Last month, the Employment Court held that an employee's refusal to answer any questions or communicate with her employer during a disciplinary investigation contributed significantly to her dismissal (Radius Residential Care Limited v McLeay). The decision recognises the difficulties faced by employers in circumstances where an employee fails or refuses to engage in an investigation and disciplinary proceedings, makes no effort to resolve the employment problem and hides behind their solicitors.
The Court confirmed that the statutory duty of good faith requires parties to be active, responsive and communicative throughout the entirety of an employment relationship, including during disciplinary proceedings. While Ms McLeay's dismissal was held to be unjustified on substantive grounds, the Court reduced her compensation by 50 percent on account of her contribution to the situation.
Further, Ms McLeay received no award for lost earnings because she failed to produce evidence proving any loss of income or that she had taken adequate steps to mitigate such loss.
Best practice tips for employers
Where an employee refuses to engage in disciplinary proceedings, for example by failing to answer questions or attend at meetings, it would be prudent for employers to require the employee to attend the meeting and put them on notice of possible adverse consequences of failing to cooperate before progressing the matter. (If they fail to attend, the employer may argue that the employee failed to comply with a reasonable and lawful instruction).
Before any decision is made:
- remind the individual of their statutory obligation of good faith;
- inform them that if they do not participate in the process, the matter will have to be determined on the limited information available (if any) which could be to their detriment; and
- allow the individual a further opportunity to respond before determining the matter.
There may of course be circumstances where a delay in disciplinary proceedings is required. For example, an employee who is absent from work due to stress should generally be supported and allowed to recover before proceeding with a disciplinary process. A disciplinary matter may also have to be suspended pending the outcome of a police investigation/ prosecution where the individual exercises their right to silence so as not to incriminate themselves.
Ms McLeay summarily dismissed for serious misconduct
Ms McLeay worked as branch manager for Radius, a private health care provider for the elderly. The company raised various allegations with Ms McLeay, including a client complaint about the poor quality of her care-giving staff and deficient (or false) note-keeping and recruitment practices. Radius informed Ms McLeay that it considered these allegations very serious.
At the outset of a subsequent disciplinary meeting, the employee's advocate informed Radius that his client would not be talking at the meeting but would provide a written response. Having considered Ms McLeay's written explanation received the following day, Radius terminated her employment without notice for serious misconduct.
Dismissal substantively unjustified
The Court determined on the evidence that the allegations were not substantiated. Ms McLeay's actual conduct as disclosed by the employer's investigation was not capable of amounting to serious misconduct.
No compensation for lost earnings
However, the Court accepted that Ms McLeay had not proved any loss of wages. Further, she omitted (until challenged) to disclose the fact that she had secured equivalent work during a period covered by a lost earnings award made by the Employment Relations Authority at first instance.
The Court affirmed that the onus was on the employee to prove any loss of income arising from their dismissal, and that they had taken adequate steps to mitigate their loss. In practice, this would require a detailed account of efforts made to find other employment and any alternative employment obtained, including dates, places, names, correspondence and any amounts paid.
No such evidence was produced by Ms McLeay. Therefore, the Court declined to award any compensation for loss of income.
As compensation for humiliation, loss of dignity and injury to feelings arising out of Ms McLeay's dismissal, the Court awarded $7,500.
Employee's refusal to speak at meeting contributed to dismissal
The Court went on to find that Ms McLeay's conduct during the disciplinary investigation in refusing to answer questions or otherwise communicate orally with Radius contributed significantly to her dismissal.
As part of her statutory good faith obligations, she was required to be responsive and communicative. The Court commented that one exception could be where there was a concurrent criminal prosecution, involving issues of self incrimination. This was not such a case.
The Court found that Ms McLeay had also contributed to the situation leading to her dismissal by delaying before reporting to the company on the concerns raised. Accordingly, the compensation award was reduced by 50 percent to $3,750.
Employment law changes update
Parliament recently passed changes to the Employment Relations Act 2000 (ERA) and Holidays Act 2003 contained in two amendment Bills released earlier this year. The principal provisions of the Bills, reported in our August news update, remain largely unchanged following the Parliamentary legislative process except for a few minor tweaks to wording.
Most of the changes under the Employment Relations Amendment Act (No 2) and Holidays Amendment Act will take effect from 1 April 2011.