Time to take a fresh look at Disciplinary Processes?07 November 2023
In a recent decision, Pact Group v Carey Robinson  NZEmpC 173, the Employment Court decided the employee had been unjustifiably dismissed. The decision sheds new light on accepted standards of what constitutes a fair process in disciplinary situations. The key points made were:
- A Zoom disciplinary meeting was deemed not fair and reasonable, given the employer’s resources and fact the employee had requested an in-person meeting;
- The employer failed to consider the cultural impact of the process it was following, which resulted in loss of mana for the employee; and there was no evidence the employer did anything, or responded to concerns raised by employee about these issues.
- The employer failed to advise the employee of an investigation before reaching a preliminary view.
- Medical evidence is not required to support a claim of compensation for hurt and humiliation. The employee’s sister’s evidence was persuasive of the impact of the dismissal on the employee’s wellbeing.
- The employee’s failure to mitigate lost wages was not necessarily unreasonable in the circumstances. The employee was so impacted by the dismissal it was not reasonable to expect her to look for other work in the short term.
Ms Robinson was a community support worker with Pact Group. She had held that role for approximately 15 years prior to her dismissal.
In early 2021 Pact Group embarked on a restructuring exercise and sought feedback from affected staff about a change of hours. In the event existing staff entitlements were essentially grand-parented. On 17 August 2021 further disruption was caused by the COVID-19 pandemic when the national lockdown started.
Mrs Robinson was based in Wellington and on 7 September 2021, she was able to begin the process of reconnecting with her clients in person. It was also around this time that Ms Robinson and others, were required to complete additional training in respect of the administration of medication. Ms Robinson had difficulty doing this as it required her to be in the office at or before 8.00 am, and she provided daily care for her elderly mother before she started her working day.
On 21 September 2021 Ms Robinson’s manager asked her to book her additional training. Ms Robinson emailed her manager saying she did not have time. This caused senior management to get involved.
Mr Cardy, the company’s General Manager, was concerned about Ms Robinson’s workload and decided to investigate. Without advising her, he caused enquiries to be made into Ms Robinson’s work diary, the clients assigned to her as shown on the company’s online management system, the electronic time recording system used by all staff, the records from Ms Robinson’s work phone and the GPS records on her work vehicle.
On 28 September 2021, Mr Cardy wrote to Ms Robinson explaining that he had undertaken a review of her current workload and that as a result he had some concerns in relation to how she was spending her work hours. His concerns were set out over some six pages of closely typed text, complete with illustrated tables. In summary, his concerns centred on whether Ms Robinson was claiming payment for time that she had not in fact worked which amounted to her having falsified records and making fraudulent claims for payment. He advised Ms Robinson that dismissal was a possible outcome. Ms Robinson was required to attend a meeting on Zoom on 4 October.
Unsurprisingly, Ms Robinson was shocked to receive Mr Cardy’s correspondence. She asked to meet with Mr Cardy in person to discuss matters. The request for an in-person meeting was refused. Ms Robinson, together with her representative, joined the virtual meeting but she said that she did not feel that the meeting, and the way it was conducted, enabled her to talk to Mr Cardy in a direct and personal way; she formed the impression that he was not listening to her; she struggled to hear all that Mr Cardy was saying; and that she and her representative were obliged to sit together in front of a small iPad, juggling papers. The meeting took around three hours.
At the meeting Ms Robinson reiterated that she had wanted to meet in person, and said that the way in which Mr Cardy had dealt with matters had left her feeling “stripped of her mana, culturally disadvantaged, and that this mishandling of [her] mana had resulted in feelings of shame.” She also touched on her personal circumstances, including that she was the carer of her mother and that she was suffering herself from a health condition.
Ms Robinson advised Mr Cardy that she had always been paid to work an 80- hour fortnight and had some ability to be flexible with when she worked. Flexibility was, she said, necessary given the nature of her role; serving clients within the community involved travel and, often, a variable workload depending on the level of complexity of her clients’ needs at any given time.
On 12 October 2021, Mr Cardy wrote again to Ms Robinson. The letter referred to the matters raised by and on Ms Robinson’s behalf at the meeting but advised that he had reached the preliminary view that the company could not have trust and confidence in her ability to complete the stipulated hours of work and that she had made fraudulent claims for payment.
Ms Robinson responded by way of letter dated 21 October 2021. She reiterated her position that seeking payment for time over her contracted hours was impossible because her line manager always edited her timesheets to a standard 80 hours of work per fortnight as per her rostered hours. She raised concerns that her line manager had not been part of the disciplinary meeting and that the meeting (conducted via Zoom) was unsatisfactory and it had been hard for her to hear.
The next day Mr Cardy wrote to Ms Robinson stating that he had formed the view that she had failed to provide a reasonable explanation for her actions and that she was dismissed for serious misconduct, with immediate effect.
