Damage to Reputation

Two employment law cases received considerable media attention recently and highlight how employment dispute stories have become very newsworthy. Both involved employers who dismissed employees for reasons either wholly or partly attributable to reputational damage. This should serve as a reminder to other employers to be concerned about the potential implications of this sort of publicity.

 

The cases were Hoff v The Wood Lifecare (2007) Limited (2013) and Hallwright v Forsyth Barr Limited (2013) which were heard recently in Christchurch and Auckland, respectively.

 

In the first case, Hoff, who was a senior caregiver at a retirement village, entered the room of a recently deceased resident on the basis that she wanted to give the village gardener access to water the deceased resident’s plants. At that time, relatives of a prospective resident were being shown around the village by the receptionist and went to view the room. Finding the door unlocked, they entered the room and noticed someone, later identified as Hoff, hiding behind the bathroom door. Adding to the suspicious circumstances at the time was that the gardener’s glasses were found on the bed next to Hoff’s keys. Questions were raised by the employer with Hoff about why she felt she needed to hide behind the door if she was only giving the gardener access to the room. Not satisfied with Hoff’s explanation, the employer decided to terminate Hoff’s employment, but in doing so the employer rushed the disciplinary process and the correct procedure was not followed. 

 

Following Hoff’s dismissal other staff at the village came forward and provided other examples to the employer that Hoff and the gardener had been involved in some inappropriate behaviour.

 

In response to her dismissal, Hoff challenged her employer and the matter was eventually heard at the Employment Relations Authority. In the employer’s favour, their House Rules document made reference to the potential for reputational damage to be considered serious misconduct. The Authority agreed that Hoff’s behaviour could have damaged her employer’s reputation. However, the employer had followed a flawed disciplinary procedure and compensation was awarded in favour of Hoff, but it was reduced because of her behaviour.

 

The second case received considerably more media attention when Hallwright, a Senior Investment Analyst, got into a confrontation with another motorist during busy Auckland traffic. Hallwright attempted to diffuse the situation by leaving the scene, but unfortunately drove over the other motorist’s leg. Initially Hallwright was given name suppression but the suppression order was eventually lifted and Hallwright was convicted at trial of causing grievous bodily harm with reckless disregard. The employer had carefully allowed the external justice process to take its course before taking its own steps. Hallwright’s employment agreement also contained a clause to the effect that damage to the employer’s reputation constituted serious misconduct and the employer ended Hallwright’s employment.

 

While it may not be possible to keep events out of the public arena, these cases highlight the importance of employers having robust employment documentation that identifies damage, or potential for damage, to an employer’s reputation as serious misconduct. An employer is able to rely on the law to protect them under these circumstances provided they make reference to this in their Employment Agreement and Business Rules. However, as the Hoff case illustrates the employer must also follow a robust process when investigating incidents such as serious misconduct.

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