Serious misconduct – how serious does the conduct have to be?

What is serious misconduct?

Misconduct can range from conduct warranting an informal chat or a formal warning, to being so serious as to justify dismissal without notice (summary dismissal). For serious misconduct, one of the leading cases Northern Distribution Union v BP Oil NZ Ltd says that “what is needed is conduct that deeply impairs or is destructive of that basic confidence or trust that is an essential of the employment relationship”.[1]

Serious misconduct will generally involve a deliberate action or inaction by an employee that is adverse to their employer’s interests. Whether misconduct constitutes serious misconduct will depend on the particular circumstances and is always a matter of degree. It is also worth keeping in mind that what may be deemed serious misconduct by one employer, may be considered mere misconduct, or less, for another. It is even possible that different workplaces with the same employer may have different standards. For example, the occasional swear word in a factory setting may not be a concern for one employer, however those same swear words being used by a teacher in a primary school classroom could be deemed serious misconduct. Similarly, where a factory swear word may be okay, swearing in front of a client may not.

Often employment documentation will list examples of both misconduct and serious misconduct which are worth noting but should not be treated as definitive. Just because an employer’s policy, or even an employment agreement, states that an action amounts to serious misconduct does not always make it so. Employers should also be wary of treating poor performance as misconduct or serious misconduct – it is not.

Some common categories of serious misconduct include fighting and assault, direct disobedience, unauthorised possession or wilful damage of company property, conduct that risks health and safety, bullying, harassment, discrimination and dishonesty.

In the past few years, we have seen a full spectrum of situations where dismissal for serious misconduct were considered justified by the Employment Relations Authority (Authority) and Employment Court (Court). Some examples include where:

• A palliative care nurse posted anti-vaccination and religion-related comments on her Facebook page during the peak of the COVID-19 pandemic;
• A support worker verbally abused and slapped the hand of a client who came towards her; and
• A traffic controller failed to keep in contact by radio telephone, allowing traffic to proceed into the wrong area and therefore cause an imminent health and safety risk to all persons on site that day.

Dismissing for serious misconduct

For dismissal due to serious misconduct to be justified, the employer will need substantive justification and to have followed a fair and reasonable process.

An employer’s guiding star when considering dismissing an employee for serious misconduct is, as always, the test of justification under section 103A (2) of the Employment Relations Act 2000 (Act), which is “whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal or action occurred”.

If an employer suspects serious misconduct has occurred, this does not eliminate the need for due process to be followed. Section 103A(3) of the Act states the Authority or Court will consider the following steps when determining whether a dismissal (or action) was justifiable.

Has the employer, before dismissing or taking action against the employee:

1. sufficiently investigated the allegations;
2. raised the concerns with the employee;
3. given the employee a reasonable opportunity to respond; and
4. genuinely considered the employee’s explanation.

In addition, employers should always remember the good faith obligation in section 4(1A) of the Act to provide all information that is relevant to the continuation of employment, i.e. the allegations or concerns. 

In summary  

For serious misconduct, the focus is on whether, as a result of the conduct, the employer has lost trust and confidence in the employee. It is important employers do not to jump to any conclusions. Even if it seems clear that serious misconduct has occurred, there are often two (or more) sides to every story.

If you have any questions about serious misconduct or dismissing an employee for serious misconduct, please get in touch with our Employment Law Team or your usual contact at Hesketh Henry.

Disclaimer:  The information contained in this article is current at the date of publishing and is of a general nature.  It should be used as a guide only and not as a substitute for obtaining legal advice.  Specific legal advice should be sought where required.

[1] [1992] 3 ERNZ 483.