A show cause letter is an official document issued by an employer to an employee, asking them to explain or justify why disciplinary action should not be taken against them. This process is fundamentally about ensuring procedural fairness. It allows the employee to present their side of the story before any disciplinary action, including termination, is decided.
A show cause letter allows an employee to respond to proposed disciplinary action. It is important when an employer is contemplating dismissing an employee.
In Australia, if an employer fails to give an employee a chance to respond to proposed disciplinary action, their decision may be reversed, and compensation ordered. The idea that employers should allow employees to respond to proposed disciplinary action is well established.
Typically a show cause letter contains the following information:
In any business or organisation, procedures are put in place for different employees to perform different roles. In some circumstances, specific delegations are necessary for a disciplinary process to commence. As such, disciplinary proceedings may be taken in a way that gives rise to a question as to whether they have been validly commenced or continued.
A show cause letter may be issued at different stages:
Typically, a show cause notice is issued in the context of a disciplinary process rather than at the stage of investigation. No matter the stage at which a show cause letter is issued, it should always be issued prior to a disciplinary decision. If a decision has already been made to discipline or dismiss the employee, then there is no real opportunity respond.
For an employee, often the aim of a show cause notice reply is to convince an employer not to take certain action against them. Practically, an employer may have an obligation to investigate issues raised by the employee as part of their response. Show cause letters may be relevant to any claim someone wishes to bring in a court or tribunal. This can be a double-edged sword. While a well-argued response may assist someone in advancing their claim, such as an unfair dismissal claim, the opposite may be true where a response fails to raise certain arguments or important evidence.
It is critical to understand that show cause responses may also be used in a number of other ways. For instance, it may be disclosed or disclosable to professional regulatory bodies or law enforcement agencies. This may make issues such as the privilege against self-incrimination relevant. This again highlights why it is prudent for people to get legal advice as early as possible.
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Responding effectively requires understanding your rights, the allegations, and the best strategies for your situation. There are a number of options to consider:
When an employee is given a show cause letter they are often also instructed to keep the process confidential. The isolation people can feel can leave people uncertain of the way forward. In such moments, getting advice and guidance from an expert is prudent, particularly when the stakes are high.
Experience shows that executives and employees sometimes delay getting legal advice (if at all). It can be due to fears or concerns that don’t actually reflect their own interests. Such concerns can impact their decision to seek expert assistance from an employment lawyer. It is an important issue because it is surprising how often employers fail to:
By the time a show cause letter is issued, it can feel like the easy option is for employers to follow through with their proposed disciplinary decision. Yet advice and guidance can help you to better understand your options. Moreover, it can help you to tip the scales back in your favour.
Challenging the process refers to raising issues that go to matters of procedural fairness.
A workplace may be subject to rules about how a complaint or grievance is to be managed. For example, it may be from particular laws, industrial instruments, employment contracts, or internal policies and procedures. An employer who fails to follow these in issuing a show cause letter may open up a basis to challenge the process. There can sometimes be sound reason to argue that procedural fairness has not been afforded in such circumstances. Flawed processes may be subject to injunctions to preserve the status quo, withdrawn, or set aside.
To challenge allegations in the workplace, it is helpful to begin with first principles.
Challenging allegations requires a focus on two issues: credibility and reliability. In essence, credibility concerns honesty whereas reliability concerns accuracy. An allegation may be honestly raised but it may depend on a person who is mistaken or otherwise wrong.
One of the important tasks in challenging an allegation is to identify, as early as possible, the relevant information or evidence that may show an allegation to lack credibility or be otherwise unreliable. The reason it is important to do so as early as possible is to ensure relevant witnesses are interviewed while matters are fresh in their mind, or to prevent other
evidence being lost or destroyed.
For an employee facing a disciplinary process, often the aim of ‘without prejudice’ negotiations is to resolve all disputes quickly and quietly. It can see an employee reach a commercial settlement with their employer, affording the employee the resources, time, and space to pursue other opportunities.
When faced with an unjust situation, it is understandable why you may wish to be vindicated. We all like to be right. However, contested disciplinary processes create real risks for both employers and employees. Sometimes after working through both the risks and rewards of different options, reaching a negotiated settlement to a dispute can start to look attractive to both sides – it’s the bird in the hand instead of the two in the bush.
Sometimes, an employer is motivated to end a dispute about conested allegations or disciplinary process on confidential terms. While not a ‘win’, it can give an employee facing allegations or disciplinary action an ‘exit lane’ away from a protracted fight. Where appropriate, such settlements can afford reputational protections and commercial terms that make it financially viable for the departing employee to exit the workplace.
Initiating confidential ‘without prejudice’ negotiations with an employer is something generally undertaken by a lawyer on behalf of an employee. Power imbalances may otherwise impede discussions between the employer and employee, particularly at a time when an employee is facing a disciplinary process that may result in their dismissal.
While confidential negotiations and settlements are not always possible or appropriate, their use as a complementary strategy in trying to resolve disputes can see quick resolutions to situations that may otherwise take months to resolve through litigation. Handled incorrectly, allegations of contractual breaches, or worse, can be made.
Seeking to reach a mutual agreement or negotiated settlement generally requires a clear understanding of your legal rights, obligations and options. Agreements of this kind often involve certain guarantees, indemnities or waivers, which can have real consequences when breached. Again, this highlights why it is prudent for ‘without prejudice’ negotiations to be handled with care and with the benefit of legal advice.
So, what do you do when you want to keep your job but accept you made a mistake or need to make some improvements to your performance? Receiving a show cause notice in those circumstances may mean trying to argue for a lesser consequence than the termination of employment.
In some instances, an employee may simply accept their conduct fell below the appropriate standard or that their performance needs to improve. When there is no dispute that the employer has a valid concern about an issue, it can make sense to focus on mitigating the consequences.
Outlining why a particular disciplinary outcome would be appropriate requires considerable care. There can be a fine line between seeking to mitigate culpability and blame-shifting. In the latter case, an employer may respond that such explanations wrongly play down the seriousness of the conduct, or otherwise demonstrate a lack of insight.
What may be raised to seek to explain (though not necessarily seek to excuse) why something occurred generally falls into two categories. First, issues internal to the workplace. Second, issues external to the workplace.
In seeking to dissuade an employer from dismissing an employee other factors may be relevant. An example of this may be an exemplary work history. Long-standing employees with a good history often are on a much stronger footing.
Any insight, training or programs that may be, or have been, undertaken to address any concerns may also be relevant as to whether the employer can have ongoing trust and confidence in the employee.
Arguing for a lesser penalty than dismissal is not easy. Mitigating the consequences of misconduct is not always possible. Asking for another opportunity to improve performance will not always be granted. For responses of this nature to a show cause letter, maintaining a focus on why a decision to terminate employment would be harsh, unjust, or unreasonable
may give an employer just enough pause for thought.
