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Unjustified dismissal claim rejected

06 Oct 2017

Allianz chief executive who was sacked after last year's Kaikoura earthquake has had his claim of unjustified dismissal rejected by the Employment Relations Authority (ERA).

Eugene Elisara headed up Allianz in New Zealand until this year.

After the Christchurch earthquakes of 2010 and 2011, Allianz introduced new property underwriting rules for Canterbury and Wellington. New policies in those areas had to meet strict criteria.

But when the insurer was hit with a $32 million loss due to damage to Wellington property caught up in the November earthquake, it was found that the underwriting instructions had not been complied with.

It was found there had been a substantial breakdown in underwriting controls by Allianz in insuring 29 Wellington properties worth $564m.

"The reviewers found that Elisara's decision-making in relation to the [properties] showed a lack of business judgment that operationalised when the underwriting process broke down," ERA member Vicki Campbell said.

Allianz said Elisara's failure as chief executive, to ensure the underwriting instruction was followed, was a serious breach of not only the underwriting instruction but also his obligations under his employment agreement and his duty of fidelity.

Elisara, for his part, said the disciplinary investigation and process was unfair because Allianz had not put all the allegations to him to ensure he was aware of their substance, nature and weight.

He said it did not allow him enough of an opportunity to bring a support person or representation to the disciplinary meetings, did not give him the opportunity to respond to evidence and did not provide an preliminary decision.

He said the decision was pre-determined and he did not have the decision-maker investigate and hear his explanations.

Elisara said Allianz made allegations that his actions amounted to gross negligence but this was never put to him for his comment. He also said Allianz relied on a finding that there was an inappropriate "sales culture" within the company and did not interview others in respect of this allegation.

When he was told his employment was to be terminated Elisara asked to have it recorded as a resignation or transferred into a redundancy.

Campbell ruled that the decision to dismiss Elisara for serious misconduct was substantively justified and within the range of reasonable responses Allianz could take.

She said he was responsible for a substantial breach of his obligations as chief executive, which caused a significant loss to Allianz. "He failed in his requirement to ensure 100 per cent compliance with the underwriting instruction."

Costs were reserved.

 - Stuff

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