trendz - our client newsletter

august 2007

sleeping with the enemy: is it a conflict of interest?

You will probably have read about the Setchell matter where Ms Setchell lost her job because of her partner’s job. Ms Setchell was employed as a communications person with the Ministry for the Environment, her partner worked in the Office of the Leader of the Opposition. When applying for the job Ms Setchell gave full disclosure of her relationship and where her partner worked and she got the job. However, the Minister subsequently indicated that he would be less frank in her presence and she lost her job.

At the core of the debate is whether the employer was justified in seeking termination of Ms Setchell’s employment as she was unfit for the job because of her relationship with someone who worked for the opposition. The human rights legislation prohibits discrimination on the basis of, amongst other things, marital status.

Under employment law, whilst a personal relationship may not be a justified reason not to hire it may in certain circumstances be a just reason for firing.

In an Employment Court case in 2001 where a husband and wife had worked together. The husband was fired and took a personal grievance claim against the company. The company then made the wife redundant as the company were concerned she had access to information beneficial to her husband in his claim against the company.

The wife’s dismissal ended up in the Employment Court. The Court found the redundancy not to be genuine but found dismissal would have been justified because the company were entitled to protect itself from any potential harm or damage as a arising from the wife’s knowledge and position.

what can we take from this?

On the one hand the law recognises the right to protect commercially sensitive information on the other an employer is required not to discriminate on the basis of marital status, which includes de facto relationships. In the Setchell case there was full disclosure and the employer hired on that basis. Does it make any difference that it was a State Sector employer and would the standard be any different from that of the private sector?

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Disclaimer: This article is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication. Please refer to our Legal Notices.

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