HR in May: Criminal charges and CEO pay

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This month the Supreme Court ruled that if an employee is charged with a crime while working for your company, you do have a right to know about it.

ASG was a Security Guard working for the University of Otago’s security team. He pleaded guilty to one charge of wilful damage and another of assault but was discharged without conviction because it was deemed ‘extremely likely” he would lose his job otherwise. The Court made an order for name suppression however one of the University’s management team was in the public gallery and heard the sentence. The University then launched an employment investigation and suspended ASG with pay. The Union claimed this violated the name suppression and ASG raised two Personal Grievances for unjustified disadvantage in relation to his suspension and the final written warning.

The Court held that while suppression orders do prohibit “word of mouth” communications, it doesn’t include sharing details with those who have a genuine need to know the information. The Court of Appeal later agreed with that decision and now the Supreme Court has upheld the ruling.

This means that if criminal charges against an employee are relevant to their employment, employers may have the right to know and communicate details that are otherwise subject to non-publication orders.

Also this month, the NZ Stock Exchange have launched their corporate governance code which recommends companies disclose the remuneration arrangement in place for their chief executive in the annual report – those that fail to do so will have to justify their decision.

The NZX recommendation includes stating a CEO’s base salary, short term incentives, long term incentives and bonus payments as well as the performance criteria used to determine performance-based payments.

Due to come into force from October 1, the change will bring New Zealand in line with Australia where listed companies must be transparent about executive compensation.

 

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