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Unfair Process + No Good Reason = Unjustified Dismissal

Published November 08, 2017 (last updated December 4, 2020) -

Dismissal is sometimes a natural end to an employee’s time with a business, but employers often overlook how important it is to follow a fair process and have a good reason. Failing to tick off these two simple aspects can result in huge fines in the Employment Relations Authority (ERA) for unjustified dismissal.

Unfair process

A fair process, when dismissing an employee, does not mean there are absolutely no errors, however, an employer is often judged on the circumstances. Best case scenario, the employer will follow the termination process outlined in the employment agreement or what is outlined in workplace policies or procedures. If there are no clear processes outlined, the employer will be asked to consider “what could a fair and reasonable employer have done in the circumstances”.

The clearest example of this is where there is no notice period outlined in the employment agreement, or in any policy, so the employer must give reasonable notice. There is no clear number on how long this is, but employers should be careful to avoid being unreasonable.

Good reason

Following a fair process will be a crucial process, after the employer has identified a good reason for the dismissal to take place. Without a good reason, it does not matter how good the process is – the employee will have been unjustifiably dismissed.

There are some processes to ensure there is a good reason prior to dismissing an employee.

Disciplinary process

A fair disciplinary process following an incident in the workplace can deliver a good reason to dismiss an employee. However, the process for disciplinary action is also important. The employee must be communicated with, they must be able to respond to allegations of misconduct, documentation must be consistent and clear, and ultimately the employee must be treated with respect and no pre-determined decision. A fair disciplinary process can deliver a good reason for dismissal, if followed correctly.

Performance issues

Where an employee is not completing their job in line with expectations, this is often referred to as poor performance and can uncover a reason for an employee to be dismissed. Similar to disciplinary processes, it is important for there to be a clear process in place and followed correctly. Acknowledging there is a performance issue can often be confronting for an employee, which is why a structured process can make it easier for them to work towards improvement. However, this may not work and the employee may simply not be of the level required for the workplace giving the employer the option to dismiss the worker with a good reason.

Bullying, harassment and discrimination

One of the more obvious reasons for a good reason for an employer to dismiss an employee is their role in bullying and harassment. The impact of this type of behaviour on any workplace is well known and there should be a zero tolerance from every employer. However, every employer has an obligation to properly investigate an allegation of bullying or harassment. Only at the end of the investigation and with a clear outcome of the employee’s involvement will the employer have a good reason for dismissal.

Written statements

When an employee is dismissed, there is a 60 day window in which the employee can require the employer to respond with reasons for the dismissal. The employer must then provide the written statement 14 days after this request.

Dismissal is a difficult process to get right, and can be cripplingly expensive if an employer gets it wrong. Having a fair process, after establishing a good reason will ensure any dismissal is justified.

About Employsure

Employsure is one of New Zealand’s largest workplace relations advisers to small and medium businesses, with over 5,500 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

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