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Employee Awarded Over $18,000 After Being Dismissed For Not Revealing Criminal Record

Published 01 Jan 2014

The case of Richardson v Fonterra Cooperative Group Ltd [2013] NZERA Wellington 132 stands as a warning for Employers who wish to dismiss an Employee for misrepresentation to follow due process.

Mr Richardson was employed as a tanker driver for Fonterra after completing a three stage recruitment process. At each stage he indicated that he did not have previous criminal convictions and was cleared to proceed to the next stage in the process. Mr Richardson had criminal convictions for driving with excess breath alcohol, driving while disqualified, and theft as a servant. Nonetheless, Mr Richardson relied on the Criminal Records (Clean Slate) Act 2004 stating that he did not have any previous driving and criminal convictions.

The first stage involved a pre-employment questionnaire, the second was a telephone interview and the third was a face-to-face interview. Mr Richardson then received an unconditional letter of appointment. A month after he had started work, Fonterra received Mr Richardson’s Criminal Convictions Record from the Ministry of Justice which detailed eight convictions between 1997 and 2004. The Criminal Records (Clean Slate) Act 2004 did not apply as Mr Richardson had a term of imprisonment. Mr Richardson was instantly dismissed following the conclusion of a meeting on 26 November 2012. It was argued that Mr Richardson had deliberately withheld information material to Fonterra’s decision to employ him and a dismissal without notice was the appropriate outcome.

The Employment Relations Authority (ERA) determined that the dismissal was unjustified because there was an unconditional offer of employment to Mr Richardson and that there was no provision in the employment agreement to wait until the Ministry of Justice Criminal Convictions Record to be received or provision for a termination on misrepresentation. Fonterra did not rely on a disciplinary process under the Employment Relations Act, but rather sought to terminate the contract under the Contractual Remedies Act 1979. Nor did Fonterra put directly to Mr Richardson that he was accused of deliberately misrepresenting himself. Mr Richardson had no notice, no opportunity to respond and provide input before the decision to terminate was made on the grounds submitted.

The ERA decided that there should be a reduction of 25% for contribution and blameworthy conduct. Mr Richardson received $13,152.75 lost wages and $5,250 in compensation under for hurt and humiliation.

The case shows the importance of explicitly setting out the grounds of possible termination. The entitlement to cancel under the Contractual Remedies Act 1979 works in tandem with the requirement in s 103A of the Employment Relations Act 2000 that the actions of the Employer and how it acted were what a fair and reasonable Employer could have done in all the circumstances at the time.

There is a danger in moving away from the original letter of termination which, in this case, was based on a failure to disclose all criminal convictions which was based on the evidence at the time. Reliance on deliberately withheld information material to the decision to employ, as argued, required an unnecessarily high degree of intention which proved in the circumstances of this case as unsustainable.

Most importantly, the case highlights the importance of having explicit terms relating to misrepresentation contained in the employment agreement.