Dentons
A useful last resort: pursuing directors personally for unpaid company debts
What if you are owed money and you believe a director is in breach of their duties?
The Employment Court has made an important finding in relation to officers’ duties under the Health and Safety at Work Act.
Whether we like it or not, we are in the midst of an internet age. The expansion of the internet has made it easier for ‘keyboard warriors’ to cause harm to employees, particularly those who are in the public eye, by threatening and harassing them.
The recent Employment Court decision of Wiles v Vice-Chancellor of the University of Auckland [2024] NZEmpC 123 has provided insight into the obligations of directors to ensure employees are protected from threats and harassment.
You may remember Associate Professor Siouxsie Wiles of the University of Auckland as a prominent academic commentator throughout the Covid-19 pandemic and New Zealand’s lockdown. As an expert in microbiology, infectious diseases and science communication, Wiles contributed extensively to public discourse surrounding the pandemic on mainstream media platforms. However, with her increased public exposure during the pandemic came an increase in risks to her safety.
Wiles experienced ongoing abuse, harassment and threats from a small portion of the public throughout the pandemic. For example, many of her personal details such as her home address were shared online (a harassment tactic known as “doxing”). Wiles first raised a concern with the university in March 2020. Following Wiles’ complaints, the university advised her that she should consider pulling back from Covid-19 commentary and that such commentary did not constitute “work” which the university had health and safety responsibilities for. In July 2021, Wiles raised a personal grievance.
In the Employment Court, Wiles claimed that the university had unjustifiably disadvantaged her and breached its good faith obligations. Wiles also claimed the university had breached its health and safety obligations to her.
The Employment Court found that Wiles’s public commentary on Covid-19 constituted “work” which the university had health and safety obligations in relation to. The university had breached those obligations. The Employment Court acknowledged that the university had taken some effort to comply with its health and safety obligations, such as by monitoring social media threats and recording issues of external harassment. It also arranged a safety audit from a computer security company which the Employment Court said was commendable, but the audit did not commence until mid-2021 and its completion and implementation had been slow.
The Employment Court stated that the situation that existed, at least from the beginning of 2021, required urgent measures to be put in place. The obligation was on the university to obtain the right advice and put in place a plan proactively. Instead, while university personnel were sympathetic, they still seemed reliant on Wiles and her colleagues to suggest actions they would like the university to take.
In addition, the Employment Court found that the university’s response to Wiles amounted to an unjustifiable disadvantage. The court stated that Wiles was entitled to expect the university to have put together a plan to keep her safe as she went about her work and to have supported her as she did so. It was also found that the university had breached its duties to be a good employer and to act in good faith. The university was ordered to pay $20,000 to Wiles for humiliation, loss of dignity and injury to feelings.
The relevant Collective Agreement expressly required both the university and its employees to comply with their obligations under the Health and Safety at Work Act 2015.
Under the Act, a person conducting a business or undertaking (PCBU) has an obligation to eliminate risks to health and safety and, if elimination is not reasonably practicable, to minimise those risks so far as is reasonably practicable. Company directors (referred to as “officers”) have a due diligence duty to ensure that the PCBU has complied with its health and safety obligations.
While there are very limited situations in which WorkSafe is likely to take action in response to psychosocial risks, this case demonstrates that the Employment Court will enforce these statutory obligations when they are incorporated into the relevant employment agreement. This decision also highlights that the obligation can cover not just physical risks, but also psychosocial risks such as harassment imposed by third parties. The remedies awarded were relatively modest because Wiles was still employed and there was no evidence of any serious or ongoing health consequences. In cases where there is evidence of harm, the remedies are likely to be much more significant.
Whilst this case was unique on its facts, it does serve as a timely reminder for directors to consider what safeguards are currently in place to protect employees from threats and harassment.
Directors should ensure that psychosocial harms to employees are addressed and appropriately managed. Board discussions around how best to support employees who suffer from threats and harassment should be encouraged, as well as having an adequate plan for managing threats and harassment of employees.