Employed but not Engaged: How to break up with your employees and hold onto the ring
Author: ApproachableLawyer

Chapter 3
Breaking Up Isn't Easy



It rarely happens overnight, but it can seem like it. You wake up in the morning and glance across at your partner sleeping soundly and realise:  “What the hell am I doing with this person?”


You have now entered the “break up” zone.  What you do from this point onwards will have a profound effect on your future reputation and whether you can exit the relationship with dignity.  What do you say?  When do you say it?  How do you say it?  The options and permutations are endless and your reputation depends on it.


Your reputation is important

Your reputation as an employer and as a person is important.  In a personal relationship a bad reputation amongst your friends and in the wider community could affect your ability to find another partner.  If you act callously over the break up with your existing partner, then few would be willing to recommend you to their friends.


But, as we all know, break ups are rarely one sided.  So, who is going to tell your side of the story?  You may be well within your rights to break up, but your partner may not portray it like that.  All of a sudden your dignity and reputation go down the gurgler with half of your CD collection.


As an employer, your reputation is also paramount.  You have employment rights too, so use them to preserve your reputation and dignity throughout the dismissal process.  First of all, make sure you are in control of the process, not your employee.  Second, make sure it is handled in such a way that it doesn’t send the wrong message to your other staff or the outside world.  And finally, make sure no financial or reputational damage is caused to your business whilst you work through the process.


Whenever you decide to enter into the break up zone with an employee, these considerations should be running through your head.  Above everything else you need to preserve the investment you have made into your business.


When you wish your partner HAD been unfaithful

Whilst no one wants their partner to be unfaithful, it does have its upside when it comes to the break up.  After all, you are the wronged party so it is their reputation that is damaged, not yours.  Also, communicating the break up becomes much easier.  However, if not handled correctly, even these break ups can go wrong.  I have seen the wronged party end up being the victim, and the real villain in the piece taking the moral high ground.  We have all heard of employment cases where the employer pays compensation when the employee appears at fault!


Then there are other relationships where the break up creeps up on you. You suddenly lose that ability to connect.  You talk less and your partner appears to be making less effort with their affection.  Initially you think that it is just because the relationship has matured and there has been a natural settling down of enthusiasms.  But this is more than that:  your partner has gone from one extreme to the other.  Your partner has disengaged from the relationship.


Employees can become disengaged too

Not all employees are the same.  According to the Unlimited / JRA Best Places to Work Survey 2007 only 30%of New Zealand employees can be described as being fully engaged in their work. By engaged, I mean employees who are fully connected with their employer’s business.  In other words, they believe in what the organisation is trying to accomplish and are therefore much more likely to give their all in helping that organisation to succeed.  An engaged employee is like the loving partner who will turn into marriage material, make a good parent, and with whom you could spend the rest of your life.  Engaged employees are worth their weight in gold.  Treat them well and they will pay you back many times over by going the extra mile.  They are worth two “ambivalent employees”.


Ambivalent employees (who represent 61% of the New Zealand workforce) are those who could become engaged employees one day but for some reason hold back any extra effort.  They do what is required of their contract and no more.  If you can find out what is holding them back, you may have a match made in heaven.  These are the people who could be worth chasing to see what they could deliver if provided with the right incentives.  HR professionals specialise in these types of people.  They can advise you on incentive schemes, organisational restructures and leadership skills to get the best out of them.   However, despite investing time and resources into these ambivalent employees, not all will become engaged.  In fact, some may become disengaged.


Disengaged employees

Unfortunately, the remaining 9% of the workplace are described as disengaged.  They are neither satisfied with their work, nor committed to their organisation.  They do the bare minimum to get by and not get fired. 

In the relationship context, this is the partner who has stopped displaying affection, even when you make the effort.  This person may start to avoid your calls and you can expect criticisms and complaints about seemingly trivial matters.  They may even start lying to you about their whereabouts. However, they either don’t have the guts to break up or they are waiting for something better to come along.  For them, being in a dysfunctional relationship may be better than being in no relationship at all.  If there is going to be a break up, the burden is going to fall on you to make the first move.


This is even more the case in the employment sector.  No one wants to be unemployed, particularly in times of high unemployment.  Employees will try and hold on to what they have rather than find fresh pastures.  However, rather than persevere with that employee, the best option for both of you is to free up their future.


Why you must free up the future of disengaged employees

Disengaged employees are very bad for business.  For starters, they are unproductive and not performing their duties adequately.  When you employed them, you expected a certain standard of performance and set the salary accordingly.  Now you are not getting that performance, so you are paying over the odds for someone that is not working.  But that is just the direct cost.


