Employment termination must be done by the book

OPINION: Let's face it, the recent recession has made it increasingly difficult to find a job, let alone hang on to it – but employers beware; while terminating employment is a commercial reality, failure to follow the appropriate procedure might cost you more than that final pay cheque, writes Mary-Jane Thomas in this week's Work to Rule.

This comes on the heels of another Employment Relations Authority decision reminding employers that they must carry out a "full and fair" investigation into an employee's actions before terminating them.

The facts of the case are simple. H was the manager of the kitchen, restaurant and bar at a hospitality establishment and T was her employer.

H had various responsibilities, notably the overall responsibility to make sure any money received in the kitchen, restaurant and bar area were properly accounted for at events they hosted.

As with any good hospitality function, the purse felt a little light at the end of the night, but this time it wasn't the wallets of happy patrons but the till balance at closing.

However, the exact amount outstanding was never ascertained.

While T told H he did not believe she took the money, subsequent to the incident H was given a written letter of dismissal for serious misconduct.

It is here that the cautionary tale begins. H attended only one formal meeting with her employer at which the decision to dismiss her, a decision actually reached the previous day, was delivered.

H was never formally advised of the allegations against her or advised to bring a representative to the meeting and wasn't given a real opportunity to offer an explanation and have that taken into account.

In essence, H had no opportunity to properly influence the conclusion that there had been serious misconduct on her part.

The authority then further highlighted the lengths a "fair and reasonable" employer would have gone when investigating an incident of this nature, citing such an employer would not simply hold a manager accountable for a discrepancy in revenue received versus products sold without a full and fair investigation.

The authority held T should have compared stock and sales figures as best he could to determine whether there was a shortfall and how short it was exactly.

He also should have provided the information that formed the basis of the conclusion to H and conducted a thorough investigation – involving talking to the kitchen staff to determine what their role was regarding sales. If, for instance, H had instructed her employees to record sales and they failed to do so adequately, then that would have mitigated the seriousness of her own conduct.

Ultimately, without a full and fair investigation, there was insufficient evidence to conclude that H's conduct amounted to serious misconduct.

But for anyone still paying off their Christmas credit card debt, here's the real kicker, as a result, H was awarded compensation exceeding $5000 and reimbursement for 13 weeks' lostwages.

Employers, if you're thinking about terminating an employee for poor performance, make sure you do it by the book.

» Mary-Jane Thomas is a partner at Preston Russell Law. E-mail questions to mary-jane.thomas@prlaw.co.nz.

- © Fairfax NZ News

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