Are you making these mistakes when dismissing staff?

Amanda produced the print outs from her time and attendance system and showed them to Kim. The printouts proved the Kim had consistently been turning up late for work as the weeks and months went on. Amanda then showed Kim the quarterly results which showed a decrease in profits consistent with Kim's increasing lack of punctuality. Amanda knew something about employment law and realised that she must give Kim an opportunity to respond. However, in her own mind Amanda was decided. Kim muttered something about road-works but Amanda wasn't really interested or listening. Amanda then explained that this latest complaint was the final straw for the her and that Kim must go. She reached from inside her personnel folder and took out a termination letter which she had typed earlier that day. Kim was devastated and angry.

Kim wasn't a problem in the early days

For the first 6 months Kim's time keeping was faultless. Things started to go wrong when she moved houses. First, she started being 5 minutes late once or twice a week, but within three months her lateness had risen to as much as 20 minutes on some mornings. Amanda had turned a blind eye until the results for the quarter indicated that sales had started dropping off. The crunch came when she received an angry complaint from an otherwise loyal customer. It was time for Kim to go.

Kim didn't want to go

The day after receiving the complaint Amanda called Kim into a disciplinary meeting. She told Kim about the complaint. Since Amanda owned a beauty salon a number of customers were accustomed to dropping in before work for a quick sun-bed session. However, since the store would often not be open on time they would simply walk by. When Amanda produced the print outs, explained the effect on the business and suggested that things weren't working she expected Kim to admit her failings and offer to resign. When Kim didn't Amanda got more frustrated and stopped listening. As she stopped listening so Kim got angry.

Her anger turned into a personal grievance

Two weeks later Amanda received a letter from Kim's lawyer requesting that she attend mediation to resolve Kim's personal grievance. Confident that she had a genuine reason to dismiss Kim, Amanda decided that she didn't need a lawyer. When the day arrived Amanda was feeling confident. She marched into the mediation room armed with her time and attendance printouts and quarterly results.

But the mediation didn't go as planned

As the meeting progressed Kim's lawyer explained that Amanda had failed to follow fair process when she dismissed Kim. As the mediator nodded, Kim shifted uneasily in her chair. She was waiting for Kim to claim that she had not been late or that the decrease in profits had nothing to do with her punctuality - Kim had documentary evidence that would knock both these arguments dead. But there was no mention of either. The mediator turned to Amanda and asked her to comment. All of a sudden Amanda felt a little at sea. She immediately reached for her printouts and began to explain the effect on her business of Kim's lack of punctuality. Despite these figures it was if the mediator was not interested and she kept directing Amanda back to "fair process".

Amanda failed to follow fair process

Feeling somewhat deflated and exasperated Amanda pronounced: "But I gave her an opportunity to respond to the allegations".

"When did you write this letter?", the mediator asked as she handed Amanda the termination letter. Amanda rocked uncomfortably in her chair as she realised what she had done wrong. In a desperate attempt to change the subject she pointed again to the time and attendance print outs.

"Did you raise the lack of punctuality with Kim before you dismissed her?", asked the mediator. Amanda could feel her blood rush to her cheeks as she scanned the windows for some fresh air. All she could see was Kim and her lawyer staring piercingly at her.


There was little respite for Amanda

Sensitive to Amanda's predicament the mediator suggested that both parties go to different rooms so she could talk to each individually. When Kim and her lawyer left the room the mediator explained to Amanda that whilst she was a little sympathetic to her plight the law requires that when dismissing staff an employer must conduct a fair process even when there is a genuine reason for dismissal. She explained that in her view Amanda didn't follow a fair process in this case and that she would have difficulties defending a claim in the Employment Relations Authority.

Compensation was inevitable

The mediator left Amanda to talk to Kim and her lawyer. Whilst the mediator was out of the room Amanda thought about all the other things she could have been doing with her time. She knew she would end up having to pay some money. How much she didn't know. She felt embarrassed. If only she had been more patient and got some advice before rushing in. The mediator seemed to be gone an age. By the time she returned Amanda would have paid anything to leave. She announced a figure which Kim was willing to accept. Amanda had read about employment claims in the newspaper and knew they could be large. This figure was less than some she had heard of but still seemed quite a lot.

"Could she get that in the Employment Relations Authority?" enquired Amanda.

"It's possible", the mediator replied, "but not certain. The Authority would consider her lack of punctuality as a mitigating factor".

The alternatives weren't attractive

Amanda just wanted the whole experience to be over. She said she would pay what Kim was asking for, less $500 by way of a token effort at negotiation. The mediator asked whether she wanted time to take legal advice. By this time Amanda started to see the cost of legal bills in addition to whatever she would have to pay Kim. She sent the mediator to the next room and the offer was accepted. It was only three months later when relaying the story to a friend that Amanda realised she had paid Kim about $2000 over the odds. Amanda thought this would never happen to her Amanda had never had any problems with previous employees. She thought she knew enough about New Zealand employment law not to get in trouble. However, knowing just a little bit was her downfall and she resolved never to put herself in that position again. She made it her mission to find out as much about fair process and employment law so she wouldn't make mistakes like that again.

Amanda's mistakes

Her biggest mistake was that she didn't follow a fair process. That involved more than just giving Kim an opportunity to respond to the allegations. It also meant, among other things, not predetermining the outcome of the disciplinary meeting and giving her warnings before the dismissal occurred.

She also went into the mediation unprepared and not familiar with the type of awards given for that type of case. Perhaps more fundamentally she should have pulled Kim up earlier with regards to her punctuality before it got out of hand - that may have prevented the whole episode occurring in the first place.

Many thousands of dollars later in lost sales (both past and future) plus a claim for compensation and a large advertising bill to regain her custom, Amanda had learnt her lesson. Hindsight was a great thing she thought.

Print this pageEmail to a friendUse this article in your newsletter/magazine