Then consider how their behaviour may be affecting your other employees.  The constant complaining about management will affect other employees’ productivity as they start to believe the complaints.  Like a dye in water, their negativity will permeate the organisation.  They may be what prevents your ambivalent employees from becoming engaged.  Worse still, they may be pulling your ambivalent employees down to become disengaged employees.  If you find yourself having to performance manage a lot of people in your business, then the problem may lie with just one person.


Of course, that’s just the effect they have on your staff. Now think about the effect they may be having on your customers or the world at large.  If they have direct customer contact you can be sure that they will be losing new business through their negative attitude.  Even if they don’t have customer contact, you can be sure they will be complaining about you to friends and family (who of course may tell someone else and so on and so on).  The cost could be huge.


What does this add up to?

Based upon the research from Best Places to Work 2007, engaged workplaces (characterised by a high proportion of engaged employees) when compared to disengaged workplaces (characterised by a high proportion of disengaged employees):


1.      Have a return on assets 66% greater than disengaged workplaces;

2.      Generate 51% more sales per employee; and

3.      Have retention rates 27% higher than disengaged workplaces.


This means that disengaged employees and ambivalent employees are a huge cost on your bottom line.


How to avoid the cost

Nobody likes breakups, whether personal or in the employment context.  But if you want your business to succeed then you will have to bite the bullet.  However, just as in personal relationships, break ups are often best for both parties.  If your employee isn’t performing it may be because he is in the wrong job.  By freeing up that employee’s future, you allow him the opportunity to pursue his dreams.  Okay, so he may not see it in quite the same way at first, but hopefully that perspective may make things a little easier for you.


Doesn’t the law make it hard?

I am not going to lie and say that dismissing staff is easy in the current legislative environment. However, the perception amongst employers is that it is very hard, verging on impossible, to dismiss someone without some repercussion.


That’s simply is not true.  I have conducted many dismissals for my clients without any repercussions at all.  In fact, only a very small percentage ever turn into a personal grievance.  Some employees actually resign before the dismissal process has concluded because they see the writing on the wall.  The key to avoiding the repercussions is to follow the strategies in this book.  Let me start by giving you some general guidelines.


The first signs of break up

I love you.  I love hanging out with you.  You are so easy to live with.  I want everything to remain the same except for the boyfriend/girlfriend thing.  Let’s just be friends.


Yeah right!


If you have ever been told by a partner that he or she “wants to be friends” you will probably know where I am coming from.  Similarly, if you have used this line, let’s get real.  It is not really about wanting to retain a friendship, it’s because the relationship isn’t working and you want to get out.


So, if you think this line works, then think again.  It is as see through as a wet t-shirt.  Your partner won’t buy it.


It is the same when it comes to breaking up with your employees.  An employee on his way out can have an uncanny way of identifying the real reason for the break up.  If he doesn’t, his lawyer will.  But if the words coming from your mouth don’t match the real reason, you can be sure to end up with a personal grievance on your hands. 


Your reason must be genuine

If you are going to dismiss an employee you must have a genuine reason, and it must be the real reason.  So what amounts to a genuine reason?


Let’s start with a complete “no go” area:  discrimination.  Everybody in New Zealand has certain rights and one of those is not to be subject to discrimination.  It is possible to discriminate against someone on many different grounds.  Sexual and racial discrimination are generally considered to be the most common (at least historically) but some of the other grounds are starting to become more common place. 


The next category of reason where you can’t dismiss someone comes under the heading of “fit”.  In other words, you can’t dismiss someone just because they don’t quite fit your business or their personality is different to your other 10 workers.  This is where the employment sector differs from personal relationships.  The law requires that you must have a genuine reason for dismissal and it specifies what those reasons can be.  They are where:


1.      The employee has committed some act (or not done something) which amounts to misconduct (Chapter 4);

2.      The employee is not performing up to the standard required for his or her role (Chapter 6);

3.      You need to make certain job positions redundant for commercial reasons and as a result employees will lose their jobs (Chapter 5);

4.      The employee is rendered physically incapable of performing his or her duties due to some illness or injury (Chapter 7);

5.      There has been a breakdown in the relationship of trust and confidence between the employer and the employee such that the relationship cannot continue. 


Aside from the above reasons, the only other way an employment relationship can end is if the employee resigns.  That includes situations where the employee is considered to have abandoned the employment.  However, unlike employers, employees don’t need to give a reason for their resignation.  The burden to provide a reason is upon you only.  In that sense, the law is weighted in their favour, but it only need be a problem if you don’t follow the rules.


Can you fit your situation into one of the above reasons?

If you have entered the break up zone with one of your employees, you will need to adopt one of the genuine reasons prescribed by law.  If you don’t, you will almost certainly end up having to deal with a personal grievance. 


