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Compensation Awards 06Compensation for Humiliation etc Table(s123(1)(c)(i) ERA) 1 January 2006 – 31 December 2006
While every effort is made to ensure the accuracy of the information provided in this table, the Court, Authority, and Department of Labour 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. Crown copyright 1997. All rights reserved. No part may be reproduced or copied in any form or by any means without the prior written permission of the copyright owner except in accordance with the provisions of the Copyright Act 1994. Infringement of copyright may result in criminal charges, a fine of up to $50,000 and imprisonment for a period not exceeding 3 months. All requests for reproduction or copying of this table should be addressed to: The Legal Section, Workplace Knowledge Management Team, Department of Labour, PO Box 3705, Wellington. Awards of $15,000 and overAberhart v Simpsons Farms Ltd unreported, V Campbell, 20 January 2006, AA 11/06The applicant was employed as a working manager on one of the respondent’s farms. The respondent’s directors decided to reorganise the management of their farms and proposed disestablishing the applicant’s position. The parties met twice to discuss the proposed restructuring and the applicant was invited to apply for a new position. There were no further discussions about the restructuring until the applicant was told the new position was to be advertised. The applicant did not apply and at the start of December he was advised his employment would terminate in five weeks. The Authority found the redundancy was genuine but procedurally unfair. The process of consultation did meet the tests set out in Communication & Energy Workers Union Inc v Telecom NZ Ltd [1993] 2 ERNZ 429. The applicant was not able to receive precise information about the scope of the new role and understand the reasons behind the restructuring until the investigation meeting. No discussion took place with the applicant regarding the impact of the proposal, which was surprising given he would have to move his family from the farm property he had occupied for 15 years. The applicant’s partner gave compelling evidence of the impact on him of losing a job he had held for 15 years. The lack of discussion or consultation for four months after the initial meetings made the final decision more of a blow than if discussion had taken place and offers of assistance made to help with finding alternative work and/or accommodation. The applicant and his partner were also not invited to the staff Christmas function, this added to the applicant’s humiliation. The applicant was awarded $15,000 compensation. The Authority took into account the applicant’s long service, his age, and that he had received more notice than required by his employment agreement and a redundancy compensation payment in excess of $10,000. Simpsons Farms Ltd v Aberhart [2006] 1 ERNZ 825The Authority’s award of $15,000 was subsequently confirmed by the Employment Court. The Court commented that although the award was at the highest end of discretionary awards that could have been made in the circumstances, it was not so wrong that a lesser award should be substituted. Hitchiner v New Zealand Management Academies Ltd unreported, K Anderson, 27 January 2006, AA 16/06The applicant was employed as a Hospitality Tutor with the respondent. The respondent planned to restructure and its tutors were informed one position was to be made redundant. The respondent’s Human Resources Manager considered the other tutors were more suitable and selected the applicant for redundancy. The Human Resources Manager met with the applicant and began by raising a disciplinary matter relating to an alleged breach of confidentiality by the applicant. He then informed the applicant she was being made redundant. There was disagreement between the parties over what happened next, but the Authority accepted it was made clear to the applicant she should leave the premises as soon as possible. The Authority was not able to find that the redundancy was simply a vehicle to terminate the applicant’s employment. However, the selection process was not fair and reasonable, and the procedure adopted by the respondent when making the applicant redundant was fatally flawed. The selection criteria were not adequately conveyed to the applicant and she was not consulted or given an opportunity to have any input into the decision. The manner in which the applicant was treated on her last day of employment was also unfair and unreasonable; she was subjected to a harrowing and hurtful process. This, in itself, made her dismissal unjustified. While the Authority found no evidence the redundancy was not genuine, it found the selection process was indecently hasty and that had further