Company ordered to pay “back pay” to employee of over $185,000…

In a recent Employment Relations Authority case a poorly worded employment agreement cost the employer over $185,000.  The agreement was for a bonus based on annual gross sales over a set figure.

The employee took a personal grievance and claimed he was entitled to the bonus based on total company sales.  The employer claimed that the bonus was only triggered when the employee’s personal sales exceeded the target.

The ERA held that the clause meant total company sales and therefore the employee had been short paid $185,000 over three years of employment.

It "pays" to get the wording of all your agreements clear.  If you need help give me a call on 04 473 6850.

Alan Knowsley

Sting in Holiday’s Act costs employer $13,500 extra pay…

A small employer recently had problems with its cleaner and tried to enforce standards regarding the cleaning done.  Despite promises, the cleaner did not improve and decided to leave his employment.

The employer and employee had entered into the employment agreement on the basis that the employee would be paid an hourly rate, and not be paid for any additional holiday pay, statutory holidays, time in lieu and time and a half.

When the employee resigned after several years’ employment he claimed for constructive dismissal and a personal grievance for holiday pay, statutory holidays, time in lieu and time and a half for statutory holidays worked.

The Employment Relations Authority awarded the employee over $13,500 for these unpaid wages as it is illegal to contract out of the Holiday’s Act and therefore the employee was entitled to be paid all these entitlements from the start of their employment.

You cannot wrap up all holiday entitlements into a single pay rate; they must be paid separately and on top of the pay rate.  Holiday pay (apart from a specific exception in the Act) must be paid at the time of the holiday and not with the normal wages. Many employers have ended up paying holiday pay twice when they paid it originally with the normal pay cycle instead of at the time of the holiday.

If you need help getting your holiday pay entitlements sorted call me on 04 473 6850 for an initial chat.

Alan Knowsley

PS The employee's claim for constructive dismissal was unsuccessful as he had left of his own choice and the employee had not done anything to force him out.

Deaths at work - employer's liability

There has been a lot of publicity given to the recent study about New Zealand's workplace death rate compared to other countries. We are apparently twice as bad as Australia and four times Briton in death rates at work.

Accident Compensation cover is put forward as a reason. Apparently it is argued that employers do not take enough care to prevent deaths because they cannot be sued in New Zealand. Is this right? You can take out insurance against damages for being sued. The cost of a bad record is higher preminums not the damages. ACC also rates on safety record and likely harm in its premiums.

You cannot insure against fines and the fines will usually be way higher than your insurance premiums. The High Court has just decided that the starting point for failing to take all practicable steps to prevent a death is between $125,000 and $135,000. Enough to make the eyes water of most employers if the mere fact of not wanting to kill one of your staff is not enough.

Indeed just for not reporting a serious haarm accident OSH is pushing for a starting point fine of around $100,000.

You need to take all practicable steps to identify hazards, eliminate, minimise or isolate them.
Have you checked your policies lately, when did you last blow the dust off them, when did you last check for hazards and do something about them?

A failure to do so will result in significant fines and no one wants their employees to be injured or killed at work.  If you need help call me on 04 4736850

Alan Knowsley

Failure to Report Serious Harm Incidents…$50,000 to $100,000 Health & Safety fines per defendant “starting point” says OSH…

In a recent case where a company and its sole director were both charged with failing to notify the Department of Labour of a serious harm incident OSH was seeking fines for each of $50,000 - $100,000.

In this case the company and director were not charged with failing to take reasonable care not to injure their employee (who fell and injured his back), but only with failing to report to the Department of Labour (now the Ministry of Business & Innovation).  Both the company and director were each fined for the non-reporting.

The case illustrates the serious penalties that can be imposed in the Health & Safety area and the need to be fully aware of your responsibilities – not only to prevent accidents, but to report serious harm and not to interfere with the accident site.

The Judge commented on the failure to report resulting in OSH not being able to investigate the incident and prosecute those who may have been responsible.

If you need assistance with your Health and Safety responsibilities give me a call on

04 473 6850.

Badly drafted 90-day trial clause costs employer $10,000…

An employer included a 90-day trial period in their employment agreements but did not get the strict legal requirements correct.  They then fired the employee for poor customer service within the 90-day period.

A valid 90-day trial period allows an employer to fire an employee within the first 90 days of employment without reason.  The employee may not raise a personal grievance for the dismissal.

However, it is crucial that the employer complies with strict legal requirements otherwise any dismissal using the trial period provision may be challenged by the employee.

The employee raised a personal grievance.

