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Brief Counsel

Hurting the firm out of hours can cost you your job

18 March 2013

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​The Employment Relations Authority decision upholding Guy Hallwright’s dismissal from Forsyth Barr over a road incident is a reminder to employees that conduct independent of the workplace can cost you your job.

It also provides some useful guidance to employers on what they need to prove in order to justify a sacking or other disciplinary action.

Quick recap

Guy Hallwright was dismissed after being convicted of causing grievous bodily harm in a traffic dispute with another driver.  The incident attracted much media attention because of Mr Hallwright’s position as a senior investment analyst at Forsyth Barr Limited.
Mr Hallwright contested the dismissal, saying that he should not be held responsible for sensational and inaccurate media reporting and that, while he personally had been brought into disrepute, Forsyth Barr had not.
But Forsyth Barr argued successfully that the firm’s reputation had also suffered and that Mr Hallwright had breached his obligation in his employment agreement not to engage in any activity that was likely to compromise his ability to carry out his duties.

The test

To dismiss an employee for behaviour outside of work, there has to be a link between that conduct and the employee’s employment.  This test is met where it can be established that the conduct:
  • has damaged the employer’s business or its reputation
  • is incompatible with the proper discharge of the employee’s duties
  • has affected other employees, or
  • undermines the necessary trust and confidence between the parties.
In this case, a PR consultant for Forsyth Barr testified that Mr Hallwright’s name being linked to Forsyth Barr would have caused damage to Forsyth Barr’s reputation and that it had the potential to cause significant ongoing damage. 
The Authority accepted this testimony as being sufficient, without requiring Forsyth Barr to demonstrate any financial losses. 

Chapman Tripp comments

The principle that out of work conduct can be grounds for dismissal is well-established in law, although these cases are relatively rare. 
And, in our view, the Authority’s analysis is correct.  It was entitled to accept the PR consultant’s expert evidence as being sufficient to get the employer across the line. 
It will be interesting to see if Mr Hallwright exercises his right of appeal to the Employment Court. 
Our thanks to Gemma Peachey for writing this Brief Counsel. For further information, please contact the lawyers featured.

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