The amount of compensation awarded for hurt and humiliation by the Employment Relations Authority (the Authority) and the Employment Court has been a topical issue among those practising employment law.

Some suggest that the awards given in the employment jurisdiction have been stagnant for too long. They claim those who successfully raise a personal grievance today are not being adequately compensated for any unjustified action of their employer.

Against this backdrop, it is becoming a popular notion that employees will obtain higher compensation if they take their claim to the Human Rights Review Tribunal (if the circumstances allow). This issue has come to the fore due to recent comments by Judge Inglis in Hall v Dionex Pty Ltd [2015] NZEmpC 29 and Judge Ford in Rodkiss v Carter Holt Harvey [2015] NZEmpC 34.

In Hall v Dionex the Court expressed sympathy for the view that awards had fallen “woefully behind” in both the Authority and the Court.

The Court considered recent commentary and observed that compensatory awards had been stagnant for the last 20 years despite inflation.¹

The Court further observed that in 2005 the Court of Appeal attempted to set an upper limit for compensatory awards of $27,000 in NCR (NZ) Corp Ltd v Blowes [2005] ERNZ 932. This upper limit was reached by considering the award of $20,000 given in Telecom South v Post Office Union Inc [1992] 1 NZLR 275 (CA) and adjusting this for inflation. The Court observed that if inflation were similarly applied to the upper limit of that time, it would be set at $33,000.

Hall v Dionex is notable for the fact the Court deliberately resisted the temptation to award compensation consistent with previous awards. Counsel for the employer in Hall suggested that a global figure of $5,000 should be awarded for the claims the employee made, analogous to the quantum which would usually be awarded in cases of that nature. The Court observed that while there was a need for a degree of consistency in cases, there was a danger of this consistency keeping compensation awards artificially low.

Having considered these trends, the Court awarded the employee $18,000 in compensation which was reduced by 50% for contributory conduct.

In Rodkiss v Carter Holt Harvey, Judge Ford commented that the Court would follow the approach adopted in Hall v Dionex and endeavour to “fix a fair and reasonable amount of compensation bearing in mind the need in this jurisdiction for moderation in such awards”. The Court awarded the employee $20,000 in compensation.

Judge Ford referred to the “extensive publicity” given to the Human Rights Review Tribunal (HRRT) cases Hammond v Credit Union Baywide [2015] NZHRRT 6 and Singh v Singh & Scorpion Liquor (2006) Ltd [2015] NZHRRT 8 where compensation awards were $98,000 and $45,000 respectively.

While the Court considered that it would be inappropriate to compare the facts of the cases to the one being considered, the Court said that “the awards in question do appear to be substantially in excess of the awards made both the Authority and in this Court for arguably similar wrongs committed on employees”.

Caution should be exercised regarding whether persons claiming in the HRRT are likely to receive higher awards than if they filed in the employment jurisdiction. Both Hammond v Credit Union Baywide and Singh v Singh are cases where the harm suffered by the employees warranted compensation awards falling within the upper range. Furthermore, Singh v Singh has since been appealed and the matter will be reheard on the basis that the defendant was not able to respond at the hearing.

Hammond v Credit Union Baywide

In Hammond v Credit Union Baywide the HRRT found that there was a “sustained campaign by [Baywide] to inflict on Ms Hammond as much harm and humiliation as possible by ensuring she could not be employed in the Hawke’s Bay area (if not further afield) and to secure her dismissal by her current employer”.

The employer’s actions included forcing a junior employee to access private pictures on Facebook (of a cake with an insulting message towards the employer) which would not have otherwise been able to be seen by them. The employer then circulated these images to at least four “HR agencies”.

The employer later attempted to secure Hammond’s dismissal from her new employer. This included paying the new employer’s legal fees for advice on how they might dismiss her. When this failed, they refused to do business with her new employer until Hammond, out of sympathy for her new employer, resigned.

Singh v Singh & Scorpion Liquor (2006) Ltd

In Singh v Singh the employee successfully brought a claim for racial discrimination. Singh was the victim of regular, racially motivated bullying. Contrary to his Sikh faith, Singh trimmed his beard and hair to avoid the unkind attention directed at him. This later came to the attention of his family, who were located in India, who disowned him as a consequence.

