The Importance of Getting it Right
Recent case law regarding performance management emphasizes the importance of managing risk.
Case Summary: Ford v Henry Brown Ltd
In the case of Ford v Henry Brown and Co Ltd, the employee, Mr. Ford, raised a personal grievance, arguing that the dismissal for poor performance was unjustified because of a lack of clear communication and support from the employer.
The Employment Relations Authority (ERA) found that Henry Brown and Co Ltd did not clearly communicate performance expectations to Mr. Ford. There were no specific examples or detailed feedback provided to help him understand what was required. Additionally, the employer failed to offer adequate support or training to help Mr. Ford improve his performance. There was no evidence of a performance management plan or any structured approach to address these issues. The process was poorly documented, with the employer failed to keep detailed records of discussions, feedback, or any steps taken to support Mr. Ford’s improvement.
The ERA stressed the importance of acting in good faith, noting that the employer and employee are required to work together to resolve performance issues.
Because of these shortcomings, the ERA ruled that the dismissal was unjustified and awarded Mr. Ford compensation for lost wages and emotional distress.
The ERA awarded the following:
· the equivalent of nine weeks’ remuneration by way of lost wages
· $9,000 compensation under s 123(1)(c)(i) Employment Relations Act 2000
Unjustified dismissals can lead to costly legal battles and compensation payouts.
The Price of Bias in Disciplinary Investigations
Case Summary: Ormsby v Fonterra
In this case, an employee at Fonterra’s Te Awamutu Distribution Centre was dismissed in September 2022 for alleged serious misconduct. The employee subsequently raised a personal grievance arguing that Fonterra’s investigation was biased and did not allow for a fair conclusion. Mr. Ormsby claimed that Fonterra accepted complaints at face value and did not explore alternatives to dismissal.
During the investigation, senior Fonterra employees revealed new information about the employee’s disciplinary history and alleged gang affiliations. These allegations were not communicated to the employee, preventing him from responding to these serious claims.
The ERA found that Fonterra failed to meet the statutory test of justification in its decision to dismiss the employee. The lack of transparency and the failure to inform the employee of the gang-related concerns tainted the investigation.
Consequently, the ERA ordered Fonterra to reinstate the employee and compensate him
$44,479.24 for lost wages
$1,334,38 for KiwiSaver entitlements
$3,558.34 for holiday pay
$17,000 as compensation for humiliation, loss of dignity and injury to feelings
Total: $66,371.96*
* Representation costs are in addition
Policies
Having clear and consistent policies and procedures can mitigate risk by supporting the employment agreements you already have in place with your employees and sets expectations for how employees should conduct themselves in your workplace.
If you haven’t reviewed your policies recently, we can help. Contact us to discuss the policies your business needs.
Getting it right is important for the success of your business. Whether you are managing employee performance, navigating disciplinary processes or ensuring your policies and agreements are clear and up to date, every detail matters.
If you have any questions or require support in any of the areas outlined above contact us.