Worker cries foul against employer's defamatory allegations
The Employment Relations Authority (ERA) recently dealt with a preliminary determination involving a former club employee who claimed unjustified disadvantage after his employer made defamatory theft allegations following the end of his employment relationship.
The worker argued that his former employer breached the duty of good faith by making false theft allegations and filing a police complaint after his employment had ended.
He sought to have two additional parties join his claim and argued that the ERA had jurisdiction to hear his case despite the allegations being made post-employment.
The case raised important questions about the ERA's jurisdiction over employment-related disputes that occur after the employment relationship has ended.
The worker contended that post-employment actions by employers that affect former employees should still fall within the Authority's jurisdiction, while the employer argued that matters arising after employment ends are outside the ERA's scope.
Jurisdiction disputes under employment law
The worker resigned from his position at a chartered club on or around 19 December 2024, after his partner was dismissed by the club on the same date.
His agreed final day of employment was 21 December 2024, when he worked until approximately 7:30 pm and then attended another staff member's farewell before leaving the premises.
The worker left the club, taking a number of items with him, at approximately 8:15 pm on 21 December 2024. He firmly maintained that these items belonged to him and his partner, not to the club. However, the operations manager emailed the worker on 24 December 2024, raising an allegation of theft of club property.
The email indicated that if any club property that was allegedly removed were not returned by 29 December 2024, then a complaint would be made to the police.
The worker replied by email later that same day, rejecting the allegations of theft and advising that he had taken items owned by himself and his partner only.
Post-employment allegations and police complaint
Despite the worker's denial, the operations manager made a complaint to the police on 31 December 2024, which appears to have been submitted online.
This complaint included an explicit allegation of theft of club property, leading to a formal police investigation into the worker's conduct.
The worker argued that the ERA had jurisdiction to hear his claims because they arose from his employment relationship, even though the allegations were made after his employment ended.
He referred extensively to Supreme Court precedent, stating that "nothing turns on whether his claims against the [club] and [other parties] arose before or after his employment ended."
The worker contended that his claims "arise out of his employment relationship (albeit after his employment ended)" and argued that "actions affecting an employee taken (or not taken) by an employer after termination of an employment are aspects of the employment relationship and can form the basis of an unjustified disadvantage claim."
He described the conduct as "even more damning and harmful" because the allegation portrayed him as a thief and was coupled with a defamatory police report.
Supreme Court precedent and jurisdiction boundaries
The ERA considered the Supreme Court's decision in FMV v TZB, which addressed the Authority's exclusive jurisdiction over employment relationship problems.
The Supreme Court had established that problems must relate to or arise from the employment relationship, with the test being whether "the controversy arises during the course of the employment relationship and in a work context."
However, the club argued that since the allegations were made after the worker's employment had ended, the ERA lacked jurisdiction to hear the claim.
They referenced the Supreme Court's comments that while "theft by an employee is an employment relationship problem," if "the employee resigned and stolen from their former employer after the termination of their contract, that would not be an employment relationship problem because the theft was not in an employment context."
The worker submitted in reply that "the whole thrust of the employment law regime is that any and all matters with any nexus whatever to employment are within the Authority's exclusive jurisdiction."
He argued it would be contrary to the Employment Relations Act if he were required to pursue defamation proceedings in the High Court when the conduct was undertaken "in the course of the employment relationships and in the context of work."
ERA findings on jurisdiction limits
The ERA found that the worker's claims were "founded on actions which occurred after his employment with the club had ended, following his resignation."
The Authority noted that the club and operations manager's actions that the worker complained about primarily related to the allegation of theft and the complaint to the police, both of which occurred days after his employment ended.
The ERA determined that the fact that the actions were connected to the worker taking possession when his employment ended was not "sufficient to find the [club] and [operations manager's] actions give rise to employment relationship problems."
The Authority distinguished the worker's situation from established post-employment obligations such as settlement agreements and restraint of trade clauses.
The ERA applied an adapted version of the Supreme Court's guidance, stating that:
"Where a former employer makes an allegation of theft by an employee after the termination of their contract, that would not be an employment relationship problem because the [allegation of theft] was not in an employment context and there would no longer be any relevant expectation sourced in the employment relationship."
End of employer's good faith obligations
The ERA also addressed the worker's claim that the duty of good faith applied following the end of his employment relationship.
The Authority rejected this argument, referencing the Employment Court's decision, which established that "the statutory obligations of good faith end when the employment ends."
The court had noted that the duty of good faith applies "to any matter arising under or in relation to an individual employment agreement while the agreement is in force" and "applies only while the agreement is in force."
The ERA concluded that no employment relationship existed beyond the ending of employment except for specific enforcement purposes.
The worker had also raised matters concerning the club's suspension and termination of his club membership, which were founded on the alleged theft.
However, the ERA found that correspondence from the club clearly presented these as membership matters to be determined under the club's constitution, not employment-related issues.
ERA's final determination and considerations
The ERA concluded that the worker "has not established that he has an employment relationship problem" with the club or the other parties he sought to join in his claim.
The Authority, therefore, determined it did not have jurisdiction to consider the substantive issues raised by the worker.
As a consequence of this finding, there were no proceedings to which the additional parties could be joined under the Employment Relations Act.
The ERA noted that this matter was investigated on the papers in combination with a related matter involving the worker's partner, which was proceeding to substantive investigation.
The Authority reserved costs and encouraged the parties to resolve any cost issues between themselves.
