Employment Dismissal Process

January 30th, 2006 at 9:27 am by David Farrar

One of the biggest criticisms of the current employment law environment is that minor process flaws can make it impossible to sack someone, even if you catch them stealing.

This is shown in this report in the Dominion Post.

Firstly I should comment that process is important. The basic notion that an employee should have the chance to defend themselves is very important. There may be factors unknown to the employer.

However in the case linked above the employee, caught on film taking company property, has won $19,000 because of what I have to say is a very minor procedural point.

Basically the employer showed him the film of him removing company property and asked him to comment. Realising he had been caught, he refused to explain. Now the flaw the employer had was not stating the obvious “We believe this video shows you stealing from us”.

I’m appalled that such a minor procedural breach gets the sacked employee walking away with six months salary or so. If they had not confronted him with the video evidence at all that would be a different matter, but come on when your employer shows you a video of you removing company goods, you know what it is about.

The pity with this ruling is it lumps in the genuinely good employers who try their best to be fair, with the genuinely bad employers who do ignore employee rights.

No tag for this post.

32 Responses to “Employment Dismissal Process”

  1. maurice () says:

    John Leslie Lawless has won his battle but lost the war!. Who would emply him now!. Even the surname has memorable ring to it.

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  2. Adolf Fiinkensein () says:

    Now you know why thousands of small businesses avoid employing people, preferring not to take the ridiculous risks associated with growth.

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  3. johnie () says:

    That’s right, adolf…I can imagine the thinking of your entrepreneur friends “If I hire someone I can increase my turnover by $1M, and my GP by $1/2M…but oooohh theres a small possibility I might get sued by my employee. No. No. I couldn’t. It’s too risky…”

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  4. David Farrar () says:

    And here Johnie shows how little he knows of business. Hell if only hiring an employee does bring in $1m extra.

    The more iikely scenario (and I have been there) is hey do we have enoough cash in the bank to be able to lose $25,000 if we get it wrong.

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  5. johnie () says:

    And irony is something you play golf with, eh david?

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  6. Adolf Fiinkensein () says:

    johnie, such intellect. Such astute insight. Do you run a buusiness? Do you actually know anyone who does? I do and I know many others who do. This is a significant one of the many factors which, in the real world which you appear not to inhabit, discourages employment.

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  7. johnie () says:

    The company I work for, a small firm with 12 employees, is about to hire a new worker. The thought that they might sue for unjust dismissal has not been considered. Perhaps it’s only those that inhabit the neocon shadow world who do so?

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  8. David Farrar () says:

    Johnie if you work for them, then you won’t know what factors influence the owner’s decisions. And numnerous employer surveys have shown this to be a significant factor.

    Inventing terms such as neocon shadow world is a poor substitute for actual experience.

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  9. Murray () says:

    Hey jonnie my business plan was worked over several times to ensure it will never involve employing people regardless of how it grows.

    Any additional work needing to be done is contracted out.

    Simple risk managment and economics require it.

    One single bad employee WILL kill a small business stone cold dead and the best way to avoid that is to pay out more in sub contracting and make less money by farming out the work.

    Not to mention the costs of employing anyone at all in terms of paying them to not be there for another holiday and all the addtional costs.

    What is this wonderfull majical fairy tale business you have where employing one person will get you an extra $1,000,000:00.

    Does it inolve majical beans at all?

    All employers are evil greedy capitalists dogs who will be put against the wall when the revolution comes eh jonnie?

    Glad to see reeducation camp didn;t do you any harm.

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  10. Gooner () says:

    The process has become too important in my view. If the substantive reason stacks up the process should only be of minor concern. The Employment Court constantly gets overruled in the Court of Appeal in important cases. Let’s hope this happens here.

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  11. tincanman () says:

    Exactly Adolf, exactly. Why would you take the risk? And his Union official sat there, probably full well knowing what was going on. It’s really a disgusting state of affairs.

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  12. johnie () says:

    I see why rightwing blogs are called echo chambers! And we have some of silent running’s and sir humphrey’s famous bitchiness as well. Are we honoured?

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  13. Oswald Bastable () says:

    Well, of course people with similar outlooks would have similar opinions.

    A leftie ‘echo chamber’ tends to be the cavity between the ears…

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  14. Joely Doe () says:

    A leftie ‘echo chamber’ tends to be the cavity between the ears…
    Ouch! Touch

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  15. Cadmus () says:

    Murray said,

    “One single bad employee WILL kill a small business stone cold dead and the best way to avoid that is to pay out more in sub contracting and make less money by farming out the work”

    Well we agree to a point on that one Murray!

