The first ground for her application was that, being a criminal offence, the alleged blackmail could not form part of the “purposes of mediation” referred to in section 148 of the Employment Relations Act 2000 and therefore fell outside the statutory confidentiality granted by that section. As an alternative, she asserted that the alleged blackmail fell within the exception considered, but not determined, by the Court of Appeal in Just Hotel Ltd v Jesudhass (2008) 8 NZELC 99,137. The Court there had opened the possibility of “evidence of serious criminal conduct” during a mediation being admissible, as a public policy exception.

Submissions were made by the Chief Mediator, who took the view that allegations of blackmail and extortion were more appropriately dealt with in the criminal jurisdiction. (Here the employee had made a complaint to the Police and there was evidence independent of the mediation in existence.) The Chief Mediator considered that the allegations did not reach the threshold suggested in the Just Hotel case because the allegations were disputed and might have been made for the legitimate purposes of mediation.

Noting that there can be a very fine line between robust discussion at mediation — particularly with regard to the consequences of not settling — and blackmail, the Court disagreed with the employee’s submissions. The statement containing the alleged threat was made solely for the purposes of mediation as it was, allegedly, that if the personal grievance was not settled, the threat would be carried out. The fact that blackmail is a crime did not mean that a threat could not be “for the purposes of mediation”. Furthermore, the public policy exception in Just Hotel should only be used for the clearest of cases. In the case before it, the subject matter of the threat did not relate at all to the allegations forming the basis of the constructive dismissal grievance.