When it comes to dismissal, let the punishment fit the crime, says NZ professor

New Zealand’s employment legislation still needs work in the areas of remedies and punishments involving dismissal law, according to an expert in employment and industrial relations.

Professor Mark Harcourt from the University of Waikato Management School has contributed to an international study on distributive justice, comparing dismissal law in New Zealand and the United States. He says New Zealand legislation doesn’t provide enough options for employers between warnings and dismissal.

“Unless the contract provides for it, there’s no scope for unpaid suspensions,” says Professor Harcourt. “And often the options for punishment do not fit the so-called crime. I think there should be more intermediate punishments and each level should be more explicit about the types of offence. At the moment, our employment law does not provide for this.”

He says while the current law allows employers a degree of latitude in how they approach disciplinary issues, it also creates ambiguity. “I think the [Employment Relations] Act could be amended by specifying unpaid suspensions of different lengths as punishments for various categories of misconduct. For example, one-day unpaid suspensions for minor misconduct, such as unexplained lateness; up to a month for more serious conduct where a dismissal is not warranted, perhaps for negligence by an employee that resulted in substantial damage to property.”

Professor Harcourt says people are sometimes dismissed when a lesser punishment, other than a warning, would be more appropriate. “The current aversion to reinstatement might reflect the absence of any intermediate punishments. Full reinstatement can often send out the wrong message about potential tolerance of wayward behaviour, but unpaid suspensions could send the right message.”

Professor Harcourt also says when people have been unjustifiably dismissed, especially in a redundancy situation, they’re often insufficiently compensated. “For example, reimbursement for lost earnings often doesn’t go beyond three months and never beyond two years, even when employees have been out of work for much longer. You’re more likely to be compensated when an employer ‘messes up’ the dismissal process.

“Compared to the US, where there is very limited protection against dismissal, New Zealand’s system delivers better outcomes in terms of remedies and punishments, but that doesn’t mean we’ve got it totally right. We could still do better.”