For the record, a tape is not necessarily proof
A failed Mad Butcher franchisee is seeking donations to help pay staff who ‘‘did not deserve to lose their jobs’’ when the company’s franchise agreement was terminated.
The company which formerly operated the Mad Butcher store in Papanui, Christchurch, went into liquidation in May following a dispute with the franchisor.
Insolvency Management liquidator Wayne Deuchrass estimated there would be a $660,000 shortfall to those owed money, after rising costs and low profit margins had squeezed the business.
Former employees were owed about $15,000, but it was unclear whether there would be enough money to pay them.
As a result, the company’s director, Allan Aitchison, set up a Givealittle fundraising page looking for donations to cover the unpaid wages.
The page said the 15 staff made redundant were just ‘‘normal working folks’’ who cannot afford to take this loss.
So far, just $620 has been raised from 13 donors.
Aitchison said he did not have the funds to pay people who had become his friends.
‘‘We are looking for support to pay our 15 staff [who] were made redundant when our Mad Butcher franchise was terminated, this happened for reasons I cannot disclose.
‘‘We do not have the funds to pay the staff who were a really great team and did not deserve to lose their jobs like this, unfortunately any funds from the business will be taken by the bank to repay debt.’’
The first liquidators’ report for the company noted 13 secured creditors, while the plant and equipment was subject to a security interest from Westpac.
One former staff member estimated he was owed about $2000 as a preferential creditor.
‘‘But we aren’t preferential enough to get a single dime that is owed to us back.’’
The first liquidators’ report for the store says it ceased trading in May after the franchisor was granted a High Court injunction.
The store had operated for about two-and-a-half years before this, the report says.
‘‘But increased operational costs combined with inadequate margins and funding costs ultimately lead to declining profitability and insufficient cashflow to pay debts as they fell due.’’
Mad Butcher stores in Napier and Dunedin have been sold by their respective franchisees in the past six months and at least eight stores have gone into liquidation in the past couple of years.
Veritas Investments, the listed company which owns the franchise, in February made an aftertax profit for the six months to December 31 of $1.2 million.
This was a $6m improvement on the $4.8m loss it had made last half-year. OPINION: Claims of a secret recording brought a brutal end to the political career of Parliament’s youngest MP, Todd Barclay.
Since the issue first came to light over 18 months ago, Barclay has consistently denied allegations that he secretly recorded his former staffer, Glenys Dickinson.
Police looked into the matter but declined to lay charges. However, the issue burst back into life recently when text messages sent by Prime Minister Bill English were reported as referring to Barclay having recorded Dickinson with a dictaphone.
Things then got worse for Barclay when a statement provided by English to police was released by his office. The statement referred to Barclay having told English that he had recordings of an electorate staff member criticising him.
This contradiction by the prime minister made Barclay’s position untenable, and he announced he would step down from Parliament at the election.
Police have now reopened their investigation into the recording.
Under the Crimes Act, it is permissible to record a communication provided the person making the recording is party to the conversation. The fact the recording is being made does not need to be disclosed to that other party.
However, it is unlawful, and in fact a criminal offence, to record a conversation that the person recording it is not a party to. This is what Barclay has been accused of.
Secret recordings are becoming increasingly common in employment disputes. Cases regularly turn on one person’s word against another, so it is no surprise that employers and employees have shown an increased willingness to secretly capture evidence in case they need evidential back-up down the line.
However, just because a secret recording may have been lawfully obtained does not automatically mean it will be admissible. As a result, the admissibility of a recording is a matter that will often need to be addressed by the Employment Relations Authority or Employment Court before it can become part of the record.
One example of this was a case between Neil Bosman and Total Access Ltd.
Following a meeting between Bosman and the employer’s general manager, Bosman resigned, claiming constructive dismissal.
He alleged that during the meeting he was sworn at, interrupted every time he tried to speak, and was shoved in the back by the general manager when he attempted to leave the meeting.
The matter came before the Employment Relations Authority where Bosman’s recollection of the catch-up meeting was heavily disputed by the general manager.
It turns out that Bosman had secretly recorded the meeting, in his words to protect himself, and sought to produce the recording as evidence to back up his account of events. Unsurprisingly, the employer objected.
The authority initially decided to allow the recording into evidence on the basis of its wide powers to receive information, and its view that the recording would provide the best evidence of what happened during the meeting.
But this was not the end of the matter as allegations were subsequently made by the employer that Bosman’s recording had been doctored and was not reliable.
Both sides produced forensic reports seeking to support their arguments. Ultimately, the authority concluded that given the uncertainty about the accuracy of the recording, its earlier decision to allow the recording into evidence should be reversed.
Bosman’s case nicely illustrates the legal and practical issues that can arise with secret recordings. Employees and employers therefore need to know that a secret recording will not necessarily be a silver bullet that can be relied upon to support their case.
There is also a broader issue of secret recordings arguably being inconsistent with good-faith obligations.
Finding out that the other party to a conversation has secretly recorded it is a sure-fire way to erode trust and confidence.
A secret recording will not necessarily be a silver bullet.
Susan Hornsby-Geluk is a partner with Dundas Street Employment Lawyers. www.dundasstreet.co.nz.