reasons for dismissing an employee are:

1. Poor performance

2. Serious misconduct

3. Redundancy

The courts have, however, long recognised another ground for dismissal which is incompatibility. A well known case is Walker v Procare, where a highly competent accountant was justifiably dismissed for incompatibility after causing tremendous conflict with her work colleagues. 

Sometimes the incompatibility is between an employee and their employer. If the employer dismisses the employee they have to establish an “irreconcilable breakdown of trust and confidence”. An example is the case of Reid v New Zealand Fire Service Commission. Mr Reid was a firefighter for 22 years. In the last few years of his employment he brought numerous court proceedings against his employer. The Fire Commission got fed up with him and dismissed him. The Employment Court agreed that the nature and volume of Mr Reid's court proceedings were unequivocal evidence of conflict.  The Court held that while it is unusual for an employer to justify dismissal on the grounds of the irreconcilable breakdown of trust and confidence in the employment relationship, this was such a case.

Where the incompatibility is between work colleagues or between an employee and their manager, one or both of them may claim they are being bullied by the other. This triggers the employer’s obligation under the Health and Safety at Work Act 2015 to investigate whether bullying is taking place.

In cases of incompatibility between employees, many issues arise:

• What steps does the employer have to take to manage and resolve the conflict before it can fairly cry halt and dismiss an employee for incompatibility?

• Does the dismissed employee have to be more to blame than the other employee?

• Does the employer need to engage an independent investigator or can it investigate the incompatibility in-house?

• What must the employer do to keep other employees safe from the effects of the conflict?

The case law says incompatibility is a recognised and justified ground for dismissal but the employer must make reasonable attempts to resolve the incompatibility and cannot just throw up its hands and say “this is not going to work”.

If you need advice on incompatibility issues, call Workplace Law on (027) 270 1057.