|
Recent decisions from the Employment Authority and Court have shown an increased sensitivity with process and procedure.
In 2004 an amendment to the Employment Relations Act brought the concept of good faith into the legislation explicitly. Good faith is now a requirement of the procedure when disciplining or dismissing an employee.
Where process or procedure is incorrect the Employment Relations Authority or Employment Court will be prepared to regard that as evidence of bad faith, justifying a finding of unjustified actions or unjustified dismissal.
There has also been a gradual increase in the average minimum payment for compensation (to reimburse for humiliation, loss of dignity, etc.). Between 1 January and 30 June 2006 34% of compensation awards in the Employment Authority were $3,000.00 or less, 15% were between $3,000.00 and $5,000.00, 41% were between $5,000.00 and $10,000.00 and 10% were over $10,000.00 (with two awards being in excess of $15,000.00).
In the same timeframe the Employment Court’s average award was approximately $6,500.00.
This shows a definite trend upwards, with more awards of compensation being above $5,000.00 than below.
The process or procedure that needs to be followed when disciplining a member of staff is fairly settled. The employer’s obligation is to provide the employee, before decisions are made, a fair opportunity to be heard in relation to the allegation, the opportunity to have a support person and/or lawyer or advocate present and reasonable notice of any meeting including the nature of the meeting and allegation to be discussed.
The process becomes a little more confused when disciplining for non-performance or during a probationary period. If you are doing so it is important to recognise when the process has gone past a performance issue and become one of whether or not the employee will remain in your employment. Once at that point the usual rules relating to the disciplinary process need to be followed. Therefore if you are bringing an employee in to tell them that their performance is sagging in certain areas, it is not necessary to follow disciplinary procedure but when that meeting is to be along the lines of ‘you are not performing in such areas and failure to improve will result in dismissal,’ the full procedure must be followed.
The importance of correct process was outlined recently by a highlighted in the following article on the NZ Herald web-site:
A man fired after calling in sick and then going fishing has won $5000 plus six weeks' pay for unjustified dismissal.
The Employment Relations Authority made the ruling in the case between James McNeill and Solid Energy, despite his "extraordinarily cavalier" approach to his job.
Mr McNeill was an electrician at Huntly's East Mine for almost 10 years and had taken sick leave during that time because of hay fever and the effects of the medication.
He also regularly took time off to go fishing and had, in November 2005, received a formal warning for being absent without leave to go on a fishing trip.
The authority found Mr McNeill's conduct amounted to a misleading and/or fraudulent misuse of his sick leave. However, Solid Energy did not follow the correct procedures in dismissing him, something a "fair and reasonable employer" would do.
The authority said Mr McNeill seemed "almost to see it as an imposition to be required to attend work if it did not suit him" and believed he had done nothing wrong.
The worker had sought three months' lost earnings but was awarded only six weeks.
This case highlights the need to follow correct procedure. We hope for the sake of all employers that Solid Energy takes it to the next level!
If you have any questions arising out of any matter contained in this update please do not hesitate to contact Simon Wilton or Bruce Gilmour.
|
