Insight 2 (1)

There is something to be said for structure.  Courts and tribunals have for some time used 'bands' or 'scales' to help provide a structured, consistent and fair assessment of remedies.  A recent Employment Court decision continues this theme, and sets a new level for 'mid-range' cases of $20,000. 

The decision signals a likely increase in awards for hurt and humiliation in the employment jurisdiction.  It is noteworthy for employers and employees, not only when they go into a hearing, but when they weigh up the merits of settlement.  For public sector agencies especially, working to the Auditor-General's guidelines, settlement payments should generally reflect the amount that the employee would be likely to receive if he or she brought the matter before the Authority or Court. 

It is worth noting also the bands being applied in the health and safety, human rights and privacy jurisdictions. 

Employment:  Waikato District Health Board v Archibald [2017] NZEmpC 132

Mrs Archibald had a lengthy nursing career with the District Health Board (DHB).  Her employment was terminated for redundancy following a restructuring.  Mrs Archibald declined a role that would have involved her travelling for almost three hours each working day, for up to nine months.

The Employment Court found that the dismissal was unjustified.  It said the DHB failed to comply with the relevant change management provisions, and failed to appropriately engage with Mrs Archibald.  It found that she had experienced stress, worry and a deep sense of hurt that she had not been listened to, and that there had been a "lingering negative impact".  The Court awarded her $20,000 compensation for hurt and humiliation under section 123(1)(c)(i) of the Employment Relations Act.

In doing so, Chief Justice Inglis said that assessing compensation is an "inexact science", and that she found it helpful to use three bands:

  • Band 1 - low level loss/damage
  • Band 2 - mid-range loss/damage
  • Band 3 - high level loss/damage.

The Court held that Mrs Archibald's circumstances fell in the middle of Band 2.  While the Court did not define the bands beyond this, it provides some indication knowing that $20,000 and this case represent the 'middle of the middle'. 

Human Rights and privacy

The Human Rights Review Tribunal has been applying three bands as a "rough guide" since the 2015 decision in Hammond v Credit Union Baywide (the 'cake case').  It said that for less serious cases, awards should be up to $10,000; for serious cases, between $10,000 and $50,000; and the most serious cases should be above $50,000.  In this case it awarded nearly $100,000 for hurt and humiliation. 

The bands are described differently to the bands used by the Employment Court, so may not be directly comparable.  'Middle of the mid-range' however in this jurisdiction appears to be $30,000. 

Health and safety

The health and safety jurisdiction is different altogether, so not at all comparable.  There is also no High Court (or higher) decision under the Health and Safety at Work Act to provide authoritative guidance. 

The District Court has however been applying bands, including in the recent and helpful decision involving Rangiora Carpets Limited (RCL).  In that case, a worker fell 2.5m from an unconsented mezzanine floor through a false ceiling to the floor below, resulting in significant injuries - broken bones mostly. 

To assess the fine for 'failing to a comply with a duty that exposes an individual to risk of death, or serious injury or illness' under section 48, the Court held that the appropriate bands were:

  • Low: $0 to $150,000
  • Low/Medium: $150,000 to $350,000
  • Medium: $350,000 to $600,000
  • Medium/High: $600,000 to $850,000
  • High: $850,000 to $1,100,000
  • Extremely high: $1,100,000 +

The Court stated that there should be a buffer at the top end of the scale for a wealthy defendant to have their otherwise appropriate fine increased to ensure the purposes and principles of sentencing are properly met in each case. 

The Court fixed RCL's culpability in the Low/Medium band, and set the starting point of the fine at $300,000.  The Court found that the hazard should have been obvious and could have cheaply and easily been remedied.  It acknowledged however that the mezzanine was a storage area where it was uncommon for workers to work, and distinguished it from a roofing company whose workers are routinely operating from a height.  Taking into account mitigating factors, including RCL's co-operation in the investigation, its clean safety record prior to the accident, the remedial steps it had taken since, and its remorse and willingness to attend restorative justice and pay reparation, the court imposed a fine of $157,500. 

All the best

On behalf of Buddle Findlay, we would like to thank you all for your support and feedback throughout the year.  Please let us know if you have any suggestions for topics you would like covered, or if we can assist in any other way.  This is our last employment law update for the year, so Merry Christmas, and have a happy and safe holiday.