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.
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