time and consideration been allowed there may have been a different outcome. The applicant was entitled to the benefit of that doubt and was awarded three months reimbursement of lost wages, less one month’s notice and earnings. The Authority also concluded that given the overall course of action adopted by the Human Resources Manager, in particular, the manner in which her dismissal was implemented, and the consequential overall affect upon the applicant, a reasonably high sum of compensation of $15,000 was warranted. Prins and Anor v Tirohanga Group Ltd (formerly Tirohanga Rural Estates Ltd) [2006] ERNZ 321The plaintiffs were employed by the defendant to co-manage its accommodation complex. The defendant’s managing director purported to make the plaintiffs redundant because the business had been sold. The defendant had not sold the business but the managing director had instructed the new managers to create the impression they were the new owners. The first plaintiff also alleged she had been sexually harassed by the managing director. The Employment Relations Authority found that both plaintiffs were constructively dismissed and the first plaintiff had been subject to sexual harassment. They were jointly awarded $7,500 compensation for their dismissals, with the first plaintiff awarded a further $1,000 for the sexual harassment she suffered. The Authority also ordered the defendant to pay a penalty to the plaintiffs. The plaintiffs brought a non de novo challenge to the Employment Court seeking an increase in remedies. The first plaintiff alleged a number of incidents constituted sexual harassment by the managing director. While the Authority had concluded that two of the alleged statements were sexual harassment the Court found another two incidents occurred. The sexual harassment was an element of a subtle campaign of destabilisation of the plaintiffs’ relationship by the managing director. The first plaintiff’s vulnerable employment relationship aggravated the effects of this behaviour. The Court awarded the first plaintiff $4,000 compensation for her sexual harassment claim. The Court considered it appropriate to differentiate between the circumstances of the plaintiffs when considering compensation for their dismissals. Because of the intervention of illness the second plaintiff suffered less from the effects of dismissal than the first plaintiff and could not claim lost remuneration. He was entitled to $8,000 compensation. The first plaintiff was entitled to $12,500 compensation and to be paid for the remainder of her fixed term contract, less earnings. The Court also ordered the defendant to pay holiday pay, interest, relocation costs, and a penalty to the Crown. Whitehouse v Moorhouse Construction Ltd, unreported, P Montgomery, 28 July 2006, CA 110/06The applicant was employed as a construction manager with the respondent, a franchisee. The respondent, after receiving a number of complaints about the applicant’s alleged failings, advised it would review his performance. At the start of the review meeting, the applicant was told he would not be dismissed. Despite this, when the applicant explained he would not complete some of the company’s checklists because of a directive from the franchisor’s national training manager, the respondent dismissed him. In a subsequent letter setting out the reasons for the dismissal the respondent advised it had taken into account earlier performance warnings that the applicant had challenged. The Authority found that the respondent had not followed the procedures set out in the employment agreement relied on by the parties. It required the respondent to advise employees of the right to representation in meetings of a disciplinary nature. Also, the applicant was not advised his employment was at risk, instead the respondent referred to a “review” of his position. The Authority was strongly of the view that a review required an employer to put its concerns on the table, and invite, listen and consider the employee’s responses before deciding on a course of action. This had not happened and the dismissal was unjustified. The applicant had also been unjustifiably disadvantaged by the issuing of the first warning and by being denied the right to respond to its contents. While the Authority did not hear from anyone attesting to the applicant’s reaction to his dismissal, it did not doubt that he was stunned at the outcome of the “review” meeting. The Authority was firmly of the view that had the parties had legal representation at the meeting, the outcome would likely have been significantly different. The procedure followed by the respondent was blatantly flawed and lacking in natural justice. The applicant was awarded a total of $17,000 compensation in respect of the disadvantage findings and for the unjustified dismissal.
