Employer’s Decision to Dismiss Upheld by Employment Relations Authority

The case background

A Wanganui care worker with almost 30 years’ experience was sacked when a frail and elderly man she looked after claimed he felt “unsafe, neglected and scared” by her.

The man says the worker, Tuahine Hansen, would order him to make her cups of tea and do housework.

Mrs Hansen claims the complaints were untrue and the man and his housemate were coerced into making her look bad. She argued she was unjustifiably dismissed and sought compensation for lost wages, hurt and humiliation.

However, the Employment Relations Authority upheld Mrs Hansen’s dismissal from her role as a community support worker for Idea Services.

She had worked for the service for nine years and for IHC for 19 years before that.

For the 15 years until her sacking last year, Mrs Hansen provided support to two people in a Wanganui home, owned by the man who made the complaints and referred to by the authority as Mr A.

“The allegations made by Mr A, who was described by Ideas Services as frail and elderly, were that he felt unsafe, neglected and scared at times due to his treatment from Mrs Hansen,” the authority decision says.

“Specific allegations he had made were that Mrs Hansen sat on the couch and called him out of his room to make her cups of tea, that she made him do housework which he found very difficult, and that he was scared to ask her to hang the sheets out. If he did, she had a ‘go’ at him.”

When her employer, Dallas Barns, Area Manager, Idea Services, investigated, Mrs Hansen accused another support worker who did shifts at the house of coercing Mr A and the other man who lived there into making her look bad.

She denied other allegations against her.

The other worker, Heather McDonnell, said she had known for a couple of years something was not right at the house and Mr A was initially reluctant to talk about his problems regarding Mrs Hansen.

Mrs Hansen, whose employment file showed evidence of warnings and performance issues, was dismissed.

Mrs Hansen’s representative Alaska Dobbs questioned the adequacy of Idea Services’ probe and said there were dangers in relying on statements made by “vulnerable people who were easily influenced”.

Employment Relations Authority member, Trish MacKinnon, said she ”did not believe Ms Barns reached her decision lightly and I accept that she acted as a fair and reasonable employer is required to do”.

Mrs Hansen’s claim to have been unjustifiably dismissed failed and her application was dismissed.

 Measured and Methodical Process:

Authority Member MacKinnon said she was satisfied that a comprehensive and fair investigation into the complaints was undertaken and that the process was conducted in a “measured and methodical” fashion.

Once the complaint was raised Idea Services wrote to Mrs Hansen informing her of the allegations and asking her to a meeting to respond to the allegations. The outcome of the meeting was that a disciplinary investigation would be carried out. Mrs Hansen was informed that due to the seriousness of the allegations, dismissal was a possibility.

Following exploration of other alternatives, Mrs Hansen was placed on paid suspension for safety reasons.

The investigation was carried out with notes of those meetings provided to the Authority.

As a result of the investigation, further allegations were put to Mrs Hansen in another letter and a further meeting scheduled. After that meeting Ms Barns re-interviewed the complainants, reviewed Mrs Hansen’s personal file, reviewed all options open to her and wrote Mrs Hansen another letter.

This letter said a tentative decision had been reached, what it was and that no final decision would be made until Mrs Hansen had had the opportunity to respond to the tentative conclusion and the possibility of dismissal. That opportunity was given in the next meeting.

After hearing from Mrs Hansen and her supporters, the meeting adjourned.

When it reconvened Ms Barns informed Mrs Hansen she had listened to what had been said but her trust and confidence in Mrs Hansen had gone. She explained the reasons for this and informed Mrs Hansen that she would be dismissed with two weeks’ pay in lieu of notice.

Ms MacKinnon was satisfied that a comprehensive and fair investigation into the complaints was undertaken and that the process was conducted in a measured and methodical fashion. At all times Mrs Hansen had support staff available to assist her. Where necessary, timeframes for meetings were extended to allow for unforeseen events. Ms MacKinnon was also satisfied that the matters Mrs Hansen raised during the process were genuinely considered and that Ms Barns did not reach her decision to dismiss Mrs Hansen lightly. Ms MacKinnon accepted that Ms Barns acted as a fair and reasonable employer is required to do.

Conclusion:

The Authority will look closely at the process followed – it pays to ensure you follow a measured and methodical investigation and disciplinary process.

Minimum wage increase

The Government announced that the adult minimum wage will go up by 50 cents to $15.25 an hour from 1 April 2016.

