What your conflict of interest policy needs to say about senior staff
Your GM incorporated a company and said nothing. A New Zealand employment case decided on 12 March 2026 shows exactly why that matters.
Chris Yu was dismissed as General Manager of Home Synergy Limited on 3 February 2026. The core issue was not the side business itself. It was the silence around it.
Home Synergy is a small, family-owned business in East and South Auckland, selling, installing, and servicing HRV ventilation systems, heat pumps, and water purification products. Yu joined in January 2025 as Sales Manager and was promoted to General Manager on 1 September 2025, reporting to Michael Chong, the company's sole director, and a shareholder.
In late December 2025, Chong discovered on a search of the Companies Register that Yu had incorporated Yunico Limited on 23 October 2025, while already serving as General Manager. Yunico was a manufacturing company producing aromatic products for the cosmetic sector. Yu was its sole director, holding 84 percent of the shares, with the remaining 16 percent owned by a business partner.
On further investigation, Chong found that the business partner was the director and main shareholder of an electrical services company in Auckland. Chong was concerned Home Synergy's proprietary information could be inadvertently accessed through that connection. As General Manager, Yu had full access to revenue results, costing, daily and weekly performance data, customer lists, and employee wage rates.
On 20 January 2026, Yu received a letter setting out the allegations and inviting him to a disciplinary meeting. The first meeting took place on 29 January 2026, with a second on 3 February 2026. Chong's affidavit states that Yu was asked twice at the second meeting to provide further information about his Yunico involvement but refused. Home Synergy dismissed him that day, with the decision confirmed by letter on 10 February 2026.
Yu applied for interim reinstatement, arguing the dismissal was unjustified. He claimed the Code of Conduct did not bind him as it was not expressly referenced in his 2025 Employment Agreement, that Chong had predetermined the outcome and had a closed mind throughout the process, and that the dismissal was retaliation for an earlier incentive payments dispute he had filed with the Authority.
Home Synergy countered that Yu agreed on 3 February 2026 that he was bound by the Code of Conduct, and that the process had been fair: allegations were set out in writing nine days before the first meeting, summary notes were provided, adjournments were taken, and the decision was reached only after Yu confirmed he had nothing further to say.
Authority Member Eleanor Robinson found that Yu had an arguable case for unjustified dismissal, but was not persuaded the case for permanent reinstatement was strongly arguable, and found his case for interim reinstatement to be no more than weakly arguable. An altercation between Yu and Chong at the end of employment, a trespass order issued by Home Synergy, the close working environment, and untested affidavit evidence from employee electrician Ede Prasad that Yu's return would cause "a lot of unhappiness and dissatisfaction amongst the employees" all weighed against reinstatement. Robinson noted there were "issues about his good faith duties towards his employer including as regards to his position regarding the non-application of the Code of Conduct to him as the General Manager of Home Synergy." The application was declined.
The substantive case has not yet been heard.
For HR leaders, this case raises practical questions. Are your conflict of interest policies clearly incorporated into your employment agreements? Do they require senior staff to disclose outside business interests, including shareholdings and directorships, before taking them on? And does your disciplinary process provide a documented record that employees were given every reasonable opportunity to respond?
