Suspending Reality

Understanding when to hit the suspension button - and when to let it play out.

Suspending an employee is a serious decision that requires careful consideration, as it can have significant consequences for both the employee and the employer. While there is no automatic right to suspend an employee, there are specific legal justifications and processes employers must follow to ensure the suspension is fair, reasonable, and legally defensible.

Here’s a guide to understanding when and how to suspend an employee, the legal requirements for doing so, and the potential remedies if the suspension is found to be unjustified.

When is employee suspension justified?

In New Zealand, suspension is not a right granted automatically, it must be justified by either contractual or statutory grounds, or agreed to by the employee. Common reasons for suspension include serious health and safety concerns or the potential for misconduct affecting the workplace. However, suspension must always be approached with caution, and in rare instances, such as immediate safety concerns, employers may act without prior consultation.

Statutory or contractual justification

The most straightforward justification for suspension is a clear contractual clause allowing it, or a statutory obligation that requires suspension in specific circumstances. For example, the health and safety laws that apply in certain industries may warrant suspension of an employee who poses a risk to themselves or others.

Consulting with the employee

In most situations, employers are required to consult with the employee before suspending them, offering the employee the chance to respond to the proposed suspension. This is a critical aspect of procedural fairness, which ensures that the employee’s rights are protected during the suspension process.

However, there are some rare circumstances where immediate suspension may be necessary, particularly when health or safety risks are imminent.

Legal precedents on employee suspension

A number of legal cases in New Zealand have addressed the issue of employee suspension, providing valuable insights into when it is justified and the processes that should be followed.

For instance, the Case of Singh v Sherildee Holdings Ltd illustrated that suspicion of misconduct alone isn’t enough to justify suspension. In this case, the Court found that suspension must be based on a legitimate concern, such as the risk of harm or interference with an investigation, rather than being used as a knee-jerk response to allegations.

In contrast, the Kereopa v Go Bus Transport Ltd case showed that serious health and safety risks—such as the use of illicit substances while operating a bus—could justify an immediate suspension without prior consultation, especially when the employee’s actions could endanger the safety of others.

The suspension process and the MUST DOs

When suspending an employee, employers need to follow certain steps to ensure fairness and compliance with the rules of natural justice.

These include:

1. Notify the employee of suspension possibility - The employee should be made aware that suspension is being considered and provided with clear reasons as to why it is necessary. For example, if an investigation into serious misconduct is being conducted, the employee should understand the rationale behind the decision to suspend them.

2. Provide relevant information - Employers should share any information that is relevant to the suspension decision, such as the nature of the allegation and the grounds for believing that suspension is necessary (e.g., safety concerns, potential interference with the investigation).

3. Allow the employee to respond - The employee should be given the opportunity to comment on the proposed suspension, presenting any arguments or information that might influence the decision.

4. Consider the employee’s response - After receiving the employee’s input, consider the response before making the final decision to suspend. This step is vital to ensuring that the process is fair and that the employee has a chance to present their side of the story.

5. Follow-up on the suspension - Once the suspension decision is made, it’s important to consider the duration of the suspension and to ensure it is not prolonged unnecessarily. In many cases, suspension should be for no longer than required to complete the investigation and reach a decision.

   
   

Is suspension disciplinary in nature?

The answer to this question can vary depending on the context. Suspension is often seen as an operational measure to allow for an investigation to take place. However, if the suspension continues for an extended period of time, or if it is seen as a punishment without due process, it can shift from being an operational action to a disciplinary one.

In the Graham v Airways Corporation case, it was established that suspension should not be viewed as a punishment before any formal conclusion has been reached. If a suspension is prolonged without proper justification, it could be seen as a disciplinary action, and this may expose the employer to legal challenges.

Remedies for unjustified suspension

If a suspension is found to be unjustified, employees may be entitled to remedies, including compensation for lost wages, damages for humiliation, and in some cases, reinstatement.

Employers should be aware that unjustified suspension can also lead to breach of contract claims, where the employee may seek damages. The severity of the remedy depends on the specifics of the case, including how the suspension was handled and whether the employee's rights were respected throughout the process.

Key Takeaways

• Suspension should not be automatic: Employers must have statutory or contractual justification, or a genuine belief that suspension is necessary due to serious risks such as health and safety concerns.

• Follow procedural fairness: The employee must be consulted before suspension, except in rare cases where immediate suspension is required to protect safety or the investigation.

• Suspension is not a punishment: Suspension should not be seen as a disciplinary action before any conclusions are made regarding the employee's conduct. Prolonged suspension without good reason can lead to claims for unjustifiable disadvantage.

• Documentation is key: Employers should carefully document the reasons for suspension, any consultations with the employee, and the decision-making process to protect themselves in case of legal action.

  
  

In short, while suspension is a tool that employers can use to address serious issues, it must be handled carefully, respecting both legal requirements and the rights of the employee. Following the correct procedures and ensuring that suspension is justified are key to avoiding costly legal disputes and maintaining a fair workplace.

If you need advice on managing suspensions or navigating the complexities of employee conduct, the Yellow team is here to help. We provide expert guidance on employment law to ensure your processes are compliant and fair.

Disclaimer This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.