    You of course will find if you sub contract via overseas you will make more than less, if you do your homework.

    Of course it comes down to employing the right people for the job, as the saying goes you pay peanuts you get monkeys.

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  16. Murray () says:

    He lets you in to talk shit doesn’t he jonnie?

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  17. spector () says:

    Johnie – letting guys like this get compensation for riping off their employers actually harms all employees. Unions have fought hard to give good employees protection from bad employers. These protections will be eroded if there are no counter balances to protect good employers from bad employees. It has to work both ways if it’s going to work at all.

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  18. johnie () says:

    I agree, spector, but the right on here would use this case to reduce the rights of all workers..their view is that employer’s rights are paramount. And, as well, they bite so beautifully.

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  19. AL () says:

    Moving on from the self-appointed insulting offtopic Kiwiblog troll,

    It’s not just a matter of risk when a small company (or one man band) considers hiring staff. There is also the great problem of dealing with red tape in the form of variable PAYE rates, student loan repayments, involuntary IRD (etc) repayments which companies must perform on behalf of staff, FBT, ACC, potentially super, etc.

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  20. Mellie () says:

    The case in point is a good example of where the ‘process’ has really hurt an employer who just about did everything by the book.

    Of course it is unreasonable to ask someone to incriminate themselves. That should not be in doubt, and it is more than likely that this is what the union delegate told the guy.

    It’s hardly likely that the union delegate said, hey look we cn get you some money out of this… Someone who has deliberately committed a sackable offence is a hot potato and all one can do as a support person is to help them not make things any worse for themselves or other employees.

    I agree though that cases like these illustrate the disadvantage that SMEs face – they can’t afford to hire a vanload of HR graduates – and sometimes they get hit hard when it comes to employment and dismissal procedures.

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  21. maria von trapp () says:

    David, I agree with you on this.

    This has gone too far, and the award is too much. I’m disturbed that there seems to be no evidence of “contributory negligence” here.

    I hope that this does get overturned, as there are cases where process hasn’t been followed and the complainent still fails due to their contribution (Westlake Girls’ High School vs. a Cleaner whose name I can’t remember!).

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  22. Geoffm () says:

    Well, Johnie, let me assure you the dangers of employing staff certainly do affect employment. My previous job – 3 of us in a company (more like a partnership in some ways). We made a decision early on not to employ enyone else – everything else would be subcontracted out. If they dindn’t perform, then they didn’t get any more work. Ditto if the work dried up. and if they stuffed it up, we didn’t have to pay them again to go back and fix it up. This is wothout even getting into ACC (What a ripoff) and tax generally.
    In the end the owners decided that growth had more pain than gain, and we all went our separate ways (by choice – I went on to postgrad study). Last heard, by halving the company, having no payroll and focussing on a small part of the previous business, the margins are better than ever, and it doesn’t get in the way of fishing.
    THe leap from a small company of a couple of people to a bigger one is dangerous – the legal costs alone will kill it dead. There aren’t the profits in a legal business to support the dead weight of some loser. A 50+ company can afford the legla costs and time, a micro camonay will close their doors. That risk is too high for many people.
    Geoff

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  23. maria von trapp () says:

    I think you’ve hit the nail on the head Geoff.

    As a leftie who strongly supports the rights of workers, I have a huge concern with the current employment legislation (and other costs of transacting) being based on historical problems within “big business.”

    As Mellie so correctly pointed out, a big business can afford good hr staff, legal staff etc, and have economies of scale as a result.

    I think the next step for this legislation is to address the impact on small business, given that there is such a high prevalence of it in the New Zealand economy.

    It’s a tough issue that I don’t have the answers to yet, as I don’t see the answer being the removal of workers’ rights. But something does need to be done to support those in an entreprenuerial setting.

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  24. Rumpole () says:

    Employment legislation & Margaret Wilson a disaster waiting to happen & it is happening! The UK changed employment conditions more than a decade ago that allowed employers to terminate employment in the first 2 years without giving a reason and paying notice only, result employers employed more people more easily as they were able to shed labour in downturns. Funny thing is employees then became aware that permanent employment required reliability,honesty etc so modified their behaviour which after 2 years became an accepted part of life thus better employees. Net result UK has lowest unemployment rate in Europe and the economy the 4th largest, compare with France etc were ultra restrictive employment practices have produced 10%+ unemployment for a decade. Suggestion send Wilson to France and improve NZ & France in one go.

