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Dismissals - Justification vs Process

Published 24 Feb 2022

A Northland Honey company has learnt the hard way at the Employment Relations Authority (ERA) that process is just as important as the justification when it comes to misconduct terminations.

Amongst other allegations the company alleged to have found a signed agreement between their employee and a competition company to place beehives on their competition's site during the course of his employment. Any act seen as a huge breach of good faith and his duty of fidelity to his primary employer.

The employee was subsequently and promptly terminated at an informal meeting at which the Boss attended with the letter of termination in hand.

In comes the Personal Grievance for the ERA to make a determination on.

As expected, it wouldn't end well for the Employer based on the procedural shortcomings.

The justification would have held as serious misconduct if the company could have proved the evidence occurred prior to the date of termination. Unfortunately they couldn't.

Apart from that, calling a formal meeting where someone's employment may be terminated must follow a strict process. There are certain important things to outline to establish and present a fair procedure. None of these seemed to have happened.

The upshot was that despite the subsequent confirmation that the employee's offences did occur, the procedure was fatally flawed, thus the employee was unjustifiably dismissed and suffered consequential humiliation.

However, what was encouraging from this case is that the ERA decided that the employee had significant contribution to the circumstances in as far as he had acted in bad faith and against his duty of fidelity to the company and therefore the award against the company was discounted by $7,000.00.

The final award was still an undesirable $18,000.00 to the employee, essentially due to procedural breaches.

Employees breaching a duty of fidelity and working on their own endeavours, secondary jobs or even the competition during their primary employment is not uncommon in our experience. While naturally this may come as a nasty surprise for the business, there is a recognised and legally acceptable process to follow.

This case serves to outline making rash or 'knee jerk' reactions costs the employer dearly even with all the moral justification you would think necessary.

If you find your business facing similar circumstance, take a few minutes and call us for advice first.