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House Rules Oversight Costs Employer $10K

Ms Lummis was an 18-year-old employed by The Shawz Group (Mr and Mrs Shaw) to work in its supermarket. The employee signed an employment agreement in November 2019 and at the same time signed a set of house rules dated 2018. About a year later she dyed her hair partially blue. When she was next at work, she asked Mr Shaw what he thought of it. He asked her to put a hat on for the remainder of her shift. Branded caps were part of the uniform available to staff but not compulsory for all staff.

At Ms Lummis’ next shift she’d forgotten to bring the cap into work with her. The grocery manager questioned her on this, and Ms Lummis explained why.  She added that the house rules did not require her to wear a hat. The grocery manager contacted the Shaws resulting in a speakerphone conversation between Ms Lummis, Mrs Shaw and the grocery manager. Mrs Shaw told Ms Lummis that refusal to wear a hat was considered serious misconduct and could result in disciplinary action or even dismissal.

The Shaws referred to a 2020 set of house rules they were developing; these were not signed by Ms Lummis. Neither set of house rules prohibited dyeing hair or required the wearing of a cap. The Shaws were of the view that it was common knowledge that dyeing your hair unnatural colours would result in the requirement to wear a cap.

Ms Lummis engaged in further communication with the Shaws where she was once again required to comply with wearing a hat. She continued to reiterate that the rules did not require her to wear a hat. The Shaws found Ms Lummis’ non-compliance insubordinate and suspended her on pay. A formal investigation meeting was held which was not constructive and shortly after Ms Lummis was sent a letter of the outcome.

The letter said that she was summarily dismissed for serious misconduct. Ms Lummis raised a personal grievance claiming unjustified dismissal.

The Employment Relations Authority (ERA) found that the Shaws:

  • Relied on the 2018 and 2020 set of rules, neither of which prohibited the dyeing of hair or the requirement to wear a cap.
  • Relied on it being “commonly understood in the store that if a staff member dyed their hair an unusual colour, then they needed to wear a uniform cap”. However, the Authority found that this common understanding was based entirely on one conversation with Ms Lummis.

Ultimately the Shaws failed to demonstrate they had made a lawful and reasonable instruction. Neither the employment agreement or the sets of house rules (2018 and 2020) prohibited the dyeing of hair or required employees to wear a hat if hair was dyed an unnatural colour.

The employer needed to have ensured that any lawful and reasonable expectation they had of Ms Lummis was understood by her as being a requirement.

The Authority also found the employer did not fully investigate whether Ms Lummis’ failure to adhere to any policy or code of conduct was due to “inadvertence, oversight, or negligence or whether it was done deliberately in the knowledge it was wrong”. An employer must consider whether the ‘oversight’ was deliberate on behalf of the employee or whether there “was genuine room for misunderstanding” what the policy or code of conduct meant.

The employee repeatedly told the Shaws that she did not believe there was a contractual requirement to wear a hat.

The ERA ordered the Shaws to pay A $7,000 for the hurt and humiliation she experienced and $3,000 for lost wages resulting from the summary dismissal.

There are a couple of critical times for communicating the culture you want to cultivate in your workplace. During onboarding of new employees and when producing new policies; It is a good idea to consult with employees and ideally have these signed off by them. If you would like to develop a code of conduct or any specific workplace policies for your workplace, we can assist with this.

You get reassurance that your employment matters are dealt with professionally, so you can go back to doing what you do best.

Help with anything in the employment life cycle from recruitment and employment agreements to disciplinaries and disputes and anything else in between.


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