The Court was not satisfied on the evidence before it that a fair and reasonable employer could have reached the conclusions the company did in all of the circumstances. While the material relied on may have provided an adequate basis for raising performance concerns, it did not justify advancing immediately down the disciplinary route, and nor did it justify the end point the company got to. The company did not adopt a fair process in dealing with its concerns and its failings in that regard were not minor. The dismissal was both substantively and procedurally unjustified.
An employer’s actions must be assessed having regard to what a notional fair and reasonable employer could have done “in all the circumstances at the time the dismissal or action occurred”.
Ms Robinson’s email which triggered Mr Cardy’s involvement came at a time of significant transition within the workplace. At the time, Ms Robinson was in the process of renewing contact with her clients. What the company may not have known at the time it commenced its formal process, was that Ms Robinson had caregiver responsibilities to her mother (who suffered from dementia and required daily care), but she alerted it to during the Zoom meeting. She also referred to her being impacted by her own health issues.
It is notable that Mr Cardy did not request further information as to the personal challenges Ms Robinson was evidently confronting, either during or following the meeting. It was his obligation as a fair and reasonable employer to take steps to ensure he had the relevant information to inform the inquiries that he had chosen to initiate in a disciplinary context before reaching any concluded view.
Also relevant to the circumstances was the fact that Ms Robinson is Māori and raised concerns that her mana was being impacted by the processes adopted by Mr Cardy.
There is nothing to suggest that these concerns were seriously considered, explored, or factored into the way in which the company responded, indeed it is apparent that the process was hurried and conducted in a distanced, impersonal way that undermined, rather than maintained, Ms Robinson’s mana.
With regard to the Zoom meeting, Mr Cardy resides in Central Otago and he did not consider it necessary to travel to Wellington to meet with Ms Robinson in person to discuss a matter as serious as the possible termination of her employment.
While there may be circumstances in which it is fair and reasonable to conduct a disciplinary meeting via Zoom, and to decline a request from an affected employee for an in-person meeting, the circumstances of this case fall well short. The reality is that this was a very serious issue, both from the perspective of both parties and Ms Robinson had raised concerns from the outset about the appropriateness of the Zoom meeting, had indicated that she had trouble hearing and that the way in which the meeting had been conducted undermined her ability to communicate with Mr Cardy.
Ms Robinson had also made it clear to Mr Cardy that she considered the lack of face-to-face communication was inadequate and engaged cultural concerns from her perspective. Mr Cardy readily accepted that Pact Group incorporated tikanga into the workplace via company policies. The Court had no difficulty concluding that, at the very least, a fair and reasonable employer would have considered what an appropriate process might require in light of its obligations to staff under its own policy and Ms Robinson’s expressed cultural needs, and engaged with her on these points. And a fair and reasonable employer in the circumstances would have arranged an in-person meeting.
There are other difficulties with the approach taken by the company, as the Authority member pointed out. The company proceeded on the basis of assumptions as to what Ms Robinson was spending her time at home doing. If the company genuinely believed that Ms Robinson was underperforming (despite her years of apparently good service with no issues) and that she should have been doing more work than she was, then that was a performance issue that ought to have been dealt with under that umbrella. That would have involved clarifying expectations and then giving Ms Robinson time to meet those expectations.
More particularly, there was a failure to adequately consider the flexible work arrangements that had previously been in place and whether a change in approach had been adequately communicated. If the company was concerned that there had been non-compliance with a relatively recent change in policy which it considered had been communicated to staff, a proportionate response would have been to clarify the new approach with Ms Robinson, ensure that she understood it and the company’s expectations, and the need to comply with it.
At the initial meeting Ms Robinson raised a concern that the company had launched into an investigation without first discussing matters informally and in person, particularly in light of her long service to the company (almost 15 years). That objection to the process adopted by Pact Group was well made.
The company relied on GPS tracking records in its disciplinary process and to support the decision that serious misconduct had occurred and that dismissal was justified. The company policy has a section relating to company vehicles and, in particular, the GPS navigation unit. It provides that the purpose of the GPS system is to “help with health and safety of staff and passengers” and “improve the efficiency of vehicle running”. The policy also provides that the GPS data can be used to determine a vehicle’s speed, and that that data can form the basis of a disciplinary process for misconduct if there has been a breach of legislation, such as speed limits. While the company policy is explicit that GPS data can be used as the basis for a disciplinary process in circumstances involving a legislative breach, it does not provide that GPS data can be used more generally for disciplinary purposes.
In cases involving accusations of workplace fraud, the employer must operate on a reasonable basis. In respect of the Court’s inquiry, justification is assessed against a standard of proof (balance of probabilities), flexibly applied depending on the circumstances.
The Court was not satisfied based on the evidence before it, that a fair and reasonable employer could have reached the conclusions the company did in all of the circumstances. While the material relied on may have provided an adequate basis for raising performance concerns, it did not justify advancing immediately down the disciplinary route, and nor did it justify the end point the company got to. The company did not adopt a fair process in dealing with its concerns and its failings in that regard were not minor. The dismissal was both substantively and procedurally unjustified.
