To suspend or not to suspend

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When an employee is facing disciplinary proceedings, particularly if the allegations are of a serious nature, it is almost a given that you will have one unhappy employee on your hands. An employer may naturally assume that suspending the employee during any disciplinary proceedings or investigation, will resolve the issue.

However, employers need to be wary that suspension is not an automatic right available to an employer in these circumstances, and the grounds for justifying a suspension may present a higher threshold than one might first imagine.

To justify suspending an employee, the suspension needs to be lawful as well as substantively and procedurally justified. In order for it to be lawful, the employment agreement needs to contain a clause that allows the employer to suspend, usually on full pay.

It is a rare employment agreement that does not contain such a clause, but it is also a rare suspension that will be justified without a suspension clause, so check the employment agreement first.

The next hurdle is to substantively justify a suspension. There are relatively few substantive grounds which justify a suspension. The first is where there is a high chance (not just a possibility) of an employee interfering with an investigation, either by intimidating or manipulating witnesses or by destroying evidence. An employer would need to have sound evidence that demonstrates the existence of such a risk.

Complainants being uncomfortable working alongside an accused during the investigation, is insufficient to justify suspension, and an employer might look at other actions such as changing work assignments or reporting lines during an investigation, to alleviate such discomfort.

A second reason which may substantively justify suspension is where there is evidence that sabotage to an employer’s business during an investigation is highly likely. Again, an employer would need to point to sound evidence of this, not merely the possibility of sabotage, which could be said to exist in any case where an unhappy employee is facing disciplinary proceedings.

The final reason that may substantively justify a suspension is where the employee works in a safety sensitive area, the allegations raised relate to negligence in performing those duties and there are no other duties the employee can be assigned to during the investigation.

In addition to justifying a suspension substantively, an employer needs to show that the suspension was carried out in a fair manner. This will usually require an employer to inform an employee that suspension is being proposed, the reasons why the employer believes suspension is necessary and giving the employee the opportunity to comment on the proposal, before making a final decision to suspend.

The 2008 case of Hamilton v B & D Doors Limited, gives some indication of just how high the suspension threshold is. In this case, the relationship between the employee, Mr Hamilton, and the employer, B & D Doors, had deteriorated due to what the employer saw as performance issues.

B & D Doors made garage doors, which included a relatively new division that made wooden doors. Mr Hamilton was in charge of this division. Mr Hamilton was temporarily replaced as manager of the wooden door division, in an effort to increase the production in this division.

Central to production, was a machine which cut wood to an exact size. The machine was automatically set to the size, and a considerable amount of deliberate effort was required to change the settings by even a millimetre. Following a lunch break, when only Mr Hamilton was seen near the machine, the settings were found to have been altered by three millimetres, rendering the wood cut at the altered sizing unusable. Subsequent alterations were also made in relation to other calibrations on the machine, and on one Saturday, the machine instructions were found to have been changed from English to German, rendering it unusable until the Monday morning when it, somewhat miraculously, reverted to English when Mr Hamilton resumed work.

Not surprisingly, the employer concluded that Mr Hamilton was responsible for the alterations to the machine, in an attempt to sabotage the business. The employer merely informed Mr Hamilton he was being suspended, and then dismissed him following a disciplinary process. The Employment Relations Authority upheld Mr Hamilton’s grievances for unjustified suspension and dismissal, awarding him $8000 in tax-free compensation and $11,000 gross in lost remuneration.

In relation to the suspension, the Authority held that with no written employment agreement, there was clearly no written suspension clause and the employer had not offered the employee any meaningful opportunity to comment on suspension, before making a final decision n the matter.

The employer challenged this decision in the Employment Court. While the Employment Court upheld the suspension as unjustified given the lack of a contractual suspension clause and failure to consult on suspension, Judge Couch assessed the employee’s contribution to the situation as 100 percent and also found there was no evidence that the employee had suffered as a result of the suspension and therefore did not award any remedies for the unjustified suspension. The Court described the evidence justifying dismissal as “straightforward and compelling” leading His Honour to assume that the evidence provided to the Authority must have been significantly different. The remedies ordered by the Authority were set aside, and the employee received nothing.

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About Author

Erin Burke

Employment Lawyer and Director at Practica Legal Email: erin@practicalegal.co.nz phone: 027 459 3375