The Employment Relations Authority held that the clause was defective and could not be relied upon by the employer because:

• The clause did not provide a statement that explained the provisions of the Act as required.
• In the Agreement there was a “yes” and “no” operative provision for the trial clause.  Neither had been ticked.

Because the 90 day trial period provision did not apply the employer was required to act reasonably and fairly.

The employer failed to act reasonably and fairly because they had relied on the 90 day period clause, and failed to follow any process in regard to the dismissal.  There was:

• No investigation into the complaint before the dismissal.
• No raising of the allegation with the employee.
• No reasonable opportunity to respond/comment.
• No discussion on any penalty.
• No consideration of any explanation from the employee before the dismissal.

As a result the dismissal was unjustified and the employee was awarded over $10,000 lost wages and compensation.

If you need assistance drafting your trial period clauses or your employment agreements give me a call on (04) 4736850.

Alan Knowsley

A failure to keep notes leads to finding of poor disciplinary process…

In a recent Employment Court decision, following a personal grievance for unjustified dismissal, the Judge found that the employer’s disciplinary process was below standard…

In part this was because the managers involved in the disciplinary meeting failed to keep any notes of what the employee said in response to the allegations raised with her.

It is important to keep good notes of what the employee says so that the employer can be seen to have listened to what has been said and taken it in (even if what was said was not accepted).

A lack of notes means the ERA or Court has no contemporaneous record of what was said.  In this case the employee admitted serious wrong doing so a note of that would be really helpful to justify the employer’s decision.

In this case the employee’s behaviour was so illegal she was found to have been justifiably dismissed and so got no remedies for the poor process.  However, in the normal case you should not risk it.  Write it down.

If you need assistance with handling a disciplinary process give me a call on (04) 473 6850.

Alan Knowsley

Dismissal following failed drug tests results in five months lost wages and damages for employees…

An employer was ordered by the Employment Court in a recent decision to pay two sacked employees up to five months lost wages plus damages (over $6,000) for unjustified dismissal and personal grievances.  They were fired after each failing a second drugs test, and they had agreed to a tough anti-drugs policy.

How did the employer get this process so wrong?

The employer had implemented a detailed anti-drugs policy.  The problem was that they failed to follow the policy, in that:

(1)  The policy specified a second failed test after rehabilitation could result in dismissal – but the second tests for both employees were taken during rehabilitation, in breach of the policy.

(2)  The policy specified that testing could be done “for cause” if two people witnessed the behavior and suspected drug use – only one person saw the incidents, and so the policy was breached.

(3)  The policy stated that the drug use had to impact on work and safety – one of the employees was smelt with cannabis at a non-work social event when he was off work for an extended period.  It could not have impacted on his work or safety.

These breaches of the policy meant that there was no basis for the second drugs test (both having failed correctly applied first tests), and therefore dismissals based on the second tests were unjustified.

If you need help drafting or implementing drug and alcohol policies call me on 04 473 6850,

or email me at aknowsley@raineycollins.co.nz

Alan Knowsley

Failure to have signed Employment Agreement causes huge disruption…

In a recent dispute an employee refused to sign an employment agreement provided to her after she commenced work.

The employee had worked for the employer before on a fixed term agreement.  She was then taken back on for an agreed fixed term, but no employment agreement was signed before she started. 

She then refused to sign the new fixed term agreement, claiming she was offered a permanent position.  To avoid an argument the employer offered the employee a permanent agreement on the same terms as previously (apart from the duration), but the employee refused to sign any agreement and failed to detail what it was she disagreed with in the agreement.

The employee has a duty to be communicative, but the employer will be put to the huge disruption and costs of an Employment Relations Authority hearing, to determine the terms of the “agreement”, as the employee is employed, but will not agree on any terms beyond those required by law.  She will not even agree to the terms she agreed to in her prior employment.

The lesson from this is that no employer should allow any employee to commence work unless the employment agreement has already been signed and returned to the employer.

If you need help getting your employment agreement process right give me a call on

(04) 473 6850.

Alan Knowsley

Keeping copies of employment agreements…

For some time it has been a legal requirement for all employment agreements to be in writing. A failure to have an agreement in writing can result in penalties and damages plus personal grievances and disputes over the terms of employment which can cost the employer thousands of dollars.

It is now also a legal requirement that the employer keep on file a copy of the signed agreement, giving one to the employee is not sufficient.

It is also a legal requirement for copies to be kept on file of all drafts given to the employee to consider.  When you send out a draft agreement put a copy into the employee’s file.  When they sign the agreement and the employer has also signed give a copy to the employee and put a signed copy on their file.  A failure to do so could be costly.  If you need assistance with your employment agreements give me a call on (04) 473 6850.

