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A beautiful game, shame about the scandal

9 June 2015


Against the backdrop of the recent Fifa scandal, it seems incongruous that in New Zealand we have idealistic youth playing in the under-20 football World Cup from North Cape to the Bluff.

I was privileged to meet the Colombian under-20 team. Those who have had the privilege of meeting some of these exceptional young players can’t fail but to be impressed by their idealism and the fact that many of them come from simple rural backgrounds but have travelled the globe to play. These footballers will meet other young people and excel in a sport they love because of their raw native skills.

Shortly before the tournament began in New Zealand it was announced that some officials in football’s governing body, Fifa, had been charged with racketeering, wire fraud, money laundering, bribery and the like.

We are told the investigation that led to the arrests has unveiled a scheme going back 24 years exposing corruption in international football.

The United States Attorney-General has said that what happened spans at least two generations of soccer officials who allegedly abused their positions of trust to acquire millions of dollars in bribes and kickbacks.

One of the sub-themes is that through subsidiaries, Fifa commercialised media and marketing rights associated with football events in some countries. These were sold to marketing companies which would, in turn, sell them down stream to local radio and broadcasting networks. Football officials would then benefit from payments of bribes and kickbacks. 

More recently we saw the extraordinary story of Sepp Blatter, president of Fifa for the last 17 years. Blatter was re-elected to the role last week despite the eruption of the kickback scandal. Four days later he resigned, with little to no explanation.

As if to cement matters, we have one former Executive Committee member, Chuck Blazer, pleading guilty in a United States court that he and other people received bribes to vote for South Africa to host the 2010 World Cup. 

Many of the people involved appear to be elected officials. Others may be employees.

New Zealand is one of the least corrupt countries in the world, thanks in part to our small size, the excellent work of Transparency International and generally perhaps because of our culture and values.

One hears of occasional stories of people breaching their employer’s trust, generally not for money, but on occasions for financial benefit.

So what does employment law have to say about these issues?

One of the most colourful cases about an employee benefiting from their position was that of George Blake, a member of the Secret Intelligence Service in the United Kingdom from 1944 to 1961.

Between 1951 and his arrest in 1960, he was an agent for the Soviet Union.

He was convicted for betraying his country and sentenced to 44 years in prison.

There is no question that he breached his obligation of loyalty and fidelity to his employer and his obligation to behave in a way that enhanced trust and confidence. Extraordinarily in 1966 he escaped from prison and emerged in Moscow. 

In 1990 he published a book unconvincingly entitled No Other Choice, no doubt seeking to redeem himself from his irredeemable deeds. The book selectively described his actions during his time with the SIS. 

The British Crown was not happy that the book was published and sought to prevent Blake from receiving any financial benefit.

The matter came before the English Court of Appeal, which declared “the employee must act in good faith, he must not make a profit out of his trust… he may not act for his own benefit or the benefit of a third party without the informed consent of his employer”.

However the court also held that those duties exist only for as long as the employee is in the employment relationship. As Blake had written and published his book well after his employment was terminated, there was no basis for the Crown to recover any proceeds from the book.

Interestingly, the Crown did succeed with an argument that a person should not benefit from the commission of their crimes. Blake was prevented from receiving any payment from the sales of No Other Choice.

The law set by the case of George Blake applies in New Zealand and is often quoted here as authority for the proposition that an employee must act in good faith and not make a profit out of the trust put in them without the consent of the employer.

I wish the competitors and officials hosting the outstanding Under-20 Fifa World Cup a successful and inspirational competition. What is happening here in New Zealand is what sport is all about and gives inspiration to young people.

It is far removed from the world of Sepp Blatter and his governing body.

Cullen - The Employment Law Firm is one of only eleven law firms in New Zealand approved to provide employment law services to Government and the public sector.

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