The perils of firing at will
Happy New Year everyone! It’s great to be back into the full swing of the year. Vitamin D levels are up and the body well rested.
I skipped into the office on my first day back to be met with a literal wall of employment disputes that needed urgent attention. The smile on my face didn’t last long. One of my first pieces of work was to help a client with a very messy “instant dismissal” that had occurred last year and came to the eyes of the Employment Relations Authority in December.
Many employers I speak to genuinely believe in a phrase that has sneaked into employment terminology over the years – instant dismissal. “Somebody did something wrong, therefore I summarily (or instantly) dismissed them – our employment agreements said I could do that.” And that’s where the trouble begins.
Employers also ask me: surely if both parties have agreed to something in writing, it’s enforceable isn’t it? Yes and no – but always proceed with caution. For example, just because both parties agree to pay less than what the law says you can, it doesn’t make it right, nor is it legally binding. There are oodles of examples where both employee and employer have agreed to something in writing at the promise of a positive employment relationship. It’s generally only when things turn sour that one of the parties wants to pull apart the agreement and its intent.
One of the biggest mistakes we see at Everest is from employers who really believe they have genuine reasons to consider terminating employment but who carry out the process the wrong way. The law says, not only must you have substantive reason to consider disciplinary action, but you must carry out the process of investigating and raising the matter with the employee in a legally appropriate manner. When taking action against the employee, the employer must follow the requirements of the Employment Relations Act 2000 and natural justice.
The Ministry of Business, Innovation and Employment says the employer must:
• fully investigate the concerns, taking into account the resources that they have to do this
• properly raise their concerns with the employee. This involves telling the employee exactly what the problem is, providing all relevant supporting information and telling them that disciplinary action is a possibility
• give the employee a reasonable opportunity to tell their side of the story, and
• genuinely consider the employee’s explanations (if provided).
The employer should also:
• make sure the decision-maker is as impartial as possible
• tell the employee that they may have a representative or support person present at any disciplinary meetings
• give the employee an opportunity to seek independent advice throughout the process
• give the employee an opportunity to give their explanation or response to the person who will make the final decision
• not make the decision on what action to take until after hearing and considering the employee’s response to the proposed course of action
• treat employees without bias and in a way that takes into account any similar situations that have occurred
• consider all options before making a final decision.
Before May 6, 2019, there will be a requirement on all employers to review their employment agreements to implement the amendments to the Employment Relations Act. As part of this process (or sooner) you may want to take a long, hard look at your termination clauses, your misconduct and serious misconduct guidelines and any other policy or procedural information you use when considering taking disciplinary action with an employee. Now is the perfect time to remove those clumsy “instant dismissal” statements.