A recent determination of the Employment Relations Authority serves as a reminder of the obligations of an employer when considering dismissal on the basis of serious misconduct.
Even where an employer considers it obvious that acts or omissions constituting serious misconduct occurred, the employer is still required at a minimum to:
- Follow their own disciplinary policy (if they have one).
- Set out the allegations in writing to the employee, with all relevant supporting evidence.
- Advise the employee of their right to obtain independent legal advice and to bring a support person and/or representative to any and all meetings.
- Outline the possible worst-case consequence for the employee’s employment status.
- Fairly investigate any disputable events.
- Hold a disciplinary meeting.
- Meaningfully consider the employee’s feedback before reaching a decision on serious misconduct and on disciplinary action.
Further, for the dismissal to be justified, the employee’s conduct must have deeply impaired or destroyed the basic confidence or trust essential to the employment relationship. It will always be a matter of fact and degree.
Mitchell and Anor v Lone Pine Farms Limited [2025] NZERA 547
In this matter before the Authority, Ms Mitchell and Mr Jenkins were employed by Lone Pine Farms Limited (LPF). They were both dismissed for serious misconduct, specifically abusive and expletive language towards the Director.
The Authority determined that there were several problems with the process and decision, including that:
- The allegations against Ms Mitchell and Mr Jenkins were lacking in detail.
- The investigation was inadequate.
- LPF failed to provide notice of the concerns or a reasonable opportunity for the employees to respond.
- The allegation in relation to Ms Mitchell was only made (belatedly) after LPF felt they had justification to dismiss Mr Jenkins.
The Authority found that although Mr Jenkins’ abusive language was unacceptable, LPF’s flawed process and reliance on previous instances of inappropriate conduct that they had not previously addressed with him, meant the dismissal was unjustified. The Authority noted that LPF had effectively condoned some of the inappropriate behaviour by not addressing it.
The Authority also determined that the outcome of the disciplinary process was predetermined, and that LPF was actively seeking to no longer employ Ms Mitchell and Mr Jenkins – rather than conducting a fair and reasonable investigation and disciplinary process.
Remedies
LPF was ordered to pay Ms Mitchell and Mr Jenkins:
- $20,000 each in compensation for humiliation, loss of dignity and injury to feelings.
- $12,109.38 each as compensation for lost wages.
- $432.69 each for unpaid entitlements under the Holidays Act 2003.
- Penalties ($1,000 each to the employees and $2,000 to the Authority via the Crown account) for breaches of its duty of good faith.
This determination of the Authority highlights the importance of a proper process and thorough investigation when the employer believes the employee has engaged in serious misconduct.
Even if the behaviour appears at first blush to clearly reach the threshold, employers need to pause and consider all relevant circumstances and fairly investigate and obtain feedback. Lane Neave’s specialist Employment Law team deals with these processes every day and is on-hand to assist.
