Dismissal Laws
March 3rd, 2010 at 9:48 am by David FarrarMany employers say the present rules are too heavily weighted in favour of workers, and make it too easy for frivolous complaints. Business New Zealand has also raised concerns about employers being penalised for not following correct processes when sacking workers, even though the dismissal was proved justified.
But unions are alarmed by some of the options, which include:
Increasing the length of the 90-day period for workers in small firms, which stops them taking unjustified dismissal cases.
On this issue, I tend to side with the unions. I am a big supporter of the current 90 day grievance free period, but I do not support it being extended to say 180 days.
In my experience 90 days is long enough to work out if someone is going to work out. Hell, 30 days will often do that.
Six months is, in my opinion, too long to keep someone on what is effectively a trial period.
Extending the 90-day rule, presently restricted to companies employing fewer that 20 staff, to those with up to 49.
This I do not have a problem with. In fact I am comfortable with a 90 day period for all employers.
Changing the “justifiable dismissal” test to what a reasonable employer `might’ have done, rather than what they `would’ have done.
My view is that there is too much focus on form over substance.
Removing reinstatement as a primary remedy in cases.
This one I have some concerns over also. If reinstatement is not a primary remedy, it may encourage unjustified dismissals. However a workplace can be very unsettled when an employee is reinstated to a job against the employer’s wishes – it is almost impossible to ever regain the trust needed for an employment relationship to work.
My gut reaction is reinstatement should be the primary remedy, but one has to recognise that often this will not be sensible.
Related posts:
- Labour Dismissal Laws
- Messenger may sue for unfair dismissal
- Trial periods working well
- Herald on 90 day bill
March 3rd, 2010 at 10:08 am
Everyone knows someone who is lazy, incompetent and generally a nightmare to employ, but can’t be fired because it is next to impossible to fire in NZ unless theft or fraud is involved.
It’s funny that someone can cost thousands of dollars of lost productivity through having an anti-work attitude etc, and can’t be fired, but if they steal 5 dollars, they’re gone.
I would strongly support making it easier to dismiss useless employees – workers who aren’t useless would have nothing to fear. Sadly many unions seem to genuinely resent workers being asked to work in exchange for their salaries.
Vote:March 3rd, 2010 at 10:14 am
Dairy farm employees usually start work on June 1 so the 90 day period covers winter when the cows aren’t being milked and the start of calving. It’s often only well in to calving – out of the 90 day period – that you can tell if people aren’t up to the job.
Unions opposing the trial period always seem to take the side of the one unsuitable employee without considering the impact on other staff of working with someone who either isn’t carrying his/her weight or is doing – or not doing – the job in a way which negatively impacts on the rest of the staff.
Vote:March 3rd, 2010 at 10:16 am
Why oppose trial periods at all, David? If an employment agreement is made between two informed and consenting adults, then what is added by having the state come in and rewrite the rules by force and for everyone, regardless of circumstance? I have never understood the argument for state intervention in this manner when informed consent works, and (voluntary) unionisation steps can step in and solve a real problem where the individual is at a significant disadvantage. What is the problem state regulation for one and all is supposed to be solving?
Vote:March 3rd, 2010 at 10:18 am
In a former life, I was an employment lawyer. I represented both employers and employees at more than 100 mediations and adjudications on personal grievance claims.
Firstly, although both the Employment Contracts Act (ECA) and Employment Relations Act (EMA) both provide(d) for reinstatement as the primary remedy, in my experience fewer than 5% of employees actually wished to be reinstated. By the time a dispute reached the Employment Tribunal or its equivalent under the EMA, the employment relationship had invariably irreparably broken down.
Secondly, it is correct that mistakes in “process” were the downfall of probably 60% of employers who lost in the Tribunal. Sometimes those mistakes were very serious – such as sacking employees without warning and without any opportunity to give their side of the story – more often they were much less serious, such as having a dismissal letter dated the same day as a second disciplinary meeting. What employers were and are supposed to do is go through the sham of a second period of consideration of the employees submissions, even in blatant cases of serious misconduct where there was always only going to be one outcome.
Finally, I agree from both life experience and experience as a lawyer, that 90 days is usually more than long enough to work out whether an employee is going to be suitable. I can see no good reason not to extend the 90 day trial period legislation to larger employers. The reality is that even before the law change, many employers used trial periods. The only real change was to remove the need for formal documented assessments during the trial period if dismissal during it was to be legal.
Vote:March 3rd, 2010 at 10:23 am
DPF – My view is that there is too much focus on form over substance.
Did you thinnk of this yourself, or did you pick it up from Wilkinson on Morning Report? Looks like we need to preserve National Radio to make sure all National Spinmeisters are informed of the day’s catchphrase.
At least Wilkinson was upfront to admit that there is no empiracal evidence of the 90 days or the need for extending it. looks to me like one more case of a government in flail around mode. It would be nice if they’d get the evidence, then layout a policy, take submissions and decide.
Anyone seen any accurate stats yet on the number of young drivers who die within the current alcohol levels?
Vote:March 3rd, 2010 at 10:29 am
Generally agree with DPF’s commentary.
