When an employee’s worst family troubles become yours

How should a board of directors respond when an employee's family situation becomes a liability for the business?

The ethical, legal, and reputational considerations can sometimes — and very quickly — turn tricky. A recent NZ Herald front page story offers such an example.

The husband of a school principal, it was reported, was a convicted sex offender, and had been the subject of an anonymous email to staff and parents expressing concern at his occasional presence at the school, and which in turn had provoked strong reaction across the school community, including some disquiet about "poor judgement" and “lack of honesty” in the school's governance.

Should your own organisation ever find itself on the front page in this way, what comes next?

Your foremost question should be: how relevant or otherwise is this issue to the employee's work responsibilities? That’s to say:

●     What impact could this have on our reputation?

●     Is there a potential conflict of interest here?

●     Could this have an adverse impact on safety or work performance?

●     And could this call into question the employee's judgement?

And there will be wider questions to ask:

1.    Could this affect our reputation, not because of any action or inaction on our part but simply by virtue of association?

2.    Where do we stand on this, morally and ethically?

●     Is the nature of the family member's wrongdoing so severe that it clashes with our core values?

●     What is our responsibility as a community member?

●     And in criminal cases such as this where do we stand on the right to be rehabilitated? Once the family member has served their sentence, do they not have the right to be reintegrated into society? And by extension, does the employee have the right to continue in their role without the shadow of their family member’s past?

3.    What’s our legal ability to take such matters into account?
Laws around employee rights and privacy may restrict the range of options available to the board, and your failure to adhere to these could have adverse legal consequences.

4.    What are our realistic options here?

Lastly, you will need to give careful thought to any corrective measures. There can be a fine line between taking necessary action and making things worse.

The law

Both the Employment Relations Act 2000 and the Human Rights Act prohibit discrimination in employment on the ground of family status, which includes ‘being married to, or being in a civil union or de facto relationship with, a particular person; or being a relative of a particular person’.

The Privacy Act 2000 prohibits gathering or taking into account personal information which is not relevant to an employee’s employment.  It also prohibits sharing or using any private personal information without a legitimate business purpose. 

Even what may appear to be a straightforward conflict of interest situation could catch out unwary employers.  Recently the Human Rights Review Tribunal ruled that the Public Service Commission’s decision not to employ an applicant based on the conflict of interest that would arise given the applicant’s mother would be working in the same team was a breach of human rights. The Public Service Commission’s strict conflict of interest policies did not help.  It was argued that the relationship was simply the trigger for the application of the conflicts policy which did not focus on family status, but the Tribunal took the view that the family relationship underpinned the whole approach.

The Clean Slate Amendment Act confirms that individuals with minor convictions, that have lived seven years free of conviction, are entitled not to disclose those convictions.

Weighing the issues and deciding what, if anything, should be done

Your starting point in all of this should be caution. Given the legal protections in relation to ‘family status’ it is only in exceptional circumstances that you should even consider anything to do with an employee’s family member.

Bear in mind also that much can be done to address community and/or business concern with careful communication and confirmation of your values and position on the relevant issues.  The impact can vary, and that may well be influenced by how you’re viewed in the community.

Good communication is key. Being clear about your values and stance can help calm people's concerns.

Sometimes you can fix issues without taking steps against the employee. Maybe you can even work together on a solution, since the employee is likely just as eager to solve the problem.

If you absolutely have to act against the employee, it should only be in extreme situations where there's a clear safety or legal risk that can't be managed otherwise. And be prepared: you might face legal challenges for doing so.

In short, deciding what to do when an employee's family issue affects the business can be a  tricky task. Sending the wrong message or taking the wrong action can quite easily make things worse, so be cautious.

And if you're in any doubt at all, you should probably be picking up the phone to your PR people and your lawyers.