It is also important to use the real reason.  For example, I have seen cases where the real reason for the dismissal is non-performance, but rather than deal with the non-performance issue, the employer deals with the dismissal as a redundancy instead.  On an emotional level, redundancies are much easier to deal with because (in theory at least) they are not personal.  However, very often when this is done it is easy to spot that the redundancy is a sham designed to mask the real reason.  This causes a problem because (as chapters 5 and 6 will explain) the procedures for handling redundancies and non-performance dismissals are very different.  By adopting a redundancy procedure, the non-performing employee has been denied the opportunity to improve.  Expect to have to deal with a personal grievance. 


Why you don’t need a personal grievance

Personal grievances are bad for several reasons.  First, there are the financial consequences:  you are likely to have to pay some money in compensation to your disgruntled employee and even more likely to have to spend money on lawyers’ fees defending yourself or getting advice.  It would be very rare for any employer to escape a personal grievance without paying some money for it to go away.


Then there is the indirect cost.  Whilst you are fighting a personal grievance you become distracted from your business.  Your time, and often that of other staff, becomes consumed with the personal grievance rather than making money in your business. 


Finally, there is the damage to your reputation. That is particularly bad if you decide to fight and lose.  All of a sudden other employees may be given the confidence to raise a personal grievance and fight to the bitter end in the hope of a similar outcome. 


These three factors are made all the worse by the fact that you probably had a genuine reason to dismiss that employee in the first place, but you just chose the wrong reason, and in doing so exposed yourself – read more in Chapter 10.


Why choose a different reason?

I have mentioned the emotional reason for choosing a redundancy over, say, a non-performance dismissal.  There may also be another reason, namely that you perceive that the standards you are setting for your employees are higher than would be regarded by law as being fair.  In other words, the law is stacked in favour of the employee and you will never establish a non-performance dismissal.


Again, this is untrue.  The law says that a business owner is entitled to set her own standards for her business.  The Authority or Court should not impose its own standards unless those standards being set are wholly unrealistic.  The reason for this is that the Authority or Court is not qualified to run your business.  They will never know enough about your business to impose a new set of standards.  So provided you can justify the standards you set, then the Authority or Court will take you at your word.


So, by and large (but not always) employers get this part of the equation right.  Where they stumble and get penalised by the Authority is when it comes to process.  Process is all about the way that you go about the break up rather than the reasons why.



During the war, soldiers on the front line would receive a ‘Dear John’ letter to inform them that their partner had run off with another man.


Then came the telephone.  More personal than a letter, but not as personal as the face to face chat.  The advantage of the telephone for the person doing the dumping was that you could always hang up if your partner got over emotional.  Of course, that wouldn’t stop return phone calls, until we got the answering machine to screen our calls, a device which some then decided to use as the main method of imparting the terrible news.  Add CallerID, and there was no need to speak to the person at all when they rang back to confront you.


Then we had email (always dangerous in my view due to its ability to be forwarded to multiple recipients).  And now, finally, we have reached the age of the breaking up by text message.  Now the recipient doesn’t even have to hear your voice and due to the nature of the medium you can be as brief as you want.


Itz Ovr:  Texting won’t do your reputation any good

Despite its mass availability, texting is regarded by most (I hope) as an unacceptable and cowardly way of breaking up a relationship, particularly a long term one. 


Needless to say, if you fire an employee by text (and I have seen it happen) be prepared for a personal grievance.  Employment law sets certain standards as to how you can go about dismissing staff.  If you fall foul of those standards, then regardless of whether you have a good reason to dismiss that employee, he will have the right to raise a personal grievance. 


What standards are expected?  The process which you need to follow to dismiss an  employee will vary depending on the reason for the dismissal.  The rest of this book explains the process for each type of dismissal in a lot more detail so you don’t make any mistakes.  Here what I will do is give you some basic guidelines so you know the type of process you must be going through. 


The Employment Vows

To have and to hold from this day forward, for better, for worse, for richer, for poorer, in sickness or in health, to love and to cherish, to death do us part.  And hereto I pledge you my faithfulness”


This is one of the most famous wedding vows and remarkably it has a number of similarities to your obligations as an employer:


To have and to hold, from this day forward”  =  I will remunerate you for your efforts


For better, for worse, for richer, for poorer”  =  even when the business is not doing so well


In sickness or in health”  = and even when you take sick days or annual leave


To love and to cherish”  =  I will incentivise you by conducting appropriate remuneration reviews


Till death do us part”  =  until termination of the employment relationship


And hereto I pledge my faithfulness”  =  I agree to abide my duty of good faith.


Marriage signifies a special bond between two people.  It is a special relationship - and so is employment.  Because the employment relationship is a special relationship, the law imposes certain duties on both employers and employees which do not exist in other commercial relationships.  In the employment context, that duty is referred to as the duty of good faith.  It is that duty which underpins how we go about terminating the employment relationship.


