Question

Karen is a director of Trust Insurance Ltd. Trust Insurance Ltd has recently introduced a new computer system for processing insurance claims. Karen has trained two members of her team on how to use the new computer system.

George is 58 years old and has worked for Trust Insurance Ltd for 30 years. He is struggling to adapt to the new computer system which makes processing claims faster. George refuses to use the online training program to practise using the new computer system.

Karen has been contacted by a customer. The customer said that they had telephoned George about a claim they had made. The customer said George was rude to them on the telephone and told the customer to ‘go away and annoy someone else’. Karen called George into her office. She told him about the complaint from the customer and dismissed him with one month of notice of termination last week.

Tony is also in Karen’s team for three years. Two months ago, Karen observed Tony accepting an envelope from a customer. The envelope was very full and Karen saw that it contained several HK$1,000 notes. Karen believes that, with proof, much secret commercial information and clients’ personal data have been leaked to another competing local insurance company by Tony. She has found out that some of her major regular customers have been diverted to her competitor’s insurance company. Karen also discovered with evidences that Tony has stolen company’s properties for sale and kept the sale money himself three times in the last two months. During the last three months, Karen found with evidences that Tony spent much of his office hours to communicate through his iPhone with his friends to discuss about their private affairs.

Yesterday, Karen dismissed Tony without any notice of termination and compensation.

Advise whether Karen can dismiss George through reasonable dismissal mode?

Advise whether Karen can dismiss Tony through summary dismissal mode?

    

Answer 1

i.Can Karen dismiss George through reasonable dismissal mode?

Some of the cases where a dismissal is considered as fair are given as:

• Not having the necessary qualifications or capability(skills, aptitude,mental and physical qualities)
• Conduct of the employee - any breach of contractual duties or gross misconduct
• The employement has become redundant
• Illegality- Remaining in the position would be illegal
• Any other reason of substantial nature(decided by the court applying the principle of equity and fairness)

An employee is entitled to obey reasonable instructions put out by the employer. Here in our case, Tony is new to the computer system and it is reasonable to provide him with enough time to get used to it. However, the employer asked him to use the online training program to make himself more acquainted with the learning process. However, George refused to obey the instruction and thereby, not co-operating with his employer. According to law, in such cases an employer can take an action against the employee. Furthermore, he was rude to a customer. An employee is expected to follow certain code of conduct at workplace and show a certain level of competency required for the job. His conduct amounts to gross misconduct. Having such an employee at workplace may dimnish the goodwill and image of the company as well as the moral of the peers. Therefore, for all of these reasons the employer can provide a notice to the employee and terminate his contract.

ii. Can Karen dismiss Tony through summary dismissal mode?

According to law, summary dismissal can take place in the following conditions-

• The employer gives a reasonable and lawful order that the employee refuses to obey it
• Serious breaches such as violence or theft or any other violations
• Extreme carelessness or competence from the part of the employee.
• Discrimination and harassment

In this particular case, the second and third conditions are applicable. Tony has stolen properties and money, and leaked secret information to competitors in return for money, resulting in a huge loss to the company. Not only has he been misappropriating funds and working as a spy for competitors, he also spent much of his office time talking to friends about private affairs. Tony has made some serious breaches as well as exhibited extreme carelessness. Therefore, Karen can dismiss him through the summary dismissal mode without providing a notice or any compensation.

Relevant laws include Fair Labor Standards Act(FLSA) and the National Labour Relations Act(NLRA). However, it should be noted that in the USA most states have adopted the at-will employment contract. This allows the employer to terminate the employee's contract without having to justify the reason.