Compensation Awards 08

  Compensation for Humiliation etc Table

(s123(1)(c)(i) ERA)
Employment Court and Employment Relations Authority

1 January 2008 – 30 June 2008

While every effort is made to ensure the accuracy of the information provided in this table, the Court, Authority and Information Centre accept no liability for any consequences that may arise from reliance on this data. The awards shown above take into account any reduction for contributory conduct. Also note that Employment Relations Authority awards that have been set aside or altered by the Court are included in the table. Where there were two successful applicants awarded separate amounts, those amounts are recorded separately.

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Awards over $15,000

Ringrose v Brazin Ltd and Bras n Things New Zealand Ltd

Unreported Y S Oldfield, 5 Feb 2008, AA 31/08

The applicant was employed as the Country Manager for New Zealand for the respondent.  The respondent was an Australian retail chain that was expanding its operation into New Zealand.  The applicant was responsible for opening five stores initially, followed by another two stores several months later.  As time progressed the applicant found the workload to be unreasonable, often working in excess of 60 hours per week, and the support she received inadequate.  The applicant’s health deteriorated and she suffered “burn out”.  The applicant took a period of sick leave.  On her return from sick leave the applicant found that her workload remained excessive and she felt she was subjected to unreasonable and bullying treatment from her managers.  The applicant’s health again deteriorated and she resigned.

The Authority was satisfied that the applicant’s first period of ill health was caused by her excessive workload.  However it was not foreseeable by the respondent that the applicant’s work posed a risk to her health.  The Authority found that the applicant’s resignation however, amounted to a constructive dismissal.  Following the applicant’s first period of ill health the respondent was on notice that the applicant’s workload could affect her health.  The harm the applicant suffered from then on, and her resignation, were direct results of pressures at work and the treatment she received from her managers.  The harm caused was foreseeable and the respondent did not put in place appropriate steps to prevent it.  The respondent breached its duty to provide a safe system of work.  The actions of the respondent’s managers destroyed the applicant’s trust and confidence in the respondent.

The applicant was very distressed by the entire experience.  She suffered a severe blow to her self esteem in not being able to cope with the challenges the role posed.  The applicant was diagnosed with reactive depression and was unable to work for several months.  She was awarded $20,000 compensation for the hurt and humiliation caused by her dismissal.

Kirkley v Ora Ltd

Unreported M Urlich, 19 Feb 2008, AA 51/08

The applicant was employed as the Head of Corporate Services for the respondent.  The applicant claimed that she had been suffering from work related stress due to inadequate support from the respondent.  Following a number of incidents it was decided that the applicant would take a period of study leave for professional training in management.  While she was on study leave the applicant came into the office for a team meeting and to help with preparing the payroll and hand over of her responsibilities.  The applicant found that her personal belongings had been boxed up.  The applicant had a very strong reaction to this discovery and began yelling and storming around the office.  Following that incident the applicant began to assist with the pay roll.  The applicant made the decision to give her codes for the payroll system to a contracted pay roll clerk.  Following an investigation the respondent dismissed the applicant for serious misconduct because she had given her codes to the clerk.

The Authority found that the applicant had been unjustifiably dismissed.  The decision to dismiss the employee was not one a fair and reasonable employer would have made in the circumstances.  The employer’s investigation was inadequate and parts of it were unfair.  The Authority found that the reasoning relied on by the employer to dismiss was wrong in principle.  The defects in the dismissal process were not minor; they went to the heart of the decision.  The Authority dismissed the applicant’s claim for work related stress.

The applicant, applicant’s husband, and medical professionals provided evidence to show that the applicant had been profoundly affected by the dismissal.  The Authority accepted that the dismissal had a significant impact on the applicant and awarded the applicant $15,000 compensation for the hurt and humiliation it caused.  The compensation award had been reduced by 10% because of the Authority’s finding of contributory conduct.  The Authority found that the applicant was a very experienced pay roll administrator and despite her ill health she should not have made the error she made.  The error contributed to the circumstances that led to her dismissal.

