Blog
The Press Test - Bringing an Employer into Disrepute
April 25, 2017
The New Zealand public has recently been treated to a number of juicy defamation cases in which, by seeking to uphold a reputation, the plaintiff succeeds mainly in serving up their personal life for general consumption. Such, they say, is the importance of reputation.
As many employers learn the hard way, business reputations can be damaged when the ill-considered actions of an employee make it to the front page of the Press, or worse, to the viral annals of social media. Bringing an employer into disrepute is frequently a basis for disciplinary action, and because employers like to believe that their reputations are impeccable, it is often suggested that the disreputable conduct strikes at the heart of the employment relationship and could justify dismissal.
The Employment Court recently issued a note of caution for employers seeking to dismiss an employee for bringing the business into disrepute.[1] The Employer operated a prison in Northland. The Employee had been charged with a criminal offence following an incident outside of work. She was discharged without conviction after an appearance in Court. The Employer dismissed her on the basis that her involvement in activity that lead to her appearance in Court, and the public nature of that appearance, risked putting the Department into disrepute with those who dealt with it.
The Court noted that the test was whether a fair and reasonable employer could conclude that it had been brought into disrepute. That is different to whether the employee has suffered personal disrepute – especially but not only when the events occurred outside of work. In assessing whether this test has been met, the Court said:
it is not the case that any appearance in Court for a criminal matter automatically brings the employer into disrepute. It may if the charge is related to the employment. It probably won’t when the charge is minor, mitigated by particular circumstances, and unconnected to the employee’s occupation.
the employer must consider not only the nature of the employee’s actions, but also the reasonable response of that employer’s customers. The approach is similar to that taken in defamation cases – that is whether the standing of the business been lowered in the mind of reasonable observers. This may take into account the nature of the employer’s customers, and the nature of the employee’s role.
the question is assessed with reference to the reasonable person. That person is neither unusually suspicious, nor unusually naïve. They read beyond a sensational headline, and would want to know about all the important circumstances of a situation before forming a judgment.
The test is an objective one – so it is not a question of what the employer thinks its reputation is, but how others perceive the employer’s reputation, and whether their view is modified by the employee’s actions. In most cases, the employer will require proof of how the employee’s actions affected the employer’s reputation.
What this means is that the employer is not allowed to be precious about how it is perceived in the public eye, and can not treat its reaction to the behavior as equivalent to damage to its public standing. It might be important to consider how the reasonable public perceives the employer, or those of its type. Car salespeople are consistently ranked poorly on trust surveys[2] – could a salesperson’s employer be bought into disrepute by the employee’s dishonesty? Is an accountant’s drink-driving more or less likely to cause disrepute to her employer than that of a doctor? Can the controversial political statement of a shop assistant cause disrepute to the department store for which he works? How about the political statement of a person who works for the local Council?
If you think the actions of your employee have caused disrepute to your business, please call me to discuss how that might be addressed.
[1] Wikaira v Department of Corrections [2016] NZEmpC 175
[2] www.roymorgon.com/findings/6797 -image-of-professions