Alan Knowsley

Reinstatement after dismissal for ignoring instruction not to leave work…

An employee dismissed after he ignored written and verbal instructions not to leave the workplace has taken a personal grievance for wrongful dismissal and won reinstatement, 11 weeks lost wages, $4,500 compensation and $3,500 legal costs.

The employee was the Union delegate for the work force and was told that if he was attending mediations with employees he needed to apply for unpaid leave seven days in advance.  He and the Union did not agree with that interpretation of the employment agreement. 

He attended a mediation and did not give the seven days notice, and was dismissed for a failure to follow instructions.

It was held that the dismissal was unjustified as the employer attended the mediation along with the Union delegate, and knew he was there supporting another employee in that role.  The requirement to give seven days notice was not reasonable.

If you need assistance dealing with any employment issues and getting the process right give me a call on 04 473 6850.

Alan Knowsley

Poor employee performance needs to be dealt with...

Sometimes an employee’s performance is not up to scratch.  Your role as an employer is to help them improve and to meet your expectations.  Such an approach is mutually beneficial and required by our law. The aim is to get the employee functioning at the required level in your business.

Recently the Employment Relations Authority reminded employers of how they are expected to manage such a process.  This includes:

·                Telling the employee of specific concerns about inadequate performance;

·                Setting measurable goals and expectations to remedy these inadequacies;

·                Putting in place any necessary training or support; and

·                Allowing time to review, and reviewing, progress.

In the case at point the employer had told the employee that “he had concerns for some time”.  This, however, was an issue for the Authority who pointed out that the employee had only been employed for 21 days. 

It may be that there is good cause for concern.  However, sweeping statements and generalisations will not assist you if any personal grievance arises.  Notification of allegations or concerns should be carefully detailed in writing.  We often assist employers in getting these letters right. It also helps to focus on what the real concerns with the employee’s performance are.

Once an employee is fully informed of the issues to be addressed, then you can meet with them to discuss what they are doing well and what needs improvement. Get their input and feedback and then put a plan in place to monitor their performance to achieve realistic and measureable standards.

For further information, consult our Performance Guide on www.raineycollins.co.nz in the Download section or for an initial discussion contact me on (04) 473 6850.

Alan Knowsley

Employee dismissal for obscene words & gestures overturned…

The Employment Court has granted an appeal by an employee against his dismissal.  The Employment Relations Authority had upheld the dismissal but this has now been overturned by the Court.

The employee was asked to work on a public holiday but when he arrived at work he was told he was not needed.  He denied receiving a text telling him not to come in.  He claimed for pay for the time at work and a day in lieu, but this was rejected by his manager who did not discuss it, or tell him of the decision.

When the employee discovered he had not been paid an argument developed and the employee swore at his manager, and made rude gestures, before walking off.

He was dismissed for misconduct by the same manager he swore at.  The Court said that in a large organisation a separate manager should have conducted the disciplinary investigation, and that the dismissal was not justified.  It would amount to misconduct, but not serious misconduct, given the employee’s previous good record and the lack of communication from his manager.

The main lesson to be remembered from this case is that the complainant on the receiving end of the rude behavior should also not be the investigator and decision maker.  The complainant cannot act impartially and without bias.  Get a different manager to do the interviews and make the disciplinary decisions.

The employee’s personal grievance was upheld, and he was awarded three months wages and can apply for reinstatement.

If you need help with a disciplinary process give me a call on 04 473 6850.

Alan Knowsley

Lack of proper process costs trucking company $15,000…

In a recent Employment Relations Authority case a transport company has been ordered to pay its former employee for unpaid overtime, wages, days in lieu, notice and holiday pay plus interest.  These amounted to $5,000. 

The company was also ordered to pay $5,000 compensation for the lack of any proper process in the dismissal.  All the employee got was a phone call and a text saying he was dismissed.

The ERA ordered the company to produce wage records for the employee but they failed to do so.  As a result the company was penalised a further $5,000.  Half of this is to be paid to the Crown and half to the employee.

If you need help with the right way to carry out a disciplinary process or to defend a personal grievance claim call me on 04 473 6850.

Alan Knowsley

Dominion Post Surviving Redundancy Article

I was quoted by the Dominion Post in its article on surviving redundancy on 22 August. There is no general right to a redundancy payment. It all depends on your employment agreement and particular circumstances. Employers must follow a fair and proper process when considering redundancies. For the full article click on this link.

http://www.stuff.co.nz/business/money/7519962/Be-prepared-for-the-pink-slip

If you need help with a redundancy issue then give me a call on 04 4736850

Employees need to watch out for long notice periods…

In a recent case an employee was bound by the employment agreement to give three months notice of resignation.  A term of notice this long is quite common for professionals or senior executives.

