Sunday, July 11th, 2010

Warning, warning, warning

The cases discussed in this article show firstly that an inappropriate warning may give rise to a claim for unjustified disadvantage and secondly that warnings must not be used simply as a pretext for a planned dismissal.

An employer should have a fully worded warning procedure in the employment agreement or in the staff manual.  The procedure should recognize that the primary objective is to lift the performance of the employee in order to meet the standards reasonably prescribed by the employer.

In each of the two cases, warnings were given without any consultation with the employee and without the employee having the opportunity to comment.  The employers had predetermined the facts.

Rangiwananga v Cado Holdings Ltd CA 37/10

Ms Rangiwananga was employed by Cado Holdings Ltd and claimed that she was unjustifiably dismissed following an argument with her employer.  She also claimed that she was unjustifiably disadvantaged when she received a warning concerning her performance.

She received the warning without any prior discussion or opportunity to discuss or comment on the reasons for the warning.  The warning letter referred to customer and staff complaints and alleged that Ms Rangiwananga was rude, disrespectful and belligerent.

Ms Rangiwananga was required to attend a meeting on the 4  September to talk about the issues arising out of the warning letter.  The warning letter had been delivered the previous day .

Ms Rangiwananga asked for the meeting to be postponed so that she could get advice but her employer refused this.  The meeting proceeded and the employer reiterated the allegations.

The Employment Relations Authority was critical of the employer.  Specifically:

  1.  The employer had saved everything up rather than raise issues of concern with Ms Rangiwananga when and as they arose.
  2.  Ms Rangiwananga should have been given the opportunity to get advice or representation.
  3.  Ms Rangiwananga should have been given the opportunity to comment on the individual matters of concern and her responses taken into account.  Instead, the employer had already determined culpability.

Ms Rangiwananga was unjustifiably disadvantaged because security of her employment had been undermined and her work environment was less satisfactory as a result.

About a month later, the employer raised another complaint.  The manner in which the employer dealt with this left Ms Rangiwananga visibly upset and she left home for the day.

Her employer was abusive and told her that by leaving she was abandoning her employment.

Her doctor certified her to be unfit for work.  The medical certificate was faxed through to the employer.  Despite the medical certificate, the employer delivered a notice of termination recording that Ms Rangiwananga had abandoned her employment and was instantly dismissed.

The Employment Relations Authority had little difficulty finding that the employer had no justification for the dismissal and was fully aware of the reasons for Ms Rangiwananga’s absence.

The employer was ordered to pay:

1                         $3000 for the manner in which the initial warning letter was dealt with;

2                         $12,500 as compensation for the manner in which she was dismissed and

3                         loss of earnings of $7,020.

Shan Mohammed Ali v AAA Parts & Auto Services Ltd AA 103/07

In the second case, Shan Mohammed Ali took action against his employer, AAA Parts & Auto Services Ltd following his dismissal for poor performance.  The employer maintained that he had properly delivered three warnings for poor performance — alleging poor quality of work, time wasting and unsatisfactory dealings with customers.

The first warning was verbal and was given in April 2006.  Written warnings were given in July and October 2006.

The employer said that during the April discussion, he talked about a lot of general issues with the Ali.  He said that he complained about “too much mucking around” and that he told the employee “to behave himself and work properly”.

The second letter was delivered three months later and complained about the time it took for the employee to get things done.  The letter said that the employee had one last chance after which he would be dismissed.  There was no meeting between the time of the verbal warning and the delivery of the first letter.

A final letter was delivered in October.  It recorded that the applicant’s performance and attitude had not changed.

Although it seems there may have been grounds for concern about the employee’s performance, the  Employment Relations Authority found that the employer went about it the wrong way. The Authority firstly considered the proper way for dealing with poor performance issues.  The long-standing approach is as follows:

  1.  A fair and reasonable employer will put the perceived performance problems directly to the employee;
  2. The parties are to discuss the problems and with any assistance needed by the employee in order to achieve targets or outcomes.
  3.  The employee must be given an opportunity to improve.  Progress is to be reviewed.  The employee should be given an opportunity to explain why the particular outcomes are not achieved.  Only if there is inadequate explanation, may the employee be dismissed.
  4. The employer must give specific information about the shortcomings and achievable targets to overcome them .
  5. During discussions, the employee must have the opportunity to be accompanied by a support person or representative.

The authority also explained the law on warnings.

  1.  A warning must give the employee an opportunity to improve.
  2.  A warning cannot be used to create a pretext for dismissal.
  3.  The purpose of the warning is to avoid a dismissal if possible by describing the shortcomings, give a clear information on what improvement is necessary and how improvement is to be measured.

AAA Parts & Auto Services Ltd made no effort to discuss shortcomings nor did it make any effort to bring about improvement.  The warnings were simply dressings down.

Compensation of $4000 was awarded for the distress.  Compensation of $14,731.20 was awarded for loss of income.