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Nothing to Hide? You're Fired.

Monday, June 16, 2014

This article was prepared in June 2014.  It is intended as general information and not specific legal advice.  If you want legal advice about a problem, you can contact the author below.   

A recent decision of the Employment Relations Authority in A v B Ltd indicates the potential pitfall where an employer dismisses an employee on discovery of the employee's undisclosed criminal convictions.

What should an employer do when it discovers an employee has undisclosed criminal convictions?  Proceed with care!

Mr A had been employed by the company, B Ltd, in a series of positions for 13 years.  In 2013, Mr A's historical but serious criminal offending, for which he had served two separate terms of imprisonment, came to the attention of the company.  Soon after, Mr A was dismissed for failing to declare his criminal convictions.  The Employment Relations Authority held that the dismissal was unjustified, and awarded three months of lost wages, and $6,750.00 for emotional harm compensation.

At first blush, this result appears to be counter-intuitive.  The employer had asked the employee to declare whether he had any criminal convictions.  The employee stated that he did not.  The company was then deprived of any ability to consider the convictions when deciding whether Mr A was a suitable employee.  How then did the company incur liability for Mr A's failure to be truthful about his past?  The Authority considered that the primary fault was the company's desire for haste, as this compromised the fairness of the process for Mr A, and made the dismissal unjustifiable.

Prior to the dismissal, the company's HR advisor and a senior manager met with Mr A.  Mr A was told that he did not need to give an explanation immediately, and was advised to take legal advice.  So far, so good.  Mr A's lawyer subsequently wrote to the company asking for clarification of its concerns or allegations.  The company did not reply in writing, and continued with the disciplinary process.

The Authority determined that it was not completely clear to Mr A what the company's allegations were, other than not being truthful on his employment application form.  The specific concerns held by the company about Mr A's suitability to remain in employment were not clearly set out for Mr A, despite Mr A's lawyer's request for clarification.

The lesson here is plain.  The valid reason for a dismissal can be undermined by not using a fair process.  The steps required of the company in this case were not trying.  The company was required, as a basic matter of fairness, to set out in writing its concerns about the employment relationship.  If done correctly, this would have provided Mr A with a meaningful opportunity to respond to the company's concerns, and once the company had heard from Mr A, it would be able to make a decision about whether the employment relationship could continue.

We are able to advise both employers and employees about the correct steps that must be taken in a disciplinary process, beginning with the drafting of disciplinary processes in an employee's individual employment agreement, through to advice on consulting on the steps to take about any aspect of job performance or behaviour during the employment relationship.  Where necessary, we are able to intervene at an early stage to promptly and pragmatically resolve any disputes, grievances or claims.

Please contact one of our Litigation Teams on 415 477 (Albany Office) or 377 9966 (Auckland Office) to discuss any employment issues.