Major Employment Case Law Development : Recording Conversations at Work

Secret recordings in the workplace 

A recent case of Downer v LM Architectural Builders Ltd highlights the risks around carrying out secret recordings in the workplace and the potential for breaches of Good Faith around this issue. In this case, this part of the decision went in the employer’s favour. This case is interesting and instructive in many ways regarding how the employer managed to deflect claims of unjustified dismissal and disadvantage, but not concerning an unfair suspension.

Background

Ms Downer alleged that she was unjustifiably dismissed and disadvantaged based on alleged bullying and unfair suspension. LM Architectural argued it had grounds to dismiss her after she attempted to secretly record private conversations with Mr Meredith, the company's director.

On 17 February 2023, Ms Downer expressed dissatisfaction with Mr Meredith's support and confirmed she was seeking alternative work. On 20 February, Mr Meredith spoke with Ms Downer about his concerns, which she secretly recorded. The following morning, Mr Meredith suspended Ms Downer due to her computer usage and phone recordings. She also recorded that conversation.

That afternoon, Ms Downer emailed Mr Meredith, claiming she felt “sacked” after being accused of serious misconduct and given the option to resign with two weeks' pay or face disciplinary action. Mr Meredith clarified that she had been suspended, and her employment had not yet been terminated.

A disciplinary meeting was held on 1 March 2023, and Ms Downer was dismissed on 2 March 2023. Mr Meredith cited her secret recording attempts as a serious breach of good faith and destroying the employer’s trust and confidence in the employee.

Decision

The Employment Relations Authority (ERA) found that it was reasonable that an employer could potentially summarily dismiss an employee for attempting to make such a recording. Given Mr Meredith’s expectation of privacy in his own office after hours and the small size of the business, LM Architectural could reasonably expect employees to respect confidentiality. Ms Downer was found to have breached her duty of good faith, and her actions constituted serious misconduct. Dismissal was deemed fair and reasonable.

ERA determined that LM Architectural sufficiently investigated its concerns about Ms Downer, put concerns to her for feedback, provided a reasonable opportunity to respond and genuinely considered her explanations, even if it did not accept them. Her claim of unjustified dismissal failed, as did her bullying allegations around being offered two weeks’ pay if she resigned to avoid a disciplinary process after stating an intention to resign. ERA said it was not unreasonable for the employer to address his concerns formally.

However, ERA found the suspension unjustified due to a discussion with Ms Downer, with a pre-determined decision to suspend her. As LM Architectural failed to engage in any meaningful consultation, its actions caused Ms Downer to be unjustifiably disadvantaged and awarded $7,000 for this part of the case.

Key Takeaways

• Secret recordings of conversations in a workplace potentially a breach of Good Faith, particularly where protecting commercial sensitive information a consideration.
• Employer ‘ran’ a very sound disciplinary process. Reaffirms the importance of meeting Section 103A of the Employment Relations Act requirements.
• Having an uncomfortable conversation where employer raises performance concerns with employee does not constitute bullying.
• Employer’s must seek views of employee before making decision to suspend employee.

Summary

In most respects, the employer got this disciplinary investigation process correct, but suspending an employee requires genuine consultation with the employee before deciding to suspend an employee. Suspensions are not straightforward, so before you do, seek specialist advice.

🚨 We can help

For specialist advice in this area, or to discuss how we Business Canterbury can support you, please contact us at hradvice@cecc.org.nz.