Points on dismissal from the KiwiRail case

This recent Employment Court decision[1] contains useful guidance for dismissal cases: about the disparate treatment of employees when policy regimes are updated and about exercising a delegated authority to dismiss.

More well-known for its facts than for these legal points, this was the case where a train overshot the Melling station in Lower Hutt and crashed into a concrete block stop. There was significant damage to the train and to overhead wires, and two passengers sustained minor injuries. A post-incident drug test was positive for cannabis and the employee was dismissed.

Disparate treatment

During the investigation and subsequent legal proceedings, the employee pointed to three earlier cases where rehabilitation was offered to locomotive engineers who had failed drug tests, instead of them being dismissed. However, those instances had occurred 4-5 years earlier when different contractual and policy regimes were in place.  In particular, there is now a greater emphasis on health and safety and a ‘zero tolerance’ stance towards drug use.

KiwiRail was able to demonstrate that it had gone to considerable lengths to ensure that this new stance on drug use was well known, including staff being rostered-off duty in order to attend presentations – at which they were provided with information to take away and given the opportunity to consult with union delegates. It could also point to the date that this particular employee had attended a presentation.

In the circumstances the Employment Court considered the new policy framework to be “a sound explanation for the disparity”. In other words, because the disparity could be explained, the employer’s action in treating him differently was not held to be unjustified.

Exercise of delegation to dismiss

Many organisations have formal delegations which enable certain managers to dismiss employees. This is critical in the public sector, where the legal authority to ‘hire and fire’ stems from legislative provisions (e.g. in the State Sector Act 1988 and the Crown Entities Act 2004).

Pursuant to KiwiRail’s policy, the General Manager of the business unit held the authority to dismiss but could delegate that authority to the ‘investigating manager’ – but only after the General Manager had ‘seriously reviewed the case’ to ensure there was no bias and that the process had been procedurally fair.   The General Manager was also required to consult with the HR Manager.

This particular case was complicated by the ‘investigating manager’ to whom the General Manager had delegated the authority to dismiss the employee (after the requisite ‘serious review’ of the case) also being the HR Manager. This allowed the employee to argue that the policy requirement to consult with the HR Manager had not been met, because the HR Manager was one and the same person as the authorised decision-maker.   The Employment Court disagreed, holding that on the evidence before the Court such consultation had in fact occurred.  Even so, the Court noted that even if this was wrong, it would have been a minor defect in the process that did not result in the employee being treated unfairly.

Points to remember

  • New policy that alters rules of conduct should be clearly communicated to employees, preferably in a way that will allow the employer to demonstrate that this communication has occurred.
  • The authority to dismiss should be delegated and exercised in accordance with any applicable policy. To avoid any procedural issues, such delegation should be made to a person who can then operate within and according to that policy.[1]Thorne v Kiwirail [2015] NZEmpC 48
View All

Leave a Reply

Your email address will not be published. Required fields are marked *