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EMPLOYMENT LAW NEWS - August 2015

  • By Gage Keenan
  • 09 Dec, 2015

Procedure for its own sake.

We start this newsletter with the words of Chief Judge Colgan in the case of Kaipara v Carter Holt Harvey Ltd ARC 45/11:

[21] Compliance with fair and reasonable procedures is not, and never has been, a requirement simply for its own sake.

Since that case was decided, the justification test in the Employment Relations Act has changed to include as a minimum, a list of procedural requirements that an employer must follow when investigating an employee.  It is set out below;

103A Test of Justification

(1)     For the purposes of Section 103(1)(a) and (b), the question of whether a dismissal or an action was justifiable must be         determined, on an objective basis, by applying the test in subsection (2).

(2)     The test is whether the employer's actions, and how the employer acted, were what a fair and reasonable employer could have done in all circumstances at the time the dismissal or action occurred.

  (3)   In applying the test in subsection (2), the Authority or the court must consider—

(a) whether, having regard to the resources available to the  employer, the employer sufficiently investigated the allegations against the employee before dismissing or taking action against the employee; and

(b) whether the employer raised the concerns that the employer had with the employee before dismissing or taking action against the employee; and

(c)   whether the employer gave the employee a reasonable opportunity to respond to the employer's concerns before dismissing or taking action against the employee; and

(d) whether the employer genuinely considered the employee's explanation (if any) in relation to the allegations against the employee before dismissing or taking action against the employee.

(4)     In addition to the factors described in subsection (3), the Authority or the Court may consider any other factors it thinks appropriate.

(5)     The Authority or the Court must not determine a dismissal or an action to be unjustifiable under this section solely because of defects in the process followed by the employer if the defects were—

(a) minor; and

(b) did not result in the employee being treated unfairly.

Note the open ended provision in subsection (4).

The purpose of the clause was supposed to set the rules for an employer’s investigation in a manner that has been applied by the Courts since the judgement of;

New Zealand (with exceptions) Food Processing IUOW v Unilever New Zealand Ltd.

In that case the Court set the rules of fairness as follows;

The minimum requirements can be said to be:

1. Notice to the worker of the specific allegation of misconduct to which the worker must answer and of the likely consequences if the allegation is established;

2. An opportunity, which must be a real as opposed to a nominal one, for the worker to attempt to refute the allegation or to explain or mitigate his or her conduct; and

3. An unbiased consideration of the worker's explanation in the sense that that consideration must be free from pre-determination and uninfluenced by irrelevant considerations.

So you can see the similarities between that case and the statutory wording in Section 103A.

Now it has always been the law that the role of the Court is not to investigate the employee’s guilt or otherwise as the employer did, and to substitute its view for the employer’s, but rather its role is to scrutinise the employer’s conduct to see if what it did and how it did it, was what was open to the employer acting fairly and reasonably.

But to do that the Judge must look at all the evidence that the employer relied upon, and any evidence that the employer should have relied upon which was available had the investigation been done as the Judge would have done it.

The latest illustration of the Judge scrutinising the employer’s investigation process by analysing the evidence collected by the employer (and the evidence it didn’t collect but should have), is the case of H v A Ltd. In that case the well resourced employer conducted a very comprehensive investigation into allegations of sexual harassment by one employee against another.

The employee H was successful in being reinstated following a step by step analysis by the Judge of the employer’s investigation process concluding that its investigation was seriously flawed because of the way evidence was collected and assessed, not collected when it should have been, and the analysis of the evidence by the employer.

The case is currently before the Court of Appeal on whether the Trial Judge applied Section 103A correctly.

But what it illustrates to us is the blurred line between a Judge assessing the evidence based on what was open to an employer acting in a fair and reasonable manner and what the Judge substituting himself for the employer’s investigator would have done had he been the employer at the time.  And what if the employer has got it right?

For a dismissal to be justified two tests must be satisfied; Substantive grounds must have been proven to exist and procedural fairness must have been applied leading the employer into a position where it was entitled to make the decision to dismiss.

