21.12.2018

Suspension – Not as straightforward as you may think

Suspending an employee is not as straightforward as many employers may think. In this article, we guide you through the legalities in New Zealand.

What is a Suspension?

We commonly think of a suspension as sending an employee home from work.  Directing an employee to remain away from the workplace for a period of time is one type of suspension, but directing an employee to not perform some or all of their duties can be an alternative form of suspension.

A Right and a Reason

To suspend an employee, an employer needs to have a right and a reason to propose a suspension.

The right to suspend an employee can be a contractual term in the employee’s employment agreement or a statutory right to suspend, for example during a strike.  Only in very limited circumstances can an employer lawfully suspend an employee without a contractual or statutory right to do so.

In addition to the right, an employer needs a reason to suspend an employee.  Possible reasons include allegations of serious misconduct where the employee’s presence in the workplace could compromise the investigation, or cause further problems (e.g. where the allegations involve violence or harassment) or for health and safety reasons.  However, the mere fact that there are allegations of serious misconduct does not justify a suspension.  The suspension requires its own reasons such as to avoid the employee compromising the investigation if there is a reasonable likelihood of that occurring.

If the employment agreement or a company policy details situations in which a suspension can occur, the employer must comply with the contractual term or policy as well.

The Process

If an employer has the right and a reason to suspend, a procedurally fair process must also be followed.  A lawful decision to suspend cannot be predetermined and must follow consultation with the employee.  Once again, if the employment agreement or a policy details a process, it should be followed to avoid a breach.

The allegations or concerns (usually something that may amount to serious misconduct) should be put to the employee together with the employer’s proposal to suspend the employee and the reasons for that suspension.  The employee should then be given a reasonable opportunity to respond to the employer’s proposal of suspension.  Discussion of the proposal should include whether or not the suspension should occur, alternatives to suspension, the proposed length, the possible implications and whether the suspension would be on pay.  We note that the ability to suspend without pay is extremely limited.  The employer must genuinely consider the employee’s response (if any) before a decision is made on whether to suspend the employee or not, and if so, on what basis.

As a suspension would have an impact on the employee’s employment, an employee should be advised of the employee’s right to take legal advice and have a legal representative or support person present at any meetings.

Final Points

The courts have held a suspension of an employee to be a drastic measure which almost always will have a devastating effect on the employee concerned, and some cases have noted that it is rare for an employee to return from a suspension.  Therefore, as with any other action that may affect an employee’s employment, the legal test 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 suspension occurred.

If an employer breaches its legal obligations with regard to a suspension it could give rise to a breach of contract (or policy), breach of statute or the employee could raise a personal grievance for unjustified disadvantage.  All these situations could result in a remedy being awarded to the employee.

If you are thinking of suspending an employee, or your own suspension is proposed, the Hesketh Henry Employment Team is happy to assist.

Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
Kerry_100x100 1
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

Related Articles / Insights & Opinion

Design life in the spotlight!
Blackpool Borough Council v Volkerfitzpatrick [2020] EWHC 1523 (TCC) In 2009, Blackpool Borough Council (Principal), as principal, contracted with Volkerfitzpatrick Ltd (Contractor), as head contracto...
COVID-19 and the Future of Force Majeure
Not since Y2K have force majeure clauses been of so much focus.
Shareholder Agreements:  The Corporate “Pre-nup”
You’ve got a great idea for a business and you’re pumped to get to work. 
23.06.2020 Posted in Business Advice & Company Law
Wake Up Call for #Influencer Marketers
A recent decision by New Zealand’s Advertising Standards Authority (“ASA”) concerning a sponsored Instagram story posted by a well-recognised New Zealand personality, serves to remind all partie...
12.06.2020 Posted in Advertising Law
COVID-19: Weekly Construction Briefings
12 June 2020 New Zealand has moved into Alert Level 1 from 8 June 2020. While this means that life has largely returned to normal, as physical distancing and other restrictions have been removed, upd...
12.06.2020 Posted in Construction Law & COVID-19
Liquidated damages and penalty clauses: the last word on Honey Bees
The Supreme Court’s judgment in 127 Hobson Street Limited & Anor v Honey Bees Preschool Limited & Anor [2020] NZSC 53 confirms the test for determining when a clause in a contract designed t...
10.06.2020 Posted in Construction Law
COVID-19: OIO Urgent measures – Coming soon!
The Overseas Investment (Urgent Measures) Amendment Act 2020 (“Amendment Act”) was passed on 28 May 2020 and received Royal Assent on 2 June 2020.  The majority of the Amendment Act will ...
Send us an enquiry
For expert legal advice, please complete the form below or call us on (09) 375 8700.
  • This field is for validation purposes and should be left unchanged.