Employment Disciplinary Procedures

At the recent update hosted by the Employment Relations Authority we were reminded how crucial it is for employers to have tangible written records of their disciplinary processes.  Without this written evidence, it is virtually impossible to successfully defend a personal grievance claim. The good news is that employers can save thousands of dollars and an unquantifiable amount of time and stress by ensuring they have a record of the disciplinary process taken, including:

  • Evidence from the investigation into the alleged misconduct;
  • Recorded minutes of meetings with the employee; and
  • Copies of notices sent to the employee.

Employers who keep written records and follow the steps set out below are far more likely to be able to prove that they followed proper process.

Many employers consider the disciplinary process a burdensome box-checking exercise.  “Let’s be honest, everyone including the employee, knows he stole from me, so why do I need to send him a letter informing him of this when I can just tell him to leave the farm?”  However, the time involved in following proper process is negligible compared to the overall cost of defending an unjustified dismissal claim.

If you are not convinced that the proper process is worth your time, I have set out some points for consideration below:

  1. It is easy for an employee to raise a claim for unjustified dismissal.  The claim could rest solely on the employer failing to provide evidence forming the basis of their investigation. The burden is entirely on the employer to prove with tangible evidence that proper process was followed.  A determination of unjustified dismissal is almost certain if there is no evidence that proper process was followed.
  2. There is a high financial, emotional and time cost in defending an unjustified dismissal claim. Settling a personal grievance can take several weeks. This is a long time to have a cloud of uncertainty hanging over your head. Having to take time away from the business to reach a negotiated settlement or attend mediation is expensive, let alone paying the legal fees, the mediator’s costs and the venue hire.
  3. The compensatory awards for lost opportunity and humiliation can be several thousand dollars.  You may recall the case in the news late last year where the Authority ordered a Takaka farmer to pay compensation of almost $8,000 to his former employee who was mistreating the animals. Even though the farmer was justified in dismissing his employee, he failed to follow proper process. Awards of this amount are not uncommon.

Despite the potential consequences and the abundance of information available to help employers follow proper disciplinary processes, we are receiving an increase in personal grievance claims. We have therefore set out a step-by-step guide to remind you of your basic obligations to help protect yourself against personal grievance claims.  Below is a checklist on the minimum steps that employers must undertake.

  1.    Act on every incident and keep written records

Employers are often prepared to overlook minor misconduct (typically failure to turn up to work or turning up late) because they don’t like conflict.  If you turn a blind eye to an incident, you cannot store the misconduct in your memory bank and raise it at a later point in an attempt to justify your decision to dismiss an employee.  If the misconduct is minor, a good employer will have an informal conversation with the employee and warn them that, if the incident happens again, the employer will commence a disciplinary process. It is crucial that you record every incident and conversation. It would also be prudent to advise your employee that the incident will be noted on their employee record.

  1.    Read the employment agreement

The employment agreement will contain provisions identifying what constitutes misconduct and/or serious misconduct and the process you are required to follow.

  1.    Investigate the allegation

You must investigate the allegation to see whether there is substance to the allegation.  Obtain written statements from witnesses with specific times and dates. If you witnessed the misconduct first hand, make a written record of the event.

  1.    Give written notice of your investigation and an invitation to meet

Provide your employee with a written notice.  You must include all of the following information to ensure you are following proper process:

  • State that you are conducting an investigation.
  • Provide details of the allegation and copies of all supporting evidence. You must not withhold any information from your employee.
  • Invite the employee to meet to discuss the allegations. You must give the employee reasonable time to prepare for the meeting – this should be 48 hours at a minimum.
  • Invite the employee to bring a support person.
  • Alternatively, if the employee does not wish to meet, invite the employee to provide written comment, within a reasonable timeframe.
  • State the potential consequences if the allegations are proven – for example, a written warning, final written warning or dismissal.
  • If you are concerned that your employee’s presence at work is a safety concern or may impede your investigation, you may consider suspension with pay.  You must state in your notice that you are considering suspending the employee and invite them to discuss the possible suspension at the meeting. You must not suspend the employee without giving the employee the opportunity to meet to discuss the suspension.

  1.     Meet with the employee

At the meeting:

  • Explain the reason for the meeting, the allegations and the potential consequences.
  • Give the employee an opportunity to explain. You must listen to your employee’s explanations with an open mind.  No conclusions can be made until you have properly considered what your employee has to say.
  • Advise that you will take a day or more to consider all the evidence before informing the employee of your conclusions.
  • Keep a record of what was discussed at the meeting.  You should get your employee to sign a copy of the meeting minutes as confirmation of what was discussed.

  1.     Decide whether further investigation is necessary

After the meeting, you should decide whether further investigation is necessary, based on any new information provided.  If your employee makes allegations about other employees, you need to properly investigate these allegations. It is important that you treat all employees fairly.

If you uncover new evidence in your further investigation, repeat steps 4 & 5.  You must give your employee the opportunity to comment on any new information from further investigation and hold another meeting if necessary.

  1.    Make a decision and give written notice of your conclusion

Based on the information, you need to decide whether your employee has committed misconduct or serious misconduct and decide what action to take.

You must provide your employee with a notice including:

  • Your findings as to whether the allegations are substantiated, and if so, whether the conduct amounts to misconduct or serious misconduct.
  • The outcomes you are considering – for example, a final written warning or dismissal.
  • An invitation to them to attend a meeting to discuss the options you are considering. Give at least 48 hours’ notice.
  • An invitation to the employee to bring a support person.
  • An alternative, if the employee does not wish to meet, inviting the employee to provide written comment within a reasonable timeframe.

  1.     Meet with the employee

If your employee would like to meet, you must give them the opportunity to comment on the potential outcome and provide reasons that could mitigate further action.

In making your decision, you must consider alternatives to dismissal and any mitigating factors or reasons raised by the employee.

  1.     Give written notice of your final decision

After the meeting, you should provide notice of your final decision – written warning, final written warning or dismissal with or without notice.

If you are providing a final written warning, you should state this and state that further misconduct may result in dismissal.  Note, however, that if your employee engages in further misconduct several months after a final written warning, this will not automatically mean that you can dismiss your employee after following proper process.  You must consider the nature of the misconduct, whether it is repetitive offending, your employee’s previous good behaviour, and any alternatives to dismissal.

  1.   Give written notice terminating your service tenancy

If you are providing accommodation as part of your employee’s remuneration package, the tenancy is a “service tenancy”.  This is still governed by the Residential Tenancies Act. However, special provisions apply for ending a service tenancy.

If you decide to dismiss your employee, you must also give written notice terminating your employee’s tenancy in accordance with the employment agreement (usually two weeks’ notice is required).  You may also have the option of ending the tenancy earlier if you require the accommodation for new employees or if you are concerned about the employee damaging the accommodation. However, this will depend on the terms of your employment agreement.

If you fail to give written notice, your employee can remain in the accommodation beyond the date their employment ended, until you give proper notice.

So, next time you find your employee misbehaving, stop, think before you act, and follow these steps – it will save you thousands of dollars, hours of your time and a priceless amount of peace of mind.

At BlackmanSpargo, we will provide you with specific legal advice to address your concerns.

If you are unsure about any of your employer or employee obligations, please contact us on 07 343 9393.