Don't give boss's money to your lover

OPINION: In the occasional case the tables are turned and employees are ordered to pay lots of money to their employer after their employment relationship turns sour, writes Mary-Jane Thomas in this week's Work to Rule.

A recent Employment Relations Authority decision is an example of just that.

Mr T was employed by the Auckland Regional Council in a relatively senior management position. He was asked by his employer to prepare a coherent customer service strategy, which his manager estimated would cost around $400-$500 to complete.

Mr T engaged X, as an independent contractor, to perform the job. However, he did not follow the appropriate procedures, like using the standard letter of engagement the council had for contractors, or ensuring that X had relevant qualifications and experience.

Crucially, Mr T also failed to inform his employer that the contractor he chose for the job was someone he was conducting an extramarital affair with!

If this seems like bad conduct on the part of Mr T, the facts of the situation get worse. X issued two invoices, each for $4500 plus GST. Neither of them contained any details of the work carried out, or any of the other information the council ordinarily required.

Part of Mr T's job was to authorise the payment of such invoices, which he of course did in this case.

When the time came for the Council to review the work that X had done on the customer service strategy, it became apparent that it was sub-standard. At around the same time as the review occurred, Mr T resigned.

During his notice period the Council investigated the matter, discovered what had happened and dismissed him for serious misconduct.

The council then brought an action in the ERA claiming damages for Mr T's breaches of his employment agreement.

The authority found that the work X performed did not justify the payments she received and that Mr T did not have reasonable grounds for authorising the payments. He should have been more transparent with his employer and disclosed his relationship to X.

To add insult to injury, X and Mr T used the money to pay for an overseas trip. The ERA found that it was "difficult to avoid an inference of dishonesty" in Mr T's conduct. In the end he was ordered to pay the council over $40,000, including reimbursement for the invoices, their legal fees and the cost of the investigation against him.

Next week I am going to be at the Sevens in Queenstown in our Preston Russell law tent. If you are passing by make sure you pop in and say hello and pass on any ideas for the column – I will be the one yelling very loudly things like "make the ball available" and "been doing it all day ref" with a husband and two boys behind me looking embarrassed!

» Mary-Jane Thomas is a partner at Preston Russell Law. E-mail questions to mary-jane.thomas@prlaw.co.nz.

- © Fairfax NZ News

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