The Talley’s defamation trial has been rocked by revelations the food processing giant became aware in 2019 that its workplace injury management and compensation unit had “likely forged and falsified records”.
Talley’s is suing Television New Zealand (TVNZ), and its Christchurch-based 1News reporter Thomas Mead, over six stories published in 2021 and 2022 concerning allegations of poor health and safety standards at several of its South Island plants and mismanagement at the company’s Injury Management Unit (IMU).
Talley’s claims the stories are false or misleading and defamatory, with its lawyer, Brian Dickey, arguing they were part of a “campaign” that “put the boot in”.
TVNZ and Mead are defending the claims, citing truth as a defence and that their reporting was conducted responsibly.
The IMU was set up by Talley’s as part of an Accident Compensation Corporation scheme allowing large companies to effectively opt out of the levy system and instead self-manage their employees’ injury and compensation claims.
Nathan Howes, HR manager at Talley’s, gave evidence that staff at the IMU approached him in mid-2019 over concerns their manager, Rebekah Vincent – who had established the IMU in 2017 – was asking them to back-fill client files before they were sent to an ACC-appointed auditor for review.
“I found there was evidence of files being edited after the fact, and I ultimately determined that the allegations were likely true and that Rebekah had likely forged and falsified records,“ Howes said.
He said he began an investigation into the matter, but Vincent ultimately resigned before it could be completed.
“We instructed staff to reverse any issues caused by Rebekah’s alleged actions and to fix anything they might have done at Rebekah’s instruction.
“Any alleged improper actions were reversed with no lasting impact, and we did not feel the need to notify ACC formally,” Howes said.
Under cross-examination by Davey Salmon, KC, acting for TVNZ, Howes acknowledged he had discussed the apparent forgery with Talley’s director, Andrew Talley.
“Well, he certainly was supportive of how I was handling the situation,” Howes said.
“Including not telling ACC?” Salmon asked.
“I don’t recall anything about that,” Howe responded.
Salmon put it to Howes that Talley’s were suing over allegations the company was “interfering with workers’ injury compensation claims in order to save themselves time and money … and that, in fact, happened while Rebekah Vincent was at Talley’s”.
“No, I don’t agree,” Howes said.
Salmon asked Howes if the alleged forgery was done to short-change workers and save money for Talley’s, a suggestion Howes disputed.
“Knowing Rebekah, a more likely scenario is that she wanted the unit to succeed, and so a failed audit would be potentially an indication of failure, but I’m just assuming,” he said.
Salmon said the court would hear from a former IMU staff member that she had earlier raised concerns that Vincent was directing staff to doctor claim files and that Howes had ignored this warning.
“One-hundred-per-cent: She did not tell me that,” Howes said.
The alleged forgery by Vincent at the IMU did not form part of Mead’s earlier reporting and was made public for the first time in court this week.
Howes told the court the wider TVNZ reporting about the company in 2021 and 2022 had a negative effect across the 8000 staff working at Talley’s sites and plants across the country.
“Staff were verbally abused at children’s sports games, for working at Talley’s, on the weekends,” he said.
“Many staff stopped wearing Talley’s-branded clothing in public, due to abuse.”
Howes said he encountered difficulties recruiting staff to fill vacancies after the TVNZ stories when applicants realised who their prospective employer would be.
“One applicant expressed hatred for Talley’s saying he would never work at a Talley’s site based on what he read about them,” he said.
Howes acknowledged Covid travel restrictions and lockdowns contributed to hiring difficulties, but the TVNZ reporting “made a bad situation worse”.
Talley’s is suing as a corporate entity. This requires the company to prove the reporting complained about resulted in a financial loss.
Salmon’s cross-examination of the company’s executives has focused on the inability of Talley’s to differentiate claimed costs and losses from wider issues such as Covid-related lockdowns and supply chain disruptions.
Earlier in the week, Mark de Lautour, who at the time was sales and marketing manager at Talley’s meat processing subsidiary, AFFCO, claimed in evidence that negotiations to supply Foodstuffs in 2021 were delayed by fallout from TVNZ’s coverage.
He said he was told by a Foodstuffs executive after the first stories broke: “We might give you a break for a couple of weeks.”
De Lautour said delayed sales were costly when dealing with perishable products.
“There’s a famous slogan in the meat business: ‘Sell it or smell it’,” he said.
He said unsold products could be frozen, but this would halve their value.
Salmon noted the Foodstuffs executive was not being called by Talley’s to support his contention the delay was because of TVNZ’s reporting.
“It felt commercially insane to bring a major client in this situation [a defamation trial],” de Lautour said.
Greg Stewart, Talley’s chief commercial officer, said another contract to provide vegetables to Countdown (now Woolworths) had been delayed six weeks after the supermarket giant sought additional assurances around health and safety and hygiene concerns he claimed were triggered by the TVNZ reports.
Stewart said the heightened concerns led the entire Talley’s senior leadership team to travel to Auckland to address the supermarket giant’s concerns, a delegation he said was “unusual”.
Salmon said revenue figures for Talley’s showed no decline.
Stewart insisted the TVNZ stories had a negative effect but conceded he could not quantify the loss.
“It’s too hard to do analysis on lost sales in that time. I can’t tell you exactly how much,” he said.
The complex trial before Justice Pheroze Jagose, with 42 witnesses expected to be called, is set to continue for three more weeks.
Matt Nippert is an Auckland-based investigations reporter covering white-collar and transnational crimes and the intersection of politics and business. He has won more than a dozen awards for his journalism – including twice being named Reporter of the Year – and joined the Herald in 2014 after having spent the decade prior reporting for business newspapers and national magazines.