The Employment Relations Authority has found an employee to be in breach of his obligations of good faith and ordered him to pay seven penalties (totaling $25,000) to his employer for the breaches.

The employee told his employer that he was intending to stay long term with the employer, but, in reality, he was already setting up a business in competition with a recently departed employee as a partner.  The employee was also directing potential customers to his new business while still employed and had copied and sent internal documents to his personal email to assist him with his new venture.  He also contacted clients and other employees to entice them to his new business.

Four of the breaches were while he was still employed.  For each of those he was penalised $2,500.  For the three breaches after he left his employment, he was penalised $5,000.

When the employer found out about the employee’s behaviour he fired him on the spot without giving him any opportunity to respond to the allegations. This amounted to an unjustified dismissal.  The ERA awarded no damages to the employee as he had failed to prove any lost wages (immediately operating his new business) and even if he had proven damages, he was unlikely to be awarded any compensation because it was his own underhand and devious behaviour that had contributed to his being fired.

The other employee who went into business with him could not be penalised for his behaviour in going into competition, but was penalised $2,000 for other breaches of his employment obligations and ordered to repay the employer over $6,700 for money owing.

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