Can you rescind a termination for disciplinary investigation?

Published 28 May 2024 | 23min read

As an manager, owner, or HR, you've most likely faced the challenging situation where an employee's unexpected leave disrupts your business operations.

Managing such situations while maintaining fairness and legal compliance is crucial.

But what happens when the issue escalates, and termination notices are involved?

Unpaid leave issue

Imagine this: one of your key employees, recently hired, starts taking unplanned, unpaid leave. They need to care for their children due to a babysitter's unavailability and support a pregnant partner. They inform you via text, acknowledging that their absences are unpaid. As a result, you begin to worry about their reliability and the impact on your business operations.

When matters get worse

Despite initial understanding and informal discussions, the absences continue. Frustration builds, and your relationship with the employee starts to deteriorate. The employee agrees the arrangement isn’t working, requesting respect and time to find another job.

However, you decide to terminate their employment under the 90-day trial period clause, but the employee disputes the termination, claiming the trial period has already ended.

Upon realising the trial period clause is flawed, you attempt to withdraw the termination notice and initiate a disciplinary investigation instead.

ERA's involvement

This is where things take an intriguing turn. The Employment Relations Authority (ERA) has weighed in on this issue, providing valuable insights from a recent case involving a dairy herd manager and his former employer.

ERA's decision

  • Termination can't be withdrawn without consent: Once an employee is dismissed, that decision cannot be unilaterally revoked without the employee's agreement. The ERA found that the dismissal in this case was clear and could not be undone without the worker's consent.
  • Fair process required: Employers must follow a fair process, including raising concerns and giving the employee a reasonable opportunity to respond before taking disciplinary action. The ERA emphasized that a fair process was not followed in the dairy herd manager’s case.
  • Disciplinary investigation post-dismissal is invalid: Initiating a disciplinary investigation after a dismissal is procedurally irregular and invalid. The ERA noted that the employer's attempt to conduct a disciplinary investigation after already deciding to dismiss the worker was improper.
  • Performance concerns must be raised: Employers must address performance issues transparently and timely, adhering to the standards of a fair and reasonable employer. In this case, performance concerns were not adequately raised with the worker before the termination.

How to ensure you don't end up in a similar situation 

To navigate these complexities, here’s a clear path forward:

1. Review employment agreements

Ensure your trial period clauses and other contract terms are legally sound. In the ERA case, the flawed trial period clause led to significant legal complications. Regularly review and update employment agreements to ensure compliance.

2. Document issues promptly

Address performance or reliability issues as they arise, documenting each step and communication. In the case study, performance concerns were not documented adequately, leading to procedural unfairness.

3. Follow fair procedures

Before considering termination, engage in a fair process by discussing concerns with the employee and allowing them to respond. The dairy herd manager was not given a fair opportunity to address the employer’s concerns before dismissal.

4. Seek legal advice:

When in doubt, consult with legal experts such as EQ Consultants to ensure compliance with employment laws and regulations. The employer in the ERA case could have benefited from legal guidance to navigate the complexities of employment termination and disciplinary actions.

5. Open communication

Keep open dialogue with employees to address issues early and constructively. The breakdown in communication between the worker and employer in the case study exacerbated the situation, leading to an unjustified dismissal.

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