EMPLOYMENT LAW: Personal Grievances – Minimising the Risk

Sometimes personal grievances can seem like the bane of an employer’s existence. An employee is performing badly, or having far too much time off sick. The employer tries to manage the issue and then faces personal grievance claim.
All is not lost, however: with little planning and patience, employers can safely negotiate the minefield.
There are number of grounds upon which personal grievance claim can be brought, but by far the most common one is unjustified dismissal. The main reasons for dismissal (and therefore the basis for the claim itself) are misconduct, poor performance, redundancy and ill health.
Misconduct Misconduct can be anything from theft to assault, although the types of behaviour that can amount to misconduct are so many that it is not possible to list them all here. In order to discipline an employee for misconduct, it is necessary to ensure that the correct steps are followed. As for other types of dismissals, having good reason is not enough: fair process must be followed.
A fair process must be followed in investigating employee misconduct. The leading case “NZ Food Processing etc IUOW v Unilever New Zealand Ltd [1990] 1 NZILR 35” outlined three hoops an employer must jump through when investigating alleged misconduct:
1) notice should be given to the employee of the specific allegation and of the likely consequences if it is established;
2) the employee should have real opportunity to attempt to refute the allegation or to explain or mitigate their conduct; and
3) the employer should give an unbiased consideration to the employee’s explanation (avoiding predetermination).
The Court stated that the failure to observe any of these requirements will usually render disciplinary action unjustified. It might be added that it is important to carry out proper investigation before commencing disciplinary action, and to allow the employee to be represented.
Poor performance Managing poor performing employees is another difficult task for employers. It is important that employers first ensure that the expectations of employees are clear. The employer must also assist the employee to improve his or her performance, by monitoring it and providing feedback.
If these initial steps don’t result in any improvement, the employer can take disciplinary action. However, the employee must be given at least one warning (and in many cases more than one) before dismissal. Also, as each warning is disciplinary sanction in its own right, the employer must follow process similar to that set out above in relation to misconduct before deciding whether to give warning or dismiss.
Redundancy redundancy occurs when an employee’s employment is terminated because their position has become superfluous to the needs of the employer. The redundancy must be both genuine and based on fair process.
This requires consultation period (usually of at least week) in which employees are able to comment on any decision likely to lead to redundancy, and to discuss with the employer ways to avoid termination. In addition, where more than one employee in the same or similar role is superfluous, the employer must apply fair criteria for deciding who to dismiss.
Ill health Ill-health dismissals most often involve long-term absentees, although employers tend to get even more frustrated by the employee who takes several shorter spells off at time – day for tummy ache here, day for the flu there. Both problems are often very difficult to manage to successful conclusion, and will generally require proper medical evidence about the nature of the condition, as well as full discussions with the employee, and consideration of other alternatives.
The best way to avoid personal grievance claims is to ensure that employment policies are firmly in place and to deal with any issues that arise immediately. First and foremost, an employer must act in good faith, which as minimum requires only considering dismissal where there is genuine reason for doing so, and following proper process. Provided employers do so, the risk of successful claim is dramatically reduced.

Greg Cain is partner with law firm Minter Ellison Rudd Watts. Amy Cunningham is solicitor with the firm.

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