In this case the employee was a chef working in a factory.  Unfortunately the Employment Relations Authority has no power to vary an unusually long notice period and the employee had to comply.

Employers can recover damages if the right notice period is not worked, so employees need to watch out when signing up to agreements that they know what they are getting into.

If you need help to negotiate your way out of an employment agreement (or to enforce one) give me a call on 04 473 6850.

Alan Knowsley

Employment restraints of trade too wide & too long…

A recent Employment Relations Authority decision has given a warning on the need to get your restraint of trade clauses right.

The ERA found that the employer had no proprietary rights that needed protecting.  The employee was a chef making one particular product.  His knowledge of that product predated his employment and he could not be stopped from being employed to make it for another employer as he was not using any proprietary information of the employer.  In addition the ERA refused to uphold the restraints because they sought to ban the employee from working in any food manufacturing business.  The restraint should only have related to what was necessary to protect the employer’s proprietary interests i.e. not making the same product for a competitor.

The restraint was for two years.  This was held to be far too long and three months might have been more appropriate.

The restraint was for the whole of New Zealand and should only have related to the area where the employer did business.

The ERA said that, as there was no proprietary interest to protect, the clause was unenforceable.  Even if there had been an interest to protect it was worded so widely (activity, duration and geographical location) that it was unreasonable and the ERA would not have used its power to amend the clause to make it reasonable and enforceable.

By being too greedy the employer could not use the clause to protect itself at all.  You need to get your restraint clauses right if you want to enforce them.

If you need assistance with reasonable restraints give me a call on 04 473 6850.

Alan Knowsley

Use of Undercover “Spy” Costs Employer $25,000...

An employee was asked by her employer to assist a student with his thesis on service.  She was told to answer all his questions and make files available. 

It turned out that the “student” was actually a consultant hired to make cost savings. 

The employer then made the employee redundant without any proper process and she was escorted off the premises immediately.  The employee raised a personal grievance claim and the ERA awarded her lost wages of $15,000 and compensation of $10,000 for the way she was treated.

If you need assistance with managing a redundancy process call me for an initial chat on 04 473 6850.

Alan Knowsley

Obligation to provide information to employees costs employer $11,000…

All employers have to act in good faith towards their employees.  That includes providing relevant information.  An employer who is proposing to make a decision that will have an adverse effect on the continuation of an employee’s employment must give the employee access to relevant information and an opportunity to comment on it before making the decision.

A failure to provide the information means the employer has not complied with their statutory obligations and the dismissal is unjustified.

The Employment Relations Authority ordered an employer to pay lost wages of $2,000 and compensation of $9,000 following the dismissal of a worker for alleged bullying.  Details of the complaints and complainants were withheld from the employee so she could not comment on the material.  The verbal versions given by the employer were also misleading.

What may have been a justified dismissal following numerous complaints from staff and customers became a costly lesson for the employer because the correct process was not followed.

If you need help with the disciplinary process call me on 04 473 6850 for an initial chat.

Alan Knowsley

$20,000 exemplary damages for copying materials…

In a very interesting recent Court of Appeal decision the Court has upheld a $2,000 damages award for breach of a restraint of trade provision by setting up in opposition and distributing material.

Of greater significance was that the Court increased the damages from $1,000 to $20,000 for copying operational materials line by line in breach of the duty to keep materials confidential.  The Court held this was a flagrant breach justifying the 2000% increase in damages.  The defendant company was liable under the Copyright Act and the individual who breached the confidentiality was ordered to pay $20,000 exemplary damages.

These damages were awarded because actual damages were slight but the Court found it necessary to punish the flagrant breaches by the defendant who had copied the material and then aggravated matters with a denial of that copying.

Really great to see the Courts upholding the business owner's interests in their intellectual property from those who feel they have a right to make use of those materials for their own gain and hitting the defendant hard to discourage similar behaviour from others.

If you need help drafting contracts to protect your interests, or enforcing them, give me a call on 04 473 6850.

Alan Knowsley

Poor performance management process results in 3 months wages plus $5,000 for injury to feelings…

Disciplinary processes often give rise to personal grievances but so too can a performance review as this case from the Employment Relations Authrority demonstrates.

