The ERA heard Ms Atchison laid a formal complaint with the school's board of trustees in February 2011, but the complaint was put on hold. In the meantime, Ms Atchison's dissatisfaction "continued to fester and, if anything, worsened".
She wrote a second letter of complaint to the board in May 2011 -- and only then were Ms Mantell and later Ms Johnston made aware of the complaint.
Ms Johnston denied any wrongdoing and agreed to mediation with Ms Atchison, but the mediator could not get the two teachers into the same room.
The mediation was abandoned in July 2011, when Ms Atchison withdrew her formal complaint. Instead, the teachers agreed to take part in a three-day professional development and team-building workshop in Hanmer Springs.
However, the ERA said the workshop not only failed but "further aggravated the situation".
Ms Atchison "reacted visibly, vocally and negatively" to her colleague, which led to Ms Johnston being absent from part of the workshop.
The situation did not improve upon their return to Dunedin, and plans to travel from the airport together were scrapped.
Ms Mantell told the ERA the team-building exercise had been "totally destructive". She remained concerned about the broken relationship and attempted to arrange further mediation.
However, Ms Johnston went on leave on August 11, 2011 and filed a disadvantage claim the following day.
Most, but not all, of her four-month absence was covered by medical certificates, one of which referred to the stress related to the working environment.
At a meeting between Ms Mantell and Ms Johnston in December 2011, the women discussed a rehabilitation plan and agreed Ms Johnston would return to work at the start of the 2012 school year.
However, after the meeting Ms Mantell began to question how Ms Johnston's health prognosis had suddenly changed. The school's lawyers then wrote to Ms Johnston, informing her she was being dismissed on the grounds of medical incapacity.
ERA member Michael Loftus found Ms Johnston had been disadvantaged by being required to work in a dysfunctional environment, and by the delay in addressing the complaint against her.
Had the complaint been addressed when it was first raised, then Ms Atchison might have become aware that Ms Johnston was not "shirking" but working in accordance with her terms of employment.
Mr Loftus also found Ms Johnston had been unjustifiably dismissed.
He ordered the school to pay $6351.78 in lost wages and $12,000 in compensation. Costs were reserved.
Ms Mantell, now the school's principal, said the ERA's decision was an "unfortunate outcome" but it would not impact on the school's delivery of quality teaching and learning.
She agreed it was disappointing the relationship between the teachers could not be repaired. "As a school, we tried everything possible to resolve that matter."
Ms Johnston was being sought for comment.
