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It can be tempting for an employer to think that it is only a dismissal that requires a disciplinary process, and that a warning or a final warning can be issued simply by notifying the employee. Beware; simply issuing a warning risks an employee raising a personal grievance, and can also mean that the warning is ineffective.
What is a formal warning?
A formal warning can be either verbal or written and can be a first, second, or final warning in respect of an employee’s performance or conduct. As the name implies, it is formal notice to an employee that their conduct or performance has been unacceptable in some respect, and must improve. If the performance/conduct does not improve, there will be further disciplinary consequences – perhaps another warning, or even dismissal.
Warnings given appropriately should be used as a rehabilitative tool, rather than a punitive one. A warning should not be a step towards dismissal, but instead a step to avoid dismissal and get the employee back on the right track.
A warning must also actually warn the employee. A warning needs to explain, for example, that because of the identified misconduct, the employee has received a written warning and that if there is any further conduct of a similar kind, the employee may receive a final written warning or may even be dismissed.
What is not a formal warning?
An employer can tell an employee where they have fallen short and can set expectations for the future. However, if this is done without a fair and reasonable process, it will not ‘count’ as a formal warning (no matter how strongly the message is expressed, or the words that are used to convey the expectations). Simply saying it is a formal warning will not necessarily make it so. An ‘informal’ warning (i.e. one that does not meet the legal requirements) will, however, be evidence that an employer can point to in the future that indicates that the employee knows what is expected of them.
Test of Justification
The Employment Relations Authority (Authority) and Employment Court (Court) have frequently found that warnings are an employer’s ‘actions’ and therefore are subject to the test for justification set out in section 103A of the Employment Relations Act 2000.
The justification test looks at whether the employer’s actions (in this case, the warning) and how the employer acted (the process followed before issuing the warning) are what a fair and reasonable employer could have done in all the circumstances. The test considers both the substantive (could a fair and reasonable employer have issued a warning in the current situation?) and procedural (could a fair and reasonable employer have followed this process?). The Authority or Court will look at all the same factors that would be considered in a dismissal – that is, whether before taking action against an employee:
- The employer sufficiently investigated the allegations, taking into account the resources available to the employer;
- The employer raised the concerns with the employee;
- The employer gave the employee a reasonable opportunity to respond to the employer’s concerns; and
- The employer genuinely considered the employee’s explanation.
An employer’s policies or handbook, a collective agreement, or the employee’s individual employment agreement may contain specific processes or substantive requirements for a warning. It goes without saying that these requirements must also be followed – a fair and reasonable employer will follow its own policies and comply with its own agreements.
So what is the process?
The process for issuing a warning is exactly the same (to the same standard) as if the employer were considering dismissal. The employer should:
- Put the allegations/concerns to the employee, with all of the relevant information, including what the possible outcome(s) might be (e.g. a first written warning).
- Allow the employee a reasonable time to consider the allegations/concerns and their feedback, including advising them that they may take advice.
- Receive the employee’s feedback or explanations – usually in a meeting.
- Consider (with an open mind) the employee’s explanation and investigate further if necessary.
- Decide whether the concerns/allegations are, on the balance of probabilities, made out.
- Advise the employee of this decision, and what sanction/outcome(s) it is considering – e.g. a first or final written warning).
- Allow the employee a reasonable time to provide their views on the proposed outcome(s).
- Consider the employee’s responses to the proposed outcome(s), and then decide on the appropriate outcome in all the circumstances.
- Advise the employee of the outcome. The warning should be confirmed in writing, explain what conduct/performance is expected in the future, and what the consequences of non-compliance might be.
A formal warning should also set out how long it will be in effect – this may be covered in a policy, or the employer may need to set a reasonable period.
Where do employers go wrong?
The most common pitfall is simply not following any process, and issuing a warning as a unilateral edict. This will almost certainly mean that the warning is unjustified. The problem can be compounded if an employer then relies on an unjustified warning to take a further disciplinary step.
Another common error is in thinking that a warning can be issued when there ‘isn’t enough evidence’ for a dismissal – for example, if an employer is unsure whether or not a serious allegation has been conclusively proven. If an employer is unable to substantively justify a dismissal, it is very likely that the same problem will apply to the warning.
Finally, we frequently see employers neglecting to check their policies and procedures to establish whether there are any guidelines or requirements about warnings. We generally recommend that policies are drafted to give the employer some flexibility around matters such as the type and number of warnings, the duration of warnings, and any specific procedural requirements.
If an employee is unhappy with a warning (because they consider it to have been substantively unjustified, or because the process was unjustified), they may raise a personal grievance. An unjustified warning will amount to a disadvantage in employment, and the employee will likely claim compensation for humiliation, loss of dignity, and injury to their feelings.
Can we help?
If you need help with a particular process which could result in a warning, or you would like to review your policies and processes in this area, please do not hesitate to contact the 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.
