OPINION: Labour leader Andrew Little has had a mixed showing in his fight against a defamation claim brought by Scenic Hotel Group founder, Earl Hagaman and his wife Lani.
The lawsuit was filed by the Hagamans in respect of comments made by Little regarding a $101,000 donation they made to the National Party during the 2014 election, and a contract they won a month later.
The contract was for the Scenic Hotel Group to manage the Matavi resort in Niue, which receives government funding. The comments were made outside of Parliament’s debating chamber so Little was not protected by the privilege that attaches to comments made by MPs in that context.READ MORE: * Labour leader Andrew Little cleared of defamation against Lani Hagaman * Susan Hornsby-Geluk: Paying anything but a fair wage is ripping workers off * Susan Hornsby-Geluk: Consider the human impact of corporate restructuring However, Little’s defence team argued that he made the comments as part of his moral duty as leader of the Opposition and was therefore entitled to “qualified privilege”. In his evidence, Little said that he was required to scrutinise the Government’s actions and ask necessary questions.
Little was cleared of defaming Lani Hagaman; however, the jury was unable to reach a majority decision as to whether he defamed Earl.
He is now left in the position where a second trial may be necessary.
While MPs are not employees, Little’s situation does raise the question about what happens where employees make comments in the course of their employment and are sued for defamation.
Is the employee out on his or her own, or is their employer responsible for their actions?
It is well established in New Zealand that an employer is required to indemnify or reimburse an employee against costs that are incurred in the reasonable performance of their employment.
This includes in respect of any legal liability. However, it is not an absolute protection and an employer will usually be excused from responsibility if the employee has acted in a way that is unreasonable, negligent, or if they knew what they did to be unlawful.
One venerable case that came before the Employment Court related to an employee of a public sector department, ‘F’, who raised a number of concerns with the department’s deputy chief executive about matters she felt required the attention of the internal auditors.
F was asked to put her concerns in writing, which she did in the form of a memorandum that she marked confidential.
Notably, before submitting her final report, F showed a draft version of the document to the deputy chief executive.
She was advised to soften some of the wording, which she did.
The document was completed during work hours, and (as was the case back in the day), it was prepared by a typist in the department’s typing pool.
Included in the memorandum were a number of claims relating to one individual. In particular, it suggested that there were certain serious deficiencies and irregularities on his part.
Evidently, the subject of these criticisms learned about the document and its content, and commenced defamation proceedings against F.
F resigned soon after all this blew up, and she brought proceedings in the Employment Court claiming that she had been constructively dismissed by the employer department.
She also sought an order requiring the department to cover the costs of defending the defamation action, and argued that whatever liability she had incurred, she had done so in the official discharge of her duties.
The court took the view that F’s actions in writing a confidential memorandum to the deputy chief executive had not breached any duty she owed to her employer.
It also considered that if her actions were in any way unlawful (which it did not take a view on), she did not know this to be so.
The department was accordingly required to indemnify the employee for the actions she took in the course of her employment. It was ordered to cover F’s costs in defending the defamation claims.
Comments made in a confidential memorandum to one’s employer are quite different to statements made to the media where it is intended they be made public.
There will not be many employees who are a situation where they can claim that public comment is legitimately part of their role.
However, in the rare situations where this is the case, such as company spokespeople or publicists, the same principles of indemnification should still apply.
An important lesson for Little this week is that the privilege he is entitled to as leader of the Labour Party only goes so far.
He has been successful in his defence of one part of the claim, but may now have to go through it all again.
Susan Hornsby-Geluk is partner at Dundas Street Employment Lawyers, www.dundasstreet.co.nz