When it Comes to Disciplining Employees, Avoid a Knee-Jerk Reaction

Managing employees means handling disciplinary issues. HR must consider several factors before deciding how to handle disciplinary action.

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One of the more challenging aspects of managing employees is handling disciplinary issues. HR managers must consider several factors such as the egregiousness of the behavior, how the behavior is impacting other employees, company policy, how issues of a similar nature were handled in the past, employee contracts, and, of course, employer laws before deciding how to handle disciplinary action. This careful deliberation is needed to avoid a workplace lawsuit based on allegations of wrongful termination, retaliation, discrimination, or harassment.

Deciding whether to discipline employees with a progressive discipline model

HR managers may reflexively want to follow a progressive discipline model that starts with a verbal warning and increases in severity if the behavior continues to a written warning, suspension and then termination. Some may feel that any action less than a termination is a safe choice but that is not necessarily true. For example, a business may decide to suspend the employee while they carry out an internal investigation because they see this as a fair and potentially temporary answer to the conduct in question. It is important to understand that suspending an employee could actually cause unforeseen issues.

One thing to keep in mind is that in certain employment arrangements, a progressive discipline model can change an at-will employment relationship to a contractual one, whether or not the policy is written in an employee handbook or elsewhere. The Hawaii Supreme Court has held that if an employer establishes a disciplinary plan that should be followed before an employee is terminated, that plan may be interpreted as an implied contract, and therefore must be followed. Employers are not entitled to selectively abide by policies and procedures they establish in a manual (Kinoshita v. Canadian Pacific Airlines, Limited, 724 P.2d 110 (1986)). Employers should always follow the policy they have created and apply it equally to avoid an accusation of unfair treatment.

How should employers decide if suspension is the best option for disciplining employees?

If an employer believes that employee conduct warrants a suspension, there are some things to consider before following through, starting with whether you have the right to suspend them.

1. Is there an employee contract that lays out the right to suspend the employee? If so, an employer is unlikely to be at risk for a breach of contract lawsuit. When the contract doesn’t address suspension or when the employee has an implied right to receive work because they are compensated through commission or some other type of variable pay based on work done, a suspension may be a breach of contract. In these cases, an employer should be very cautious before suspending the employee.

2. What does your company’s disciplinary policy say about suspension? Are there steps that must be taken before this measure is used?

3. How should employees be treated while they are suspended? Will they continue to receive pay?

4. Is there reasonable and proper cause to suspend the employee?

Partnering with Makai HR

Need help navigating employee disciplinary issues? We’ve got you covered through HR outsourcing! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are in compliance with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long). When choosing a PEO to partner with, there are many things to consider including cost, services and technology solutions.

With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone. We can truly improve your employees work benefits while freeing you up to run your business.

What are you waiting for? Companies that partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!

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