Don’t follow the Folau example
The scandal continues eight months after rugby player Israel Folau’s Instagram post got him sacked from the Wallabies. Last week Rugby Australia and Folau issued a public statement confirming that a confidential settlement had been reached to settle Folau’s grievances with Rugby Australia, and that neither party would be making further comment.
Despite this, Folau and wife Maria Folau released a video the same night expressing their gratitude to their supporters and their delight at the outcome.
A few hours later, it was reported that Rugby Australia had paid Folau $8 million and apologised to him as part of the settlement.
The head of Rugby Australia, Raelene Castle, has since said that while she could not get into details, the amount of compensation reportedly paid to Folau was ‘‘wildly inaccurate’’.
Putting specific details of the settlement to one side, the alleged breach of confidentiality and possible leak of information raises some important points about settling employment disputes and could have some wider implications.
In New Zealand it is common for employment disputes to be settled by way of a confidential record of settlement. The pros of settling largely come down to quick and cost-effective resolution, certainty of outcome and the reputation of both parties being protected.
These records of settlement come in a relatively standard form, and in order to be enforceable by way of a compliance order in the Employment Relations Authority must be signed off by a qualified mediator through the Ministry of Business, Innovation and Employment.
Depending on the nature of the dispute and what the parties want, a record of settlement can be made up of a variety of different ingredients including a compensatory payment ($8 million would be an exceptional amount by anyone’s standards and seemed a little unlikely from the start), a positive reference, contribution to legal fees, payment of outstanding wages, and agreed communications as to how the employment ends.
In addition to this, there are also a few standard clauses that are included in most, if not all, records of settlement. These include clauses confirming full and final settlement, mutual nondisparagement, and, relevant to the Folau saga, confidentiality.
The whole point of having a confidential settlement is so that neither party to a dispute can go and tell other people what the details of the grievance or dispute were, or what the terms of a settlement were.
For both parties, this is important in ensuring that their reputations are protected. In terms of not being able to disclose the terms of any given settlement, this is also important so that the employer is not seen to be setting a precedent for what other aggrieved employees may expect in the future.
One of the problems that occurs is that it can often be difficult to prove where or how a breach of a confidentiality record of settlement has occurred. In the Folau case, we know that information was leaked to the media, but it remains unclear who was responsible.
Where there has been a possible breach of confidentiality, a party can apply to the Employment Relations Authority for a limited number of remedies. The two main remedies are enforcement of the record of settlement through a compliance order, or a penalty of up to $10,000 for an individual or $20,000 for a company.
Unfortunately, these remedies are not always effective when it comes to breaches of confidentiality because once it has been breached and information is shared, there is very little that can be done to undo the damage.
That being said, the Employment Relations Authority does take breaches seriously and will award remedies and penalties where they are satisfied that breaches have occurred.
In today’s world of social media, breaches of confidentiality commonly occur through people positing about their settlements or grievances on Facebook or Twitter. This has caught many people out as it is clear evidence that the breach has occurred.
A bigger issue that comes with confidentiality breaches is that it could deter employers from entering into settlements of employment disputes, as it undermines a significant reason for settling in the first place.
High profile confidentiality blunders like Folau’s have the potential to undermine the settlement process for others.
Whether or not there is any truth to the claim that he was paid $8m and given an apology, we may never know. What we do know though is that the Folau scandal continues to teach us how not to behave – this time in relation to confidentiality.