Employment Court sends employee to prison

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ALA (the employer) v ITE (the employee)

Unfortunately, this is another case where the parties have been given name suppression, but the story is worth telling as it is the first time I have seen the Employment Court order someone to go to prison.

This didn’t happen overnight but is the culmination of a long story.

A complicating factor in researching the case is that it changed names as it travelled through the different judicial bodies. In the Employment Authority it was P v Q, in the Employment Court it was ALA v ITE and in the Court of Appeal and Supreme Court it was B v ALA.

The employer is a local authority and ITE worked for ALA as an information technology expert.

ITE was a disgruntled employee. He was critical of his manager’s competence and of the organisation and started doing what he considered necessary to hold them to account. ALA became concerned that he was accessing the computer system and deleting data without authorisation, some of which belonged to other local authorities, so it embarked on an investigation and suspended him during the process. The police were also called in to conduct a criminal investigation and searched his home where computers were removed for further analysis. This led to ITE being charged with damaging or interfering with a computer system and accessing a computer system without authorisation, although these were withdrawn some time later.

During the course of the employment investigation, ITE’s lawyer proposed a negotiated settlement to end the matter. The settlement was signed by the parties and confirmed as final, binding and enforceable by a mediator from Ministry of Business, Innovation and Employment.

The agreement included terms in which [ITE] promised to keep certain matters confidential and [ALA] agreed to pay him… tens of thousands of dollars. It was money paid in return for a promise about future behaviour.

The confidentiality clause was extensive and included an agreement that ITE would not disseminate or disclose to any third party (verbally or otherwise)… investigation data…and any other information…related to his employment…whether or not that information… related to the employment investigation.

Within six months, ITE had set up a website, prepared a video in which he set out his explanation of events, and his perception of what had occurred and why. He made that video available via his website and sent emails to a large number of [ALAs] staff and to staff of other organisations, inviting them to view the video.

ALA commenced proceedings in the Employment Relations Authority to enforce the confidentiality agreement and to have the video taken down, and sought penalties for the breach.

ITE argued that the confidentiality clause didn’t apply because the issues in the video were about the police investigations not the employment investigation, the information was now in the public domain so was no longer confidential and that any confidential information not covered by the previous arguments was only a minor technical breach of the settlement. He also said he was entitled to freedom of speech under the Bill of Rights. But if he wanted to express his views, he shouldn’t have entered into a confidentiality agreement.

The video was 35 minutes long and, according to the website it documents the management failings, money that was spent, the NZ police involvement and other matters around what happened behind [ITE’s] sudden departure.

Little did he realise, that this was just the start of a long judicial experience for the parties.

The three hearings in the Employment Relations Authority in 2015 culminated in an order for ITE to remove the posts from the website and to cease communicating with any third parties about the matter and to pay a penalty of $6000 to the Crown for breach of the agreement. He was firmly told that failure to comply could result in a fine of up to $40,000 or a prison term of up to three months. Furthermore, he was ordered to pay $15,000 in costs to the employer, to defray their $86,000 in pursuing the case.

Instead of complying with the Authority, ITE ramped up his efforts to disseminate the information and posted material to Facebook and put a series of documents on a cloud-based facility with access provided to other people and emailed the newly elected councillors in 2016. He was fined $7500 for this breach.

Next he sent flash drives with his story to the chief executives of several local authorities and published six YouTube videos. Further action was initiated in Court and he was reminded of the potential outcome if he persisted. The day after being served with the Court action, ITE sent more information to candidates of previous local body elections with links to the videos. There were more appeals for action from the employer and more stern words from the Judge, all to no avail and ITE continued to contact people and promote his view.

A further court hearing ensued and ITE was required to comply with taking down the websites. He declined to confirm immediately that he would do so, leaving the Judge to make a decision on further sanctions.

The history was one of repeated flouting of the compliance orders. ITE had failed to pay $138,000 fines and costs ordered against him, such that ALA had him declared bankrupt, so the Court was left with little option but to sentence him to an immediate term in prison of 21 days and to pay a further $48,000 in costs.

In total the taxpayer has provided the venue for three hearings in the Employment Relations Authority, ten in the Employment Court, and one each in the Court of Appeal and the Supreme Court, all of which agreed with the original decision.

The bottom line is, when the Authority orders you to do something, it is best to comply.

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About Author

Anne Aitken

Anne Aitken is a highly experienced Human Resources professional who focuses on helping employers strengthen their organisations through working with their people. email: anne@anneaitken.co.nz | www.anneaitken.co.nz

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