Manawatu Employment Law Services
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MISREPRESENTATION BY AN EMPLOYEE

Many employers rely on the results of criminal record checks to decide whether they will hire an otherwise suitable worker. However, since those checks can take up to six weeks to be processed, the employer often takes the word of the prospective employee as to whether they have any convictions, and hires them on the basis of an assurance that they do not have, or only have minor convictions that are of no concern to the employer. If it then transpires that the employee does have convictions that would have been grounds for not offering the position in the first place, the employee is often dismissed.

Now, if the employer’s paperwork does not cover the above outlined scenario, he/she could face an unjustified dismissal claim as the case of Richardson v Fonterra Cooperative Group Ltd [2013] NZERA Wellington 132 shows. Fonterra has a zero tolerance policy for criminal convictions and it hired Mr Richardson on the latter’s assurance that he didn’t have any. He, in fact, did, but was relying on a mistaken belief that they were sealed under the Criminal Records (Clean Slate) Act 2004. He consented to a Ministry of Justice check which arrived five weeks after he accepted the job. This revealed that he did have convictions that had even led to a term of imprisonment. After an investigation, Fonterra fired Mr Richardson on the basis of misrepresentation. Mr Richardson claimed unjustified dismissal and won his case. The reasons why are very important for any employer to know who requires employees with no convictions.

In Fonterra’s application process online, the applicant is asked to disclose whether he/she has any criminal or driving convictions. The online application also informed the applicant that:

‘Sometimes background check results are not confirmed until after employment has started. Please note that nay information obtained will be checked with you for accuracy, but be aware that if you have not given Fonterra information that is relevant to the background checks or your general suitability for employment, or if you have provided misleading or false information, then this may be grounds for dismissal without notice’

Fonterra subsequently relied on this statement in its defence of the unjustified dismissal allegation, claiming misrepresentation under the Contractual Remedies Act 1979, which, if proven, would have the effect of cancelling the employment contract with Mr Richardson. Unfortunately, subsequent documentation pertaining to Mr Richardson’s employment, namely, the letter of offer of employment and his employment contract, made the offer of a job unconditional. There was no reference in either document as to any misrepresentation and the consequences that could arise from it, such as dismissal. Further to that, the employment contract also had a Completeness of Employment Agreement clause, which means that the contract superseded all other documents. Therefore, unless the contract had a misrepresentation clause, the employer could not rely on the above statement which was in the online application form.

So what does this case mean for employers? Simply this – that, if a prospective employee’s hiring is dependent on a clean criminal record which may not be proven until after the start of employment, then the employer must have a clause in the offered employment contract, and letter of offer of employment if one is provided, that covers the issue of misrepresentation. Such a clause must state that if the employee gave false or misleading information, then dismissal may follow as a result. An employee must, however, be given the opportunity to respond to such an allegation.

Note, an applicant’s criminal history may not be the only issue that can be covered by a misrepresentation clause. Another matter of concern for many employers is the state of health of any prospective employee.

Clearly, such a clause would be advantageous and is to be recommended.

Posted: Wed 15 Jun 2016

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