The starting-out and training hourly minimum wages rates will also increase from $11.80 to $12.20 per hour from 1 April 2016.

Paid parental leave increases to 18 weeks

Paid parental leave will increase from 16 to 18 weeks in April. To be eligible for this increase, the baby must be due or born on or after 1 April 2016.

If you have pregnant employees due on or after 1 April, who intend to take parental leave, check they’re aware of the:

  • increase in the length of payments
  • form they need to complete and send to IRD

If they’ve already applied and their due date is on or after 1 April, IRD will make sure they receive 18 weeks of payments. If their baby is due before 1 April but arrives late, they need to let IRD know so they can pay the correct entitlement.

When a Resignation is a Resignation

This Employment Relations Authority case is based on a sad set of background facts, but demonstrates when an employer can deem a resignation as exactly that.

Corrine Tribe had only been working for her employer for four weeks when she was diagnosed with cancer, advised her tongue would need to be removed and other tissue transplanted to replace it – her treatment and recovery period was expected to be a year. Two days after receiving this news Ms Tribe emailed her employer with the following:

“Whilst I would dearly love to hope that the job would be there for me I appreciate that a business cannot be run like that and that you probably need to move on, cut your losses and employ someone new,” …”I am concerned that my ability to speak clearly, whilst not hindering the job itself, may make it difficult for a new employer to take a chance on me so if it was at all possible for me to keep in touch with the hope of anything that may come up at JSC I would be very grateful.” Ms Tribe also asked what was the best day for her to finish.

The employer asked her to confirm her resignation in writing, however Ms Tribe refused. The company determined the email was a resignation, and replaced Ms Tribe with a new employee. To the employer’s surprise, a month later, Ms Tribe arrived at their offices asking about returning. The company advised her there was no position and subsequently Ms Tribe raised a personal grievance, claiming the email was sent during a highly emotional period and should not have been accepted as a resignation. She described herself as feeling that she did not know ‘which way is up’ at the time.

However, the Authority noted Ms Tribe did not write the email immediately after she received the devastating news but after reflection over two days. The Authority found that her email was sufficiently clear and unequivocal and therefore the employer was entitled to conclude Ms Tribe had resigned. Ms Tribe was ordered to pay the employer $3000 in costs.

Resignations are not always clear, and we would advise caution if there is the possibility of doubt. Any resignation given in the heat of the moment should be provided with a cooling off period, and we recommend any communication is best followed up in writing and notes taken.

This employment information is supplied by Chapman ER – www.chapmaner.co.nz

Health & Safety Law update

Update kindly provided  by Chapman ER.

The Health and Safety at Work Act 2015 has been passed into law and will come into effect on 4 April 2016.

WorkSafe NZ want to see a 25% reduction in NZ’s workplace serious injuries, illnesses and fatalities by 2020. If Australia’s improvements are any indication on what we might expect, given our new legislation is based on Australia’s law, this goal may be achievable as a report released in July 2014 stated they had experienced their lowest number of work-related deaths in 11 years.

WorkSafe NZ aim to provide guidelines about the new legislation, but in the meantime they advise five key areas that organisations should focus on which includes:

  • Familiarising yourself with the key concepts of the legislation
  • Reviewing your health and safety practices
  •  Identifying health and safety risks in your business and take steps to prevent these from causing harm
  • Leading by example
  • Making health and safety part of your workplace culture

 

Closing or selling your business?

We see many employers who decide to close down or sell their business and haven’t realised their good faith obligations extend to consulting with their employees before they make the final decision.

In a recent case a Whangarei woman whose employment was terminated because the business was closing down has been awarded more than $6000 for humiliation and other entitlements because she was not consulted about closing the business before the decision to close was taken.

Ms Saroz started work for Flower Feva Limited (Flower Feva) in June 2009 as the Florist Manager – and only employee. Flower Feva was situated in the Palmers Garden Centre in Whangarei. Ms Saroz was made redundant when Flower Feva ceased trading on 19 May 2014.

In May 2013 Mr Damian Luiten, the Director of Flower Feva, handed Ms Saroz a memorandum recording the decline in Flower Feva’s financial position and setting out some options to save money. Mr Luiten says it must have been obvious to Ms Saroz that the business was not doing well in the 12 months before it closed. Mr Luiten even suggested that because Ms Saroz was the only person working in the Flower Feva shop she must have somehow contributed towards its decline.

