Dishonesty catalyst for dismissal

23:03, Jul 20 2014

The Court of Appeal recently considered whether it would allow an appeal from the Employment Court on whether an employer could dismiss someone it regarded as having lied about something when being investigated over another issue of misconduct.

The application for leave to appeal was declined.

It was an Auckland Council case involving a senior accountancy/ finance manager and how she hired a casual employee. The employee was eventually dismissed because the employer concluded that she had lied during the investigation into how she hired the casual worker.

In December 2009, Ms G provided a detailed written response to the issues raised by the council, which were that she had failed to comply with the recruitment policy when she hired a casual employee. She attended a meeting with council representatives in mid-December accompanied by her lawyer.

After further investigations by council officers, Ms G was invited (in writing) to attend a meeting to discuss allegations of serious misconduct relating to the recruitment of the casual and the access that person had to confidential systems.

The letter also raised the additional allegation about the truthfulness of her explanation to the allegation around the recruitment of the casual. She was warned that if her explanation was not truthful, then the action of lying in the investigation may constitute a separate act of serious misconduct. Ms G provided a detailed written response and her lawyer provided submissions on her behalf.


The meeting was reconvened and Ms G was informed that the allegations relating to the recruitment matter were sustained and found to be misconduct. She was informed that there were serious doubts about the truthfulness of her explanations.

This struck at the heart of the trust and confidence that must be part of a relationship with such a senior staff member.

The finding that Ms G had been untruthful in turn led to the conclusion she was guilty of serious misconduct and, after being given the opportunity to make submissions on whether dismissal was warranted, she was dismissed.

Ms G filed a personal grievance, which was heard in the Employment Court. The judge rejected a submission made by counsel for Ms G that it was not open to the council to expand the original disciplinary investigation into the recruitment matter to include alleged untruthfulness in the answers Ms G gave in the course of the investigation.

The judge said, "There is no doubt that dishonesty in the context of an employment relationship can give rise to disciplinary action and dismissal."

The judge could see "no reason in principle why an employee who was untruthful to their employer during the course of a disciplinary process should be immune from disciplinary action."

The judge rejected the proposition for Ms G that "the employer was required to commence a fresh disciplinary process should the employer seek to rely on the alleged untrue statements to support disciplinary action against the employee".

The judge did not accept that "an employer who becomes concerned that an employee is not being truthful in his/her responses is obliged to conclude a disciplinary process that is already in train and then embark on a new process, or initiate parallel processes."

The court held that provided the requirements of fair process are met, an employer may identify a concern about truthfulness and deal with that concern in the course of a pre-existing process.

On whether the statements of Ms G were truthful, she accepted the submission on Ms G's behalf "that humans have an imperfect recall and that different versions of the same event may be explicable on this basis". However, the judge found that the discrepancies in this case went well beyond the usual vagaries of the human mind and the council was justified in drawing the conclusion that Ms G was not being truthful in her responses.

In summarising her conclusions the judge said that "the council could reasonably expect that [Ms G] would be open and frank in explaining her actions and inactions".

She also concluded that council officers were justified in their "conclusion that Ms G had not provided truthful responses during the course of the . . . disciplinary process", and that this amounted to serious misconduct warranting dismissal.

The Court of Appeal declined Ms G's application to appeal the decision of the Employment Court.

This case is a graphic example of where the truth would have resulted in a much less serious sanction being applied against Ms G than was eventually realised. The council found that the recruitment incident was only misconduct and could not have led to dismissal, but her untruthfulness in her responses was the catalyst for a justified decision to dismiss.

Brian Richardson is a human resources adviser at Preston Russell Law. Email

The Southland Times