FAQ: What Happens if I Don’t Act in Good Faith as an Employee?
Most employees know their employer must treat them fairly. However, good faith goes both ways. Employees must also be honest, responsive and constructive in their dealings with their employer. Failing to act in good faith may damage the working relationship. In more serious cases, it could lead to a warning, dismissal or legal consequences.
What does “good faith” mean in New Zealand employment law?
Good faith is a central part of every employment relationship in New Zealand. Under section 4 of the Employment Relations Act 2000, employers and employees must deal with each other in good faith. This duty is wider than simply agreeing not to lie. Acting in good faith means:
Being honest and not misleading or deceiving each other,
Being responsive and communicative,
Raising and responding to concerns in a timely way,
Acting constructively to maintain a productive employment relationship,
Listening to the other person and keeping an open mind, and
Treating each other with respect.
Good faith does not mean you must agree with everything your employer says. You can question a decision, make a complaint, join a union, raise a personal grievance or challenge treatment you believe is unfair. However, you should raise concerns honestly and give your employer a reasonable opportunity to respond.
What could be considered a failure to act in good faith?
Whether an employee has breached good faith will depend on the circumstances. The seriousness of the behaviour, the employee’s explanation and the effect on the employment relationship will all matter.
Possible examples include the following.
Lying or providing false information
An employee may breach good faith if they deliberately lie to their employer about an important workplace matter. This might include:
Falsifying a timesheet or attendance record,
Making a dishonest expense claim,
Giving a false explanation during an investigation,
Providing false qualifications or work records,
Saying work has been completed when it has not, or
Lying about the reason for an absence.
This does not mean an employer can assume you are dishonest simply because they do not agree with your explanation. They should investigate the facts and give you a fair chance to respond.
Hiding important information
In some situations, remaining silent may amount to a breach of good faith. This is more likely where the information could affect safety, your ability to perform your job or the interests of the business. For example, there may be a concern if an employee deliberately fails to disclose a serious safety risk, a conflict of interest, an error that could cause significant harm, the loss or misuse of confidential information, or a health issue that directly affects their ability to perform the role safely.
You do not normally have to tell your employer every detail about your health or personal life. However, Employment New Zealand says that failing to disclose a health condition may breach good faith if the condition affects your ability to do your job. It could also create health and safety issues if it places you or someone else at risk.
Refusing to communicate
Good faith requires employees to be responsive and communicative. Problems may arise if an employee repeatedly refuses to respond to reasonable questions, ignores workplace concerns or will not take part in a reasonable process. For example, an employee facing a disciplinary allegation should be given a proper opportunity to respond. The employee does not have to admit the allegation, but refusing to engage may mean the employer makes a decision using the information it already has.
Making a malicious complaint
Employees have the right to raise genuine concerns about bullying, harassment, safety or unfair treatment. A complaint does not become malicious simply because it cannot be proven.
However, an employee may breach good faith if they knowingly make up allegations to harm another person. An employer may investigate whether a complaint was malicious if there is evidence the employee deliberately lied.
Misusing confidential information
Employees may have access to customer details, financial records, business plans or private information about other workers. Deliberately sharing or misusing confidential information may breach the employment agreement and the duty of good faith. Depending on the seriousness, it could also amount to serious misconduct.
Secretly acting against the employer’s interests
An employee may breach good faith if they deliberately work against their employer’s legitimate interests. Examples could include secretly diverting customers to another business, working for a direct competitor in breach of a valid obligation, or hiding a serious conflict of interest. This does not prevent you from looking for another job or making reasonable plans to leave. The issue is usually whether you have acted dishonestly or misused your employer’s information, time or resources.
What are the possible consequences?
Not every breach of good faith justifies dismissal. The outcome should depend on what happened and how serious it was. A breach of good faith could result in an informal discussion, a disciplinary investigation, a warning, or dismissal.
A serious breach of good faith may amount to serious misconduct, particularly where it destroys the employer’s trust and confidence in the employee. Examples might include theft, fraud, serious dishonesty or deliberately exposing the workplace to a major risk. Serious misconduct can sometimes result in dismissal without notice. However, the employer must still investigate and follow the dismissal rules before making its decision.
A breach of good faith on the employee’s part may also result in a penalty or reduced personal grievance remedies if an employment dispute arises. A party to an employment relationship can apply to the Employment Relations Authority where they believe the duty of good faith has been breached. The Authority may award a penalty for a qualifying breach, such as deliberate, serious and sustained conduct or behaviour intended to undermine the employment relationship.
Since 21 February 2026, an employee’s conduct can also have a greater effect on the remedies available in a successful personal grievance. If the Authority or Employment Court finds that an employee’s behaviour contributed to the grievance, some remedies may be reduced or unavailable. If the contributing behaviour amounts to serious misconduct, the employee may receive no remedies.
What should I do if I am accused of acting in bad faith?
Take the allegation seriously, but do not panic. Ask your employer to give you the allegations and supporting information in writing. Read your employment agreement and relevant workplace policies. Keep copies of emails, messages and other records that may help explain what happened.
Before attending a formal meeting, consider getting advice from an employment advocate. You can also bring a representative or support person with you. Be honest in your response. If you made a genuine mistake, explain how it happened and what you will do to prevent it from happening again. Do not guess, destroy records or give an answer you know is incorrect.
Good faith applies to employees as well as employers. It requires honesty, communication and a genuine effort to maintain a productive working relationship.
A failure to act in good faith can lead to disciplinary action and, in serious cases, dismissal or legal consequences. However, your employer should not simply label something 'bad faith' and dismiss you. They must properly investigate the concern, consider your explanation and reach a fair and reasonable decision.
If you have been accused of dishonesty, misconduct or breaching good faith, Mathews Walker can help you understand the allegations, prepare your response and protect your employment rights. Get in touch today for a free consultation. MathewsWalker.co.nz | Employment Problems Solved | 0800 612 355
Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal advice. While we strive to keep the information accurate and up to date, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. For specific legal advice tailored to your situation, please contact a qualified legal professional.
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