Mutual agreement can be a better option

MANY employees’ dismissal cases that end up costly to organisations in many ways would have been better handled through mutual separation on negotiated and agreed terms.

When an alleged act of misconduct by an employee comes to surface it is not always the most prudent thing to jump at using the disciplinary code of conduct. One has to first assess the risk related to the use of the code of conduct. 

Stephen, a senior manager in one company, had a disagreement with the chief executive on the direction which the company should take.

Thereafter relations deteriorated to a point that the chief executive charged the senior manager with misconduct and dismissed him. 

During the hearing the senior manager raised a number of allegations as the real reasons for his dismissal. 

He also brought to surface a number of illegal acts that he had engaged in on instruction of the chief executive. He provided evidence of illegal acts, which indeed violated a governance principle and some bordered on criminality.

On appeal the senior manager raised these issues as the real reasons for his dismissal. He agreed that he had opposed the illegal acts and advised his boss via email, which he produced.

In the end the appeals authority became confused and adjoined the hearing indefinitely as the issues raised had not been contemplated and were too hot to handle at the same time the press had picked the story and journalists were having a field day accusing the chief executive of victimising an innocent man.

The shareholders got concerned and pushed the board to act and in no time the chief executive was suspended together with the purchasing manager who had been implicated in the indiscretions. The board commissioned a forensic audit to look at the alleged indiscretions.

While all this was happening the two suspended employees continued to draw salaries for the next four months and the dismissed senior manager approached the labour court over his appeal, which had not been concluded.

The employer got lawyers to handle all the labour cases at a huge cost. 

When the forensic audit results came out they showed that it was more of bad blood between the chief executive and the senior manager and minor violations of procedure where stop gap measures existed.

The suspended employees were reinstated and the Labour Court ordered reinstatement of the senior manager based on the merits of the case.

The lawyer then recommended retrenchment or mutual separation with senior managers as trust between him and the chief executive had collapsed.

Negotiation for mutual separation were seen as a better option to give the matter some privacy and parties reached an agreement to separate on confidential terms.

Lessons from this case are that cool heads are required when there are problems. There is a need to have effective management of human relations and when things have gone wrong the risk of the organisation’s skeletons becoming public must be assessed.

In worse cases dismissing one employee has resulted in even the complainant being dismissed.

There are also costs related to negative publicity, legal costs, forensic audit costs, unbudgeted for board sitting allowances, people being paid while they are not at work, disrupted work as workers attend to auditors, lowered productivity as employees put up with the forensic audit and many others.

Lastly, separating with an employee should not be stormy where mutual separation is an option as it preserves the dignity of everyone concerned including the image of the organisation at the same time cutting costs.

– Davies Ndumiso Sibanda can be contacted on: Email: [email protected]