Employment Law – When is a Dismissal Justified?
When the working relationship between an employer and an employee breaks down, the outcome can often be that an employee is fired. Regardless of which side of the dismissal you’re on, this is likely to be a stressful and unpleasant experience. While there is no doubt that this is a difficult time for both employees and employers, it is important that dismissals are handled correctly to prevent ongoing problems.
During dismissal proceedings an employer has an obligation under the Employment Relations Act (The Act) to act in good faith and to act as a fair and reasonable employer. In order to dismiss staff an employer must have both a justified reason for the dismissal and follow a fair process while making the decision. The overall test for the court is whether an employee has been “treated fairly in all of the circumstances” which is judged by considering all of the facts cumulatively. Failure to do so may give rise to grounds for an employee to raise a personal grievance, even if the reason for the dismissal is valid. The type of process that a fair and reasonable employer would be expected to carry out will vary significantly depending on the circumstances and therefore it is important that employers are well informed about their obligations under The Act.
In the case of a dismissal for misconduct the employer needs to ensure that the employee knew, or ought to have known, that the conduct in question would not be tolerated and could result in dismissal. Allegations of the misconduct should be put to the employee so that the employee has the opportunity to refute, explain, or mitigate the alleged conduct. The employee should be invited to bring someone with them to the meeting, and should be warned that the meeting may lead to dismissal. A full and impartial investigation should be undertaken into the alleged misconduct taking into consideration the information provided by the employee. A lone incident of misconduct may not be enough on its own to justify a dismissal, however this will vary depending on the seriousness of the incident. In some more serious cases such as theft, violence, or bullying, the employer may conclude that the relationship of trust between the parties has been undermined and may find appropriate to dismiss the employee following a fair investigation.
In other cases, an employee’s poor performance may lead to a dismissal. Before the employee is dismissed it is important that they have been made aware of the issues with their performance. The company should offer support and training, and demonstrate to the employee what good performance looks like. Essentially, the employee and employer should be working together to raise the employees performance to the required level. If genuine efforts have been made to achieve this, then a dismissal may be justified.
Sometimes an employer will disestablish a role and make the employee redundant. This can be a genuine reason for dismissal provided that the employer follows a proper workplace change process before making anyone redundant. This can include informing employees of the proposed changes, collecting feedback, and genuinely considering alternatives before making the decision. Disestablishing a role cannot be used as a means to dismiss someone, and employers who do this can find themselves facing action in the employment court.
90 day trial clauses are a common feature of many contracts and give the employer the right to dismiss an employee without providing a reason within the first 90 days of employment. In order for a 90-day trial to be valid the company must comply strictly with the regulations set out in The Act including the requirement that the company has fewer than 20 employees. The courts take a strict interpretation of trial periods and it is common that employers will fail to implement them properly.
The type of process that is expected will vary significantly from case to case, however an experienced lawyer will be able to advise you of what is expected in your circumstances. If you are an employer and you’re thinking about dismissing an employee then it is always recommended to seek legal advice before undertaking any dismissal proceedings. This will protect your company from expensive and reputationally damaging claims from former employees. If you’re an employee and you think that your employer has dismissed you without having a justified reason or without a fair procedure, then you have the right to raise a personal grievance within 90 days of the dismissal. To give your case the best chance of succeeding it is always advised that you speak to a lawyer and get help throughout the process. This will reduce the stress of the experience, and will increases the likeliness of a favourable outcome such as compensation.