You're Fired: Exiting Employees Who Hold You Back: It's Not an Easy Topic to Discuss, Both for Relationship and Legal Reasons, but Sometimes an Employer Does Need to Relieve Themself of a Non-Performing Worker. Lawyers Clayton Kimpton and Charlotte Hatlauf-Coles Discuss the Process

By Kimpton, Clayton; Hatlauf-Coles, Charlotte | New Zealand Management, May 2008 | Go to article overview

You're Fired: Exiting Employees Who Hold You Back: It's Not an Easy Topic to Discuss, Both for Relationship and Legal Reasons, but Sometimes an Employer Does Need to Relieve Themself of a Non-Performing Worker. Lawyers Clayton Kimpton and Charlotte Hatlauf-Coles Discuss the Process


Kimpton, Clayton, Hatlauf-Coles, Charlotte, New Zealand Management


Being an employer in 2008 in uncertain economic times, coupled with low unemployment and global wage pressures, represents a challenge rarely experienced. On one hand, employers cannot afford to lose staff; on the other, they may not be able to retain staff in the face of increasing global wage demands. With these competing pressures, employers cannot afford to keep employees who, although underperforming or misbehaving, keep demanding higher wages. So, it is worthwhile understanding how to manage the exit of those people who are affecting your ability to retain the best people.

Before considering dismissal of an employee, an employer must first establish why the employee must leave. Is it because they are not performing to required standards? Do they display a negative attitude at work and not fit in with team mates? Has the employee engaged in unacceptable behaviour? Maybe they have been on sick leave for a significant period of time? Or, has the position become surplus to the employer's requirements? The reason for termination will determine the appropriate course of action that should be taken.

Essentially, there are four lawful reasons for terminating an employee's employment:

1 The employee is failing to meet the requirements of the position.

2 The employee has behaved in a manner that is inconsistent with his or her employment obligations (eg, assault, theft, breach of confidence, failure to follow instructions).

3 The employee's role has become surplus to the needs of the employer.

4 The employee has been absent (and may continue to remain absent) from work for a period of time due to illness.

THE LEGAL TEST FOR JUSTIFIED DISMISSAL Brief, but very important, mention needs to be made of the new legal test for justification contained in section 103A of the Employment Relations Act 2000. This 'new' test, introduced in 2004 as an amendment to the Employment Relations Act, represents a far higher standard of objective justification for any actions undertaken.

The new legal test is whether a fair and reasonable employer would have dismissed the employee in all the circumstances. In other words, the law does not allow a range of actions from employers, rather the Employment Relations Authority and the Employment Court now step into the shoes of the employer to decide whether a fair and reasonable employer would have dismissed in the circumstances.

POOR PERFORMANCE In the event an employee fails to meet the requirements of his or her position, the employer should consider commencing a performance management process. It is important to note poor performance can encompass an employee's general attitude toward his or her position as well as to colleagues. For example, it may be appropriate to conduct a performance management process for an employee who fails to get along with his or her team mates and who generally displays a negative and uncooperative attitude.

[ILLUSTRATION OMITTED]

Usually, the first step is to enter into a counselling phase with the affected employee. During the period the employer should hold informal meetings with the employee on a regular basis to discuss the employee's performance. Together, the employer and the employee should aim to identify actions that will assist the employee in improving his or her performance. It is only after an employee has been in the informal counselling phase for a reasonable period of time and shown insufficient improvement that an employer should start a formal performance management process.

However, should the degree of poor performance be so severe that it impacts on the employer's business or even appears to be deliberate, the employer could go straight to commencing a formal disciplinary process. Diagram 1 above illustrates the usual process to be followed hut it should only be used as a guide.

It is a good idea to have a senior employer representative present to act as a witness and take notes. …

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You're Fired: Exiting Employees Who Hold You Back: It's Not an Easy Topic to Discuss, Both for Relationship and Legal Reasons, but Sometimes an Employer Does Need to Relieve Themself of a Non-Performing Worker. Lawyers Clayton Kimpton and Charlotte Hatlauf-Coles Discuss the Process
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