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Keeping secrets can prove harmful

4 february 2015


It is human nature to keep secrets, but in the context of employment, to do so can prove harmful to both employer and employee. William Hart learnt this truth after being dismissed seven weeks into his employment with Printlounge Ltd for neglecting to disclose a string of past criminal convictions including the murder of a woman.

In the job interview Mr Hart informed the employer he had served two years in prison for assault, painting the event as a one-off occurring at a party. The general manager said that he then inquired whether Mr Hart had additional convictions, to which Mr Hart replied “no”. Conversely, Mr Hart asserted that the employer never asked whether he had other convictions.

The general manager told Mr Hart he would need the weekend to consider what Mr Hart had told him and then subsequently offered the applicant a job on a “second chance employment” basis.

Seven weeks later an individual in the industry brought Mr Hart’s conviction for murder to the attention of the general manager who then found a newspaper article about it, asked Mr Hart whether it was true, and, upon Mr Hart’s admission that it was, dismissed him. Although unknown to Printlounge when the offer of employment was made, in truth Mr Hart’s record included conviction for three assault charges, a murder conviction, and another conviction for robbery-related assault charges.

Mr Hart challenged his dismissal in the Employment Relations Authority. During the Authority hearing it was agreed that prospective employees do not have a general duty to voluntarily reveal material information about themselves, but if an employer requests such information, and the applicant for the job elects to answer, the answer must be full and honest.

The Authority decided that Printlounge was within its rights to effectively cancel the employment agreement on the basis that Mr Hart had made misrepresentations which induced the company to offer employment and had fundamentally injured the employer’s trust and confidence in the employee.

Despite the wrongdoing of Mr Hart and the right of the employer to cancel the employment agreement, Printlounge was still under an obligation to consider Mr Hart’s rights by following a fair process. The employer admitted it summarily dismissed Mr Hart and agreed that it wrongfully called Mr Hart into a meeting without giving notice or informing him of his right to bring a representative. The Authority therefore concluded that Mr Hart’s dismissal was unjustified on procedural grounds.  

However, when the Authority considered the amount of compensation Mr Hart deserved, it saw fit to reduce the amount by one hundred percent because he was ultimately to blame for the situation which gave rise to his personal grievance.

The continuing obligation on the employer to observe fair process, as highlighted by this case, is crucial as it reflects the importance of ensuring the rights of individual employees are not ignored, even in extreme situations. Although it is highly unlikely that the decision to dismiss would have been any different if the employer had provided the opportunity to Mr Hart to engage a representative and to take time to construct a response, it may have affected the timing and terms on which Mr Hart’s employment ended.

This case additionally emphasises the importance of asking the right questions and thoroughly screening employees before offering a job. It is also unusual because of the drastic reduction of compensation resulting from the employee’s contribution to the loss. Such an outcome reflects the ability of the Authority to administer a holistically just result even though a personal grievance may be technically made out.

Despite this consideration, employers will not always be able to rely on this and would be well advised to protect their position by always following a robust process when disciplining or dismissing an employee.

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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