The law requires employers to act fairly and reasonably in the employment relationship, including disciplinary action. This is not a new requirement. However, what amounts to “fair and reasonable” will vary depending upon the particular circumstances. The test of whether a dismissal or other action is justifiable is determined by considering whether the employer did what a fair and reasonable employer would have done in the circumstances at the time.

If an employer has concerns about an employee’s conduct, those concerns will need to be properly investigated. If the employer reasonably believes that its concerns are well founded, an employer may take disciplinary action ranging from:

Warnings for less serious misconduct, eg poor performance or negligent acts that do not amount to serious misconduct.

It is preferable to set out a warnings procedure in the employment agreement – how many, whether oral or written etc – so everyone knows where they stand as far as this is realistically possible in advance.

Where the procedure is not spelt out, how many warnings are necessary to precede dismissal and what type of conduct is worthy of a warning will depend on the circumstances. The inevitable uncertainty that this entails can weaken an employer’s position when it comes to take disciplinary action.

Dismissal on notice where an employee continues to misconduct – eg theft, a serious breach of company/house rules – or for some other serious breakdown in the employment relationship, eg gross incompatibility with other staff or the employer.

In all cases, an employer will be considered to have acted fairly and reasonably where:

Any relevant provisions in the employment agreement have been followed.

The employee is given at least a general outline of the employer’s concern and invited to attend a meeting to discuss the problem.

Unless the employment agreement provides for a support person or union/legal representative to be present, it is not absolutely necessary to invite the employee to bring one to a disciplinary meeting. However, it is often considered preferable to give the employee that option unless there are good reasons why it is not possible, eg the situation is urgent.

At the meeting, the employer must give sufficient details of its concerns for the employee to properly give his or her side of the story.

The employer must show it has given proper weight to whatever the employee has to say and has investigated all relevant aspects of the problem.

This may mean the employer will have to call another meeting to allow investigations to take place in the interim. Any new information must be put to the employee and their response considered before the final decision is reached.

Once the employer is reasonably satisfied that after properly considering all the relevant information it is reasonably entitled to believe the misconduct occurred, the employer may take steps to warn or dismiss.

Warnings should, preferably, be recorded in writing. They should clearly set out what the employer sees to be the problem, how the employee is expected to improve and give a reasonable time limit for improvement.

When choosing what action should be taken, the employer must have regard to how it has treated past employees in the same or materially similar circumstances. The employer must ensure it treats present employees in the same way, or be prepared to justify why it is fair and reasonable to treat a particular employee differently.

Particularly where less serious misconduct is concerned, it is preferable for an employer to approach the disciplinary process from the point of view that an employee who is failing for some reason can with appropriate assistance, be turned into a very good employee. Employers too often shy away from early intervention where conduct is not serious, particularly in relation to poor performance concerns. Few of us enjoy confrontation, but addressing concerns early can prevent a crisis or a situation where the relationship has deteriorated to a point where it has become very difficult to retrieve trust and goodwill. That is where employers are most likely to act rashly and thus open themselves up to legal action which may well prove very costly.

If in doubt, employers should seek legal advice before taking any disciplinary action.