On 19 May 2014 Mr Luiten called Ms Saroz to a meeting and announced that he was closing down the Flower Feva business. Ms Saroz was handed a letter of termination which advised she was being made redundant that day because the business was closing. Ms Saroz’s employment ceased immediately.

In order for a dismissal to be justified it must meet the justification test in the Employment Relations Act. A fair and reasonable employer is expected to comply with its statutory obligations which include the duty of good faith and the four procedural fairness tests of the Act.

Mr Luiten says that even if he did not follow a proper process for making Ms Saroz redundant she still had access to information in her capacity as manager of the business so was acutely aware of its deteriorating financial position.

Mr Luiten says Ms Saroz was provided with sales reports weekly and that the two of them spoke frequently (almost daily) about the business and his concerns about its lack of profitability. However Ms Saroz had limited information about the overall business because it was effectively being run by Mr Luiten.

Section 4(1)A of the Act requires an employer who is proposing to make a decision which may adversely impact on an employee’s ongoing employment to provide that employee with relevant information andthe opportunity to comment on it before a final decision is made.

Mr Luiten says good faith requirements were complied with because Ms Saroz could have found the information herself.

Employment Relations Authority member Rachel Larmer said in her report that she found that the situation described by Mr Luiten did not meet the requirements of s.4(1A) of the Act and that Flower Feva had breached its good faith obligations. Flower Feva was obliged to provide Ms Saroz with relevant information about her ongoing employment – it could not assume she already had access to it. Ms Saroz was simply told she had been made redundant. She was not given any information before being made redundant much less an opportunity to comment on relevant information before she was dismissed.

During the Authority’s investigation Ms Saroz conceded that her redundancy dismissal was substantively justified because Flower Feva shut down its business due to financial issues.

Ms Larmer considered this was a realistic concession to make because at the date Ms Saroz’s employment terminated Flower Feva owed $74,000 rent arrears, it owed its shareholders $70,000, it had $23 in its bank account so could not pay staff and had considerable unpaid debts to it suppliers.

Ms Larmer did not consider it likely that there were any counter suggestions that Ms Saroz could have made in the circumstances that would have enabled the business to have turned around its financial situation even if a fair and proper process had been adopted.

The outcome was the Authority’s finding that Flower Feva was unable to justify Ms Saroz’s dismissal because it failed to follow a fair or proper process before making her redundant. Although there was a good reason for making Ms Saroz redundant (namely the Flower Feva business closed) the circumstances were such that Flower Feva still could and should have properly consulted with her before that occurred.

Because Ms Saroz’s dismissal was substantively justified she was not entitled to lost remuneration and her remedies were therefore limited to distress compensation. Ms Saroz was awarded $6000 for humiliation, loss of dignity, and injury to feelings and other entitlements she claimed.

Key learnings for business owners:

1. Good faith requires the business owner to:

  • consult with its employees about the proposal to sell or close its business (since that decision may have an adverse effect on its employees’ continuing employment);
  • provide affected employees with access to relevant information about the proposed decision;
  • allow employees to comment on the information provided, before any decision is made.

2. Review your employment agreements to determine your obligations. Your employment agreementsshould contain an “employment protection provision” which sets out the procedure you will follow when negotiating with a purchaser about the sale of your business.

3. If you are selling the business you should negotiate and discuss possibilities of redeployment of your employees with the purchaser. If applicable, you should ensure that you insert appropriate provisions in the Sale and Purchase Agreement that deals with how employees may be transferred to the purchaser.

4. Make sure you give your employees the requisite notice and pay any redundancy or accrued (but untaken) annual leave entitlements due to them.

6 Things Employers Must Know About Annual Holidays

Employers must know what these provisions are or risk personal grievances or prosecutions

1.       Advice of rights
Employers must advise employees of their entitlements under the Act and that information is available from the union if they are a member, and the Ministry of Business, Innovation and Employment (MBIE).

To show this has been done these points should be included in all employment agreements along with a provision concerning the opportunity to take independent advice.

2.       4 weeks holiday
This is standard and cannot be bargained away. Leave is to be expressed as so many weeks (not days). Since 1 April 2011 employees are able to request that one week of their annual leave be paid out.

A greater amount of annual leave may be agreed by the employer and employee.

3.       Annual holidays must be taken
The employer must allow the employee to take all their annual holidays. They can require them to take the annual leave by giving 14 days’ notice.

