Dundas Street Employment Lawyers navigation

FOLLOW US ON ALL NEWS

Compensatory payments on the rise

Date: 31/07/2015

Rodkiss v Carter Holt Harvey Limited [2015] NZEmpC 34

Campbell v The Commissioner of Salford School [2015] NZEmpC 12

The Employment Court has demonstrated a movement towards increased compensatory payments for hurt and humiliation, influenced in part by two high-profile decisions of the Human Rights Review Tribunal (Hammond v Credit Union Baywide and Singh v Singh and Scorpion Liquor) where awards of $98,000 and $45,000, respectively, were made for “similar wrongs”. For some time, there has been a sense that the employment tribunals under-compensate for successful personal grievances, and that determining appropriate compensation has been an inexact science.

Here’s what you need to know:

  • Following a trend towards significant hurt and humiliation awards by the Human Rights Review Tribunal, the Employment Court appears more prepared to make increased awards in appropriate circumstances, recognising that compensatory awards in the Authority and Court have become stagnant and have fallen “woefully behind” the pace of inflation. However, the Court still suggests there is a need for moderation in the employment jurisdiction.
     
  • The Court has identified the danger in using consistency of awards with previous cases to keep compensatory amounts at an artificially low level.
     
  • In Rodkiss, a senior employee was constructively dismissed, suffered anxiety and stress due to the unjustified actions of Carter Holt Harvey, and suffered damage to his professional reputation in both his former and his new employment. The Court followed another recent decision in Hall v Dionex Pty Ltd [2015] NZEmpC 29 (where $18,000 in compensation had been awarded) and awarded $20,000 in compensation.
     
  • In Campbell, a primary school principal was found to have been unjustifiably suspended and unjustifiably dismissed by Salford School, and suffered significant distress and stigma as a result. The Court again followed Dionex and awarded $22,400 in compensation.
     
  • These two cases represent a move towards a higher ceiling on awards of compensation in the Authority and Court, where the circumstances demand it.

For employers, increased awards can be expected where employees establish personal grievances and have suffered distress as a result. It is therefore even more critical to ensure that any actions taken are those of a fair and reasonable employer in all the circumstances. Please contact us for advice about how to ensure that this standard is met.

Copies of the decisions referred to are available here.