The Authority substituting for the employer is not uncommon as we remind ourselves of the words of the ERA in the case of Puhia v Ovation NZ Ltd.

In concluding the investigation into the employer’s decision to dismiss the Authority Member said:

I find that Ovation had substantive justification for finding that Mr Puhia had committed serious misconduct .”

As to the process followed by the employer the Authority said: “ I determine that Ovation carried out a fair and reasonable process.”

But then having found in favour of the employer on both counts which should have been the end of the case the Member said:

I determine that a fair and reasonable employer would not have dismissed Mr Puhia in all the circumstances at the relevant time.  I determine that Mr Puhia has been unjustifiably dismissed.”

And when it came to declining the remedy of reinstatement:

I have determined Ovation to have had substantive grounds for finding that Mr Puhia's actions constituted serious misconduct such as to destroy the requisite trust and confidence Ovation needed to have in Mr Puhia as an employee.”

So the employer had grounds to dismiss, had conducted its investigation fairly, had a situation when it was accepted the essential element of trust had been destroyed, meaning reinstatement wasn’t an option, but finding the dismissal unjustified.

We wish to announce the appointment of Michael McAleer and Karen Hunt

Michael is a Barrister and Solicitor who has been involved in employment law for the last 15 years. He has a wide range of experience in employment advocacy including appearance before the Employment Relations Authority and the Employment Court.

Michael is also the Director of several companies that have been involved in property development and management, the geriatric residential care sector and the motel industry.

Michael’s unique blend of skills as both a lawyer and as an Employer will be an asset to Gary Tayler Limited.

 

Karen Hunt has been appointed as our Administrator/Personal Assistant.

Karen has extensive background in litigation having worked for the Crown Solicitor’s Office, Public Defence Service and a number of law firms in Napier.

PROUDLY PROVIDING HR/ER SERVICES TO EMPLOYERS

VISIT OUR WEBSITE TO VIEW OUR PROFILE:  www.garytayler.co.nz


EMPLOYMENT LAW NEWS

By Gage Keenan 09 Dec, 2015

Procedure for its own sake.

We start this newsletter with the words of Chief Judge Colgan in the case of Kaipara v Carter Holt Harvey Ltd ARC 45/11:

[21] Compliance with fair and reasonable procedures is not, and never has been, a requirement simply for its own sake.

Since that case was decided, the justification test in the Employment Relations Act has changed to include as a minimum, a list of procedural requirements that an employer must follow when investigating an employee.  It is set out below;

103A Test of Justification

(1)     For the purposes of Section 103(1)(a) and (b), the question of whether a dismissal or an action was justifiable must be         determined, on an objective basis, by applying the test in subsection (2).

(2)     The test is whether the employer's actions, and how the employer acted, were what a fair and reasonable employer could have done in all circumstances at the time the dismissal or action occurred.

  (3)   In applying the test in subsection (2), the Authority or the court must consider—

(a) whether, having regard to the resources available to the  employer, the employer sufficiently investigated the allegations against the employee before dismissing or taking action against the employee; and

(b) whether the employer raised the concerns that the employer had with the employee before dismissing or taking action against the employee; and

(c)   whether the employer gave the employee a reasonable opportunity to respond to the employer's concerns before dismissing or taking action against the employee; and

(d) whether the employer genuinely considered the employee's explanation (if any) in relation to the allegations against the employee before dismissing or taking action against the employee.

(4)     In addition to the factors described in subsection (3), the Authority or the Court may consider any other factors it thinks appropriate.

(5)     The Authority or the Court must not determine a dismissal or an action to be unjustifiable under this section solely because of defects in the process followed by the employer if the defects were—

(a) minor; and

(b) did not result in the employee being treated unfairly.

Note the open ended provision in subsection (4).

The purpose of the clause was supposed to set the rules for an employer’s investigation in a manner that has been applied by the Courts since the judgement of;

New Zealand (with exceptions) Food Processing IUOW v Unilever New Zealand Ltd.