Buchanan v Vice-Chancellor, University of Auckland

Unreported V Campbell, 26 Mar 2008, AA 108/08

The applicant was employed as a senior lecturer by the respondent.  The applicant sent an offensive email to an international student who had requested an extension for an assignment due to bereavement.  The respondent investigated the matter and concluded the email was so serious that it undermined the respondent’s trust and confidence in the applicant.  Following a disciplinary process the applicant was dismissed for serious misconduct.

The Authority found that the applicant had been unjustifiably dismissed.  A fair and reasonable employer would not have dismissed the applicant.  While the applicant’s actions constituted misconduct they did not reach the level of serious misconduct warranting dismissal.  The respondent took into account unrelated matters that it had already dealt with and ignored or overlooked suggestions made by the applicant to help insure a similar situation did not occur again.

The Authority accepted that the dismissal had caused the applicant some distress and that he was having difficulty moving on from the dismissal.  The applicant’s dismissal attracted a lot of publicity which also contributed to his sense of hurt and humiliation, although the respondent was not responsible for that.  The Authority took into account the applicant’s ten years of employment with the respondent and the damage to his reputation.  The Authority found that the applicant had contributed to the circumstances that led to his dismissal.  His conduct was sufficiently blameworthy to warrant a reduction in the remedies awarded.  The applicant did not seem to fully appreciate his pastoral care duties towards students or realise how his communication style affected those receiving his communications.  The Authority found that a 25% reduction in remedies was appropriate.  Taking the reduction into account the Authority awarded the applicant $15,000 compensation.

Smith v Pacific Palms International Resort & Golf Club Ltd

Unreported L Robinson, 16 Apr 2008, AA 141/08

The applicant was employed as the General Manager of the respondent.  Prior to the applicant’s employment he became friends with the respondent’s director and assisted him on a voluntary basis with the business.  The applicant was paid through a company which invoiced the respondent monthly for the applicant’s work.  Of the twelve invoices the applicant gave the respondent only four were paid.  When repeated requests for payment failed the applicant resigned.

The Authority found that the applicant was unjustifiably constructively dismissed.  The applicant’s resignation was caused by a breach of duty on the part of the respondent.  The respondent failed to pay the applicant, breaching the wage/work bargain which is fundamental to an employment relationship.  The Authority found that the respondent’s breach of duty was so serious that it was reasonably foreseeable that there was a substantial risk that the applicant would resign.

The applicant was extremely hurt and humiliated by the respondent’s behaviour towards him.  He was distressed to learn of rumours, hurtful criticism and untrue allegations being made by the respondent’s director against him and his wife.  The situation was exacerbated by the personal friendship that had existed between the parties and the applicant’s devotion to the job.  The respondent’s failure to pay him placed the applicant in a situation where he had to sell his house as he could not meet the mortgage payments.  The applicant was awarded arrears of wages, reimbursement of wages lost since the dismissal and $15,000 compensation.

Panoho v The Vice-Chancellor of the University of Auckland

Unreported L Robinson, 24 Apr 2008, AA 153/08

The applicant was employed as a lecturer by the respondent.  Issues in the workplace caused the applicant to become unwell and take a period of sick leave.  During the period of sick leave the respondent undertook a restructuring process and selected the applicant’s department for redundancies.  Staff were asked to submit documents to a selection committee to help with its selection of candidates for redundancy.  The applicant raised concerns about having to provide information while on sick leave and it was arranged that the department would provide the information on his behalf.  The selection committee recommended that the applicant’s position be disestablished.  The applicant was then advised that his position was to be made redundant.

