Sunday, July 11th, 2010

Misconduct outside the work place

It is now well established that an employee can be disciplined, even dismissed, for misconduct which takes place outside of work hours and the workplace . However, disciplinary action can only be justified if there is some connection between the misconduct and employment.

This “connection” can be illustrated by reference to a number of cases.

It is noteworthy that in each of these cases, the employee was aware of the need to maintain an appropriate standard of conduct.

If your business is in any way sensitive to public opinion and your business interests may be hurt as a result of employee misconduct , it is important to ensure that the employee is knows that certain standards must be met.

Other misconduct may destroy the trust and confidence that an employer has in an employee .

There are a number of ways of ensuring that an employee is aware of the potential impact is non-employment activity.  The staff manual may specify a code of conduct. Equally, the employment agreements may list, as serious misconduct, any conduct that brings the reputation of the employer into disrepute.

In Whitney v New Zealand Post Ltd AA 308 A/09, the applicant was employed as a postie.  She was required to sort and deliver mail containing the usual variety of items such as cash, credit cards, gift vouchers, drivers licences and other items of tangible value as well as general mail .

She had been dismissed from her previous position because she had admitted theft from her previous employer.  The police did not however bring charges for quite some time, by which time Whitney had secured the position at New Zealand Post.  She was convicted of theft.

This was not her first problem with the legal system. Some 10 years earlier she had worked for New Zealand Post.  She had been dismissed because she had been charged with receiving wages from NZ post while, at the same time, receiving a domestic purposes benefit. She was therefore aware of the implications of inappropriate behaviour.

NZ Post concluded that it no longer had trust and confidence in her and dismissed her.

When dealing with her claim for unjustified dismissal Employment Relations Authority accepted that she held a position where a high level of trust, honesty and integrity was required.  Although there were no difficulties with the manner in which she performed her duties, the authority found that her dismissal was justified.

Compare this case with Kasey Pou v Alliance Group Limited CA 96/08 where a Quality Assurance Officer employed at meat works had been convicted of theft and receiving outside of her employment.

The incidents in fact occurred before she was employed by Alliance.  When she was interviewed, she was not asked to disclose any convictions.

She was held to be unjustifiably dismissed because the dishonesty offence did not affect her ability to perform the role for which she was employed.

On the other hand, in Murray v A-G (2002) 1ERNZ 184, Mr & Mrs Murray , both employees of the IRD, were convicted of benefit fraud. They were customer service officers at the IRD.  Their dismissals were upheld.

In another case, Dryden v The Radio Network of New Zealand Limited AA 9/09, a radio breakfast host was dismissed as a result of ill mannered behaviour at a public meeting and direct disobedience of his employer’s instructions.

The radio station maintained that his behaviour was unprofessional and inappropriate and brought the radio station into disrepute.

Although he was not representing the station at the meeting, he was wearing a jacket with the radio station’s logo.  He was also a public figure who lived in a small community and was strongly associated with the radio station.

The employment relations authority was satisfied that his conduct was injurious to the interests of his employer in the sense that it had the potential to impact on the employer’s business.

Conclusions

Misconduct outside working hours may justify disciplinary action, even dismissal.

Care must be taken because an employer has the burden of showing that the disciplinary action was justified — particularly in the case of a dismissal.

Although the cases referred to involved misconduct preceding employment, the general requirement is that the misconduct must occur following employment.  Those cases where misconduct occurred before employment were successfully defended by the employers by persuading the Employment Court to invoke jurisdiction in equity and conscience.

Any disciplinary action should be carefully supervised or at least reviewed — preferably by an independent consultant.


Saturday, October 10th, 2009

Have I got enough to fire him yet?

I doubt whether many employment advocates have not been asked that question from time to time.

In my experience, once the factual circumstances have been properly analysed and assessed, the answer will be” “no”. This is primarily because few employers really understand the need for a fair and thorough investigation, whether the issue is one of non-performance or misconduct.

So often there is some festering discontent about non-performance where the employee is unaware of the requisite standard or a sense of outrage over a particular event where judgement is made on an initial hypothesis (usually involving assumptions of wrongdoing) and facts are selected to fit that hypothesis.

This article emphasises the need for a thorough and fair investigation process.  A recent Employment Court case clearly illustrates the consequences of failing to meet the standard.

Allan v Transpacific Industries Group Limited[1]

Mr Allan was employed by Transpacific Industries Group Limited as a driver.  He was on the night shift.  His job involved collecting medical waste for disposal from various hospitals.

Employees used a card to clock in and clock out.  The company did not monitor hours worked.

On 24 January, 2007, Mr Allan clocked in at 9:30 PM but a supervisor reported that he appeared not to have arrived for work until at least 11 PM.

On 25 January, 2007, Mr Allan clocked in at approximately 9:30 PM.  He was not, however, present and his truck had not left the plant.  Attempts were made to contact him unsuccessfully.  Eventually he made contact at approximately 10:40 PM and arrived back at work at 10:45 PM.

