GOVERNMENT OF THE COOK ISLANDS
Labour and Consumer Services
Ending an employment relationship: resignation and termination
A friendly reminder on how an employment relationship can end?
An employee can decide to end the employment relationship at any given time and without having to provide a reason to the employer. To do this the employee needs to provide a written resignation letter and observe the notice period provided in their contract. If a notice period is not set out within an employee’s contract the amount of notice that must be given is at least 1 weeks’ notice, this is the minimum legal requirement.
A resignation that is submitted in accordance with the ‘notice period’ required, is deemed valid (section 43).
A valid resignation means that on ‘expiry of the notice period’, the employment agreement will be terminated. The employee is still entitled to all accrued annual leave not taken at the time of termination, and all outstanding pay (section 49).
An employer can decide to end an employment relationship for 3 reasons, capacity issues, the conduct of the employee, or a restructuring of the business (section 44).
1. Capacity – If there are issues relating to the performance or ability of the employee to carry out their duties under their employment contract:
Prior to final termination:
a. The employer must raise the capacity issues with the employee and outline why these issues have lead to termination, in writing, prior to the termination notice being given; and
b. When those capacity issues are initially raised with the employee, the employee must have been given a reasonable opportunity to respond, and to explain to the employer why their employment contract should not be terminated (section 50).
Final termination:
c. If the employer’s final decision is still to end the employment relationship because of capacity issues the employer must give the employee the amount of notice required under the employment contract. If a notice period is not specified within an employment contract then the employer must give the employee a minimum of 7 days’ notice of the termination or 7days pay in lieu of working the notice period. (Sections 45 and 50)
2. Conduct –
§ It is recommended that most work places have a detailed and clear code of conduct policy to enable a clear assessment of when there has been a breach. It is also recommended that employers ensure staff are regularly updated on their code of conduct policy, and know where it can be accessed.
§ It is recommended that employees ensure to familiarise themselves with the code of conduct policy.
§ Conduct can fall into two categories –serious misconduct or conduct other than serious misconduct (we shall refer to this as “misconduct” for ease of reference). They differ in seriousness and each result in different consequences. In some instances it may be obvious for example, an employee stealing from their employer would amount to serious misconduct. However, it is less clear whether continuously arriving to work late amounts to serious misconduct or just misconduct. Different occupations will treat that situation differently, i.e. if you need to ensure passengers make it in time to check in for a flight, lateness may amount to serious misconduct, and in other jobs it may amount to misconduct.
§ It is therefore important that a workplace has a clear Code of Conduct document specifying what situations fall into what category of conduct because an employer has different notice period obligations for each depending on the circumstances.
Prior to final termination:
§ If an employer would like to end the employment relationship because of an employee’s misconduct:
a. The employer must have already raised the conduct issues with the employee and outlined why the conduct will lead to termination, in writing, prior to the termination notice being given; and
b. When the conduct is initially raised with the employee, the employee must have been given a reasonable opportunity to respond, and to explain to the employer why their employment contract should not be terminated.(section 50)
Final termination:
§ If an employer would still like to end the employment relationship because of an employee’s misconduct the employer must give an employee a minimum of 7 days’ notice of the termination or pay the employee 7 days wages in lieu of the notice (section 46).
Serious misconduct:
§ If an employer finds that an employee has acted in a way that can be described as serious misconduct under their policy, the employer may terminate the employment relationship without notice, i.e. serious misconduct can warrant an instant dismissal. (section 47)
3. Restructure – A company may decide to restructure for multiple reasons. A restructure may lead to important changes in the work place, and employee’s roles.
§ Employers must show that any proposals for restructure that could affect jobs must be a genuine business restructure.
§ If redundancy is provided for in the employment agreement, then the notice period in the employment agreement will apply.
§ However, if there is no clause in the employment agreement relating to redundancy then any position made redundant requires a minimum of 2 weeks’ notice or the employer must pay the employee two weeks wages in lieu of that notice period. (section 48)
§ Any change of the importance of an employee’s position in a workplace needs to be communicated with clear, transparent management and implementation between administration and staff.
Furthermore,
When an employment relationship ends, regardless if it is initiated by the employee, the employer or both in mutual agreement, termination entitlements should be observed. For example, any pending wages should be paid out as well as any remaining unused accrued annual leave (section 49).
Please note that the above do not relate to casual employees.
As part of our regular worksite inspections, we often request to sight and read copies of internal policies around conduct, disciplinary processes and termination processes. These are essential tools to ensure both the rights of the employer and employee are respected and upheld. We strongly encourage workplaces to review the minimum terms and conditions of the ERA 2012 to ensure compliance.
Please contact the Labour and Consumer Services if you need a copy of the Employment Relations Act 2012, have any questions or require an explanation of any of the parts above or for any other employment or consumer related enquiries by way of replying to this email, or call 29370 to leave a message.
Meitaki maata e Kia Manuia