When problems arise

When employment problems arise

A problem includes anything that harms or that may harm an employment relationship.

While the most obvious relationship is between an employer and an employee, other examples are relationships among employees, between a union and its members, between a union and an employer, and among unions covering employees in the same workplace.

Examples of problems that can occur in the relationship from an employer’s perspective include:
poor performance or unacceptable behaviour

lateness and absenteeism
long-term illnesses
failure to comply with health and safety procedures
breaches of company policy or the law
misconduct
conflict between employees.

Problems from an employee’s perspective can include:

discrimination or harassment
disagreement about whether a warning should be issued
problems with health and safety
disagreement about what a term in an employment agreement means
misunderstood or poorly managed discipline, dismissals, redundancies or restructuring
disputes over holidays or pay (including deductions from pay).

Some of these problems may be the basis of “personal grievances”, which require specific treatment under the Employment Relations Act.

A number of staff in the same workplace may perceive the same problem. If so, it can help to deal with the problems collectively and to look for a solution that works for everyone. Where the employees are union members, their union can play an important part in representing their collective interests and agreeing on a sustainable solution.

Whether you are dealing with a problem involving an individual or a group, it is important to:

deal with the issue as soon as you become aware of it
take the time to get your facts straight
listen and seek solutions
make your view clear
follow a fair process that everyone understands
record your actions and expectations.

The risk of looking for an easy way out

Everyone can be tempted to ignore a problem and hope it will go away, but often the easy way out is really avoidance that leads to bigger problems later.

Examples of “avoidance” can include:

selecting poor performers for redundancy rather than dealing with the performance issue directly
giving fewer hours to a part-time rostered employee who has relationship problems with colleagues
seeing an act as “the straw that breaks the camel’s back” and pursuing discipline or dismissal without having raised previous concerns and set clear expectations for the future to help the employee to improve.

Such actions may well be unlawful and will often lead to greater problems, including personal grievances and claims of unjustified dismissal.

Avoiding underlying problems also denies the people involved the chance to resolve them. This is unfair and can be costly in other ways. For example, delay can create frustration that makes it harder to fix the problem. Also, the employee may be hurt and defensive to learn of a long-standing problem out of the blue. This may lead to “avoidable distress”, with productivity, legal and cost consequences for you and your employee.

Following a problem-solving procedure

Sometimes it feels as if focusing unduly on the problem-solving procedure can get in the way of solving the problem itself, but following the agreed steps helps to:

protect the rights of the employee
ensure that the problem doesn’t get worse through inconsistencies or misunderstandings
give you the information and the robust process you need to support whatever decision you eventually make.

In some cases, process problems themselves can cause the breakdown of the employment relationship and lead an employee to claim unfair treatment, so it’s important to get the process right.

Case study – good process for warnings

Andy designs wangles for Company A. The design team gets on really well and works collaboratively in a big open-plan office.

Last month, Andy’s manager, Ngaire, received a complaint from a colleague who sits behind Andy. The colleague alleged that Andy spends an excessive amount of time sending personal emails from his work email address.

Ngaire is a bit disappointed because they’ve had this kind of trouble before at Company A. She specifically explained the company’s email and internet policy to Andy during his induction to try and avoid a repeat of it.

After mulling it over, Ngaire decides the allegations are serious enough to warrant further investigation and possibly disciplinary action, such as giving Andy a first, verbal warning.

Luckily for Ngaire, she’s had to deal with discipline problems before so she knows the best process to follow.

Ngaire arranges a meeting with Andy to tell him about the problem.

“You may be surprised by this, but we have received a complaint and need to discuss a disciplinary issue that relates to your computer usage. Here is a letter inviting you to come to a disciplinary meeting next week to discuss this further. You can bring someone along to support you during the meeting if you’d like,” she explains.

At the disciplinary meeting, Andy admits that a lot of his emails are personal and related to his rugby team’s poor performance this season. Ngaire listens to his explanation and then adjourns the meeting.

After thinking things over, she returns and tells Andy she will issue him with a verbal warning for breaching Company A’s email and internet policy.

