As an employment lawyer, I am often asked if an employee’s actions (or failure to act) constitute serious misconduct. This is an important question because employers are only usually able to dismiss an employee without prior warnings and without given the employee notice in cases of serious misconduct. (Even in cases of serious misconduct, an employer must still follow a fair procedure and the decision to dismiss in the circumstances must be fair and reasonable.)
‘Serious misconduct’ and ‘misconduct’ are not defined in the relevant legislation. The test of whether a decision to dismiss is justified or not is set out in Section 103A of the Employment Relations Act 2000 and is …
… whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal or action occurred.
Serious misconduct is usually conduct that can have the effect of destroying or undermining the relationship of trust and confidence between an employee and employer. In many cases, such as where an employee has been found to have been violent, it will clear that the conduct is serious misconduct. In other cases, such as where the employee is late to work, it will be clear that the conduct is not capable of destroying or undermining the relationship of trust and confidence . However, there are many cases where it is not clear whether the matter is capable of justifying a finding of serious misconduct.
The courts have recognised that what one employer may consider to be serious misconduct may not be considered misconduct at all by another employer. In BP Oil New Zealand Ltd v Northern Distribution Union, (1992) 1 NZELR 259, the employer had found that the employee’s actions of banking a cheque payable to the social club into his personal account was serious misconduct and dismissed the employee. The Employment Court had found that in the circumstances the employee’s conduct was not capable of being serious enough to justify dismissal. The Court of Appeal was critical of the Employment Court for substituting its decision for the employer’s. It went on to say “the employer was the best and in law the only judge … ” to determine whether serious misconduct had occurred.
Employment New Zealand lists on its website examples of conduct that may constitute serious misconduct and misconduct (/misconduct-and-serious-misconduct/). While this list is helpful, it does not list all possible conduct that may amount to serious misconduct. Many employment agreement and handbooks list the conduct that the specific employer considers to be serious misconduct. It can be useful to be able to reference such list in disciplinary proceedings. However, having the list does not remove the obligation on the employer to ensure that the above test is met and the specific circumstances will be relevant.
If an employer is not sure if an employee’s conduct amounts to serious misconduct, it would be sensible to seek legal advice as early in the investigation as possible.
Disclaimer: The above information is for information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on the information given.