As a general principle, an employee can only be suspended from work if there is some contractual or statutory justification for doing so. There are exceptions to this – for example, where serious health and safety concerns exist. In deciding whether to suspend an employee, an employer must follow the rules of natural justice including consulting with the employee. Only in rare circumstances would it be justified to suspend an employee without complying with the rules of natural justice.
What do the courts say?
The courts have referred to workplace suspension as a 'drastic measure which if more than momentary must have a devastating effect on the employee concerned' (Birss v Secretary for Justice [1984] 1 NZLR 513). The decision to suspend must not be made automatically upon the commencement of a misconduct investigation, but instead on a case-by-case basis. The seriousness of an allegation, and hence the possibility of dismissal as an outcome, is not sufficient grounds to justify a suspension.
However, a recent ruling of the Employment Relations Authority (Authority) (Kenzett v FENZ [2025] NZERA 132) considered the actions of FENZ following an independent investigation into complaints involving serious workplace difficulties between Mr Kenzett and two co-workers. The independent investigation found that Mr Kenzett breached FENZ's Bullying, Harassment and Victimisation Policy. FENZ commenced a disciplinary process that the Authority considered met the test for justification under s103 of the Employment Relations Act. However, the Authority also found that the fact Mr Kenzett was allowed to remain at work, performing his normal duties (in potentially life or death situations), was at odds with the position of loss of trust and confidence. The Authority found that while there is no positive obligation on an employer to suspend while it conducts an investigation, this is something FENZ could have implemented if it genuinely had serious concerns about safety. The Authority went on to find that FENZ's decision not to suspend Mr Kenzett undermined its ability to claim loss of trust and confidence and therefore the decision to dismiss was unfair.
Impact of suspension
While suspension is intended to be a precautionary measure taken to remove an employee from the workplace temporarily, typically while an investigation is conducted or as a response to serious allegations, it does have significant implications for both the employee and employer. It can harm an employee's reputation, cause resentment, and make it difficult to defend allegations or implement a successful return to the workplace. The Kenzett decision also confirms that employers should carefully evaluate the specific situation where suspension may be appropriate and understand the potential risks associated with failing to act when necessary.
Alternatives to suspension
It is recommended that, before suspending an employee, an employer should have considered all the alternatives and found them to be inadequate in all the circumstances. Alternatives might include putting the employee on an agreed period of paid special leave, asking them to work from home, redeploying them elsewhere within the business, or temporarily transferring them to another department or office.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
