In January 2014, Hamilton City Council sacked its commercial property manager, ten weeks after suspending him. Unusually, the sacking received media coverage.
Whistleblower breaks his silence - NZ Herald (15 January 2014)
Whistleblower dismissed after bullying row | Stuff.co.nz (16 January 2014)
Allan Halse, the property manager, had made protected disclosures about widespread bullying, believing that the Protected Disclosures Act 2000 would protect him. But four years of research has taught us there’s a significant body of legal expertise involved in covering up serious wrongdoing, including arguing employees out of their whistleblower protection. That’s a situation not unique to New Zealand; in fact we have covered some egregious examples from the UK’s NHS, Sellafield, and a Network Rail agent, and a Bill to establish an Office of the Whistleblower.
Soon after his dismissal, Halse raised a personal grievance claim in the Employment Relations Authority (ERA; similar to the UK’s Employment Tribunal). The parties were referred to mediation, which resulted in a settlement under Section 149 of the Employment Relations Act 2000. In other words, Hamilton City Council paid him a confidential amount to avoid the hassle and expense of litigation.
Media reports
The Herald and Stuff did follow-ups accordingly, with Stuff noting:
“Mr Halse was dismissed on January 14 but challenged the decision and eventually settled with the council after two days of mediation this month.”
“… [Halse] launched his own employment consultancy, CultureSafe NZ Ltd, and will advocate for victims of workplace bullying as well as provide anti-bullying training for employers.”
Council, whistleblower reach confidential settlement - NZ Herald (21 February 2014)
Allan Halse: Hoping to impact workplace bullies | Stuff.co.nz (24 February 2014)
Eight years later, on 9 February 2022 and “on the papers” (without a hearing), ERA Member Michele Ryan fined Halse $9,000 (£4,200) for doing two things:
- Disparaging Hamilton City Council
- Disclosing the existence of a settlement agreement (like Stuff and NZ Herald did in February 2014 without incident)
In order to achieve this, the Council had to conduct a desperate search for the Record of Settlement (NDA), the original of which had been securely destroyed because it was over seven years old.
The Ministry of Business, Innovation and Employment (MBIE) of which the ERA is a part, came to the rescue with a soft copy. Ryan rubber stamped a penalty to be paid to MBIE, as opposed to the Council.
Workplace bullying advocacy
As the Stuff article from 24 February 2014 mentions, Halse has marketed his employment advocacy business as anti-bullying, and continues to do so. He is now very experienced in working with clients suffering from PTSD.
Unsurprisingly, Halse’s “disparagement” of the Council was in relation to one or more clients of his advocacy business, being employees of the Council, raising personal grievance claims that featured severe bullying causing suicide ideation. The Council’s lawsuit was a SLAPP. New Zealand does not have anti-SLAPP legislation, and incredibly the term was not even recognised in our employment jurisdiction until early 2023.
Ryan also fined Halse’s company Culturesafe NZ Ltd a further $9,000, but that company was put into liquidation six months later because of another SLAPP brought by Rangiura Trust Board, a Putaruru rest home, which makes that portion of the fine uncollectable.
CultureSafe was collateral damage in a coverup of alleged payroll fraud at the rest home that we understand was behind a period of severe bullying including retaliation against another whistleblower who later became a CultureSafe client. Halse narrowly avoided personal bankruptcy in those proceedings and continues advocating for bullied workers as a sole trader.
Challenge (appeal)
Halse challenged the $9,000 penalty determination to the Employment Court (similar to the UK’s EAT). The Council did not respond to that challenge, so he applied for a summary judgment on that basis.
[7] Mr Halse… submits that the Hamilton City Council should have provided sworn affidavits in evidence to support its claim, with the ability for Mr Halse to cross-examine witnesses. Mr Halse seeks a hearing to enable him to test the evidence and provide further oral submissions.
However, this was unsuccessful and $9,300 costs were awarded against him. Regardless of the merits of that particular interlocutory application and decision, weaponisation of legal costs is a common tactic associated with SLAPPs and this can be achieved a lot more easily in New Zealand than in the United Kingdom. This is not a criticism of our tariff-based costs regime, where the unsuccessful party is expected to contribute to the successful party’s costs, currently $4,500 for the first day of an investigation meeting and $3,500 for each subsequent day, pro rata, and subject to discount or uplift under certain conditions. Means testing is only a minor consideration, and it’s unusual for costs to lie where they fall.
The Council may have got through that hearing unscathed, but eventually there will be a substantive hearing on the merits of the parties’ pleadings. Hamilton City Council, having “won” the first round, having its former property manager fined $9,000 for disparaging it seven years after it sacked him, and then got away with its lack of engagement subsequently, will have to defend that “win” in the Employment Court. If it loses, it will probably have to contribute to Halse’s costs (minus the $9,300 he currently owes the Council).
What did Halse do to attract a $9,000 fine again?
He claimed that the Council had a severe bullying problem, on social media. The ERA found that to be a breach of a non-disparagement clause in a Record of Settlement signed on 14 February 2014.
Any employer can settle a personal grievance claim on confidential terms, but non-disparagement clauses are really supposed to be for companies that could be financially impacted by reputational harm that may be caused by a disgruntled ex-employee; likewise employees who are looking for alternative employment and want to avoid being slandered.
But non-disparagement agreements for Crown entities or local government are as incongruous as they sound; it is difficult to see how “disparagement” would affect the Council’s ability to collect rates, dog registration fees, parking fines and building inspection fees, as examples. If public sector managers want to instruct lawyers to argue employees or ex-employees out of their whistleblower protection and/or sue them for “disparagement”, that’s between them, the media-informed public and their own bosses!
There were confidentiality clauses in the Record of Settlement and Halse was found to have breached one of them. It was not the matter he was whistleblowing about in late 2013, but absurdly, the fact that the parties settled in February 2014, and by implication, the existence of a Record of Settlement. Check out this cutting-edge brilliance in (now former Member) Ryan’s determination:
“[29] I must find however, that the existence of the settlement agreement itself is caught by the confidentiality provision, and there is no real dispute that at least seven of the posts make specific reference to the settlement agreement…”
Staleness
Remember that both Stuff and the Herald published the existence of the settlement agreement in February 2014, which means Ryan must have known about that fact but chose to disregard it. Let’s leave aside for a moment Ryan’s wayward determination, namely a fine against a whistleblower for disclosing that he settled with his employer in a mediation. Even if it was a “breach”, under the Limitation Act 2010 Hamilton City Council had six years from February 2014 to sue Halse for his part in the existence of the settlement agreement being publicised. It sensibly did nothing – that is, until early 2021.
By the time the Council did sue, the original seven year old settlement agreement was old enough to be shredded, and the issues that led to Halse’s dismissal and subsequent mediation were certainly stale. But even if the Council’s “enforcement” had not been out of limitation, it was still a second round of retaliation against a whistleblower, that traces back to the first retaliation event by way of dismissal seven years earlier. If Leighton Associates’ UK audience can find a more egregious example than this, kindly send us the link.
It is difficult to see how Hamilton City Council can avoid having its earlier “success” in retaliating against a whistleblower for the second time, overturned in the Employment Court. We’re not sure whether the hearing will take place this year or next, but we (and most likely British whistleblowing researchers) be watching with interest.
UPDATE, 22 February 2024:
