What a difference one word makes: From 1 April 2011, the Employment Relations Act was amended to change the test of whether a particular action by an employer was justified – for example a dismissal. Before 1 April, the key question was what “would” a fair and reasonable employer have done in the circumstances – but since 1 April the question is what “could” they have done.
Good question – and one that has now been addressed by the Employment Relations Authority (ERA) in the case of Sigglekow v Waikato DHB.
Mr Sigglekow was a psychiatric nurse employed by Waikato DHB. Under his care were patients with mental health issues and criminal histories. Over time, there had been a number of incidents where Mr Sigglekow had been discovered sleeping on the job. He was dismissed on the basis that sleeping on the job amounted to serious misconduct.
Sounds reasonable on the face of it, right?
Mr Sigglekow took a personal grievance for unjustified dismissal, which gave the ERA a perfect opportunity to put the 1 April amendments to the test. And the ERA ruled in favour of Mr Sigglekow finding that his dismissal was unjustified.
The ERA found that the dismissal was unjustified because the DHB had been inconsistent in dealing with the incidents of sleeping on the job. They had not dealt with earlier incidents severely, then they had dismissed Mr Sigglekow for a later incident. Also the DHB had failed to conduct a full and fair inquiry into the incidents – and had failed to seek Mr Sigglekow’s response to the information they had. In short, the ERA found that a reasonable employer “could” not have dismissed Mr Sigglekow because insufficient enquiries were made into the allegations – and because no action had been taken when the employee was first discovered sleeping on the job.
Under the 1 April amendments, the ERA must now consider what “a fair and reasonable employer in the circumstances of the actual employer could have decided and how those decisions could have been made”.
Interestingly, the commentary around this decision seems to suggest that the resources of the employer will be relevant; that the bar is higher for an employer with for example a dedicated HR person – and perhaps higher still where there is an HR team or department. Well-resourced employers will need to take extra care to ensure that allegations are investigated thoroughly and that they get the procedural elements right.
But rather than dwelling on the semantics of “could” versus “would” when making decisions that might later be challenged, we suggest that business owners use good faith as their guiding principal when dealing with their crew.
When investigating allegations of serious misconduct, an employer acting in good faith should always do these things – regardless of whether the circumstances seem as cut and dried as a person sleeping on the job while responsible for the criminally insane:
Properly investigate any allegations;
Put the allegations to your employee without withholding any relevant information you might have;
Genuinely consider the employee’s responses to the allegations;
When considering an appropriate response, you should take into account how other similar instances have bean dealt with in the past – whether in relation to the particular employee or to other employees. And finally before acting, ask yourself “could a reasonable employer take your intended action given all of the circumstances?”
It will be interesting to see where the ERA and the Employment Court might go from here in further interpreting the 1 April amendments.