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  25. David Farrar () says:

    Mellie I agree SMEs can get hardest hit. They don’t have the funds to have expert legal advice at every step and also damages hits them much harder.

    Hence I favour in principle some (not all) employment laws being relaxed for SMEs under a certain size. I understand Australia does this.

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  26. err.. () says:

    One thing worth remembering is that it’s often harder to check references or history on a contractor than it is on an individual when you’re looking to spread the load.

    Contracting work out can be just as risky as hiring somebody, at times. If the job you’re taking is vital to your survival (as many are in the early stages of running a business) the last thing you need is a useless self-employed contractor screwing you over. And let’s face it – NZ is as well-stocked with useless self-employed contractors as it is with useless employees.

    I’d say put the work the way you can trust. If you have people you can hire that you can back 100% then go that route, but if all else is equal then you might be better off with contractors for purely legal reasons.

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  27. Dave Stringer () says:

    This, David, is just the tip of the iceburg!

    How about the example of a cohort colleage of my son (you might remember MIchael) while at Teacher Training College doing a B.Ed.

    She was hired and assigned to a class of 14 year olds. Not being old and gnarly, (infact quite an acceptable example of today’s standard for a neck-turner,) she was presentable, and tended toward the ‘skirt and blouse’ rather than ‘jeans and rugby shirt’ dress standard. Putting it succincly, a trio of youg lads decided to see if what her underwear standards were, so set up a “you kneel behid and I’ll bump into her” episode. On execution, they were thwarted by her grabbing the pusher by the hair in an instinctive reaction to stop herself falling (it didn’t work as she still fell); and by sheer luck she managed to keep hold of the boy behaving badly and so marched him down to the Principle’s office to be repremanded.

    The Reprimand? Well –

    She was fired for assulting the boy, and he received state funded counselling for his trauma!

    She now has a very well paid job in banking!

    The employment court UPHELD her dismissal!!!!

    Roll on senility when I will not be bothered by these things anymore!

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  28. gd () says:

    The problem with our law is that the old legal maxim that translates from the Latin as “the law is not concerned with small matters” has been over turned.The result is as I have found to my cost in the Court insignificant points are blown out of proportion and common sense goes out the window.The Court assumes all employers are guilty until they prove otherwise and that all employees are innocent.Until we get a dose of reality into the law we will continue to see these bizaare cases.

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  29. Ian McGovern () says:

    Hasn’t everyone missed something and are confused with reality? It’s existing employees (and only a very small minority) who take their employer to Court. Not employing more people will not change that. Employers need to take some of the blame when they employ people. The first rule of employing is, Selection, Selection,Selection. They are responsible for making the right selection of employee in the first place

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  30. culma () says:

    This is just another avenue to hamstring business, the legal fraternity that patrol the fringes of employment law, advertise vigorously “NO WIN NO PAY”, as pointed out above no employer fires people for the hell of it. As an employer you have to be so careful as to not only know how you approach such matters, but they are executed to the letter of the law. This is where problems start, we as employers are expected to be ofey with every interpretation and excitation of the letter of the law as an employment law expert, this is where the main problem is.

    If there is a Govt controlled down turn (as at present)staff have to be laid off, last on first off, (loose a few to save the majority), the law supply and demand.
    I have quite proudly never been part of a union, have always negotiated my own rates of pay where need be, and don’t need anyone to fight my battles for me, I do realise there are those out there that don’t have the ability to enlighten an employer as to their worth, hence the limited need of the union delegate or representative. But I can’t see where a union rep can look a person on a low wage in the eye and explain why he is taking $5 – $10 per week out of his pay packet for a once yearly visit and a photocopied flyer. If this was a business it would be on FAIR GO in a week.

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  31. Mr Who () says:

    I hear getting rid of a ‘wife’ can be even more expensive than an employee ! Puts the dampers on having more than one dont you think.

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  32. culma () says:

    Mr Who Employee or Wife? – you weren’t listening to Mary Lamby on the radio this AM were you? As she was trying to give traction to some story of a woman in Britain who wanted 50% of her husbands future earnings Blah Blah Blah, bullshit bullshit bullshit. Obviously Mary got up late this morning and grabbed the first bi line that sprang to hand.

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