Many ‘employers’ in New Zealand, operate under a corporate identity through a limited liability company. There is a common assumption if a company becomes insolvent, that directors or those that influence or control the company, are protected by the ‘corporate veil’ – and can avoid personal consequences. In some circumstances, as this article explores, this common assumption is wrong.
Ignore workplace bullying at your own risk
In 2011 a local high school initiated an investigation into allegations of bullying. The apparent increasing prevalence of bullying is not isolated to schools but is also on the rise in workplaces globally. Employers should be aware that they may be liable for bullying that occurs in their workplace. For that reason, it is useful to know what constitutes bullying, so that steps can be taken to pre-empt potential incidents of bullying and manage conduct of concern appropriately.
New Zealand’s employment law does not define bullying. However, it is generally accepted to be unwanted, unwarranted and ordinarily offensive actions that are repeated, carried out with the desire to gain power or exert dominance and carried out with the intention of causing fear and distress. A recent case has gone further, to suggest that interference with personal property that is emotionally offensive, malicious, intimidating and humiliating may amount to bullying. While teasing, name calling or offensive language directed at a person may amount to bullying, “workplace banter”, a direct communication style or firm management are unlikely to amount to bullying on their own.
A complaint of bullying requires investigation by an employer and where bullying behaviour is observed without complaint, an employer should also take proactive steps to address the issue. The need for an employer to act proactively, besides being embedded in the obligations of good faith, arises from health and safety legislation which requires employers to take all practicable steps to ensure employees’ safety. That includes safety from psychological harm. The Health and Safety in Employment Act defines harm to include mental illness caused by work related stress, which is usually an inevitable consequence of ongoing bullying.
The consequences of an employer not acting to protect victims of bullying are potentially severe, including prosecution under health and safety legislation, liability for a personal grievance, or liability under human rights legislation. In the event of a successful prosecution or claim, orders for compensation and fines may result.
Employers are recommended to take proactive steps to avoid bullying by fostering a culture that does not tolerate such behaviour. Research indicates that working environments without bullying experience higher staff satisfaction, greater productivity and lower staff turnover. Employers should communicate policies regarding their expectations of conduct in the workplace and where behaviour is identified as a concern, this should be investigated without delay, with the goal being to genuinely protect the health and safety of employees. Ignoring health and safety issues is likely to be a risky gamble.
This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.
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Alexandria Till
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