A manager was given target hours for his staff to reach, and put on a performance management plan.  Only two weeks later he was dismissed when the staff hours were not up to the target, and also for alleged health and safety failures.

The Employment Relations Authority has found the process followed to be poor.  The dismissal was unjustified and the employee was awarded 3 months wages, $5,000 compensation, compensation for 3 months lost Kiwi Saver contributions, lost health insurance, and loss of use of a car.

The health and safety failures alleged occurred while the manager was on leave so were couched in terms of failing to put in place sufficient measures before going on leave.  The Authority did not uphold this as the foreman in charge was not subject to any disciplinary action for allowing the unsafe practices after the safety plan had been put in place.

In relation to the performance management process the Authority found numerous problems: 

* The period for reaching the new targets set was too short (only 2 weeks)…

 * Others had an effect on the targets not being met but no action was taken against them…

* The managers who made the decisions to dismiss had not heard from the employee, but relied on reports from others…

* The employee was not heard at all on whether he should be dismissed, or some other outcome, such as demotion, imposed.

It is important to ensure that those making the decisions actually hear directly from the employee concerned.

They should give the employee opportunities to comment, not only on the poor performance allegations, but also on what should happen if poor performance is proved.

If you need help with a performance management process call me for an initial chat on 04 473 6850.

Alan Knowsley

Failure to correctly offer an alternative position after redundancy costs employer…

The Employment Relations Authority has awarded an employee three months lost wages and $7,500 compensation after her employer carried out a faulty redundancy process.

The employer correctly consulted the employee about the proposal and so was entitled to disestablish her position. 

The error made by the employer was in not correctly offering her a part-time role created on the disestablishment of her full time role.  The employer did say she could apply for the part-time role, but that the role would be advertised, she would need to be interviewed and the decision would be based on skills and experience. 

This process was incorrect because the employer had an obligation to consider redeployment to alternative roles.  The tasks in the part-time role were the same as she had been doing full time.  She should have been offered the role without having to be interviewed and without having to compete with other applicants.

The employee had refused to take part in the application and interview process for the part time role.  The ERA’s decision upheld her right to do so because the advertising, application and interview should not have been part of the process put to the employee.

Don't end up with a personal grievance claim against you. If you need help getting through the hurdles of the redundancy process call me on 04 473 6850.

Alan Knowsley

Threatening gestures and allegations of racism costs employee over $8,000…

In a recent Employment Relations Authority decision an employee was awarded lost wages and compensation for wrongful dismissal but lost over $8,000 of the award because he had caused the events which led to his sacking.

The employer had concerns over the employee’s ability to do the job and raised these as a performance matter.  When the employer saw the employee again having problems doing a simple task the employer took him to task.  The employee’s immediate response was to make threatening gestures to his boss and accuse him of being racist.  He then stormed off out of the work place.

The employer sent a letter of dismissal without any proper process.  He did not outline the allegations or give the employee any opportunity to respond before dismissing him. The employee raised a personal grievance and the dismissal was held to be unjustified.

Interestingly the employer also tried to claim that the employee had resigned, despite the letter of dismissal.

The ERA held that the employee was entitled to three months lost wages ($9,360) and compensation ($6,000) but reduced those by 40% because of the employee’s gestures and unsubstantiated claims of racism.  This reduced the award by over $8,000.

Even if the facts are crystal clear and you witness the bad behavior you still have to follow a proper process prior to a dismissal.

If you need assistance call me on 04 473 6850.

Alan Knowsley

Employee paying herself extra wages gets compensation award…

In a recent Employment Relations Authority hearing reported today the wages clerk at a social services provider was found to have made payments of special bonuses and wages to herself. 

However, the employer’s poor process for investigation and decision resulted in an award of $6,000 compensation (reduced to $4,000 for the employee’s contribution to the situation).

The employer made a decision to suspend the employee pending the investigation, but did not give the employee any opportunity to comment on that suspension before it was made.

The employer also did not give the employee the opportunity to be heard by those making the decision on whether the allegations were correct or not.  The employee only got to explain her version of events to two investigators who then reported back to the Board.  The employee should always be given the opportunity to speak directly to those making the decision.

The employee was not given any opportunity to give input into what the penalty imposed should be. 

The Board just made the decision to terminate her employment with no opportunity to make submissions. 

The ERA held that the decision to dismiss might not have been made if the employee had been able to make submissions, and the termination was therefore unjustified.

If you need help getting the disciplinary process right give me a call on 04 473 6850.

What causes employers to lose sleep at night?

