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A recent Employment Court case considered whether an employee’s failure to disclose their dismissal from previous employment amounted to misrepresentation and justified summary dismissal.

Case: Ford v Henry Brown and Company Limited [2024] NZEmpC 181

Background:

Henry Brown and Company Limited is a construction company. In late 2021 the company was hiring for a project manager. Mr Ford applied, and the company carried out its regular recruitment process.

The company spoke with one of Mr Ford’s referees who was a colleague at his previous role. When asked why Mr Ford left the company, he said it was in relation to health and safety and issues with the General Manager.

Mr Ford was requested to fill out an application form, but did not, and he was then offered employment and started work in October 2021.

Mr Ford then raised two personal grievances in September 2022, in relation to Henry Brown and Co’s approach to health and safety and alleged bullying.

The company became concerned and contacted Mr Ford’s previous employer and referee (who no longer worked there). A manager informed then Mr Ford had in fact been fired.

Henry Brown and Co wrote to Mr Ford raising concerns that this was misrepresentation, and dismissed him after a disciplinary investigation process, relying on a clause in his Individual Employment Agreement which read:

“In appointing you we have relied on your representations as to your qualifications and   experience. You confirm that those representations are true and correct and that you have disclosed everything, which if disclosed may have been material to our decision to employ you. You also acknowledge that we may take disciplinary action against you, including dismissal, if your representations were misleading or incorrect.”

Held:

The Employment Court held that the dismissal was unjustified, and awarded Mr Ford nine weeks lost wages and $9,000 compensation for humiliation, loss of dignity and injury to feelings, commenting on the distinction between a failure to disclose and a misrepresentation.

At paragraph [23] of the determination, the Court said:

 I do not see it as according with the natural and ordinary meaning of cl 16 to interpret the “disclosure of everything” which (if disclosed) “may have been material to our decision to employ you” in the disjunctive way contended for by the company, and which found favour with the Authority. That would require the reference to “misleading or incorrect” representations in the final sentence to be read as including not just representations as to qualifications and experience but also a failure to “disclose everything”. A failure to disclose suggests a failure to say something; a representation suggest that something was said.  And it is notable that no mention is made of “disclosures” in the final sentence.

The Court went on to say at paragraph [25]

“How would a prospective employee know what “may” be regarded as relevant to the employer and accordingly what they had to disclose? What of information that an employer is not lawfully permitted to ask about or rely on when making hiring decisions, but which the employer might regard as relevant? Would family commitments, health issues, an historic criminal conviction be relevant?”

The Court held that allowing for an open-ended interpretation of a misrepresentation would create a significant amount of uncertainty.

Message for Employers

It is fairly common for employers to later discover information about an employee that they consider would have changed their decision to employ them, had they known this during the recruitment process.  For advice on the best protection against these types of situations, including on the documentation to use during the recruitment process, wording of the offer letter and agreement, please contact us.

Disclaimer: We remind you that while this article provides commentary on employment law, health and safety and immigration topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.