An Employers Guide to Employee Misconduct
- Anne-Marie Dolan
- 3 days ago
- 6 min read
Addressing employee conduct is something that most employers find a challenge. You may be concerned about how it will affect your customers, your team or your business. You may also feel pressure to act quickly. However, acting too quickly is one of the easiest ways to create a personal grievance.
New Zealand employers need both a good reason for taking disciplinary action and a fair process for reaching their decision. Even where it appears obvious that an employee has done something wrong, you should investigate the matter, hear the employee’s response and keep an open mind.
Employer Direct explains how to manage employee misconduct fairly and the common mistakes employers need to avoid.
What is employee misconduct?
Misconduct is unacceptable employee behaviour. It normally involves an employee breaking a workplace rule, failing to meet a reasonable standard of conduct or acting in a way that damages the employment relationship. Examples may include:
regularly arriving late without a reasonable explanation
failing to follow reasonable instructions
behaving inappropriately towards a customer or colleague
breaching a workplace policy
using company equipment improperly
taking unauthorised leave
misusing confidential information
dishonesty
bullying, harassment or threatening behaviour
serious health and safety breaches
theft, fraud or violence.
Not all misconduct is serious misconduct. Ordinary misconduct will usually result in a warning, particularly where it is a first incident. Serious misconduct may justify dismissal without notice, but only where the behaviour is serious enough to destroy or seriously damage the relationship of trust and confidence.
The wording of the employee’s employment agreement and your workplace policies will be relevant. However, simply listing conduct as ‘serious misconduct’ does not automatically make dismissal fair. You must still consider what happened, how serious it was and whether dismissal is a reasonable response.
Misconduct is different from poor performance
Before starting a disciplinary process, make sure you have identified the right type of problem.
Performance problems usually mean the employee is not completing their work to the required standard and may need clearer expectations, support, training and time to improve. For example: An employee who does not understand how to complete a task may have a performance issue.
Misconduct normally means the employee could meet the required standard but has failed or refused to behave appropriately. For example: An employee who understands the task but deliberately refuses to do it may be committing misconduct.
Do not use a disciplinary process to deal with a genuine lack of skill or ability. Most performance problems should be managed through a performance improvement process.
What does New Zealand law require?
The main legal requirements come from the Employment Relations Act 2000.
Section 4 requires employers and employees to deal with each other in good faith. Among other things, this means being active and constructive, responsive and communicative. Neither party should mislead or deceive the other.
Section 103A sets out the test used to decide whether an employer’s action was justified. The question is whether the employer’s actions, and the way the employer acted, were what a fair and reasonable employer could have done in all the circumstances. When applying this test, the Employment Relations Authority or Employment Court considers whether the employer:
sufficiently investigated the allegations,
raised its concerns with the employee,
gave the employee a reasonable opportunity to respond, and
genuinely considered the employee’s explanation before acting.
A fair process must also follow the employee’s employment agreement, applicable collective agreement and workplace policies. Employment New Zealand confirms that disciplinary action requires a careful, fair and thorough process.
Common mistakes employers should avoid when dealing with misconduct.
There are a number of mistakes that employers often mistake when handling issues with employees:
Deciding the outcome before hearing the employee.
Statements such as “we have decided to dismiss you” made before the disciplinary meeting are strong evidence that the process was predetermined. You can form concerns and consider possible outcomes. You cannot make the final decision until the employee has had a fair opportunity to respond.
Giving vague allegations
An employee cannot respond properly if they do not know who allegedly did what, when it happened or which rule may have been breached. Be specific and provide the relevant evidence.
Rushing the process
Pressure from customers, managers or other employees does not remove the need for fairness. Allow enough time for a proper investigation and response. At the same time, do not leave the matter unresolved for weeks without good reason. Unnecessary delays can harm everyone involved.
Treating suspension as punishment
Suspension is not a finding of guilt. Consider alternatives and follow a fair process before suspending, except where urgent safety circumstances make prior consultation impractical.
Relying on irrelevant or expired warnings
A warning for an unrelated issue will not usually support dismissal. Old or expired warnings must also be treated carefully. A warning should only be relied on where it is current, valid and relevant to the new misconduct.
Applying an automatic “three strikes” rule
There is no universal rule that employees must receive three warnings before dismissal. Equally, three warnings do not automatically make dismissal justified. The correct response depends on the seriousness of the conduct, the employee’s history and all surrounding circumstances.
Ignoring the employee’s explanation
Simply holding a meeting is not enough. You must genuinely consider what the employee says and investigate important new information.
Using ‘serious misconduct’ too freely
Dismissal without notice is generally reserved for conduct that causes serious damage to trust and confidence. Calling something serious misconduct in a policy does not remove the need to assess the actual circumstances.
Failing to get help early
It is much easier to correct a draft allegation letter than to defend an unjustified dismissal claim. Consider getting HR or employment relations advice before starting the formal process, especially where suspension or dismissal is possible.
FAQs
Do I always need to carry out a formal disciplinary process?
No. A minor, one-off issue may sometimes be handled through an informal conversation, coaching or a reminder of expectations. However, if you may issue a formal warning or dismiss the employee, you should follow a formal process.
Can I dismiss an employee for a first incident?
Possibly. A first incident may justify dismissal if it amounts to serious misconduct. You must still investigate, put the allegation to the employee, consider their response and decide whether dismissal is proportionate.
Does an employee have the right to a support person?
Employees should be given a reasonable opportunity to bring a representative or support person to a disciplinary meeting. This could be a union representative, employment advocate, lawyer, colleague, friend or family member.
Can I suspend an employee while investigating?
Sometimes, but suspension should not be automatic. There should be a genuine reason, such as protecting evidence, people, the business or workplace safety. Suspension is normally on full pay and should be reviewed regularly.
What if the employee refuses to attend the meeting?
Find out why and offer a reasonable alternative date if appropriate. Explain that the process may continue based on the available information if they repeatedly refuse to participate without a good reason. Keep a written record of the opportunities provided.
Can anonymous complaints be used?
An anonymous complaint may justify making initial enquiries, but relying on it for disciplinary action can be difficult. The employee must receive enough information to understand and answer the allegation. Consider whether the information can be independently confirmed.
How long should a warning remain active?
There is no single period required in every case. Six or 12 months is common, depending on the seriousness of the issue. State the expiry date in the warning and follow any period contained in the employment agreement or policy.
What happens if I get the process wrong?
The employee may raise a personal grievance for unjustified disadvantage or dismissal. Potential remedies can include lost wages, compensation, reinstatement and contributions towards costs. The process may also damage trust within your wider team.
Get the process right before making the decision
Managing misconduct is not just about deciding whether an employee did something wrong. You also need to show that your investigation was sufficient, the employee knew the case against them, they had a fair chance to respond and you genuinely considered that response.
Employer Direct can guide you through the process, help prepare the required correspondence and support you at disciplinary meetings. Getting advice early can help you address misconduct promptly while reducing the risk of a costly employment dispute. If you need help with dealing with an incident of employee misconduct, or would like to get your ducks in a row for any future incidents, get in touch today with Employer Direct. Employer-Direct.co.nz | 0800 612 355
Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal advice. While we strive to keep the information accurate and up to date, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. For specific legal advice tailored to your situation, please contact a qualified legal professional.
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