One of the main concerns I am told about by my clients is getting the disciplinary process right because of the minefield of procedural hurdles.  Making a wrong step on any one of the process requirements can result in the dismissal or warning being unjustified.  This has consequent damages for hurt and humiliation, and often lost wages too.

In a recent Employment Relations Authority case an employee was found to have deliberately misled her manager by sending an email saying she did not have certain information when she actually did have it.

This led to a disciplinary investigation which could, if properly handled, have resulted in a justified warning or dismissal.  In the case the employer however failed procedurally on just about every step of the process.

They failed to specify to her what allegations she was facing.  The letter set out only a broad allegation of failure to follow a lawful instruction with no detail. The employee could therefore not properly prepare for the meeting as she did not know what the allegations were. 

At the meeting the employer verbally advised the employee of several anonymous allegations without details of the source or date of the alleged events.  She was expected to answer these further allegations at the meeting.  Unsurprisingly, she was held not to have had a fair opportunity to prepare her response to the allegations. 

The employee heard from other staff that they had made supportive statements to the employer.  She asked for copies but was refused.  She therefore could not use that supportive material in her response.  Indeed it became apparent at the hearing that the employer had actually removed supportive comments from the material it did supply to her.

The employer then made a finding of misconduct on an allegation (misleading her manager) which had never been raised with the employee.  Obviously she never had any opportunity to answer that allegation either.

The employer then imposed a final warning which was drafted in a way that lead the employee to think that it would be a permanent warning, when the employer considered it would only last six months.  This caused additional distress to the employee.

She had to receive medical treatment for the stress and use up her mother’s retirement savings to pay her legal costs.

The ERA awarded her damages of $6,000, but reduced the award by 10% because it was her original misleading of the manager that set the whole process in motion.

Don’t lie awake at night wondering what you need to do to get the process right.

For our guide to steps you need to follow see the downloads section of our website www.raineycollins.co.nz or call me on (04) 473 6850.

Alan Knowsley

Free Seminar. How to handle discipline and performance issues at work...

Dealing with employment disciplinary issues and performance reviews can be stressful for employers and there are steps which must be followed to ensure that you get the process correct.  A failure to properly handle the investigation or review may result in a personal grievance claim and that can be expensive as well as the cause of wasted time which would be better spent on productive activities.

In this seminar I will deal with practical problems that arise in disciplinary matters and reviews and take you through a step by step guide as to what to do … so you can confidently handle issues that arise and avoid falling into the potholes.
Tuesday 17 July 12.15pm-1.15pm
Call me on 0800 733400 to enrol
Alan Knowsley

RAINEY COLLINS LAWYERS Level 19, 163-171 Featherston Street, Wellington

Why do employers continually get the basics of the discipline processes wrong…with all the expensive, time-consuming, consequences?

Another case has been decided where the employee’s behavior would have justified dismissal but the employer got the process so wrong the employee is awarded substantial compensation…

In this case the employee was observed smoking marijuana at work.  To make matters worse it was a building site, and he was on the third level of scaffolding in an earthquake-damaged building in Christchurch.  Hardly the safest work environment and a situation that could quickly have resulted in an acceptable dismissal. 

However the employer failed to tell the employee of the allegation or its source, and failed to give him any opportunity to comment, refute, or explain the behaviour.  This resulted in an award of $13,760 compensation to the employee.

Why do employers get the process so wrong?  It is not difficult to tell the employee of the allegations, and give them a fair opportunity to respond, but in a large number of cases no fair process at all is followed.

Do employers believe that the case is so obvious that no investigation is necessary?  This is never an excuse for not having a proper process, and usually is far from a correct assumption.  This was demonstrated in the case of the employee fired for contacting her employer’s bank and seeking information on access to the company financials.  This employee was dismissed on the spot. 

She was reinstated after a hearing 12 months later.  The employee had been told by the company accountant to call the bank, but had never been asked for any explanation by her employer, and had no opportunity to respond before being marched out the door.

Employers need to stop and take a breath after learning of an allegation.  They need to investigate the allegation, and inform the employee of the allegation, give them a fair opportunity to respond, and remind them that they can seek the assistance of a support person.

If an allegation is then found to be proved the employer can move on to deciding on an appropriate penalty.  They need to give the employee an opportunity to give input into the penalty before a decision is made.

If you need help with getting the process right give me a call for an initial chat about what to do. 0800 733 011

Alan Knowsley 

Redundancy & Long Term Sickness...

Dealing with employment redundancy issues and long term sickness can be stressful for employers and there are steps which must be followed to ensure that you get the process correct. A failure to properly handle these matters may result in a personal grievance claim and that can be expensive as well as the cause of wasted time which would be better spent on productive activities.

