Failing to follow a fair process when dismissing an employee could result in their re-instatement, as highlighted by a recent Employment Relations Authority case.
The Authority has ordered the reinstatement of a former Fonterra employee who was dismissed after Fonterra believed he was “associated with gangs.”[1]
The case is a useful reminder of the importance of conducting a fair and impartial investigation where serious misconduct is alleged.
The details
Employee, Mr O, was dismissed from Fonterra’s Te Awamutu Distribution Centre in September 2022 for committing serious misconduct during two interactions with a team leader and an operations manager.
Mr O raised a personal grievance on the grounds that Fonterra’s investigation into the matter was not fairly conducted and could not reasonably have concluded he committed serious misconduct. He said Fonterra had taken the complaints at face value, closing its mind to his explanation and did not consider any alternatives to dismissal.
During the investigation, new information was disclosed by senior Fonterra employees, concerning Mr O’s previous disciplinary history, a belief that he had “gang connections” and was known to be “associated with gangs”.
The Authority heard that Mr O’s alleged gang connections were “frequently talked about among the workforce” and “added to the fear the staff felt when [Mr O] was being intimidating and aggressive.” These allegations, however, were not discussed nor raised during the disciplinary hearing with Mr O when considering his aggressive behaviour.
Authority’s determination
The Authority found that Fonterra failed to meet the statutory test of justification in its decision to dismiss Mr O. This was because he was not informed of Fonterra’s concerns about the alleged gang connection and so could not respond to Fonterra’s views about the effect this had on how he acted at work and the influence he was believed to exert over his workmates. This failure was said to have “tainted” Fonterra’s investigation from the outset.
Finding that Mr O was unjustifiably dismissed, the Authority ordered Fonterra to reinstate Mr O and pay him $44,479.24 as lost wages, $1,334.38 for KiwiSaver entitlements, and $3,558.34 as holiday pay. Fonterra was also ordered to pay $17,000 as compensation for Mr O’s humiliation, loss of dignity, and injury to his feelings.
What we can learn from this
The case highlights how an employee should be provided with all relevant information and given adequate opportunity to respond. This should include witness statements or transcripts of witness interviews where applicable.
Employers should also remember that suspension should not always be the first port of call when commencing an employment investigation. Suspension may occur during an investigation where there are health and safety concerns, or where having the employee at work may compromise the investigation or cause further issues.
Disciplinary processes can be complex and our experts can help simplify them. Contact Lane Neave’s Employment Law team for specialist legal advice.
Author: Stella Smith
[1] Ormsby v Fonterra Co-operative Group Limited [2024] NZERA 397.