Wilkinson v Tait Electronics Ltd unreported, P Montgomery, 10 August 2006, CA 119/06The applicant was employed by the respondent in Singapore as its Country Manager. His position was disestablished when the respondent restructured due to the difficult business climate in Asia. While the respondent engaged in a consultative process with the applicant in respect of the new structure, it did not engage in a consultative interaction with him in respect of the loss of his position. Although the respondent’s decision to restructure was genuine, it was obliged to advise the applicant that under the model selected for implementation it was his position that would be disestablished and enter into consultative process with him. The applicant’s dismissal was unjustified. The Authority accepted that the effect of the applicant’s dismissal was very significant, particularly in light of his position as an expatriate employee and also given the circumstance of the recent arrival of his first child. It also considered the humiliation occasioned the applicant by his wife having to return to work from parental leave earlier than anticipated to support the family. In all the circumstances the Authority considered in just to award the applicant $15,000 compensation.
Trotter & Parkinson v Bank of New Zealand unreported, R Monaghan, 25 August 2006, AA 273/06The respondent employed the first applicant as a mobile mortgage manager; the second applicant was his manager. The applicants were dismissed when the respondent concluded the first applicant had breached its policy not to deal with mortgage brokers and the second applicant had been aware of this. After considering the information available to the respondent, the Authority found that the respondent could not have fairly and reasonably concluded the applicants’ behaviour constituted serious misconduct. The Authority considered the circumstances of the two applicants separately. Taking into account the limited evidence regarding injury to the first applicant’s feelings, and its assessment that he had contributed to his dismissal, the Authority awarded him $10,000 compensation. The second applicant had also contributed to his dismissal, but only a limited reduction in remedies was warranted. The second applicant gave evidence of the humiliation, anxiety and loss of self worth he had suffered and was awarded compensation of $20,000.
Ayers v Advertising Works Ogilvy Ltd unreported, L Robinson, 20 October 2006, AA 324/06The applicant was employed as the Creative Director of the respondent. When the respondent planned to merge with another company, the applicant was told he “would be a casualty” and was a given the option of leaving or taking on a lesser position. The applicant proposed that he would resign in exchange for a satisfactory settlement. After an unsuccessful mediation, the respondent sent a email to its staff stating that the applicant had resigned. The respondent’s issue of the email was premature and precipitous. The applicant’s proposal was not a resignation, and the Authority had little doubt that if the applicant had sought to retract any resignation, in all likelihood he would not have been permitted to do so. The public announcement had significant impact on the applicant and rendered his continued employment untenable. The respondent’s actions constituted repudiatory conduct and the applicant was entitled to affirm it. The applicant gave evidence of his substantial financial commitments and the impact of the situation on his family. He was particularly aggrieved that the wording of the respondent’s email created the impression that he left “under a cloud”. The applicant held a senior position at a leading advertising agency. His standing within the industry was of importance to him and the circumstances of his very public departure caused him much anxiety. The Authority accepted that the respondent’s email aggravated the stress and suffering the applicant endured and that his encounter with the respondent’s managing director after he raised his personal grievance had caused him further aggravation. The Authority awarded him $15,000 compensation, having regard to the applicant’s evidence, length of service, and the circumstances of the personal grievance.
Challenges to the Employment Court where the Employment Relations Authority awarded compensation*Li v The Vice Chancellor of Auckland University of Technology unreported, Colgan J, 12 January 2006, AC 2/06The Authority awarded $3,500 compensation to the employee. The challenge by the employer was dismissed. The challenge by the employee to remedies was partly successful but the award for compensation was not altered. The Court, therefore, also awarded $3,500. (Authority determination: R Monaghan, 13 December 2004, AA 407/04)
Yuan Cheng International Investment Group Ltd v Buer [2006] 1 ERNZ 871The Authority awarded $5,000 compensation to the employee. The challenge by the employer was dismissed. The Court, therefore, also awarded $5,000. (Authority determination: D King, 30 May 2005, AA 199/05)IHC New Zealand Incorporated v Fitzgerald [2006] 1 ERNZ 932The Authority awarded $5,000 compensation to the employee. The employer’s challenge was successful and the Authority’s compensation award was therefore set aside. (Authority determination: D Asher, 21 September 2005, WA 154/05)
*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, may have been altered by the decision of the Court.
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