Both employers and employees often tell me what they believe employment laws in New Zealand can and cannot do.
Frequently, their impressions are informed by sensational headline stories in the media about employees that have done things any right-minded person would consider a completely dismissible offence, yet the Employment Relations Authority (Authority) turns around and awards the employee compensation.
Below are three commonly-held beliefs that are simply myths.
It is nearly impossible to safely dismiss an employee under New Zealand employment laws.
Any employer in New Zealand has the right to say how they want their business run and to set out the expected conduct and level of performance that they are paying their employees to achieve. Where you have an employee who has committed serious misconduct or has been underperforming, you can dismiss them, provided you do it using a fair and reasonable process. Failure to do the latter is where most employers fall down in cases before the Authority.
The rationale set out in a judgment is, by necessity, summarised in a media article in a few sentences, and does not give readers the full picture of why the dismissal was held to be unjustified. This creates an impression that it is nearly impossible to safely dismiss an employee in New Zealand, which is not the case.
Further, although approximately 40 cases per month are decided by the Authority and the Employment Court combined, the media reports on average only two to three per month. They are usually chosen for their novelty factor such as a surprising outcome or where unusually high remedies have been awarded.
Sensational cases are newsworthy, standard cases usually are not. Where the general public only see sensational cases, they understandably start to believe that these unusual cases represent the norm.
Summary or instant dismissal allows an employer to dismiss an employee when caught in the act of serious misconduct.
In employment law terms, summary (or instant) dismissal means a dismissal without the required notice period specified in the employee’s employment agreement. It does not mean dismissal ‘on the spot’.
Before a decision can be made to summarily dismiss an employee, all allegations and the evidence the employer might rely on must be given to the employee, who is then given sufficient time (usually two to three days at least) to get legal advice or a support person, and to then address all the allegations and evidence, before an unbiased decision maker. Only then can the decision be made to summarily dismiss and the dismissal takes effect once the final decision has been communicated to the employee.
Again, if you see a headline such as “Employee assaults boss and gets $8000 compensation” there is a good chance that the employee was dismissed before the boss could even find a handkerchief to stem his bleeding nose. Such a dismissal will never be justifiable despite the employee clearly committing a dismissible offence.
However, after deciding on remedies, it is mandatory for the Authority to consider an employee’s contribution to the situation and downgrade any remedies awarded, accordingly. On rare occasions, the employee’s contributory conduct may result in a 100 percent reduction in remedies, but more typically it would be between 20 and 50 percent.
Suspension during disciplinary proceedings is standard practice.
Many employers seem to believe that because a suspension during disciplinary proceedings is on full pay, there is no disadvantage to an employee on suspension. This is not the case.
Suspension can often cause humiliation and create suspicion among an employee’s work colleagues. For a suspension to be justified it must be both lawful (meaning there is a clause that allows for suspension in the employment agreement) and it must be justifiable.
The latter means that there must be strong reasons why the employee cannot continue to attend work during the disciplinary proceeding. These reasons are actually few and far between and are usually restricted to safety issues, where the conduct being investigated, for example, relates to negligence that could cause safety issues for others, and there are no other duties the employee can be assigned during the investigation.
Suspension may also be justifiable where there is a serious threat that having the employee remain at work could compromise the investigation or disciplinary proceedings. The latter would include where threats have been made to witnesses, for example.
If an employer is struggling to come up with reasons why an employee cannot remain at work during an investigation, there is a good chance that any suspension will be unjustified.
Employers are also required to propose suspension to an employee, clearly setting out the reasons why the employer believes they cannot continue working during the investigation/disciplinary process, and allow the employee to comment on the proposal to suspend, before making a final decision on the matter.