Mai Chen shares lessons gleaned first-hand from the independent investigation into Retirement Commissioner Diane Maxwell
by Mai Chen, Chen Palmer Partners
The independent investigation by Maria Dew QC into the conduct and behaviour of Retirement Commissioner Diane Maxwell dated 8 April 2019, which took place after Minister of Commerce and Consumer Affairs Hon Kris Faafoi requested the State Services Commissioner to exercise his powers and functions of investigation under sections 6 to 10 of the State Sector Act 1988, has just been released by the State Services Commission. This investigation report holds lessons for all chief executives and senior managers who have been appointed to organisations to undertake transformational change. During the retirement commissioner’s five-year term, she had almost doubled the size of the office and changed the emphasis and approach.
Change can be unsettling and very difficult for staff. The holding people to account, making sure that they perform, and restructuring and redundancy that often accompanies transformation creates tensions that can boil over into allegations of bullying and inappropriate behaviour being made by affected staff.
WorkSafe’s definition of bullying is “repeated and unreasonable behaviour directed towards a worker or a group of workers that can lead to psychological and physical harm.” Thus, setting high performance standards, constructive feedback, legitimate advice or peer review, a manager requiring a reasonable verbal or written work instructions to be carried out, and warning or disciplining workers in line with a business’s code of conduct are not inappropriate, and do not amount to bullying. Nor do differences in opinion or personality clashes that can happen in any workplace, as long as they do not escalate into bullying, harassment or violence. We can all have bad days and not respond well under pressure. One-off or occasional instances of forgetfulness, rudeness or tactlessness are not bullying.
The problem is that when allegations are made, “mud sticks” regardless of the evidential basis for the allegations, and whether the behaviour described actually amounts to bullying or inappropriate behaviour.
Allegations of bullying or inappropriate conduct against a chief executive and managers can have serious ramifications on their reputation and on their ability to earn a livelihood. Findings of such behaviour should be regarded with serious concern by any potential employers and should act as significant barriers to future employment. But sometimes the fact that allegations have been made is enough to do permanent reputational damage. Especially with the Health and Safety at Work Act 2015 obligations to proactively maintain a healthy and safe workplace, persons conducting a business or undertaking may be nervous about appointing or retaining chief executives or managers who have been subject to allegations of bullying even if those allegations were not ultimately made out.
Dew recognised these consequences in her report on the retirement commissioner and found that although there were a large number of allegations made, the strength of the evidence justified upholding only a few of them.
Dew considered five relevant factors when assessing conflicts in the witness statements and determining credibility in the he said/she said situations which made up a large number of the allegations. The factors were:
- The witness’ manner and demeanour while giving their witness statement;
- Potential bias and to what extent a witness may be giving evidence based on self-interest;
- Internal consistency, whether evidence given by a witness is consistent with other aspects of their own evidence;
- External consistency, whether the evidence is consistent with that given by other witnesses and/or consistent with contemporaneous documents; and
- Whether a witness gives non-advantageous concessions freely.
Dew stated that the allegations made against Maxwell had to be established on the balance of probabilities, and “the standard of proof required must be consistent with the gravity and the consequences of the allegations.”
In other words, the gravity of the consequences that can result if a chief executive or manager is found to have undertaken bullying or inappropriate conduct does justify the need for a higher quality of stronger evidence.
This approach is supported by the decision of the Supreme Court in Z v Dental Complaints Assessment Committee (2008) NZSC 55, which concerned findings of serious professional misconduct by a disciplinary tribunal.
In that case, Elias J said that “[w]here serious disciplinary charges are brought under a statutory process in circumstances where substantial penalties may be imposed and damage to reputation and livelihood is inevitable if adverse findings are made, fairness requires application of a higher standard of proof than one on the balance of probabilities.” She quoted with approval Justice Blackmun in Santosky v Kramer (1982) 455 US 745 at page 756 that “where significant stigma or penalty could result, it offends ‘fundamental fairness’ for less rigorous standards of proof to be applied than in criminal proceedings.”
She did not think the result from applying the standard of proof beyond reasonable doubt “is different in substance from the standard attempted in the New Zealand courts through variation of the ‘degree of satisfaction … according to the gravity of the fact to be proved’ or through ‘a sliding scale of probability.”
The majority (Blanchard, Tipping and McGrath JJ) agreed that “[o]f prime importance, however, is that the charge and the conduct of the proceedings are fair.” They found that the more serious an allegation made and the graver the consequences, the higher the “quality” and “the greater the strength of the evidence” needed to prove to the reasonable satisfaction of the tribunal that the allegation is made out on the balance of probabilities. “Being satisfied in this context simply means that the Tribunal has made up its mind that is the case.”
The majority quoted the approach by Dixon J in Briginshaw v Briginshaw as one regularly applied in New Zealand by the High Court as the appropriate standard of proof in professional discipline cases (emphasis added):
…The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.
The lesson for chief executives and managers appointed to transform organisations is to understand that every action causes a reaction, and thus to keep themselves safe by following the six (not 10) commandments below:
- Do not meet with staff without a third party present. It can turn into a he said/she said situation and having a third party who can corroborate what occurred is helpful;
- Observe a clear line between being the boss and being a friend – friendships with employees make it difficult if you need to performance manage or discipline staff;
- Do not drink at work functions and watch your own conduct and behaviour. Sometimes when you discipline staff they turn around to point out ways that your own conduct and behaviour have fallen short of professional standards;
- Do not bring your family to work – any missteps they make can implicate you if you are seen to have endorsed that behaviour or failed to stop them. Do not allow your family to be used to get back at you;
- Ensure you have whistleblower policies that are effective, and there is evidence of them working; and
- If in doubt, get advice. If your actions and processes are not legal, the high stakes mean you will get trouble.
Mai Chen and Rosie Judd of ChenPalmer Partners acted for Retirement Commissioner Diane Maxwell in the Maria Dew QC independent investigation.