COMPENSATION FOR NON-MONETARY LOSS IN EMPLOYMENT MATTERS

CHOICE OF PROCEDURES

Introduction

Emotional harm has received a decidedly frosty reception from the common law over the years.[1] Section 123(1)(c)(i) of the Employment Relations Act (ERA) 2000 outlines provisions for compensation for humiliation, loss of dignity and injury to the feelings of the employee.  The factors contributing towards mental distress must still be demonstrated, however, and compensation may not be awarded as a matter of course.[2]  Section 92M(1)(c) of the Human Rights Act (HRA) 1993 provides similar relief and is almost identical to the provisions of the ERA. Therefore, a complainant may choose to proceed either under the HRA or to bring a personal grievance, but not both.

This article comments on the recent compensations awarded by the Human Rights Review Tribunal and provides an outlook whether pursuing a claim under the HRA is worthwhile.

The ‘Cake’ Case

The infamous ‘cake’ case (Hammond v Credit Union Baywide[3]) where the Human Rights Review Tribunal (HRRT) found New Zealand Credit Union Baywide (NZCU Baywide) in breach of privacy of a former employee by distributing a Facebook screenshot to Hawke’s Bay employment agencies with a warning against employing her. The HRRT awarded $98,000 in compensation for humiliation, loss of dignity and injury to feelings, plus damages, amounting to over $168,000 in total.

The proceedings started after the former employee, Karen Hammond and her friend had both resigned from NZCU Baywide. They both attended a private dinner party, where Ms Hammond made a cake for the party, that was iced with words “NZCU F**K Y**” and the side of the cake had the word “C*NT”. The party was attended by 10 close personal friends, five of whom were current NZCU Baywide employees. Ms Hammond later uploaded the picture of the cake to her Facebook page. NZCU Baywide gained access to the page and took a screenshot of the cake and later distributed to multiple employment agencies in Hawke’s Bay region by email. NZCU Baywide also made phone calls to potential employers, warning them against employing Ms Hammond.

The HRRT found that in doing so, NZCU’s actions were interference with Ms Hammond’s privacy under s 66 of the Privacy Act. The HRRT concluded that loss, detriment, damage or injury as intended by s 66 was established. It was further noted that NZCU carried out a sustained campaign against Ms Hammond to inflict harm and humiliation following the discovery of the cake photo. 

Colin Craig[4] saga

A recent case in the HRRT between former Conservative Party leader, Colin Craig and his ex-press secretary, Rachel MacGregor is a perfect example of the financial ramifications an employer may suffer if they breach the terms of a confidential settlement.

Ms MacGregor was employed as Mr Craig’s press secretary. In the course of her employment, Mr Craig sent a series of text messages of a sexual nature and other inappropriate actions of a sexual nature, that led to Ms MacGregor resigning from her position. Ms MacGregor then filed a claim of sexual harassment against Mr Craig with Human Rights Commission. There was also a dispute about money allegedly owed to Ms MacGregor for work done. The matter was heard at a mediation and parties reached a confidential settlement agreement which stated that the contents of the agreement were not to be disclosed to any third-party. Mr Craig mistakenly believed that Ms MacGregor had leaked information in breach of the settlement agreement. Mr Craig then repeatedly breached the settlement agreement himself by publicly discussing Ms MacGregor and the sexual harassment claims. 

Ms MacGregor raised a claim in the HRRT alleging that Mr Craig had breached the terms of the settlement agreement. She asked the HRRT for a declaration restraining Mr Craig from further breaches and damages for humiliation, loss of dignity and injury to her feelings. The HRRT found that Mr Craig’s breaches were “deliberate, systematic, egregious and repeated”; and considered that the facts of the case fell within the most serious band of quantum for compensation. As a result, the HRRT granted the declaration and compensated Ms MacGregor with an award of $120,000 for the hurt, humiliation and injury to feelings she has suffered over a two-year period.

ERA vs. HRA – choice of procedures

An employee can pursue a complaint involving discrimination, or sexual or racial harassment through either the ERA or the HRA. As mentioned above, the law that applies to these two parallel jurisdictions is the same, however there are some significant differences between them.

The ERA only applies to employees meaning “any person of any age employed by an employer to do any work for hire or reward under a contract of service” (section 6(1)). Whereas, the HRA is an option for employees as well as anyone else who may have a discrimination or harassment claim. This could be a difficult decision to make as to which procedure to follow. A decisive factor is likely to be the choice of remedies available under each jurisdiction, though this may not be the only factor. It is also important to note that there are only limited circumstances where the complainant can bring a claim in the HRRT, i.e. where they have suffered discrimination/harassment and/or a breach of privacy (only the HRRT has jurisdiction to hear privacy complaints). 

Both jurisdictions provide the remedy of compensation for humiliation, loss of dignity and injury to feelings, nonetheless the compensation awarded in each jurisdiction has been very different.  Section 92Q of the HRA restricts the HRRT in terms of monetary award to $200,000, whereas, there is no such statutory limit defined under the ERA. Arguably the compensation awarded for claims decided under the ERA could be large, however, the recent statistics available from the Employment New Zealand show that the average hurt and humiliation payment floats around $5,000 - $10,000 under the ERA.[5]  On the contrary the Hammond[6] and Colin Craig[7] decisions show that the HRRT has clearly reached a view that earlier awards for compensation were inadequate, and has taken steps to address this by increasing the amounts awarded.[8]

Conclusion

In conclusion, it is obvious that both, the ERA and the HRA provide similar relief and have similar provisions. However, the compensation range awarded by both for non-monetary loss in employment matters is quite different. It is likely that as a result of recent compensation awards by the HRRT, aggrieved employees may well be looking seriously at pursuing claims under the HRA, instead of the ERA.


[1] “Compensation for non-monetary loss – fickle or flexible?” Paper presented by Judge Christina Inglis at Employment Law Conference, October 2016, p369

[2] Tom Goddard A Right Without a Remedy? Compensation and Costs in Personal Grievance Cases (delivered to the Employment Law Institute, Auckland 2002).

[3]Hammond v Credit Union Baywide [2015] NZHRRT 6

[4]MacGregor v Craig [2016] NZHRRT 6

[5] Compensation Awards 2015 – 1 July 2015 to 31 December 2015; sourced from Employment New Zealand

[6] above n 3.

[7] above n 4.

[8] above n 1, p401.


Further information