9.05.2018

A Word of Warning

What is a formal warning?

What is a warning in the employment law context and how do you issue an employee with a warning that will stick? It is not as straightforward as you may think.

It is also more important than you may think.  If an employer wishes to rely on a series of warnings to justify a dismissal, each of those warnings must be justifiable.

What is a formal warning?

A formal warning in employment is a reprimand for an employee’s poor performance or misconduct.  Warnings can be verbal or written, and can be of varying degrees of seriousness, such as a first written warning or a final written warning.

Warnings should be used as a rehabilitative tool, rather than a punitive one.  A warning should not be a step to dismissal, but instead a step to avoid dismissal.

A warning must also actually warn the employee.  A warning needs to explain, for example, that because of the misconduct, the employee has received a written warning and that if there is any further similar conduct the employee is likely to receive a final written warning or may even be dismissed.

For a warning to be lawful it must have both substantive and procedural justification.  It must have a reason, established or confirmed only after a fair and reasonable process has been followed.  It is only then that a warning can be issued.  If both these elements are not met, the warning will be unjustified and the employee could challenge the warning as an unlawful action of the employer.  An unjustified warning can give rise to a personal grievance even though the employee remains in employment.

Reasons

Whether the reason for a particular warning is justified will depend on all the circumstances at the time the warning is issued.

Misconduct can be a just reason for a formal warning and examples could include lateness, minor breaches of an employment agreement or policy and minor instances of unprofessional or unacceptable conduct, such as swearing. Misconduct is usually behaviour that is deliberate.  Compared to serious misconduct, which may justify instant dismissal, misconduct is generally considered to be misbehaviour that is not serious enough to undermine or destroy the relationship of trust and confidence between an employee and employer.

A formal warning can also be justified where the reason is poor performance, which is more a focus on the employee’s performance in the role and the associated duties of that role.  For example, a warning may be appropriate if an employee is not meeting the employer’s reasonable expectations or targets.

The distinction between misconduct and poor performance can be a fine one.  As an example, an employee not following instructions could be misconduct where the action is deliberate or poor performance where the employee is forgetful or careless.

Process to follow

Below is a summary of the process an employer must follow before a formal warning can be issued:

  • The allegations of poor performance or misconduct must be put to the employee with all relevant and supporting information.
  • The employee must be advised of the worst possible consequences of the process.  As an example, if the conduct may result in a final written warning as its maximum sanction, the employee must be told of that possibility.  If the conduct may only warrant a lesser maximum sanction, say a written warning, then the employee should be told that is the worst possible sanction.  It is important not to under or overstate the worst possible outcome.
  • The employee should be advised of his or her right to seek independent advice and have a support person and/or representative present at any meetings.
  • The employee must be given a reasonable time to consider the allegations, and information, and respond.
  • The employer must consider the employee’s responses with an open mind, and investigate further if necessary.  Any further investigation may result in additional information that may need to be provided to the employee and the employee asked to provide further comment or feedback.
  • The employer may only then reach conclusions about the allegations.
  • The employee should then be advised of the decision the employer has reached about the allegations.
  • The employer should then advise the employee what sanction or range of sanctions it is considering imposing (if any) (e.g. a first or final written warning).
  • The employee must be invited to provide their views on the sanctions and given a reasonable time, in the circumstances, to do so.
  • The employee then provides feedback on proposed sanctions.
  • The employer then must consider the feedback, and all the circumstances, and decide on the appropriate sanction and notify the employee of this decision.
  • Any resulting warning should detail what conduct is prohibited or expected, or what the performance expectations or targets are for the future, and the time frame for review or monitoring. A warning must also include what may or is likely to happen if there are further instances of misconduct or continued poor performance.
  • The warning should be followed up in writing, as should any reviews.

The process is flexible and needs to be able to adjust to the circumstances that exist at the time and any changes that may occur during any process.

Tips and Tricks

  • Check the employment agreement and any relevant policies and make sure they are complied with.  Remember that if there are conflicts between any of these, there is a hierarchy of compliance; the Employment Relations Act 2000 requirements trump the employment agreement; and the employment agreement trumps any policy.
  • The legal test of justification is what a fair and reasonable employer could have done in all the circumstances at the time.  This legal test is the same for all actions of the employer, whether it is a low level verbal warning or a dismissal.
  • The process must be carried out each time before a formal warning is issued, whether that is a verbal warning or a written warning.
  • There are no set number of warnings that must be issued before dismissal could result; it depends on the particular situation and circumstance, and/or employment agreement and/or policy.
  • If the misconduct or poor performance is serious enough, a final written warning could be issued without prior warnings subject to anything in an employment agreement or employer policy.
  • Each warning needs justification, and can be challenged as an unjustifiable disadvantage grievance.
  • Even if a warning is not challenged at the time it is issued, if an employer wishes to rely on it in support of a subsequent sanction, such as a dismissal, the employer may be required to justify the previous warning.
  • An employer may not be able to rely on a previous warning if it was in regard to different conduct or concerns, unless the warning is sufficiently broad to capture the new issue.
  • Warnings should detail an expiry date according to some Employment Relations Authority determinations.

Our best tip is to seek legal advice to double check your concerns and proposed process before you take any steps.  If you have any questions, please contact us.

Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
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Media contact - Kerry Browne
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