The Herald on Sunday (HOS) newspaper was justified in sacking assistant editor Stephen Cook, who was being investigated as part of a police inquiry into drug dealing, the Employment Relations Authority has ruled.

The authority was told Cook was dismissed in December last year because he would not tell his newspaper bosses why he was under suspicion.

They responded by saying they had lost trust and confidence in him, which made his position untenable.

Cook's work car had been seen outside an Auckland property under surveillance by the police drugs squad.

On September 5, officers approached HOS editor Shayne Currie about why Cook would have been at the property.

Currie said the information gave him cause for concern and he gave police Cook's home address.

Cook said police visited him and claimed that he was "pushed around and roughed up".

When asked by Currie at a meeting the following week why he was outside the address, Cook said he was covering a story about a dispute at a plastics company.

At a later meeting he told Currie and APN executive Rick Neville he had been working on the story for two to three months. APN owns the paper and is also the owner of

Cook attended with his lawyer Chris Comeskey and made a covert audio recording of the meeting.

Both parties agreed that the newspaper wanted a written assurance from Cook that he was not involved in any illegal activity or anything that would compromise the reputation of management or the newspaper. Cook provided this the next day.

Currie said he also asked for Cook's notes regarding the story he was working on, and a status report on it, something Cook disputes.

However, Cook said he received a written request on September 23 asking for the status report and his notes and some other assurances.

He told the hearing that at this point he felt he was the subject of a witchhunt and that he had lost faith in Currie.

He said he did not want to hand over the story notes as they were given to him in confidence and the story was not advanced enough for him to tell Currie.

Following further requests along similar lines, which Cook did not respond to, the newspaper suspended him on October 2.

In findings released today, authority member Rosemary Monaghan said the suspension was justified because APN was entitled to know if Cook's presence outside the suspect property was work-related or not.

Seeing his notes or story draft would have clarified this, she said.

The papers' suspicions were aggravated by Cook not providing information which could have cleared his name.

He was given a final warning and a deadline of October 24 to produce the requested information.

"In failing to provide the material in the way he did, Mr Cook fed the suspicion that he was not being open and honest about his activities," Ms Monaghan said.

She found Cook's dismissal was justified, not because he was dishonest or had something to hide, but rather his reactions to his employer "reasonably" suggested that he did.