Mathew Barnett recently spoke to the National Business Review on the topical question of when employees are required to disclose criminal charges and personal issues to their employer. Click here to watch the full interview and read the article [paywall].

When are employees obliged to disclose criminal charges and personal issues to their employer? The recent conduct of Michael Forbes, the Prime Minister’s ex-deputy chief press secretary, put this question sharply into focus.

The Michael Forbes situation

Mr Forbes made audio recordings of sex workers he engaged with, without their consent. A police complaint was made, but the Police did not charge Mr Forbes. It was also revealed that he had been taking inappropriate and compromising photos of women in public places like the gym, as well as from afar when they were in their own homes.

The police did not pursue criminal charges and it appears Mr Forbes did not tell his employer about the police process. The Prime Minister said, “[Mr Forbes] has an obligation to actually declare those issues or those incidents to us, that didn't happen which is why his employment would have been terminated obviously.” 

In Mr Forbes’ situation, the Prime Minister is correct. This is a clear-cut instance where the employee had an obligation to inform the employer. However, there could be circumstances where an employee does not have the same obligation. As is often the case, it will be fact specific.

Mr Forbes' had a public and political role as deputy chief press secretary, he almost certainly would have had obligations within his employment agreement to not bring the Prime Minister’s office into disrepute, as well as an obligation of good faith. Mr Forbes would have also held security clearance which carries a positive obligation to disclose anything, criminal or not, that could be embarrassing or be used to blackmail you. Mr Forbes’ situation clearly fits into that category. Other roles may not carry these same obligations.

Other considerations

The first place to look is the employee's employment agreement and any relevant policies to see if any clause relates to this type of disclosure. If the employment agreement is silent on this issue or there is any ambiguity, the parties should consider their mutual obligations of good faith.

The good faith obligation requires the parties to an employment relationship to be active and constructive in establishing and maintaining a productive employment relationship in which the parties are, amongst other things, responsive and communicative and not to do anything to mislead or deceive or that is likely to mislead or deceive the other party to the employment relationship. The Courts have ruled that criminal proceedings can be relevant to employment and should be disclosed when appropriate.

ASG v Hayne, Vice-Chancellor of the University of Otago

ASG was a university campus security guard charged with wilful damage and assault. He plead guilty but was discharged without conviction because the conviction would have probably cost him his job. Despite a non-publication order, the Courts held the employee should have disclosed the charges to his employer due to the nature of his role, which involved protecting university and student property. The charges were relevant to his duties, and the employer needed to have trust and confidence in him. Therefore, the employer was held to have a legitimate interest in this conduct, despite being outside the workplace.

Trust, confidence and the nexus of connection

This case has contributed to the widely held view that if an employee’s conduct outside of work is incompatible with the proper discharge of their duties or if it undermines the trust and confidence necessary between the parties, disclosure of the conduct is required under the employee’s good faith obligations. On the other hand, if there is no clear relationship between the employee’s conduct and the employment, disclosure is unlikely to be required.

It is important to note that - similar to Mr Forbes’ situation - a nexus of connection between the (mis)conduct and the employees’ work, will not always be necessary. In public facing roles, the reputational risk to the employer (or their wider industry eg sport, entertainment, politics) is likely to give rise to the obligation to disclose on good faith grounds.

Fall out for employees and employers

The decision to disclose or not to disclose is important. If an employee fails to disclose information that is relevant to their employment and reflects or has the potential to reflect negatively on their employer, it may constitute misconduct. In serious cases, this non-disclosure could undermine the trust and confidence necessary in the employment relationship to such an extent that termination of the employee's employment may be justified, provided a fair process is followed.

As with all matters, this area of law is highly dependent on the specific facts of each case. It is advisable for both employers and employees to seek legal advice when dealing with such situations.

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Special thanks to Senior Solicitor, Mathew Barnett and Law Graduate, Caitlin Walker for their assistance in writing this article.