Penalty for breach of confidentiality agreement...

The Employment Relations Authority has upheld an employer’s claim that a former employee breached a confidentiality clause in an employment settlement when he went on Facebook bragging about the pay-out he had received.  The employee’s defence that he was not talking about this employer but another employer was not believed by the Authority because the Facebook post was only five days after the settlement agreement was reached with this employer.

The ERA penalised the employee $1,500 and that money is to be paid to his former employer.

The employee had bragged in the Facebook page that he beat another employer in the Employment Court thanks to the $20,000 donation.  In reality the employer had only made a $1,000 payment.  Therefore the $1,500 penalty has wiped out all of the gains the former employee made at mediation.

Alan Knowsley    

Employment Lawyer Wellington

Cheque in the mail no defence...

The Employment Relations Authority has rejected the defence raised by a law firm that it had paid its former employee with a cheque that had been sent and not returned.  The payment was supposed to pay the orders made by the Employment Relations Authority against the law firm.

The ERA held that payment had not been made just because a cheque had been posted.  In this case the cheque was sent to an address where the plaintiff had never resided and it was supposedly sent after the law firm had claimed that it had made a direct debit to the plaintiff of the amount owed.  That payment was never received either.

Orders were made by the Authority for payment of the sums within 14 days.

The Authority advised the defendant law firm that should payment not be made within that time frame that it had the power to order imprisonment for up to three months and a fine for up to $40,000.  Perhaps the defendant will take legal advice (other than from itself) before failing to pay again.

Alan Knowsley

Employment Lawyer Wellington

$12,000 penalties for arranging gang intimidation...

The Employment Court has awarded penalties of $12,000 against the director of an employer that has gone into liquidation.  The Labour Inspector was bringing a claim against the employer for unpaid wages and shortly before the hearing two employee witnesses were visited by apparent gang members with threats that they should withdraw their accusations and not attend the Employment Relations Authority hearings.

The Employment Court was satisfied that the director of the company arranged for the threats to be made by the gang members and imposed the penalties on the director personally to deter them and others from such behaviour which was an obstruction of justice.  The Police in this case had declined to prosecute due to the difficulty of proving that the employer was behind the threats beyond reasonable doubt.  However, in the Employment Court the standard required was only on the balance of probabilities and was therefore easier for the Labour Inspector to prove.

Alan Knowsley

Employment Lawyer Wellington

Awards of costs in the Employment Relations Authority...

An employer brought an action in the Employment Relations Authority against two employees for breaches of their employment contract.  The employees had set up in opposition to the employer while still employed.  The employer was successful in the Employment Relations Authority and penalties were imposed on the employees for their breaches of contract.

Normally in such situations the successful party, in this case the employer, would receive an award of costs against the other party.  However, in this case the defending employees had offered to pay the employer a sum of money in settlement of the claim before the hearing.  That offer was rejected.  The ERA held that because the employer had unreasonably rejected the settlement offer, which was for more than the employer received from the decision of the ERA, that the employees were entitled to costs from the employer.  That award of costs seriously eroded the award of penalties made against the employees.

The employer appealed to the Employment Court against the costs order.  The Employment Court held that the employer did not have to pay costs to the employees because the employer had not unreasonably rejected the settlement offer.  This was because the employees made no acknowledgment in the settlement offer of their wrongdoing for breaches of their employment agreements and the ERA had imposed penalties on the employees which were not part of any settlement offer made.

Instead of awarding costs against the employer, the Employment Court ordered that each side should bear its own costs in the Employment Relations Authority.

As a side note because the employer was successful in the Employment Court it will be entitled to an order for costs against the employees in the Employment Court.

Alan Knowsley

Employment Lawyer Wellington

Labour Inspectors powers...

Labour Inspectors have wide powers to investigate, inspect and issue enforcement notices under many laws on things such as holidays, equal pay, employment relations, minimum wages, wages protection, parental leave etc.

At a reasonable hour a Labour Inspector can enter any place where a person is employed, except a home.  To enter a home an Inspector needs a warrant. 

They have the power to interview anyone at the place of work including any employer or employee.

They can also require employers to produce all wage and time records and holiday/leave records plus any other documents deemed reasonably necessary to check compliance with labour laws.

They are allowed to take copies of any of the records and can require an employer to provide copies including of any employment agreements and draft agreements.

Anyone who obstructs or deceives an inspector can be liable to a fine of up to $10,000.

If an Inspector enters premises they must show their identification as a Labour Inspector and comply with all health and safety requirements of the workplace including staying out of parts of the premises with restricted access due to health and safety.

Inspectors can issue improvement notices to require compliance with the labour laws.  This needs to specify the relevant section to be complied with, the reasons for believing they are not being followed, the steps the employer could take to ensure compliance and the date they must be done by.

Employers have 28 days to object to the notice with the Employment Relations Authority.  Labour Inspectors can also ask the ERA to issue a compliance order to enforce the improvement notice.

Demand notices can also be issued for unpaid wages, holiday pay or other money due.  Employers have seven days to comment on the demand notice.  Once again an employer has 28 days to object to the notice to the ERA.

Inspectors can also issue infringement notices for failure to keep records of up to $1,000 per offence.

If Inspectors find further breaches after an initial visit then they prosecute employers for any later offices so it pays to get your paper work in order.

Alan Knowsley

Employment Lawyer Wellington

Protected Disclosures...

An employee of an organisation may disclose information to an appropriate authority if the employee believes the information relates to serious wrongdoing and is true or likely to be true.  The purpose of the disclosure must be for the purposes of investigating the serious wrongdoing.  Employees also covers contractors, board members and volunteers.

If an employee makes a disclosure under the Protected Disclosures Act the employee is protected from civil, criminal or disciplinary actions and this applies even if the employee was mistaken as to the serious wrong doing.

The employee should first use any established internal procedures to report the serious wrongdoing within the organisation but can go straight to an appropriate authority if they believe on reasonable grounds that the head of the organisation is involved in the serious wrongdoing or the immediate referral to the authority is warranted due to the urgency or exceptional circumstances or there has been no action on the internal referral within 20 working days.

The appropriate authority receiving the information must take all care to not disclose the identity of the employee making the disclosure unless limited exceptions apply.

Employees who volunteer supporting information are also protected under the Act so long as they did so prior to being approached by the investigators.

The act does not permit the disclosure of legally privileged information and any such disclosure is not protected.

No one can agree that the act does not apply so employees cannot contract out of their protections.

The most common appropriate authorities for employees to make the disclosure to are the Police, Auditor-General, Serious Fraud Office, Inspector General of Intelligence and Security, Ombudsman, Commissioner for the Environment, Police Conduct Authority, Solicitor-General, State Services Commissioner and Health & Disability Commissioner, heads of Public Service organisations, and professional disciplinary bodies but does not include Members of Parliament.

Alan Knowsley

Employment Lawyer Wellington