Two things I would like to see:
1. Employees on $200K plus treated differently – a highly paid employee who performs poorly or who has an ‘attitude problem’ costs the employer heaps.
2. Limitations to be placed on ‘restraint of trade’ clauses in employment contracts and surrounding procedure. In particular the Appeal Court case (re Tory St / Holland St barrista) tipped the procedural balance too much in favour of the employer and IMO should be rolled back. In that regard the Court of Appeal has been a bit too employer friendly – they tended to embrace National’s Employment Contracts Act with open arms and then tended to ‘white ant’ Labour’s Employment Relations Act.
Vote:March 3rd, 2010 at 10:35 am
180 days is taking the piss. 90 is ample.
Vote:March 3rd, 2010 at 10:39 am
One change I would like to see (ok not entirely OT) is for senior public-sector employees to be able to be “terminated at will” (their employment that is) without any “grievance” rights. It is crazy that Ministers cannot fire troublesome or incompatible CEOs or other senior Ministry/Department/etc employees (yes there are some provisions in the State Sector Act, but I am talking about a blanket exemption).
The change need not be retrospective – but any new person applying for a senior role would know that they remain employed “at the pleasure” of the Minister. I don’t think this would result in quality people shying away – it works fine overseas, and would the Govt want to hire someone into a senior role who wasn’t confident they could stay out of trouble anyway?
Vote:March 3rd, 2010 at 10:51 am
I agree dime, three months is either enough to determine the appropriateness of a new hire, or you arent trying hard enough to find out.
Vote:March 3rd, 2010 at 10:59 am
Not me personally, but several of my clients have been hit by those reptiles who are Employment Law advocates. They operate on 60% of the first $5000 and a lesser percentage thereafter; a recalcitrant ex employee has nothing to lose.
Their favourite tactic is to suggest a full and final payout of $2500 for unfair dismissal. I have had to explain to employers that the minimum, absolutely minimum, legal fees will be $3500; so it is best to pay the $2500 and be rid of the problem.
“But the bastard raped my sister in law” said one of the employers.
“And the cops stuffed up the prosecution”
He was livid at my advice, but two years later has come to accept that it was reasonable. This is because anybody that is so useles that you must sack them will be too useless to have any funds available to pay costs.
There are a huge number of cases like that set out above that never ever get to the Employment Tribunal or anywhere else. Unions will insist that they do not occur. It would be a breach of my professional ethics to detail eight cases like that.
Vote:March 3rd, 2010 at 11:01 am
Agree, 90 days is ample.
@queenstfarmer: re: public-sector employees employment terminated at will without grievance rights, would that not just see an increase in sycophancy throughout any given political term?
Vote:March 3rd, 2010 at 11:41 am
I agree 90 days is enough and Kimbles comment is spot on: if an employer doesn’t know within 90 days of hiring if the employee is suitable or not then the employer needs to get off his or her bum and take an active interest in their staff or their manager does.
Vote:March 3rd, 2010 at 1:14 pm
@David Garrett
As a former union official I tend to agree with you on this David (but not on there being grievance-free trial periods, which I consider abhorrent to natural justice). But only with the minority of grievances that actually go to hearing. The problem with removing reinstatement as the primary remedy is that it would then not be the primary remedy at the earlier stage of mediation, where the employment relationship has often not yet broken down to the extent that it is impractical.
Vote:March 3rd, 2010 at 1:34 pm
still waiting for horror stories toad. you promised.
Vote:March 3rd, 2010 at 1:36 pm
The benefit of a longer “trial period” is the previously under performing employee has to perform for say 6 months or longer after which it is more likely to become a habit/normal conduct so less likely to fail further down the track as perhaps even DPF could abstain his wine for 90 days and then imbibe as before but after 6 months may have lost the taste for copious or even any quantities!!! Worth a try David?
Vote:March 3rd, 2010 at 4:49 pm
ben says:
Exactly. BY all means have a law that sets out a framework but allow people to opt in or out – rather like a company can adopt a standard set of rules or draft their own.
But the “state” (i.e. philandering, expense-rorting, sexually harassing, donation hiding, drunk and just plain stupid MPs, councillors and the like) need to tell the rest of us what to do, ben… who we can and cannot marry, whether we have to strap a daft looking fluro hat on before we ride a bicycle even in a park, whether we can drink in public even if we’re not at all drunk and disorderly, where and how long we can park, what colour we can paint our house and so on and so on.
Because if they weren’t so busy ordering us around and assuring us that we’re knuckle dragging morons who need them to run our lives, we’d wake up to the fact that many of them aren’t fit to wash the windows of our cars at an intersection and got where they are by virtue of a lifetime’s grovelling to their party’s power structures.
Vote:March 3rd, 2010 at 7:30 pm
Doesn’t matter what you do its always money for lawyers. Ever met a poor one?
If an employees face doesn’t fit with their employer than the relationship is bust. As our favorite ex PM would say :move on”.
Interesting that years ago a older gentleman with a trucking company said to me in the midst of a general strike by drivers. Never hard to get rid of them because they all steal.” Now that may not be literally true but stealing encompasses many things including time etc, so just tighten up the rules.
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