Barbara Buckett and Associates Barristors and Solicitors

trendz - our client newsletter

june 2007

process flaws a lesson for employers

The recent case of X v Auckland District Health Board, which attracted attention because of its peculiar facts, involved a personal grievance claim of unjustifiable disadvantage and unjustified dismissal by X against the Auckland District Health Board (ADHB).

the facts

X was a senior physician employed by the ADHB with whom he held two senior positions. In both of his roles he received and sent a substantial number of emails. Except occasionally for reasons of professional confidentiality, X’s four support staff had virtually complete access to his emails.

X was dismissed for serious misconduct. One of the reasons for his dismissal was that he took photos of his genitalia using the camera on his work phone, downloaded them onto his work laptop, and attempted to email them to a female friend from his work email. Unfortunately for X, due to an erroneous key stroke in the intended recipient’s address, his email bounced back to the ADHB’s IT system. When this failure came to X’s notice, he attempted to delete the email. Despite X’s efforts, the email remained archived in the IT system – which serves as a warning to others, that even if you delete an email, it is never eliminated from the archived system, and is easily accessible. Within a short time three of X’s staff came across the images, however, they decided not to do anything about them.

X’s dismissal was also due to the fact that he had received emails that contained attachments of pornographic nature, and forwarded such emails to others. One of X’s staff (who had previously discovered the images of X’s genitalia) came across an email of this nature in X’s emails and reported this to the ADHB which resulted in investigation and eventually dismissal.

the process

After being advised of X’s electronic improprieties X was told that he was required to attend an urgent meeting the next morning. The message did not give any indication as to the nature of the meeting, so X contacted the Chief Medical Officer, Dr Sage, who told him that the subject of the meeting was sensitive and could not be discussed until the meeting. In response to X’s specific enquiry, Dr Sage indicated that although X was entitled to representation at the meeting, it would probably be unnecessary. Dr Sage advised X that the meeting would be attended by himself, another doctor, and a HR representative. X was not told that a senior employment lawyer for the ADHB would also be attending the meeting.

imbalance, unfairness

The Court suggested that Dr X would have been left with "a clear impression of imbalance, unfairness and even deception from the outset" when he turned up at the meeting to find the ADHB’s senior lawyer present. The Court suggested that if X had not been given misleading advice by his employer, he would have sought legal advice and consequently would not have said some of the things that he did at the meeting.

After the meeting X obtained a lawyer, who asked the ADHB to provide all information relevant to the inquiry into his conduct. The Court found that the ADHB were in breach of section 4 (1A)(c) of the Employment Relations Act 2000, as they refused to provide all relevant information to X, denied the existence of some relevant information, and incorrectly told X’s lawyer that all relevant information had been disclosed.

action of a fair and reasonable employer

The Court applied section 103A of the Employment Relations Act 2000, a relatively new provision, to determine whether X’s dismissal or the ADHB’s actions that caused disadvantages were justified. Section 103A required the Court to determine whether, on an objective basis, what the ADHB did (the substantive dismissal and the grounds for it) and how it did it (the process leading to those outcomes) was what "fair and reasonable employer" would have done in all the circumstances. The Court found that the objective test for justification refers in general to the employer’s actions at all stages of the dismissal process, including the decision that misconduct has occurred and the decision to dismiss.

flawed and unfair investigative and decision making process

The Court held that the ADHB unjustifiably dismissed X. It was decided that the ADHB’s "flawed and unfair investigative and decision making process led to an unfair and unreasonable outcome of dismissal". The Court held that X’s electronic misconduct could not be called "serious misconduct". It criticised the ADHB for not acting in accordance with its policies in investigating the matter. It was also decided that a fair and reasonable employer would have given greater consideration to behavioural change strategies that could have helped X to change his behaviours, which had been used by the ADHB in similar cases that involved an employee who had viewed internet pornography. The Court decided that "a fair and reasonable employer" would not have dismissed X for the reasons it did, in all the circumstances, as the ADHB’s inquiry and decision making process was "so unfair and in breach of statute, contract and ADHB’s own policies, that no fair and reasonable employer would have so conducted itself in all the relevant circumstances at that time".

employee contribution

The Court found that X contributed substantially to his dismissal through his "adolescent and frankly stupid actions of photographing his own genitalia", transferring the images to his laptop, and attempting to send them. Had he not engaged in these "logically inexplicable acts of self-gratification, it is unlikely he would have been dismissed". This influenced the Court’s decision to award reinstatement as the only remedy in this case.

what can employers learn from this case?

The case clarified what is expected of a fair and reasonable employer when dismissing an employee on the basis of misconduct. It emphasised that a dismissal must be both substantively and procedurally justified, that is, the employer’s decision to dismiss must be justified, as well as the dismissal procedure. It also emphasised that the Court will examine the fairness of each step in the dismissal process when deciding whether dismissal is justified.

It is important for all employers to remember the following:

an employer must assess any complaint made about an employee and decide whether the allegation may have substance, and whether to investigate the complaint;
if the employer decides to investigate the allegation, it should meet with the employee;
the employee must be advised of the specific allegation of misconduct a reasonable amount of time prior to the first investigative meeting, and should be given an indication as to the seriousness of the allegation;
the employee must be advised of their right to representation and be given the opportunity to be represented at any meeting in relation to the misconduct and possible disciplinary action;
the employer should provide the employee with a copy of the allegation and other relevant information, and outline the possible consequences the employee faces if the allegation is proved, eg dismissal;
the employee must be asked to respond to the allegations, and be given a reasonable time to do so;
the employer must give the employee’s explanation unbiased consideration. it follows that the employer must listen to the explanation with an open mind and without a pre-determined view of the matter;
the employee should be provided with all relevant information about the allegations against them, including evidence that may be used by the employer in making its decision, for example, notes of interviews that the employer has conducted with other staff about the matter;
an employer must follow their disciplinary policies and any procedures contained in the employment agreement, and treat like cases similarly;
the employer must assess whether the employee’s misconduct is serious enough to justify dismissal only after a completing a comprehensive and fair investigation.

The case also made the following findings that are relevant to all employers:

x was not in breach of an obligation of confidentiality by discussing the investigations with other ADHB employees.
the ADHB was entitled to seize X’s laptop, as it was necessary to enable the ADHB to complete their investigations. In deciding this, the Court looked at the way that the ADHB conducted the seizure and found that it acted appropriately and with discretion when doing so.

timely reminder

The decision in X v Auckland District Health Board has provided a timely and succinct summary of the law as it stands in relation to employment investigation, and sets a relatively high standard for employers in discharging obligations of good faith throughout the investigation process. If you are at all concerned about how to conduct an employment investigation or about your disciplinary processes in general, Barbara Buckett & Associates can assist you with a an objective "health check".

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Disclaimer: This article is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication. Please refer to our Legal Notices.