Employee reinstated after employer terminates for misconduct

Published 18 July 2024 | 2 min read

Terminating an employee for serious misconduct is fraught with complexities and grey areas. For New Zealand managers, owners, and HR, the challenge lies in discerning whether the misconduct genuinely warrants dismissal or if alternative measures could be more appropriate. Rushing to terminate without a thorough and fair process can lead to significant repercussions for both the employee and the employer.

Don't act on impulsive decisions

The significance of applying caution when firing an employee cannot be overstated. Impulsive decisions made in the heat of the moment, without following due process and procedures, can lead to unjust dismissals. This not only damages the morale of the workforce but also exposes the company to legal challenges and potential financial liabilities. Ensuring that every step is meticulously documented and fair consideration is given to the employee’s perspective is essential to avoid costly and reputational damage.

Case study 

Consider the recent Employment Relations Authority (ERA) case involving Michelle Knuth, a Kmart employee who was dismissed after attempting to defuse a physical altercation between a mall security guard and a shopper. The ERA's interim decision highlights several key points that New Zealand employers should take to heart:

• Compelling factors: The ERA reinstated Knuth, noting her financial deprivation and exclusion from the workplace.
• Policy application: Kmart cited its "5 D's Policy" as grounds for dismissal, yet the ERA questioned the application of this policy in the given context.
• Human reaction: Knuth's actions, viewed in CCTV footage, appeared moderate and aimed at de-escalation, challenging the notion of serious misconduct.
• Alternatives to dismissal: The ERA was not convinced that Kmart adequately considered alternatives to dismissal, such as issuing a final warning.

Process is key

This case underscores the importance of careful deliberation before terminating an employee. By reinstating Knuth on an interim basis, the ERA provided her with immediate relief and highlighted the necessity for employers to evaluate all aspects of an incident comprehensively. For employers, this serves as a reminder that premature dismissals can backfire, leading to ERA interventions and potential reinstatements, which can be more disruptive than initially envisaged.

How can we help prevent this kind of situation?

To navigate these situations and ensure a positive outcome, we can adopt several best practices:

Adherence to policy

Ensure that all policies, such as the "5 D's Policy," are clearly communicated, understood, and contextually applied.

Thorough investigation

Conduct a detailed investigation of the incident, considering all available evidence, including CCTV footage and witness statements.

Employee consultation

Provide the employee with an opportunity to present their side of the story and consider their responses seriously.

Consider alternatives

Before deciding on dismissal, explore all possible alternatives, such as warnings, retraining, or temporary suspension.

Document process

Maintain meticulous records of the entire process, from the incident investigation to the final decision, ensuring transparency and accountability.

Incorporating these measures, employers can reduce the risk of unjust dismissals, and enhance overall workplace morale and trust. This approach not only aligns with legal requirements but also promotes a culture of mutual respect in the workplace, ultimately benefiting both the employer and the employee.