Sacked by text message

Things aren't going well at work. You're productivity is down. The boss wants a chat. Are you about to get the sack?

Perry Skilton, managing director of employment mediation firm ER Solutions, has seen it all before.

"I've had examples of some employers terminating employees' employment by text message," he says.

"It is quite difficult for employers to dismiss because it can be quite a long, painful emotional process for both parties."

Skilton has taken cases to the Employment Relations Authority for both employees and employers in disputes and says employers need to follow the correct procedures.

"The majority of employers have not always got all their ducks in a row before they make a decision," says Skilton.

For a constructive dismissal, he says employers should follow a three-step process. The first is at the first sign of trouble. The employee is having trouble and is feeling stressed that they are unable to perform to expectations. If the situation appears irretrievable, the employer should give a verbal warning and a note made of it in writing. The employee then has certain rights.

"If it's a performance issue for example then the employee must be treated fairly and reasonably by the employer - namely that they must be given opportunities to respond to the allegations being made with a buddy or representative present if they wish."

The employer should set out what parts of the performance are lacking and how to rectify it. If training is an issue, they should be offered appropriate training and a follow up assessment within around two weeks.

The next step is the written warning which should state that the lack of performance is a serious issue and must be addressed or action will be taken.

Skilton says the third step follows the "three strikes and you're out" motto and an employee can be dismissed at this stage.

Employees who don't want to have a dismissal on their record may be convinced their talents would best be suited with something else.

"If the employee is counselled correctly they will accept the fact that the job is not for them and they need to look elsewhere."

But Skilton says this needs to be handled carefully because it could be construed as being a constructive dismissal.

Other than a constructive dismissal, the way to dismiss an employee is through summarily dismissal. This is reserved for cases of serious misconduct.

"Employers have got to ensure that they've carried out a proper investigation because if the dismissal is challenged and it goes to mediation or to the Employment Relations Authority, one of the first things that will be looked is; 'Why did the employer make this decision and was it justified?'."

Skilton says it is generally justified in cases where an employee is caught with their fingers in the till or there has been a physical altercation between employees.

"The employer's charged with carrying out a full and proper investigation of all of the issues. That may involve suspending the employee on pay while all of that evidence is collected. Then have a meeting with them and put all of the allegations that they have found in their evidence to that employee and giving that employee a proper right of reply."

But in this case the investigation, suspension and dismissal can be over and done with in 24-48 hours. Even so, employees should be given the right to have a representative at the findings meeting and be notified in writing that it could effect their employment.

The majority of cases which go to the Employment Relations Authority are for unjustifiable terminations. But the Employment Relations Act states that reinstatement should be the primary first choice remedy to resolve an unjustifiable dismissal. Skilton says that's unrealistic in most cases.

"By the time an employer is challenged by an employee with a personal grievance, the relationship is soured completely."

In most cases the employee now just wants compensation. But what both parties generally end up with from the Employment Relations Authority is an agreement to separate with terms which are kept confidential.

"I've only had one case in my time where the employee wanted to go back into the job. The reality is that the trust and respect on both sides of that employment relationship has broken down and it is quite difficult to repair."

One additional stumbling block of which employers need to be aware of is the need for contracts with their staff, says Skilton .

"I'm totally surprised at the number of small employers out there who don't provide written employment agreements and they get into quite serious trouble whenever there is a dispute with an employee. By law, every employee must have a written employment agreement."

The Employment Relations Authority is quite unforgiving of employers without contracts.

"The authority has fined quite a number of employers who end up in dispute because they haven't had a written agreement."

Skilton says the usual fine is generally around $2000 for non-compliance, plus whatever is incurred due to the dispute. He says it is in the interest of both parties to have the written agreement because if there is a misunderstanding it can provide a point of reference.

If the dispute cannot be resolved and needs to go to the Employment Relations Authority, it can get expensive. High quality legal advice costs between $10,000 and $30,000.

Emma Butcher, a partner at Buddle Findlay, mostly represents employers at the authority. She says there is a quasi cap on lost income reimbursement of three months salary.

"I think it is a fairly unusual case where an employee would receive more than three months salary. The majority of cases are either actual losses or three months."

But the behaviour of the employer can have a bearing on the award.

"If there are really heinous circumstances where an employer has acted really poorly or in a really arrogant, high-handed manner then the authority might award more than the three months up to actual losses."

Awards to compensate for hurt and humiliation can be added on top of that and can become quite expensive for the employer.

"The Court of Appeals recently put a quasi cap of around 27,000 on those types of awards. So that is the worst case scenario of the most you'd be looking at."

But Butcher says that gone are the days of huge payouts and today's hurt and humiliation awards are between $2,000 and $10,000."

"Where the employees have quite genuine cases, the results can be quite unsatisfactory with the authority awarding such low amounts."

You're fired

* If you feel that things have not been handled correctly you have 60 days from the time of dismissal to request a written explanation of why you were dismissed.

* The employer then has 14 days to provide the written explanation.

* If you are not satisfied with the justification you have 90 days from the date of dismissal to raise a personal grievance with the employer.

* If the 90 days lapses, you may apply to the Employment Relations Authority to raise the grievance. A personal grievance is the only way to challenge a dismissal.