In marriage, the reason for wedding bells is because two people are making a lifetime commitment to one another.  The law doesn’t expect an employer to make a lifetime commitment to an employee and vice versa but it does expect each party to treat each other almost as if they were married. 


The reason stems from a perceived inequality of bargaining power.  The relationship of employer and employee has always been regarded as one of master and servant, where the master has all the power and the servant has limited rights.  The duty of good faith is designed to level the playing field, so it is fair to say that in practice the duty of good faith applies more to employers than it does to employees, (although in theory it applies equally to both).  For example, when entering into the employment relationship, when making redundancies, or when dismissing staff, the employer generally holds all the cards.  When employing staff, there is often very little scope for the employee to negotiate any fundamental changes to the employment agreement which is often standard for all employees.  Generally, only certain market forces and the possession of a valuable skill set will swing the bargaining power back in favour of the employee.  In a redundancy situation, only the employer is privy to the information concerning the running of the business which is dictating the decision to make the redundancies.  So, to even things up an employer must act in good faith towards its employees.


But, what is good faith?

The law states that both parties to the employment relationship must be “active and constructive” and “responsive and communicative” in their relationship towards each other.  Specifically, employees are given a right to access information which is relevant to the continuation of their employment.  The only exception to this is where a good reason applies – more on this in the chapter on redundancies.  It’s the concept of good faith which underpins the need to follow a fair process when it comes to dismissing staff, and to use an analogy, it is not really any different to how you would, or should, behave towards your life partner.


Have you ever lied to your partner?

It is not a crime to lie to your partner about your whereabouts.  Neither is it a crime to deny your partner affection without giving a reason.  However, your relationship of boyfriend/girlfriend or wife/husband dictates that you probably shouldn’t do either of these things if you want your relationship to be based on trust and honesty.  The employment relationship is also based on trust and honesty, and so the duty of good faith requires an employer to be upfront in all his dealings with his employees.  At one end of the scale you certainly shouldn’t mislead your employees.  But good faith means more than that.  It is about fairness and honesty.  It is not about the letter of the law, or the letter of your employment agreement, it is about the spirit under which that agreement and your employment relationship operates.  It is primarily relevant to dismissals.


Good faith in dismissals

Whether you are carrying out a redundancy process, misconduct dismissal, or a non-performance process, there are certain elements to your process which must be present.  If they are not present, the dismissal could be unjustified.  These elements (set out below) are very general in nature and for specific procedures refer to the remaining chapters in this book.  However, essentially they are:


Notify:  before embarking on any process you must notify your affected employee(s) of what is going on soon as practical. If you don’t notify, your employee cannot participate in the process.  Your notification should give as much detail as possible about the process and likely consequences and outcomes. 


Feedback:  get your employee’s feedback on the possible outcomes of the process.  It is important to note at this stage that there should always be the possibility of a range of outcomes.  No decision should have been made on which outcome is preferred.  It would also be appropriate at this stage to invite the employee to have a support person present at any meeting held. 


Consider feedback:  consider the feedback carefully before making your decision.  Don’t cast the feedback to one side (it could be obvious if you do).


Communicate your decision in writing:  you may communicate your decision verbally, but if you do then you should follow that up in writing.  The temptation is not to commit anything to writing for fear of what might happen, but unfortunately the law requires it.


It is about substance not form

Never get hung up on process.  There is a perception in the business community that if you make one tiny mistake with procedure then the dismissal will be unjustified.  That’s certainly the way the newspapers like to portray things since it makes good headlines.  However, it is not true. 


The Authority or Court is more interested in the substance of the process rather than ensuring you have followed a checklist of required steps in order.  It is not about painting by numbers if the substance of the picture turns out okay.  The above four steps represent the foundation of your process. Get those right and you are over half way there.  To avoid a personal grievance altogether read Chapters 4-8.  To avoid employment problems in the first place read on.


How to avoid employment problems

Personally, I know of no one who met the love of their life first time around and has therefore never endured a break up (although I am sure these people exist).  Generally, teenagers or young adults are jumping in and out of relationships all the time.  But often that tendency decreases as you get older.  Over time you work out what you are looking for in a partner as your tastes and expectations change.


It is no different with staff, but I know many more business owners who have never had to fire someone.  The reason for that lays partly in the fact that they take more care recruiting their staff in the first place.  If you get the right people on board to start with, then you don’t have to worry about dismissing them.  Recruiting is not as straight forward as you may imagine so I deal with that subject in the next chapter.


Chapter note:  I would like to thank John Robertson and the team at JRA (www.jra.co.nz) for providing me with the statistics employee engagement found in this Chapter.  JRA are specialists in workplace surveys and publish New Zealand’s Best Places to Work report.


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