Lawyer says gagging contract 'illegal'

A Housing NZ Corporation gagging contract is probably illegal and impossible to enforce, says Auckland University constitutional and employment law expert Bill Hodge.

Mr Hodge said public servants had an automatic duty of confidentiality, but there was an exception when their employer was committing fraud or another crime, or when there was an over-riding public interest.

The contract, dated December 14, agrees to pay a former Housing NZ executive his final pay of $3000 on condition "you agree not to communicate publicly or privately" his concerns about accounting manipulation. It specifically tells the whistleblower he is not allowed to discuss his concerns with "any Minister, [or] MP".

The contract was written by Gerard Coles, Housing NZ's general manager of assurance services, one level below chief executive Helen Fulcher. It also states the contract is "subject to chief executive approval".

The contract also states that the payment is "not an admission of any wrong-doing by HNZC or it's [sic] employees".

It states that the agreement is confidential and the former executive will have to pay back the $3000 if he discloses it.

"I would be outraged if a government employee was shut down because he wanted to reveal something that was going wrong in that department," Mr Hodge said.

"You can't take away people's constitutional rights, whether it's suffrage or access to the Government or access to your representative. That is not something that one can surrender by contractual agreement."

And he said it was illegal for Housing NZ to make the executive's final pay conditional on a confidentiality agreement.

"You never need to sign an exit agreement with respect to receiving that which is yours as of right."

-HERALD ON SUNDAY