The company convened an investigation hearing shortly after the end of his shift.  He was suspended and another meeting convened.  That meeting appears to have been relatively brief.  Mr Allan gave an explanation for his absence.  The Company did not believe him and summarily dismissed him for falsifying company records (his time sheets)

The company concluded that there was a high probability of collusion — somebody else was clocking him in.

Mr Allan was unsuccessful before the Employment Relations Authority but was successful in the Employment Court.

Lessons to be learned

The Employment Court decision  highlights the approach that will be taken by the Employment Relations Authority when considering the decision of the employer.

The Employment Relations Authority will not review all of the evidence and make a decision on the merits of the case.  Its function is to look at the substance and procedures leading to the decision made by the employer.  Having done that, the Employment Relations Authority must apply an objective standard to that decision and decide what a fair and reasonable employer would have done and how the employer would have done it, in all the circumstances at the time.

You may well ask whether there is a difference between the two approaches . The critical difference is that except to a limited extent, the Employment Relations Authority cannot take into account evidence which second guesses the employer’s decision (either by reinforcement or condemnation).  The Employment Relations Authority can only look at the evidence that the employer relied on at the time.

The exceptions are:

  1. The Employment Relations Authority will consider evidence that the employer ought reasonably to have known but did not (for example, as a result of an inadequate investigation) and
  2. The Employment Relations Authority may take into account previously unknown evidence when deciding on remedies.

An  employer cannot look at the personal grievance process as an opportunity to have a second bite at the cherry.  A bad process is likely to lead to a bad decision.  An employer takes a considerable risk by ignoring process.

The Employment Court has previously indicated that where an employer has failed to carry out a fair and full investigation, it will usually not be possible for the employer to show that the decision to dismiss was one of that a  fair and reasonable employer would have taken.  That is simply because a fair and reasonable employer would not make a decision to dismiss except as a result of a full and fair investigation.

In the Allan case, the Employment Court made the following findings:

  1. The employer did not comply with the procedure contained in the employment agreement.  That agreement contained a process of investigation.  The employment agreement is the first port of call.  Failure to comply with the provisions of employment agreement as to process may even result in the imposition of penalties.
  2. At the first investigation meeting, the employer mentioned only one of the alleged incidents.  The employer asked for an explanation of the events of 25 January.  It did not mention the events of 24 January.  An employer must advise the employee of all matters of concern so that the employee has the opportunity to comment.
  3. The employer conducted the first investigation meeting very shortly after a 12 hour shift.  This was inadequate notice.  The inadequacy was compounded by the fact that not all allegations were put to the employee.
  4. The employer did not believe the employee’s explanations but made no comment to the employee.  The employer should have advised the employee that it had difficulty accepting the explanations and why.  The employee must be given the opportunity of clearing up any doubt if possible.
  5. The employer had failed to interview other staff members who could have given evidence that would have assisted the employer’s decision.
  6. The employer had made various assumptions about the behaviour of the employee.  All assumptions were consistent with the hypothesis that employees were involved in some form of rort which involved clocking up hours that were not worked.  Evidence inconsistent with those assumptions were either ignored or not sought out.  An employer must test all assumptions in order to ensure that they are based on sound fact.
  7. The focus is on what the employer honestly believed from the information that it knew or ought reasonably to have known had it conducted a fair and reasonable enquiry.
  8. The Employment Court did make some findings against Mr Allan.  For example, on one of the  days in question, Mr Allan had forgotten his keys.  He returned home.  He did not clock out when returning home.  He had expected his employer to meet the cost of his mistake.  When returning home he was not working for his employer.  He was paying the price of  having forgotten to bring the keys.  Although he had a reasonable explanation for his absence, he did not have a reasonable explanation for not recording, properly, his absence from work for personal reasons.
  9. On the second occasion, he said that he was having a meal break.  He acknowledged that his meal break was excessive.
  10. These criticisms were relevant in reducing the compensation payable to him.  They were not relevant to the issue of justification of his dismissal.  He was dismissed for falsifying his time records by having somebody else clocking in for him.  He was not dismissed for having an excessive meal break or charging his employer for the time he spent collecting keys left by mistake.

Despite the criticisms, Mr Allan received compensation for loss of wages in the summer $17,000 and compensation for non-economic losses (embarrassment, humiliation etc) amounting to $20,000.

Conclusion

It is possible that employees were involved in a rort.  The employer made that assumption.  However, it did not carry out a proper investigation.  It did not test its assumptions.  It did not satisfy itself on the balance of probabilities that allegations against the employee were correct.  It did not have regard to the gravity of the allegation and the need for the proof to be as convincing as the charge was grave.

These failings were fatal and extremely expensive.


[1] Employment Court ARC 30/08