Compensation for humiliation, loss of dignity and injury to feelings
The Court invariably applies a banding approach to assessing compensatory awards under s 123(1)(c)(i) of the Act. The purpose of such an approach is to make clearer the basis on which an award has been arrived at and to promote a degree of consistency in compensatory awards in both the Court and the Authority.
The Court was satisfied that Ms Robinson suffered non-pecuniary loss because of the company’s failures. She was blindsided by Mr Cardy’s letter which, from her perspective, had come out of the blue and which was based on work pressure concerns expressed in an email she had sent to her line manager. Those concerns should have prompted a discussion rather than an in-depth inquiry (initially without her input) into how she was spending her time.
Ms Robinson felt on the back-foot during the course of a disciplinary meeting conducted via Zoom, during which she had trouble hearing, and believed Mr Cardy had difficulty understanding what she was saying; her integrity was called into question against a backdrop of 15 years of trouble-free service to the company; and she felt that she had not been listened to or her explanations given the sort of consideration that would be expected of a fair and reasonable employer acting in good faith.
The impact of the company’s unjustified actions included damage to her mana, reputation, serious financial pressure, feelings of whakamā, a loss of self-confidence, and personal stress. It also undermined her relationships (which were personally and professionally important to her) with her vulnerable clients. Contact with them abruptly ceased and she did not get an opportunity to say goodbye to them. In addition, Ms Robinson felt unable to seek further work in a field she was committed to because of the intense sense of embarrassment and shame she shouldered following her dismissal.
There must be a link between the grievance and the loss; if the loss is not sufficiently connected to the grievance it cannot be compensated for under s 123. That is because remedies are directed at addressing the losses sustained as a result of the breach giving rise to the grievance.
The Court did not accept that it is appropriate to read in a requirement for independent evidence, including medical evidence, when that does not appear in s 123(1)(c)(i) itself. Medical evidence may be called, and may be relevant, but it should not be regarded as a necessary touchstone where an employee seeks compensation for humiliation, loss of dignity and injury to feelings beyond band 1.
Emotional harm of the sort which s 123(1)(c)(i) compensation is directed at engages personal emotions, which the affected employee is likely to give best direct evidence of, and which can then be evaluated against other sources of evidence. In this case both Ms Robinson and her sister gave compelling evidence of the impact of the company’s breaches on Ms Robinson, which the Court accepted. Her sister gave evidence of Ms Robinson being substantially impacted by feelings of whakamā, which she described as deep shame, hurt and embarrassment.
She also gave evidence about the significant change she observed in Ms Robinson during the disciplinary process and after her dismissal. That evidence, in terms of assessing harm, is highly relevant to the Court’s inquiry.
The Court was satisfied that the circumstances of this case fell comfortably within the middle range of band 2. Applying the revised bands (band 1 $0- $12,000; band 2 $12,000-$50,000; band 3 over $50,000) an award of $31,000 was considered appropriate.
The company’s investigation was insufficient to reach the conclusion it came to as to the level of culpability and/or blameworthiness of Ms Robinson’s alleged misconduct. As a result, the Court was not satisfied that it would be appropriate to make a reduction for contribution.
Lost wages were sought under s 128(2). The key question is not whether a legal duty exists but what the prerequisites for reimbursement are. The asserted duty on employees to mitigate their losses, which has become a well engrained mantra, tends to be used as an unhelpful shorthand which focuses the inquiry on steps taken, or not taken, by an employee rather than what – if anything – might reasonably have been expected in the particular circumstances.
In the present case Ms Robinson undertook part-time work as a “stop-gap” measure before embarking on study, which was entirely reasonable given the adverse impact on her caused by the company’s breaches.
Ms Robinson was knocked sideways by her unjustified dismissal. She was sufficiently impacted by it that she felt that a return to the sort of work she had been doing over the preceding 15 years, and which she had previously felt proud of, was no longer a viable option. It was clear from her evidence, and the evidence of her sister, that this conclusion in large part stemmed from a sense of whakamā and the significant blow she sustained to her self-confidence. In any event, it is clear that she would likely have struggled to find similar work having regard to the stated reasons for her dismissal.
Ms Robinson looked for alternative work when she was reasonably in a position to do so.
In the event Ms Robinson retrained and now runs a small business. The Court considered that an award equivalent to three months’ lost wages is appropriate to compensate her for remuneration lost as a result of her grievance.
Ms Robinson was unjustifiably dismissed by the company. She is entitled to be compensated for the losses sustained as a result of her grievance. The following orders were made:
- Payment of $31,000 by way of compensation under s 123(1)(c)(i);
- Payment of a sum equivalent to three months’ lost wages under s 128(2);
- Payment of a sum equivalent to three weeks’ long service leave by way of compensation under s 123(1)(c)(ii);
- An award for costs, the quantum of which is reserved.
You can access the full decision HERE