4.       Annual holidays do not lapse
If employees fail to take holidays then clauses preventing carrying forward are of no effect. Holidays remain due (an entitlement to the employee) until they are taken. Allowing a delay will put up your costs if wages rise, and as holidays accumulate. Holidays are paid at the current rate.

5.       Two weeks uninterrupted leave
Employees are entitled to take two weeks of their leave in an uninterrupted block.

6.       Close downs
Only one per year is allowed. This is where the business is closed and annual leave must be taken.

Calculating leave can be complicated however the onus is on the employer to get it right.  Keeping accurate records is another legal requirement to ensure you are complying with.

If you have any questions regarding the above please contact Chapman ER on 03 545 0877 or email your question to katrina@chapmaner.co.nz.  10 minute enquiries on any new matter are free of charge.

Performance management vs disciplinary issues

You are aware of an issue with an employee but are unsure how to deal with it – is it a performance issue or a disciplinary issue? Does it even matter?

Yes, it matters. There are two distinct processes – one for managing poor performance and one for dealing with bad behaviour – and it is important to start off down the right path.

A gym manager who lost his job after returning from holiday to find several complaints had been made against him has been awarded $6,000 compensation for unjustified dismissal.

The Employment Relations Authority (ERA) found his employer, Snap Fitness, was unfair in firing Mathew Milne as the complaints made were about performance, rather than serious misconduct.

Eight allegations against Mr Milne were raised, among them that Mr Milne had been rude to customers, to have failed to take seriously a number of complaints made about the safety of the gym and he was accused by another trainer of taking four hour lunch breaks. On this count the ERA found no basis for the allegation, noting the trainer who made the complaint “clearly did not get on” with Mr Milne.

Korey Gibson, Mr Milne’s boss, said in a letter to Mr Milne, “as a manager there is a high level of trust and confidence that is required: my trust and confidence in you to remain in the role has been seriously eroded.” Mr Gibson summarily dismissed Mr Milne for serious misconduct.

The ERA found that, with one possible exception, the accusations were “matters of performance, not matters of serious misconduct.”

Mr Milne was a young and inexperienced manager in a sole charge position. The ERA said Snap Fitness were unfair to Mr Milne and warnings or further training would have been the appropriate course of action rather than dismissal.

It is an employer’s obligation to try to resolve problems in good faith. In cases of poor performance, good faith means giving an employee a real opportunity to improve their performance and assisting them to do so. In cases of misconduct this means conducting a fair and full investigation and giving the employee the opportunity to be heard.

Your actual treatment of any given situation will depend upon the specific circumstances, your Code of Conduct and policies and procedures, and past practice. If you are in any doubt, specific employment advice should be sought. Early clarification can save significant cost down the line.

Chapman Employment Relations provides employment law and HR advice exclusively to employers.

Any questions regarding this column can be e-mailed to christine@chapmaner.co.nz

Health and Safety Reform Bill

Worksafe NZ

As you may have seen in the Media coverage the Health and Safety Reform Bill has been reported back to Parliament which has made some improvements and clarifications. The Health and Safety Reform Bill will replace the old Health and Safety Act and is part of a number of changes aimed at reducing New Zealand’s injury and death toll in the workplace which is far too high. The bill is likely to become law later this year.

While the changes are primarily driven by the need to reform high-accident-rate industries such as forestry,  mining and farms the Bill will effect every business, including small office and retail businesses so you need to assess your business for potential accident-causing behaviour in your workplace. For example how many people stand on a chair to change a light bulb rather than using a set of steps?

Health and Safety is everyone’s responsibility – get it wrong and the penalties are significant.

Duty Holders

A Person Conducting a Business or Undertaking (PCBU) have health and safety duties toward their employees and to any other person affected by the work of the business or undertaking.  Duty holders’ obligations are limited to doing what’s in their ability to control and manage and is reasonably practicable. This makes job descriptions very important as a way to establish exactly what is in the duty holder’s ability to control and manage.

Directors, board members or partners, will now (as an officer of a PCBU) have a new duty to ensure that the PCBU complies with its duties. The bill expressly excludes those merely advising or making recommendations to an officer.

However, the responsibility sits with the PCBU, not all duty holders.

The duty holders are now personally liable and can faces fines up to several hundreds of thousands and even prison terms. This cannot be insured against.

In a shared workplace there may be more than one PCBU, the PCBUs are then required to consult, cooperate and coordinate with each other. The bill also clarifies how to do this.

A PCBU does not have a duty towards people who are at the workplace for an unlawful purpose.