In this seminar I will deal with practical problems that arise in redundancy and sickness issues and take you through a step by step guide as to what to do... so you can confidently handle issues that arise and avoid falling into the potholes.

  

When: Tuesday, 3 July 2012 – 12.15 p.m. to 1.15 p.m.

Where: Level 16, 163-171 Featherston Street, Wellington

Register on line

To register your attendance please call Maureen Harris on 473 6850 or click the link to register on line.

$4.29 million damages for breaches of employment agreement…by employees!

Three employees have been ordered to pay over $4 million in damages following an Employment Court hearing into their conduct.

The Court found that they had (while still employed):

• solicited other staff to join them at a new company,
• solicited customers of their employer,
• removed confidential information,
• obtained client lists,
• used quotes of their employer to undercut for their new business, and,
• prepared quotes for the new business while still working in their employment.

These actions significantly affected the business of their employer to the tune of over $4 million.

The new company they set up had its machinery all organized and staff in place ready to go the moment they resigned. 

Unfortunately for the three the new company has gone into liquidation.  No doubt their former employer will now begin seeking to recover the damages awarded from them personally.

The employment relationship is not a one-way street. Employees do owe duties to their employer (as well as the other way around).  It is great to see a Court taking a tough line on enforcement when the employee’s behavior is in breach.

Note that the breaches by the employees were not breaches of any restraint of trade. These breaches of the basic obligations of an employee occurred while they were still employed.

For assistance with any employment challenge please call me on 0800 733 400.

Alan Knowsley

FREE Seminar Employers' guide to the disciplinary process and performance reviews

Dealing with employment disciplinary issues and performance reviews can be stressful for employers and there are steps which must be followed to ensure that you get the process correct.  A failure to properly handle the investigation or review may result in a personal grievance claim and that can be expensive as well as the cause of wasted time which would be better spent on productive activities.

In this seminar I will deal with practical problems that arise in disciplinary matters and reviews and take you through a step by step guide as to what to do … so you can confidently handle issues that arise and avoid falling into the potholes.
Tuesday 19 June 12.15pm-1.15pm
Call me on 0800 733400 to enrol

RAINEY COLLINS LAWYERS Level 19, 163-171 Featherston Street, Wellington

Poor process costs employer a total of $20,000…

An employer who failed to consult the employee during a redundancy process has had an order made against it for $10,000 compensation by the Employment Relations Authority.

The ERA held that the redundancy was genuine, that consultation would not have resulted in the employee retaining their job, and that there were no lost wages payable as a notice period had already been paid. 

However, the failure to consult seriously impacted on the employee’s health and justified an award of $10,000 for hurt and humiliation.  To make matters worse the ERA also held that the employer had to pay a further $10,000 compensation for leaking the decision to dismiss.

If you are unsure how to handle a redundancy process call me for a free initial chat on 0800 733 400 or download our free guide to the redundancy process from www.raineycollins.co.nz

Failure to treat employees consistently costs employer $10K...

 An employer arranged for drug testing of employees, and set a cut off level for standing down employees of 50 nanograms per milli-litre of urine. 

Workers who scored less were allowed to continue at work as they were not impaired by the illegal drugs.  Workers over the limit were on suspension without pay to attend rehabilitation. 

One worker who scored 48 was dismissed even though she was under the cut off limit, and not allowed to attend the rehabilitation programme which was offered to other workers over the limit.

The employer refused to reconsider because the employee had a history of absenteeism.

The Employment Relations Authority awarded $5,100 lost wages, and $5,000 compensation, because the employer failed to treat workers consistently, and for dismissing the employee when she had not failed the company-imposed limit.

If you set rules then you must stick to them, and you must treat employees equally in the application of those rules.  If you need help developing or implementing drug testing processes give me a call on 0800 733 400.

Employers getting the process wrong...

It is a continuing cause of findings by the ERA and Courts that an empl;oyer has got the process wrong. Recently I have been approached by several employers after they have commenced an investigation to see if they should instigate a disciplinary inquiry. In all cases the employer has interviewed the alleged perpetrator without giving them the details or warnings necessary.

If you are looking at whether to start a disciplinary investigation then do not interview the employee alleged to have acted wrongly.

Interview the complainant and witnesses first to see if you need to proceed further. Only then should you interview the employee in the firing line and only after telling them all of the information they need to know such as the allegations (with supporting documentation), the right to a support person and the potential consequences.

