What the amendments mean for employee conduct and personal grievance remedies
Impact of Employee Conduct on Remedies
One of the most significant changes introduced in the recent amendments to the Employment Relations Act 2000 relates to employee conduct and its impact on remedies following an unjustified dismissal.
Previously, the Employment Relations Authority (ERA) had discretion to reduce remedies for unjustified dismissal where an employee’s conduct contributed to the situation, however, reductions were often relatively modest.
What’s changed?
Under the new law:
If the ERA determines that an employee’s conduct amounts to serious misconduct, no remedies can be awarded to the employee.
If the ERA determines that the employee’s conduct (falling short of misconduct) has contributed to the circumstances giving rise to the grievance:
Reinstatement and compensation will be unavailable; and
Other remedies (such as lost wages) may be reduced by up to 100%.
This represents a significant shift in the personal grievance regime, placing a much greater weight on employee behaviour when assessing outcomes.
Practical implications for employees
For employees, these changes mean greater risk in disciplinary situations, particularly when facing allegations of serious misconduct and less leverage in raising personal grievances where their own actions have contributed to the outcome in some way.
Employees may still establish that a dismissal was unjustified but receive little or no remedy if their own conduct is also found wanting.
Practical implications for employers
For employers, these changes heighten the importance of clearly identifying and evidencing serious misconduct, as this will now have a decisive impact on whether remedies are available at all.
The new law doesn’t define ‘serious misconduct’ or ‘contributing behaviour’ so we are likely to see an increase in litigation on these points.
It will be important for employers to have clear policies defining misconduct and serious misconduct, to best position themselves for such an argument if a dismissal is challenged.
If you would like assistance with introducing or updating a disciplinary policy in light of these changes, our team would be happy to help.
