News Article

latest news in employment law

Inconclusive Investigations Costs Employer

Published 01 Aug 2015

An "inadequate investigation in haste" cost a Christchurch company $8000 in the ERA when dismissing an employee accused of theft.

In the case of Lim v Meadow Mushrooms Ltd, the employee had been with the company for about 20 years. When he left work one day, another employee found that her phone and wallet were missing. GPS information put the phone at the residence of the Accused and the Employer (along with other staff) paid a visit, finding that the Accused had gone out at the time. GPS showed the phone moving back to the residence of the Accused a short time later, so the group went back to investigate.

The Accused denied the allegations and a security guard that worked at the residence complex searched his room. The phone was not found at that point, but was located in the bushes that night by its owner. The Employer found that the Accused was the only person employed at that time who lived at the address.

As a result of the allegations, the Accused left his employment due to the relationship breaking down. He claimed the company had breached its duty to maintain his trust and confidence, intruded on his privacy, and claimed for compensation of $30,000 in the Employment Relations Authority (ERA).

The ERA decided that the Employer had breached the duty of good faith by involving the security guard, and said the Employer and other staff present were "complicit" in searching the room of the Accused the way they did.

It was also decided that the Employer had not carried out an adequate investigation or considered the Accused’s explanations. Evidence was not produced regarding the GPS information, so sufficient proof that the Accused had taken the phone was not conclusive.

The ERA ruled the Accused was unjustifiably dismissed and the Employer was ordered to pay $4839 in lost wages and $3000 in compensation.

This shows the importance of conducting full and proper investigations when disputes arise, and once again failure to follow due process has cost the employer.

Processes of using formal letters and meetings need to be adhered to. The opportunity for Employees to seek legal advice, to be able to bring a support person to any formal meeting and to be able to provide explanations in full - must be part of this process before sanctions are imposed.

Comprehensive processes and letters are all part of the Employers Toolbox. Everything you need to be procedurally fair is available 24x7 in your own secure cloud account.

For more information or subscribing to the Employers Toolbox please see the following page.