Kaimai_Law_Bethlehem_Commercial_eSpeaking_Spring_2012.pdf
Employers can risk a costly personal grievance claim
Some businesses are still on thin ice for not recognising the need to comply with correct processes to discipline their employees. More often than not they fall into the personal grievance claim trap. We give some advice to employers on how to stay out of trouble.
A personal grievance (PG) is a type of claim brought against an employer by one of its employees. The Employment Relations Act 2000 sets out the legal grounds for this. Ultimately a PG is used in order to get a remedy (usually cold hard cash) from the employer for breaches of the employee’s rights. PG claims can be brought for several reasons and are more often than not brought about because of poor (or non-existent) disciplinary and dismissal processes.
What do I need to do?
The Act spells out your duties as an employer. You need to act in ‘good faith’ at all times. Whilst that may seem an airy-fairy concept, breach of good faith can have some distinctly adverse repercussions. Essentially good faith means you need to be open and direct at all times and clear in the way you’re dealing with your employees. You also need to ensure your employees understand what is going on and know they can get support or assistance from a third party, such as a friend, lawyer or relative. Failing to discipline properly may also give rise to a PG from another employee, such as the victim of bullying for failing to provide a healthy workplace.
What process should be followed?
You need to follow a carefully managed procedure when going through a disciplinary situation. Often employers want to talk with their lawyers early to make sure they don’t inadvertently mess it up. In general you should be open, clear, allow breaks, allow time for responses, consider all responses thoroughly and provide clear reasons for any decisions that are made. This applies to verbal warnings right through to a set of meetings for a dismissal. It’s always important that if your employee’s job is on the line that that is made clear to them and they have time to respond to any accusations. Encouraging them to have a support person is commonplace, and telling them they can have one is
an absolute must.
If you’re handling your disciplinary procedures in-house make sure you don’t expect a dismissal to be all over in a day. You cannot pre-judge an issue or an outcome of any procedure. That would be seen as predetermination which clearly shows there was no fair procedure in place. You need to ensure that you not only get the process right but also the actual decision correct. For example: is this misconduct actually serious misconduct? It is worthwhile checking whether their employment contract allows for suspensions or requires any other specific process while you investigate an issue.
What if I don’t – the most I need to pay out is three months’ wages, right?
No. If you just sack your employee then you risk serious orders against you if they raise a PG. The Employment Relations Authority may make compensation awards against you for hurt and humiliation. If you’re particularly callous in your processes then this should be expected. You can also have your employee’s legal costs awarded against you. Some employers think that employees on low wages cannot afford to hire a lawyer and, often, they would be right. However, to raise a PG they don’t actually need one. Employees often hire one of the many non-lawyer ‘employment advocates’ many of whom offer a ‘no win, no fee’ arrangement which attracts cash-strapped employees.
Aside from the financial costs, if you value your other employees you may find that your reputation as an employer is tarnished by a successful PG claim. Employers gain poor reputations quickly and it may take years to regain that reputation. Be wise, and go by the book when you have to go through a disciplinary procedure.