Andy is pretty upset when he gets the warning as he’s heard through the grapevine that it’s three strikes and you’re out with things like this. Ngaire explains, however, that the company doesn’t see it that way.

The warning is a chance for Andy to pull his socks up. It is just a verbal warning and won’t be a black mark against him for ever.

Ngaire makes a written note of the warning and puts it on Andy’s personal file. Keeping a record of the warning is important in case there are problems with Andy’s email use further down the track.

If his inappropriate email use continues, then Company A’s disciplinary policy says that Andy would need to be given a second, written warning, followed by a third and final warning, before they can consider dismissal.

Ngaire is relieved that Company A follows such a transparent process for warnings because it makes everything easier for both her and Andy in what could be a difficult and awkward situation.

Andy feels better after Ngaire’s explanation that he has a chance to improve his behaviour. He understands the status of his warning and that, under Company A’s disciplinary policy, it will be taken off his personal file after 12 months if he follows the company email policy in the future.

While Andy couldn’t help emailing his friends to rib them about their team’s poor performance, he is committed to stopping now that he’s been warned.

First steps in dealing with a problem

It is critical that you don’t jump to conclusions or predetermine your decisions. This applies whether you need to raise an issue with an employee or whether an employee raises an issue with you.

Your responsibility throughout the relationship is to ensure that you are making decisions fairly and consistently. This is usually not complicated – basically, you must investigate, gather information and think before you act.

Strategies include:

Before raising or responding to a problem, you should try to identify what the problem actually is and whether in fact there is one.
Don’t rely on rumour or assumption. The facts are crucial, and generally you won’t be sure of the facts until you’ve talked to the relevant employee and anyone else concerned.
Promptness is important, but avoid “heat of the moment” decisions made in anger or frustration.
Ensure that you have enough time and are free from interruptions as you deal with the employee.
In all cases, employees should be treated with respect and consideration. Damages can be awarded against employers when they have caused distress to employees that could have been avoided.
Deal with sensitive issues in a confidential manner – for example, by not conducting interviews in public or open-plan spaces.
Put aside emotion and encourage the employee to do the same. You should both concentrate on identifying and addressing the underlying reasons for the problem.
In more serious matters, you should consider raising or responding to the problem in writing.
Have a third party present as a witness when a problem is discussed, as this can help to prevent misunderstandings.
Encourage the employee to have a support person, union delegate or other representative present. This can also reduce emotion and misunderstandings.

Always keep a note of your meeting, the topic and any agreements reached. Make sure any such meetings and notes meet the terms of your policies and the employment agreement.

Changing the terms of employment

You may need to make changes in the workplace for a variety of reasons. Change may be driven by:

improved technology
more productive business processes
product changes
loss of suppliers or markets
a decision to contract out or sell some or all of the business.

There are also general legal requirements to provide information to employees when you are considering changes that will affect their jobs and to give them an opportunity to contribute to your decision.

The first thing that you and your employees should do is to refer to the employment agreement, since that sets out the basis for your relationship and the procedures for changing its terms.

The more significant a proposed change is, the more likely it is that it cannot be imposed without the employee’s agreement. Even where the employment agreement states that certain changes can be introduced in the future, they should be introduced with early advice and discussion.

Explaining to an employee why changes are being considered, and seeking his or her views before making a decision, is consistent with the good faith requirement and can help to prevent uncertainty, distress and resentment.

Where your employee agrees to a change, it is essential to update the terms of the employment agreement, obtain your employee’s signature and store the amendment to the agreement in the employee’s file.

Case study – redundancy and consultation

Tight competition in the soft drink industry has seen two soft drink manufacturers merge recently. The new company, B Corporation, is excited about the change as they want to expand into the lucrative organic soft drink market.

Naturally, it takes some time for things to settle down at B Corporation after the merger. Part of the trouble is that services in many areas are now doubled up. The directors decide that they need to restructure the company in an attempt to reduce costs and gain the competitive edge they need to conquer the organic market.

News of the restructure is not very surprising for B Corporation employees, but most have not been through a restructure and don’t really know what to expect, although the union has made employees aware of the provisions for redundancy in their new employment agreements.