The Authority found that the applicant had been unjustifiably dismissed.  The Authority concluded that the applicant’s position was not genuinely redundant and that it was likely that the applicant had actually been dismissed for poor performance.  The respondent’s decisions and actions were not those of a fair and reasonable employer.  The applicant was not treated fairly or sensitively.  The selection committee breached its duties of good faith and natural justice in reaching its conclusions without asking the applicant for his views.

The applicant suffered hurt and humiliation as a result of his dismissal.  He found the dismissal to be damaging for the mana of his wider whänau and his reputation amongst his own people and those of his wife.  The dismissal caused the applicant and his family significant financial hardship.  Due to the specialised nature of the applicant’s qualifications, finding similar employment had been very difficult.  The Authority ordered that the applicant be reinstated to his position.  Given the applicant’s length of service and the nature of his personal grievance an award of $25,000 compensation was appropriate.

Wells v Rescare Management Ltd

Unreported A Dumbleton, 4 Jun 2008, AA 199/08

The applicant worked for the respondent as a community support worker for people with intellectual difficulties.  The parents of two residents complained about the care provided by the applicant.  The respondent called the applicant to a disciplinary meeting and then suspended her on full pay.  The respondent told the applicant’s counsel that the applicant would be dismissed.  The respondent then proceeded with the second meeting as if no decision had been made.  The applicant attended this meeting expecting to be dismissed.  After the meeting the applicant was dismissed.

The Authority found that the applicant was unjustifiably dismissed.  The Authority was satisfied the respondent had already decided to dismiss the applicant before the dismissal meeting.  The Authority found that the respondent gave effect to the wishes of the residents’ parents without considering its obligations to the applicant as her employer.  The Authority found that the respondent approached the investigation with a closed mind and sole objective of appeasing the parents.  Summarily dismissing the applicant was an unreasonable response and was out of proportion to the complaint.  The applicant was not told the reasons for the first meeting or given an opportunity to comment prior to the suspension.  The respondent breached its good faith obligations to the applicant.

The applicant suffered serious humiliation, hurt feelings, distress and anguish as a result of her dismissal.  The applicant felt shame and guilt about the manner in which she had been dismissed.  The applicant’s treatment shattered her self esteem and confidence in her ability to perform the kind of work she had been doing and it took her a long time to return to work.  The Authority awarded $16,000 compensation.

Challenges to the Employment Court where the Employment Relations Authority awarded compensation*

Chief Executive of the Department of Corrections v Tawhiwhirangi [2008] ERNZ 49

The Authority awarded $10,000 to the employee for a successful unjustified dismissal claim but reduced the award to $5,000 because the employee was to be reinstated and because of his contributory conduct.  The Authority dismissed the employee’s unjustified disadvantage claim.  The Employment Court dismissed the challenge brought by the employer and the cross challenge brought by the employee.  The Court found that the award of $10,000 compensation was comparatively modest in the circumstances and so should not have been reduced.  The employer was ordered to pay the employee $10,000 compensation less the $5,000 already paid pursuant to the order made by the Authority.  (Authority determination: G J Wood, 27 Apr 2007, WA 65/07.  Included in 2007 Compensation Table.)

Sefo v Sealord Shellfish Ltd

Unreported Colgan CJ, 17 Apr 2008, CC 4A/08 – The Authority awarded $15,000 to the employee, reduced to $12,000 for contributory conduct, for a successful unjustified dismissal claim.  The Authority dismissed the employee’s unjustified disadvantage claim.  The employee challenged the Authority’s findings on a number of issues including the reduction of remedies for contributory conduct.  The Employment Court upheld the employee’s challenge.  The Employment Court found that the reduction in remedies for the unjustified dismissal was not warranted.  The award of $15,000 compensation was restored.  (Authority determination: P Montgomery, 24 Jul 2007, CA 84/07.  Included in 2007 Compensation Table).

*This section provides short summaries of challenges to the Court where the Authority awarded compensation.  This recognises the fact that an amount of compensation previously awarded by the Authority, and previously included in a compensation table, has been altered by the decision of the Court.