Show me the honey – fair process is critical in dealing with personal grievances

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Employee of Manuka honey producer does dodgy deals but still gets $18,000 for botched termination

When a business owner receives evidence that an employee is going behind their back, undermining their business, or receiving business funds into their personal account, they should take action.  However, one Northland employer failed to follow a simple and fair process resulting in a compensation payment of $18,000 to a staff member which could have been even higher.  The employee’s own wrongdoing and an ACC injury saved a significant amount of cost for the employer.

The case

The employer in his case is a Northland producer of Manuka honey.  Prime spots for hives are highly competitive and relationships with landowners are critical.

In 2019 the employer brought one of their staff into a meeting about his employment.  The employer had pre-prepared a dismissal letter and read out a list of “topics” including timesheet discrepancies, drafting a beehive contract for a competing business, making a complaint to the police about a client which the police could not verify, and various other performance concerns.  The employee did not get these allegations in writing, have the opportunity to take advice or have a support person, and did not comment on the allegations at the meeting.  He was dismissed on the spot.

The Employment Relations Authority found that there were significant procedural issues, but also that the employer did not have enough evidence to fairly prove each of the issues.  As far as personal grievances go, it was a “slam dunk”.

As a result, the Authority said it would have awarded a sum of $25,000 for the dismissal.  In part, that number was so high because the employer had allowed details of the alleged misconduct to spread around the community.  There would have also been a sum of up to 3 months’ wages but the employee in question was on ACC.  Together with the legal fees of defending a claim like this, the total exposure was potentially over $50,000.

Interestingly, after the dismissal the employer did some further digging and found good evidence that the employee had been providing confidential information to rival beekeeping businesses and pocketing payments from landowners into his own account.  That behaviour is bad enough that, if properly investigated and a fair process followed, the employee could have been fairly dismissed and all of this avoided.  As it stood, the employee’s $25,000 award was reduced to $18,000 for that behaviour.

Key takeaways

The key takeaways from this case are:

  • If you are worried about an employee harming the business while you carry out a disciplinary process, suspension is a genuine option. The process should never be rushed.
  • Even if you think you have an employee “dead to rights”, a swift investigation and a fair disciplinary process is essential before you can demote, warn or terminate an employee.
  • It is essential that an employer does not tell anyone about the disciplinary process as that will breach the employee’s privacy rights. That extends to any other staff who have been involved in the process.
  • Even if an employee has seriously misbehaved, that is unlikely to reduce the payment to zero. Some payment will usually be made to reflect that both parties did something wrong.
  • Compensation awards for hurt, humiliation and injury to Feelings continue to increase. 5-10 years ago the average award was $7,000 and in this case the starting point was $25,000.

How can we help?

WRMK Lawyers has Northland’s largest team of employment law specialists. We advise our clients on all stages of disciplinary matters.  A quick call before any disciplinary process can save a significant amount of money in the long run.  If you need help or guidance, please give one of us a call or contact your usual WRMK lawyer for advice.

You can view our Employment Law team here.

WRMK Lawyers takes all reasonable care to make sure that the information in this article is up-to-date and accurate at today’s date. It is necessarily general information and not intended as legal advice to be relied upon.

Our thanks to Simon Davies-Colley for writing this article.

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