Recruitment & Misrepresentation – Buyer Beware

Employment matters with thanks to Chapman Employment Relations

Misrepresentation by a job applicant is a serious matter, but you still need to get the procedure right when managing the situation.

Mr Richardson was employed by Fonterra as a Tanker Driver.  Prior to employment Mr Richardson was asked if he had any previous criminal convictions, he advised he did not. Further Mr Richardson was advised a criminal record check would be carried out, he agreed to this prior to employment, the vetting was completed after his employment began.

On being offered employment Mr Richardson was provided, in effect, a new set of conditions, including the requirement of a Criminal Record Check.  The employer did not advise what would happen if he failed that test even though this is stated in the previous recruitment process.  The letter of offer pointed to a Collective Agreement that had a completeness clause which had the effect of wiping all previous conditions and undertakings, including those within the recruitment process.

There is a great deal of trust and confidence required by the employer in their drivers, in being able to undertake their duties largely autonomously with sound judgement and professionalism.

On receipt of the criminal record check it was discovered Mr Richardson had driving offences including, drink driving, and theft and dishonesty convictions which resulted in fines disqualifications and imprisonment.

Fonterra determined to undertake an Employment investigation for a failure to disclose his convictions and advised Mr Richardson that the matter was considered serious, and that termination may follow.

Through the employer’s investigation Mr Richardson stated he understood his previous convictions were covered by the Clean Slate Act so wasn’t required to submit the convictions.  In his case this was not correct.

Whilst Mr Richardson’s last conviction was in 2004 he did not meet the criteria for coverage under the Clean Slate Act, at the very least convictions including imprisonment are excluded.  He formed his view that he did not need to disclose his convictions, it seems, from discussions with his wife who had apparently checked the Ministry of Justice website.

After an initial investigation Fonterra advised Mr Richardson, in a letter of dismissal:

You have misrepresented yourself to the Company by failing to disclose all of your previous traffic and criminal convictions and as such we are terminating your contract with immediate effect.

When Mr Richardson appealed the decision internally, Fonterra went further and advised:

Given the conclusion that Mr Richardson had deliberately withheld information material to Fonterra’s decision to employ him, Mr Rogers decided that dismissal without notice was the appropriate outcome and advised Mr Richardson of this.

Firstly let’s be clear about the Criminal Records (Clean Slate) Act 2004, if an employee or prospective employee has convictions covered by the Clean Slate Act then that person is not required to advise of the convictions, it is as if an invisibility blanket has been cast across the convictions and no one need know, speak, or hear of them in the future, well at least not in an employment setting.

When Mr Richardson appealed the decision internally, Fonterra went further and drew a conclusion that Mr Richardson had “deliberately” misled the employer.

Late in the piece Fonterra did attempt to use Contract law and misrepresentation forming a breach to justify dismissal, however it does not appear it advised Mr Richardson it intended to use this aspect of the law prior to the matter going to the Authority. In any case the Authority ruled the employer could not rely on this legislation in any regard even before testing the breach of good faith in not advising Mr Richardson earlier in the process it intended to rely on this legislation.

The Authority found the previous stipulations in the recruitment process did not have any weight, that the unconditional offer of employment, and the Employment Agreement, did not cover this situation.  Further the Authority found that the reliance Fonterra placed on wilful or deliberate misrepresentation was not correct. The Authority concluded Mr Richardson did not intend to mislead, and reference was made to Mr Richardson’s wife’s evidence and that he had agreed to a criminal record check being undertaken.  The Authority determined Fonterra had not been clear on this allegation of deliberate misrepresentation through its investigation process, so again Fonterra was found wanting on its conclusions.

The Authority found the dismissal unjustified and provided remedies in the employee’s favour, including lost wages and hurt and humiliation of around $20,000, plus costs.

The Authority did not reinstate Mr Richardson’s employment through a mixture of considerations including Mr Richardson’s desire to not return given his negative experience and apparently more importantly that had the employer been aware of the criminal convictions the employer would not have employed Mr Richardson, to which the Authority member agreed.

It would seem to be another case of get your initial allegation right, run a thorough process, and ensure your decisions reflect the allegations and findings made through the investigation. Further it is important to create a connection between an offer of employment and employment agreement that covers misrepresentation, or facts discovered after employment, otherwise buyer beware.

 

Lessons,

• When requiring Criminal Record Checks for employment purposes wherever possible undertake these prior to employment.
• Review process and supporting documentation to cover the transition from recruitment to employment process.
• If you are in a position whereby you still would want a criminal record check done but time has not allowed:
• have a clause in the offer letter stipulating the offer of employment, and employment itself, is subject to a Criminal Record Check satisfactory to the employer, and
• that any issues discovered that had not been raised or represented prior may lead to an employment investigation, and that this may lead to termination of employment.

We recommend reviewing your employment agreement and consider including such a clause.