Don't dismiss the need for safeguards

A personal grievance can be raised for an unlawful suspension if a process hasn't been adhered to. Pic Getty.

Poor performance, misconduct that continues after repeated warnings, gross misconduct (such as theft or violence), breach of company policy or employment agreement are some of the reasons an employer may want to dismiss an employee, but how do they go about it in a legal way?.

Specialist employment lawyer Catherine Stewart says the general procedure for firing someone is quite complex. "There is no blueprint or list of things that make dismissing someone justified. It depends on the circumstances of a particular dismissal. But in general, or as a broad rule, there is a requirement for there to be a fair investigation before dismissal occurs and a discussion with the employee, giving them the right to respond before action is taken."

She says it's important the company genuinely considers the employee's explanation.

"These are the broad steps that need to be taken by the employer, but there are numerous permutations of those principles in regards to each individual case," Stewart says.

"There is a statutory test that is set out in Section 103A of the Employment Relations Act which is called the Test of Justification and that encapsulates the justification principles for dismissal. I do need to emphasise that there is no blueprint for any given situation because it's very dependent on the individual circumstances."

A lot of people believe there have to be three warnings before someone is dismissed, but this is not necessarily so. "It depends on what the employment agreement says and what the company's policy says."

So, if the employment policy requires three disciplinary actions prior to dismissal, that will be required, but if it doesn't then it will come down to what is reasonable under the circumstances.

"Basically, the overarching test is: What could a fair and reasonable employer do at the time the action or dismissal occurred? So, it's a test of what a fair and reasonable employer could have done. That's the test also taken from Section 103A.

"In short, if the company has a policy on termination of employment, that must be followed. If there is not one, the action needs to be fair and reasonable in the circumstances. And that's subject to a great deal of debate. A huge body of case law has evolved around that very question — it's always dependent on quite intricate circumstances in regards to the case in hand."

Stewart says some companies might have their own policy documents which reflect their standards of their organisation. "If they do have a disciplinary policy, that might set out a step-by-step process for dismissals. If it does, that must be followed."

She recommends companies have multiple policies dealing with all manner of employment issues, including bullying and harassment, disciplinary matters and conduct expectations. These would avoid uncertainty in the workplace and set standards for employees.

"If a company has a policy, they need to be careful they don't depart from it — that could lead to a claim against them."

Ideally the policy would be made available to the employee to read through so they're thoroughly aware of what's in it. "Some employment agreements say it's the employee's obligation to make sure they're familiar with what's in the policy. And the employment agreement usually states that the employee needs to comply with any policies," Stewart says.

Stewart recommends a lawyer is brought in when creating the policy. "There's a balance between making the policy prescriptive and still flexible enough to cater for the wide range of circumstances the employer is likely to come across.

"So, while they can outline a process, they also need to be careful that it isn't too prescriptive, and likely to trip them up if something happens that doesn't fit into the process. For example, they may say generally that there will be the three steps to dismissal, but there may be circumstances where the employer may go to the third step without needing to follow the first two."

Following a process is also important for the suspension of an employee — many employers think they can simply stand a person down from work, then start the process. A personal grievance can be raised for an unlawful suspension if a process hasn't been adhered to. Fundamentally an employee has the right to work — and there needs to be fairness in the way suspension is implemented.

As far as employees are concerned, if a person feels they have been unfairly dismissed, they should consult a lawyer. If the legal advice is they have been unfairly dismissed, they have the right to raise a personal grievance and bring a claim against the company.

"They have 90 days from the date of the dismissal unless there are exceptional circumstances — but it's quite rare that it's accepted after the 90 days," says Stewart.

The reason for the 90 days is that the sooner concerns are raised with the employer the better.

"Then there's the possibility for them to resolve it before things get too distant. That's an encouragement for the parties to resolve the issues at the earliest opportunity. Sometimes personal grievances can be resolved quickly."

However, there is a large proportion also that don't get resolved and they may head for more of a formal process, Stewart says.