In that case the Court set the rules of fairness as follows;

The minimum requirements can be said to be:

1. Notice to the worker of the specific allegation of misconduct to which the worker must answer and of the likely consequences if the allegation is established;

2. An opportunity, which must be a real as opposed to a nominal one, for the worker to attempt to refute the allegation or to explain or mitigate his or her conduct; and

3. An unbiased consideration of the worker's explanation in the sense that that consideration must be free from pre-determination and uninfluenced by irrelevant considerations.

So you can see the similarities between that case and the statutory wording in Section 103A.

Now it has always been the law that the role of the Court is not to investigate the employee’s guilt or otherwise as the employer did, and to substitute its view for the employer’s, but rather its role is to scrutinise the employer’s conduct to see if what it did and how it did it, was what was open to the employer acting fairly and reasonably.

But to do that the Judge must look at all the evidence that the employer relied upon, and any evidence that the employer should have relied upon which was available had the investigation been done as the Judge would have done it.

The latest illustration of the Judge scrutinising the employer’s investigation process by analysing the evidence collected by the employer (and the evidence it didn’t collect but should have), is the case of H v A Ltd. In that case the well resourced employer conducted a very comprehensive investigation into allegations of sexual harassment by one employee against another.

The employee H was successful in being reinstated following a step by step analysis by the Judge of the employer’s investigation process concluding that its investigation was seriously flawed because of the way evidence was collected and assessed, not collected when it should have been, and the analysis of the evidence by the employer.

The case is currently before the Court of Appeal on whether the Trial Judge applied Section 103A correctly.

But what it illustrates to us is the blurred line between a Judge assessing the evidence based on what was open to an employer acting in a fair and reasonable manner and what the Judge substituting himself for the employer’s investigator would have done had he been the employer at the time.  And what if the employer has got it right?

For a dismissal to be justified two tests must be satisfied; Substantive grounds must have been proven to exist and procedural fairness must have been applied leading the employer into a position where it was entitled to make the decision to dismiss.

The Authority substituting for the employer is not uncommon as we remind ourselves of the words of the ERA in the case of Puhia v Ovation NZ Ltd.

In concluding the investigation into the employer’s decision to dismiss the Authority Member said:

I find that Ovation had substantive justification for finding that Mr Puhia had committed serious misconduct .”

As to the process followed by the employer the Authority said: “ I determine that Ovation carried out a fair and reasonable process.”

But then having found in favour of the employer on both counts which should have been the end of the case the Member said:

I determine that a fair and reasonable employer would not have dismissed Mr Puhia in all the circumstances at the relevant time.  I determine that Mr Puhia has been unjustifiably dismissed.”

And when it came to declining the remedy of reinstatement:

I have determined Ovation to have had substantive grounds for finding that Mr Puhia's actions constituted serious misconduct such as to destroy the requisite trust and confidence Ovation needed to have in Mr Puhia as an employee.”

So the employer had grounds to dismiss, had conducted its investigation fairly, had a situation when it was accepted the essential element of trust had been destroyed, meaning reinstatement wasn’t an option, but finding the dismissal unjustified.

We wish to announce the appointment of Michael McAleer and Karen Hunt

Michael is a Barrister and Solicitor who has been involved in employment law for the last 15 years. He has a wide range of experience in employment advocacy including appearance before the Employment Relations Authority and the Employment Court.

Michael is also the Director of several companies that have been involved in property development and management, the geriatric residential care sector and the motel industry.

Michael’s unique blend of skills as both a lawyer and as an Employer will be an asset to Gary Tayler Limited.

 

Karen Hunt has been appointed as our Administrator/Personal Assistant.

Karen has extensive background in litigation having worked for the Crown Solicitor’s Office, Public Defence Service and a number of law firms in Napier.

PROUDLY PROVIDING HR/ER SERVICES TO EMPLOYERS

VISIT OUR WEBSITE TO VIEW OUR PROFILE:  www.garytayler.co.nz


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