The notion that employers must issue a series of three warnings—verbal, written, and final—before dismissing an employee is deeply ingrained in the minds of many. However, this belief is more myth than reality. The actual requirements for dismissal are more nuanced and context-dependent, rooted in the principles of fairness and reasonableness rather than a rigid warning system. This article explores the myths surrounding the necessity of multiple warnings before dismissal, elucidates the legal standards for fair dismissal, and highlights the implications of internal policies on disciplinary actions. 


The Mythical Mandate of Three Warnings 


A prevalent misconception in the workplace is that an employer must provide an employee with a sequence of three warnings before proceeding with dismissal. This misunderstanding often manifests as a supposed disciplinary ladder: starting with a verbal warning, escalating to a written warning, and culminating in a final warning before dismissal. While this approach may seem like a fair and structured way to handle employee misconduct or poor performance, it is not a legal requirement. 


Employment legislation does not mandate a specific number of warnings before dismissal. The key criterion is whether the dismissal aligns with a reasonable, fair dismissal process in New Zealand, emphasising fairness and reasonableness in the given circumstances. This approach underscores that the appropriateness of disciplinary actions depends on the severity and context of the employee’s behaviour. 


Reasonable and Fair Dismissal: The Legal Standards 


The primary test for whether a dismissal is lawful revolves around the concepts of fairness and reasonableness. Employers are expected to act in a manner that a fair and reasonable employer would, considering all relevant circumstances. In short, the test is whether it is a fair dismissal. This standard allows for flexibility and acknowledges that different situations may require different responses. 


For instance, in cases of serious misconduct—such as theft, violence, or gross dishonesty—immediate dismissal without prior warnings can be justified. Serious misconduct is characterized by actions that fundamentally breach the trust and confidence inherent in the employment relationship. When such trust is irreparably damaged, an employer is within their rights to terminate the employment without a series of warnings, following a fair investigation and disciplinary process. Given different contextual scenarios a fair dismissal looks different.  


On the other hand, less severe issues, such as minor breaches of company policy or substandard performance, might warrant a more graduated approach. In these cases, issuing warnings can serve as a means to correct behaviour and give the employee an opportunity to improve. However, the number and type of warnings depend on the specific circumstances and the employer’s policies. 



The Role of Internal Policies in Fair Dismissal


While there is no legal requirement for a set number of warnings, internal employment agreements and policies can create obligations for employers. Many companies have disciplinary policies that outline a cascading approach to managing employee misconduct or performance issues. These policies often stipulate that a series of warnings must be given before dismissal for non-serious infractions. 


If an employer has such a policy in place, they must adhere to it. Failure to follow internal disciplinary procedures can expose the employer to claims of wrongful dismissal. Therefore, it is crucial for employers to ensure that their policies are clearly written, flexible enough to allow for discretion, and consistently applied. 


Moving Beyond the Mechanical to a Context-Based Approach


The key takeaway is that disciplinary actions should not be based on a mechanical or one-size-fits-all approach. Instead, they should be guided by the principles of fairness and reasonableness, taking into account the specifics of each case.  


The classic three-warning system can pigeonhole employers into equating minor issues in misconduct or performance with significant issues. Its lack of flexibility in considering the complex reality of employment relationships by simplifying discipline to a three-strike system can create liability for employers regarding their duty to act in good faith under section 4 of the Employment Relations Act 2000.  


Equally rigid and exhaustive internal disciplinary policies, often integrated into employment agreements, can also constrain an employer’s ability to act per good faith obligations. Policies surrounding misconduct and performance, when regulated by internal policies and procedures, can create absurd situations. Employment relationships are complex and multifaceted. It’s feasible and likely that a situation arises that, on paper, should be subject to disciplinary action but, when properly understood in a context beyond simple internal policy metrics, shouldn’t.  


For these reasons, employers should aim to move beyond one-size-fits-all mechanical approaches to discipline and towards modern context-based approaches.  



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The content posted on the Sacked Kiwis website should not be considered or relied upon as legal advice or opinion. The information presented here is not intended to serve as legal guidance. Over time, laws and regulations evolve, potentially altering the accuracy of previously shared information. Updates in jurisprudence or legislation (for example, changes to the Employment Relations Act), which could happen without immediate notice, may render the legal information on this platform outdated or obsolete. Seeking legal advice is always advisable.


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