Suspension, Serious Misconduct and Summary Dismissal - The $140,000 lesson for Employers

This article sets out a recent decision in the Employment Court that related to an investigation of serious misconduct, the suspension of an employee during that investigation and the summary dismissal that resulted. The case of Henry v South Waikato Achievement Trust acts as a reminder to employers of the importance of approaching decisions with an objective lens.

Background

On 30 March 2018 Ms Henry reported a complaint of an alleged abuse incident to the Chief Executive Officer, Mr Ensor. Mr Ensor reacted to the complaint and notified that the investigation was closed on 9 April 2018.

An investigation commenced to investigate Ms Henry’s delayed conduct in bringing the matter to Mr Ensor’s attention and the potential improper motive behind Ms Henry’s report.

Ms Henry received a letter that proposed her suspension due to “the nature of these concerns” and was given an opportunity to respond to the proposal. She was then suspended on full pay and received notice of a disciplinary meeting alleging serious misconduct. In brief, the allegations were that Ms Henry did not follow up the alleged abused or report the allegation in a timely manner; Ms Henry had a mischievous motive for reporting the incident; and Ms Henry conducted an inappropriate investigation of the alleged abuse.

An investigation into the allegations against Ms Henry was undertaken by a member of the Trust, whose preliminary view was that the allegations were substantiated. That view was accepted by the Trust and Ms Henry was subsequently dismissed for serious misconduct.

The Court's Findings

Unjustified Disadvantage:

Ms Henry was told that the reason for her suspension was due to the nature of the allegations and for the safety of clients and staff. However, the Court deemed that it was not substantiated that the allegations created any risk to the safety of clients or staff, therefore there was no proper basis to come to the decision to suspend.

During proceedings it became clear there was another reason for the suspension, which related to Ms Henry’s bad temper. As this was not disclosed to Ms Henry, she was not given the opportunity to respond to this concern.

Unjustified Dismissal – Serious Misconduct

It was found by the Court that the investigation of the allegations was flawed as irrelevant information was considered, relevant information was not considered, and insufficient interviews were conducted. Ultimately the Court found that the Trust “drew a long bow” in deciding that Ms Henry had an improper motive for reporting the incident and that her conduct in making the report was serious misconduct.

Serious misconduct is conduct that deeply impairs or is destructive of the basic confidence or trust essential to the employment relationship.

The Court found that when looking at the investigation objectively the finding that Ms Henry’s conduct was serious misconduct was not a decision a fair and reasonable employer could make in the circumstances. The decision to dismiss was disproportionate to the conduct of concern, and the Trust failed to consider the appropriateness of further training as an alternative to dismissal.

Remedies awarded to Ms Henry

• Lost remuneration of $52, 636
• Compensation for hurt and humiliation $35,000
• Special Damages of $8,060 for Ms Henry’s legal cost during the investigation period.

In a subsequent determination of costs, the Trust was also ordered to pay:

• $32,104 for the cost of challenge in the Employment Court;
• $1,916 as a reimbursement for disbursements; and
• $14,000 for costs in the Employment Relations Authority

Key Takeaways

Before making a decision that could negatively impact an employee’s employment it is important to provide the employee with the reasoning for that decision so that the employee can respond.

Every decision that impacts an employee should be considered from an objective lens of what a reasonable employer could do. The proportionality of any disciplinary action should be considered in the context of the conduct and must be justifiable in that context.

An objective investigation of performance or conduct allegations is essential to ensure that all relevant information is considered. Where the findings of an investigation will be relied on to justify an action of the employer, particularly a dismissal, the quality of the investigation is important. An external investigator may be an appropriate option to consider if the skill and experience required in this area is unavailable within the business.

Navigating employment investigations is stressful for all involved and employers do not need to figure it out alone. Good quality advice from specialised and experienced professionals saves time, resourcing, stress and the potential of steep Court ordered payments.

The specialist employment lawyers at DTI Lawyers have helped many businesses across all sectors and work types navigate performance and conduct issues that arise. We are experts and would be pleased to help you navigate the options and risks of your individual employment circumstances.

Both Director Andrea Twaddle and Senior Associate Anna Jackman hold the internationally recognised Association of Workplace Investigators Certificate and can assist with undertaking workplace investigations or guiding you through the process.