Dismissal for fraud prior to employment

Fraudsters dismissals were justified even though the fraud occurred prior to employment, the Employment Relations Authority has held.

Inland Revenue employed Kim Murray and his wife, Karen Murray, as Customer Services Officers at its Wellington Call Centre. Like all prospective IRD employees, they were asked to declare any criminal convictions or pending prosecutions they might have. They truthfully answered none.

After being employed, the Murrays were charged with benefit fraud for claiming social welfare benefits while in paid employment. The fraud charges related to the period before they commenced employment with IRD. They sought time off work to attend Court to answer the charges. They also indicated to IRD management that they intended to plead guilty.

Management became concerned about the seriousness of the charges and the impact their guilty pleas would have on the employment relationship between the parties. They commenced an investigation.

While IRD accepted that the fraud had not occurred while in its employ, and that the Murrays had filled out their employment application forms properly and in good faith, it believed that they had committed behavior that was likely to bring the Department into disrepute. At the end of the investigation, the IRD dismissed the Murrays.

The Murrays brought personal grievances against IRD. The Employment Relations Authority held that the Murrays' fraudulent behavior did not constitute serious misconduct because it had occurred prior to them commencing employment with IRD. For the same reason, it could not be considered as behavior likely to bring IRD into disrepute under IRD's Code of Conduct.

Regardless, the Murrays' dismissals were justified. "Inland Revenue was entitled to conclude that there had been an irreconcilable breakdown of trust and confidence between it and the Murrays because they were about to plead guilty to three charges of benefit fraud each. I would have thought that it would go without saying that any government department could not have trust and confidence in an employee who was to plead guilty to criminal charges of defrauding another government department. They are both, after all, arms of the state", Authority member Greg Wood said.

The Authority dismissed the Murrays' unjustified dismissal claims. However, it ordered IRD to pay Mrs Murray $1000 compensation for suspending her during its investigation without giving her an opportunity to make representations about the appropriateness of suspension.

More on Termination & Dismissal

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Dealing with absent employees	Importance of procedural fairness
Must consult in redundancy dismissals	Dismissal must be procedurally fair
Misconduct discovered after dismissal	Another procedural fairness example
Dismissed for benefit fraud	Terminated before started
The danger of secret witnesses	Expired employment contract
Cannot intimidate employer	Cannot rely on police enquiry
Reasonable notice of redundancy	Contractural obligation must be met
Reinstatement and workplace democracy	Employment and criminal investigation
Attack not always good defence	Dismissal of persons in authority
Employee responds by going on offensive	Legality of secret video surveillance
ERA classifies contractor as employee	Redundancy law unchanged by ERA
Loss of use of company car	Significant difference
Resolution of criminal charges	Redundancy and changed hours
Discrimination for being non Asian	Cannot take retaliatory action
Failing to meet sales targets	Misconduct outside of work
Abuse of Internet & Email	Suicide and communication
Redundancy definition	Unjustified dismissal for pornography
Abandonment of employment

More on Employment Agreements

Employee trial periods	Can change pay frequency if properly managed
More on secret video cameras	Appeal Court decision on harsh and oppressive contracts
When is an employment relationship formed?	Employment contracts must be negotiated - they cannot just be presented
Employer can still be bound by oral agreements	Cannot limit remedies for personal grievances
Common problems with employment agreements	Cannot dismiss without reason even if written in agreement
Take care when preparing employment agreements	Can a collective employment contract negotiated with union members be applied to non union members?
Importance of disclosing correct employer	Employee must disclose information at interview only if asked
Disputes resolution procedure must be included in staff agreement	Cannot require all employees to apply for new positions
Renegotiation of employment contract on sale of business	What an offer of employment might look like
Expired contracts continue with same terms and conditions

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