Everyone
Good reason
Before taking any action against an employee, employers must have a genuine and valid reason.
What 'good reason' means
When taking action against an employee, employers should make sure that they meet the requirements of ‘good reason’ (sometimes called ‘substantive justification’). These are:
- having a valid reason to begin the action or process, and
- making any decision for a good and fair reason.
An employer’s reasons for the action must be what a ‘fair and reasonable employer’ could have done at the time of the dismissal or action. To be fair in making decisions, employers should make sure:
- that they have all the facts that they can reasonably gather
- that they have heard the employee’s response to those facts
- that they have considered how they have acted in similar circumstances, and
- they have taken account of any other relevant considerations (such as length of service, and any mitigating circumstances).
Every situation must be considered on its merits and in the context of the workplace. Generally, it might not be reasonable to dismiss an employee instantly for what might be viewed as a minor action; however, this may depend on the situation.
An example might be the theft of social club funds. An employer that is a bank, and where the employee has access to money, may consider this differently than a large building contractor employing a carpenter. The situation may be different again if this did not occur in the workplace but went through the courts and was widely published.
As part of the good reason requirements:
- employers must follow a fair process, and
- all parties must also meet the good faith obligations.
Examples of 'good reason'
Some of the common reasons employers can take action against an employee are:
- misconduct
- poor performance
- workplace relationship breakdown
- ongoing illness or injury.
An employer can also make an employee redundant.
Misconduct
Misconduct is when an employee does something wrong through what they do, what they do not do, or how they behave.
What is considered misconduct, and what action an employer could take, depends on:
- the circumstances
- what’s in the employment agreement
- what’s in the workplace policy, and
- what’s in the code of conduct.
Poor performance
An employer can take action against an employee if the employee continues to perform poorly in their job.
The employer must have tried to resolve it through a performance management process first.
Workplace relationship breakdown
An employer can take action against an employee when:
- a workplace relationship has broken down to the point it cannot be fixed, and
- the parties cannot work together anymore.
The employer must have tried to resolve the problem first, for example with warnings and mediation.
Ongoing illness or injury
An employer can take action against an employee who is no longer able to do their job because of illness or injury. They cannot take any action until after the employee has had the illness or injury for a reasonable period of time.
The employer should try to support the employee to keep working first.
Redundancy
An employer can make an employee redundant if their role has been disestablished in a workplace change process. ‘Disestablished’ means the role is no longer required.
A workplace change process happens when an employer needs to reduce or change their workforce and it affects employees’ jobs.
There are things the employer must do before they dismiss an employee for this reason.