Worker participation

The responsibilities of a PCBU have been clarified in the new Bill, under which a PCBU need to engage with the workers on health and safety matters.

Some flexibility has been added to ‘worker participation’ in health and safety matters in the workplace. Health and Safety Representatives and Committees are one way of meeting the worker participation requirement. Smaller workplaces with less than 20 workers in low risk sectors will not be required to have a Health and Safety Representative or Committee when requested by workers. All other businesses need to decide whether to elect a Representative and Committee when requested. If they are satisfied current worker participation practices meet the requirement of the new law they can decline the requirements.

Health and Safety Representatives will have the power to intervene if they see an unsafe situation with serious risk. There are limitations to and training requirements attached to their power.

Definition of a Workplace

The Bill defines a workplace as a place where ‘work is carried out, including anywhere a worker goes or is likely to be while at work’.

Some areas might not be workplaces all of the time. Farmers especially had some concern regarding allowing public to enter their land, but it has now been clarified that a workplace is somewhere where work is customarily carried out, including any place a worker goes or is likely to be while at work. So, farm buildings and immediate surrounds are under the duty of the farmer as a PCBU, other parts of the farm (like paddocks) are only workplaces while work is being carried out in that part. So, the farmer does not have a duty towards recreational users coming onto farm land unless work is carried out in that part of the farm at the time. The farm family home is also excluded from the farm workplace.

Volunteers

The bill will continue to distinguish between casual volunteers and volunteer workers, where casuals health and safety will be covered but the PCBU’s duty to any other person affected by the work of the business or undertaking but not to the extent of employees. Volunteer workers will have the same protection as any other worker.  If it’s purely a volunteer organisation with no employees it is not a PCBU so the Bill won’t apply. If the organisation has employees it’s a PCBU and the Bill applies.

The following would be classed as casual volunteering not volunteer workers: participation in fundraising activity, assistance with sports or recreations for an educational institute or club, assisting with activities for an educational institution outside the premises of the educational institution, providing care for another person in the volunteer’s home.

For further information, visit:

Worksafe New Zealand

Ministry of Business, Innovation & Employment

Legislation Updates

Health & Safety Reform Bill delay:

The proposed law changes to workplace health and safety have been delayed for at least two months because of concerns within the National Party caucus about its effect on small businesses and farmers.

The main areas being reconsidered are believed to be:

  • Exemptions for businesses with 20 staff or less from the requirement to have health and safety representative on a worker’s request.
  • Whether types of businesses can be deemed exempt from the law at any time by regulation, as the bill allows.
This week in the media, adding corporate manslaughter to the Bill is also being raised by Amy Adams, Justice Minister.

Parental Leave and Employment Protection – Rate of Parental Leave Payment

These adjustments to the Parental Leave and Employment Protection Act 1987 (the Act) come into force on 1 July 2015

The rate of parental leave payment payable to an employee is the lesser of —

  • $504.10 per week (as from 1 July 2014); and
  • the greater of — 100% of the employee’s ordinary weekly pay before the commencement of the parental leave; and 100% of the employee’s average weekly earnings.

The rate of parental leave payment payable to a self-employed person is the lesser of —

  • $504.10 per week (as from 1 July 2014); and
  • the greater of — 100% of the self-employed person’s average weekly earnings; and the minimum amount set under section 71OA of the Act.

The amount of $504.10 per week must be adjusted by 1 July 2015 by any percentage movement upwards in average ordinary time weekly earnings. These regulations adjust the amount to $516.85.

Vulnerable Children – Requirements for Safety Checks of Children’s Workers

These regulations, which come into force on 1 July 2015, are made under the Vulnerable Children Act 2014 and set out the requirements for safety checks of children’s workers.

The requirements for the first safety check of a children’s worker are:

  • a full identity check (which requires confirmation of identity either by using an electronic credential or by producing a primary and secondary identity document); and
  • a Police vet; and
  • the gathering of other information (less information is required to be gathered if the children’s worker is an existing employee or contractor); and
  • a risk assessment.

The requirements for a subsequent safety check of a children’s worker that is carried out within 3 years after a previous safety check are:

  • an identity check (which, if a person’s name differs from that on a primary or secondary document produced to confirm identity for a first safety check, requires a supporting name change document to be produced); and
  • a Police vet; and
  • the seeking of information from any relevant professional organisation or licensing or registration authority; and
  • a risk assessment.

Source: Westlaw NZ/Brookers online