Karyn Gould of K3 Consulting discusses how unfair employee dismissals can impact firms
When it comes to the workplace, employers must strike a balance between their own interests and adhering to legislation protecting employees. New Zealand has recently experienced a number of cases where employers have not reached the desired balance. In the wake of an “unfair and inadequate employment investigation” that resulted in an employee’s dismissal, one Otago law firm was recently required to pay that former staff member more than $30,000.
As Karyn Gould, senior consultant at K3 Consulting, points out, protecting the welfare of both parties is often a difficult balancing act.
“The dynamics in this situation are quite complex and when things go wrong, the impact and financial implications can be fairly significant,” she says.
The law firm was criticised by the authority in this instance for acting with a “closed mind” and failing to consider the potential bias of its decision-makers. It also received a fine for not having a documented employment agreement on file as required under New Zealand’s employment legislation. The oversight went unnoticed during a company merger, which reinforces the need for sound due diligence when bringing together different entities.
“The employer is responsible for maintaining records, which includes copies of signed employment agreements, and evidence of all leave records,” Gould says. “In this example, as a result of a lack of leave records, the calculation for payment of leave also went in the favour of the employee.”
Key takeaways from the dispute
The case highlights that all types of organisations have the potential to err, and with the cost of penalties is on the rise, it warns not to have a lax approach. Businesses need to ensure that all employees are briefed and trained on employment policies from day one to reduce liabilities, Gould says.
“If disciplinary process, such as suspension is required, due process needs to be followed,” she says. “First and foremost, before claims are made, the company needs to ensure that all relevant evidence has been gathered – including documents, electronic trails and witness testimonials. In the event new information comes forward that requires further investigation, the employee should be given the opportunity to review and comment on it once the enquiry has been carried out.”
Additionally, an employee’s potential action and intent should be considered – is it reasonable to believe that an action was taken deliberately, if is there no evidence to support such a supposition?
If the suspension is considered, for the purpose of conducting an unimpeded investigation, then the scope of the investigation should be clearly outlined. Any concerns that the employee raises about the proposed suspension should be considered and responded to before any suspension commences. Secondly, the reasons for proposing a suspension to any member of staff should be made extremely clear.
Lastly, any parties who have an active interest in the outcome of the enquiry should be removed from the decision-making process entirely, to ensure that an unbiased and unimpeded investigation is carried out.
“The decision-maker for the disciplinary outcome should not be a witness or the person in charge of the investigation,” says Gould. “If necessary, an external investigator should be appointed.”
Becoming a better leader
An employer should always take a step back and look at the situation from another viewpoint before jumping to a conclusion. This may include getting external advice or an outside opinion on the matter.
“While we like to think we are logical and unbiased, we experience the normal range of emotions of simply being human, like pride, frustration and hurt; therefore, it isn’t surprising that, sometimes, our reactions as leaders are flawed in their approach,” says Gould.
As a leader in your organisation, some key questions to remember are:
- How often do you stocktake on what is adding value or working to advantage your business?
- How often do you evaluate what could be holding you back or be forming an area of risk?
- Do you know what your minimal legal employment compliance standards are?
- How often do you ask for another perspective?
- Who do you turn to for advice, before making significant decisions?
“If you are unclear on your strengths or risks, then take action now, before you are exposed to a tricky situation,” Gould says.