Employment relationships are fiduciary in nature, meaning that both parties have an obligation to prevent harm from the other. Or, as the case may be, to make good for harm done in the course of the employment. The most common fiduciary duty is the duty of fidelity, which includes obligations to act in the employer’s best interests, for instance by not disclosing confidential information and not performing work for (or helping) a competitor of the employer.
Does it also include reporting own and other employees wrongdoing? Well, maybe not. According to a recent decision by the Supreme Court of Victoria, although employees are under a duty to disclose potential or actual conflict of interest, they are not obliged to disclose past wrongdoing. Neither is there a general duty to report misconduct of fellow employees. However, this might be implied when the employee is in a managerial position.
Its difficult to reconcile that with the good faith obligations under the NZ Employment Relations Act. For instance, if an employee has lied on his application form about previous convictions or made up qualifications, such conduct would clearly go to the heart of the relationship and justify dismissal even years later. After all, how can the employer trust someone who was dishonest right from the beginning of the relationship?
So, for the time being, at least in New Zealand the application and scope of fiduciary duties remain unchanged.