If you need help with this then you can download the necessary steps free from my website http://www.raineycollins.co.nz/

Employment Agreements- get them right

A recent case highlights that the Employment Court will look closely at whether or not an employer has been fair in the way it has got an employee to sign an employment agreement. The employer offered the position but did not give the employee an agreement until the first day of work. The employer wanted the employee to sign up there and then, which he did. The agreement said that an opportunity had been offered to get advice on the agreement. That was plainly not correct.

The Court  held that the process was not fair. It also threw out the trial period in the agreement because it was not signed until after the employee had started worked.

Employers must give a fair oppportunity for the employee to consider the draft agreement and take advice on it. A failure to do so may lead to an adverse finding by the Court and an unenforceable agreement. If you need assistance on getting your agreement right and the process correct give me a call on 0800733 400

Theft by employee good reason to sack…

That may sound very obvious and it is good to see that the Employments Relations Authority upheld the dismissal. The case is notable for several points made by the ERA.

The employee was caught on camera taking money from her place of employment, confronted by the boss and shown the footage. She confessed to the thefts and was told to hand in her keys and leave. In normal circumstance there were serious failures to follow a correct process. There was no advance notice of a disciplinary process, no advice of the right to a support person, no warning of possible outcomes, no advance notice of the allegations and no opportunity to prepare an answer to the allegations.

The ERA held that the thefts were such a serious breach of trust that the dismissal was justified despite the poor process and that even if the dismissal had been unjustified the employee was 100% responsible and would not be entitled to any remedies.

Good to see the ERA taking a tough line when faced with such bad employee behaviour but employers should still ensure that their disciplinary processes are fair. If you need assistance then call me for a free initial chat on 0800 733 400 or see my guide to the disciplinary process at http://www.raineycollins.co.nz/

Alan Knowsley

Threatening the boss leads to sacking...

Not a surprising result that saying to your boss during an argument “I know where you live” lead to a sacking and the upholding of the dismissal by the Employment Relations Authority.

What may take many employers by surprise is that the ERA thought that, because the employee apologised and undertook to get on with the boss, the dismissal would not have been upheld except for a prior warning a few months before.

A clear threat to the boss and taken as such and that is not grounds for dismissal?

If you need assistance navigating the minefield that is the disciplinary process then check out our free guide at www.raineycollins.co.nz or call me on 0800 733 400.

Getting the disciplinary process right....

Over my many years of acting for employers and employees the most common thing I have noted is that it is failing to follow a proper process that lands employers in trouble and costs them the big $....

In a disciplinary investigation it is important to follow a fair process...

Here are the basic steps (full a full guide go to http://www.raineycollins.co.nz/ and see my free download guide).
1. Advise them of the investigation
2. Tell them the allegations
3. Provide supporting material
4. Consider suspension and allow input
5. Advise regarding a support person
6. Set a date, time and place for the meeting
7. Advise of possible outcomes
8. Seek their response to the allegations
9. Investigate matters arising
10. Reach a reasoned conclusion
11. Advise the employee
12. Seek input on any penalty
13. Decide on the penaly
14. Advise the employee and note the file
15. Don't take shortcuts!!

Following a fair process gives you the best outcome. You are able to investigate the allegations and reach a sound conclusion and the employee has had a fair part to play in the investigation. If you are unsure what to do, call me for an initial chat on 0800 733 400

Alan Knowsley

When is it a resignation?

A recent Employment Court case has over turned the Employment Relations Authority on whether an employee had resigned or not. The employee said "I'm out of here, I'm finished" and walked off, not contacting the work place for over 6 days.

The employer unsurprisingly took that as a resignation and arranged a replacement. The ERA agreed and rejected the claim for wrongful dismissal. The Court over turned the decision and awarded 3 months wages and compensation for humiliation.

The Employment Court considers there was not an intention to resign as the words were spoken after a heated argument and the employee was well known to be impulsive.

One good point for the employer is that the Court reduced the remedies by 50% due to the employees contribution to the situation.

What do you think? Can someone say that, walk off, not contact the employer for almost a week and claim it wasn't a resignation?

Failure to Prevent Accident Costs $45,000...

Another example from the New Zealand Courts of an employer facing a huge financial hit because of a failure to have in place health & safety measures to protect employees and others at work.
In this recent case the employer was hit with a $37,000 fine and $8,100 reparation after the worker fell into a hole on a work site. There were insufficient safety measures in place to prevent injury. Employers must take all practicable steps to identify hazards and then eliminate, isolate or minimise them. This applies what ever industry you are in.
Putting together a health & safety plan is not something you should overlook and you need to regularly check and update the plan and make sure it is being followed.