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Alert24 - Safeguard Update

Conflict of interest

Conflict of interest
Article Type:
News
Publication Date:
2013-12-13
Jurisdiction:
New Zealand

Lawyers cannot legitimately act for both a company and its employees during WorkSafe investigations, according to a paper prepared for the NZ Labour Law Society Conference in Auckland last month.

The paper's author, NZEPMU general counsel Greg Lloyd, said such an arrangement - though widely used - not only created a conflict of interest, by requiring a lawyer to give advice to two statutory duty holders in relation to the same matter, but also arguably breached the good faith provisions of the Employment Relations Act.

Lloyd said there was general acceptance that when a company instructed a lawyer during WorkSafe investigations, part of the lawyer's role was to advise employees and provide them with representation during official interviews.

"It is my contention that this is not done for the benefit of the affected employees but ... for the benefit of the fee-paying employer. In other words the interests of the employees are treated as being the same as those of the employer or, worse ... as subservient."

He cited Pike River as an example of this problem. "The company attempted to set up a parallel investigation in which all employees would be interviewed by the company before they were interviewed by the police and [the regulator]. Employees were warned that failure to attend these interviews may be treated as misconduct."

All staff were offered 'free legal representation' by the company lawyers, who claimed the right to be present during all employee interviews. "The company asserted that it was motivated by a desire to protect the rights and interests of the employees as well as those of the employer, [but it] was ... protecting its own interests ... by attempting to influence what employees said in their interviews."

Misleading and deceiving behaviour of this nature could be a breach of the good faith obligations in the Employment Relations Act, Lloyd said.

"Consideration has to be given to the inherent inequality in power in the employment relationship. There is little doubt that without independent advice an employee is likely to feel considerable pressure to acquiesce to an employer's demand that the representative be present during a [WorkSafe] interview. That is not consent freely given."

From the lawyer's perspective, such an arrangement meant that a solicitor-client relationship had been established with both employer and employee, he said, but the legal obligations associated with that relationship created serious potential for conflict of interest.

"The lawyer has an obligation to disclose all relevant information to the employer, but has a corresponding obligation to keep all information relevant to the employee confidential."

When investigations resulted in defended hearings, lawyers could be required to cross-examine employees they had previously represented, he said, or, in s19 cases, to blame employer failures, such as inadequate training, for an employee's safety breach.

"To comply with his or her professional obligations a lawyer must ... advise one client that a possible defence may lie in blaming another client. That is a conflict that cannot be managed. It must be avoided."

Lloyd called for regulation to prohibit employer representatives being present during WorkSafe interviews with employees, and challenged lawyers to refuse any request to act in such circumstances.

 

People Mentioned:
Greg Lloyd
Organisations Mentioned:
WorkSafe; Pike River Coal
Reference No:
131213CA-9416

From Alert24 - Safeguard Update

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