Jim, Mike and Mary, who work as taste testers in Research and Development, are a bit concerned. They have heard through the grapevine that B Corporation really only needs one taste tester instead of three.

B Corporation sends a copy of the proposed structure to the union and asks for their feedback. The union asks for an opportunity to discuss the proposed restructuring at staff meetings, so that they can provide the directors of B Corporation with their members’ feedback.

Eventually, the R&D team receives a copy of the proposed B Corporation restructure and is asked for their feedback. All the staff get a copy of the proposed changes and a statement that outlines whether their job stays the same, changes or no longer exists. All the new jobs that have been created are also listed with details as to how people will be redeployed or appointed to them.

The testing team’s suspicions are confirmed. There will only be room for one of them in the new structure. They discuss the proposed changes together and attend the union presentation at their staff meeting.

The testing team accepts that, in relation to their team, the restructure makes commercial sense for B Corporation and they ask the union to reflect that in their discussions with the directors.

The union includes this as part of their submission on the proposed restructuring, which also contains a number of other suggestions on how the company can improve its competitive edge.

B Corporation wants to discuss these some more with the union but, in the meantime, the company confirms the proposed restructuring of the R&D team.

It’s a tough call for Mary but she decides not to apply for the job. She’s only been taste testing soft drinks for nine months and, deep down, she wants to return to university.

Consequently, she opts for the B Corporation voluntary redundancy package. The directors have made sure that she fully understands the terms and conditions of the redundancy, and they give her a glowing reference that should help her get back in to the soft drink industry after her studies are complete.

Mike, on the other hand, is thrilled. He’s been redeployed to the position of Carbonation Control Officer. The new job will have a lot more responsibility and a pay increase, which will help to reduce his student loan.

Jim is also delighted with how everything has worked out. The directors decided that he had the right skills and experience to continue being the B Corporation taste tester.

“The changes are a bit sad but they have been easier to cope with because the directors were open and clear in their communications. We knew what was going on with the restructure every step of the way and always had the chance to offer our thoughts. I’m already looking forward to taste testing our latest range of drinks,” he says.

Pitfalls in redundancies

When a business changes, including changing how work is carried out, jobs may become surplus. Any redundancy needs to be conducted in good faith, with advice of potential redundancy given as early as possible.

The Employment Relations Act covers the treatment of workers when a redundancy is caused by the sale of a business or the contracting out of work.

In all cases of redundancy, the process you follow should be clear and fair and be transparently driven by the work – not by the individual or their performance.

It is a requirement of legislation that information is provided to employees and consultations take place before final decisions are made, although there are provisions to allow commercial sensitivity to be considered and the requirements to provide information and consult do not apply for employees on trial periods.

A poorly managed change process or redundancy situation does not just affect you and your employees in a personal sense – it potentially impacts on productivity during the change and your relationship with customers.

A number of simple steps can reduce problems and avoid distress:

Think ahead by including in the employment agreement clauses on the key aspects of any potential change. These might include the consultation process that is to be followed, whether the employee is entitled to redundancy compensation and the consequences of an employee turning down an offer of redeployment.
Follow all relevant provisions of the employment agreement before starting and during any change.
Allow an appropriate time scale for the change – neither too fast nor too slow. Redundancies announced suddenly and without genuine consultation can cause resentment and be distressing (even for staff whose jobs will continue). Likewise, letting things drag on without direction and clear communication can cause avoidable anxiety and uncertainty.
Potential redundancy almost always requires prior consultation with the potentially affected staff. Consultation doesn’t mean you must reach agreement with employees, but it must be genuine. Consultation often covers issues such as whether redundancies are needed at all, the selection criteria that the employer proposes for deciding who will be made redundant, whether voluntary redundancies will be called for and alternatives to dismissal if an employee’s position is to be disestablished.
Any selection process used must be genuine and based on objective and fair criteria. After consultation, employees and their representatives must be informed of the final criteria that will be used in the selection process.
If disagreement arises over issues during a redundancy situation, be prepared to listen to what the employee or his or her representative has to say, to genuinely consider what has been said and to provide a response.

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