Posted on: May 06, 2013

Misconduct outside work may provide justification for the dismissal of an employee if the misconduct has the potential to damage the employer’s business in some way. The conduct may be incompatible with the employee’s duties at work or it may undermine the trust and confidence that is necessary between employer and employee (Smith v The Christchurch Press Company Limited (2001) 6 NZELC 96,162; [2000] 1 ERNZ 624 (CA)).

In Hallwright v Forsyth Barr Ltd [2013] NZERA Auckland 79, the Employment Relations Authority considered whether an employee, who had been dismissed for conduct outside work, was justifiably dismissed in terms of section 103A of the Employment Relations Act 2000 (the Act). When Mr Hallwright was driving in Auckland he offended the driver of another car, Mr Kim. Hallwright and Kim got out of their cars to discuss the matter. Hallwright thought better of stopping and drove off. By accident, Hallwright drove over Kim and caused him serious injury. Hallwright was employed as a senior investment analyst by Forsyth Barr Ltd (the employer). At the time of the incident, Hallwright was not acting in the course of his employment and nothing during the incident was capable of identifying the nature of his employment, but nonetheless the incident received significant media attention.

The employer waited to see what the outcome of Hallwright’s trial and sentencing would be. Almost two years later Hallwright was convicted of causing grievous bodily harm with reckless disregard. After a series of discussions with Hallwright, the employer dismissed Hallwright for serious misconduct (bringing his employer into disrepute) and for engaging in an activity that was likely to compromise his ability to carry out his duties which required him to have a high public profile.

Hallwright brought a claim for unjustified dismissal. He denied that he had brought his employer into disrepute and that his ability to carry out his job had been compromised.

The Authority considered the requirements of Hallwright’s job in detail. The Authority referred to Smith v Christchurch Press Company Ltd (supra) and held:

  • the employer had reasonable grounds for concluding that serious misconduct had occurred even though the employer could not provide actual evidence of damage, and
  • Hallwright’s conduct discredited him personally and tainted his position overall.

The Authority concluded that dismissal was the action of a fair and reasonable employer.



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