The bullying continued and events culminated with him being hit on the head with a clipboard and being punched. Singh resigned but faced uncertainty regarding whether he could remain in New Zealand as his visa had been dependant on his employment. Singh suffered from depression and anxiety due to these events.

It is clear that these awards from both these cases would represent the upper range for compensation in the HRRT.

Comparison with awards in the employment jurisdiction

However both of these awards are exceptionally high when compared to the highest awards given in the employment jurisdiction for hurt and humiliation. The compensation in Hammond is higher than any compensation for hurt and humiliation awarded by the Authority or the Court. Only two hurt and humiliation compensation awards have been given by the Authority which are higher than the award given in Singh. The highest awards the Authority and Employment Court have given since the Employment Relations Act 2000 was passed are as follows:²

While current upper range awards from the HRRT appear to be higher than those awarded by the ERA and Employment Court, it is less clear whether middle range cases might be.

Notably five years ago, the HRRT wrestled with the same issues that the Employment Court has this year. In EN v KIC [2010] NZHRRT 9, the HRRT commented that the awards given for compensation should be calibrated for inflation. The HRRT further observed that the awards given by the HRRT had not been reviewed since 1998 and this was long overdue. The HRRT awarded the victim of the sexual harassment $10,000 but declined to review compensatory awards as the defendant did not have legal representation. It is possible that the awards given by the HRRT for the last four years represents an intention by the HRRT to calibrate awards in accordance with inflation.

The awards given by the HRRT each year from 2012 to 2015 are summarised in the table below.

Schedule of Compensation award given by the Human Rights Review Tribunal 2012-2015 ³

Key:
PA = Privacy Act 1993
HRA = Human Rights Act 1993,
HDCA = Health and Disability Commissioner Act 1994
$ = Decision is being appealed.
# = The HRRT found there were two separate breaches and awarded $10,000 and $7,000 compensation humiliation, loss of dignity and injury to feelings. The decision was appealed to the High Court and the award for $10,000 was set aside and the award for $7,000 reduced to $2,000.
* = Cases arising from an employment relationship
Figures include compensation awarded for emotional harm under s 88(1)(c) of the Privacy Act 1993, s54(1)(c) damages for emotional harm under the Health and Disability Commissioner Act 1994 and s 92I(3)(c) and 92M(1)(c) of the Human Rights Act 1993.

If only cases involving an employment relationship are considered since 2012, no award falls below $10,000. However, when all compensatory damages are considered, even where there was no employment relationship, the range of awards widens and a favourable trend of taking a case to the HRRT become less discernible.

It is important to note that the use of statistical information to scrutinise or determine likely awards has been the subject of criticism. The Courts observed that tables and surveys, such as the above, are of limited use as they do not provide sufficient detail of the facts justifying each particular award.⁴ This criticism can be similarly applied to discerning any trend from the table regarding whether an award in the HRRT would be higher than if it were to be heard by the Authority.

However, these tables do indicate the range and frequency of awards given by the HRRT. Notably in Nakarawa v AFFCO New Zealand Ltd [2014] NZHRRT 9, the HRRT stated that the plaintiff’s original claim for $2,000 under the Human Rights Act was “modest” when compared to compensation awards under analogous provisions in the Privacy Act. The HRRT considered a range of cases where the awards ranged from $10,000 to $20,000. The HRRT ordered that compensation of $15,000 should be awarded. This case demonstrates that the HRRT has considered the range and frequency of awards in other cases to determine the amount of compensation that should be awarded.

There is strong evidence to suggest that compensatory awards given by the Authority and Employment Court have fallen behind over the years. The recent judgments in Hall v Dionex Pty Ltd and Rodkiss v Carter Holt Harvey may provide some impetus for compensation awards to increase to match inflation, especially in mid-range cases.

There is a strong basis to argue that cases likely to garner an award for compensation in the upper range are best dealt with in the HRRT, if at all possible. This said, it is unclear whether mid-range cases will fare any better there than they would if heard by the Authority or Employment Court.

Peter Cullen is a partner, and Calum Cartwright a lawyer, at Cullen – the Employment Law Firm. Peter is also a member of New Zealand Law Society Employment Law Committee.

1. Citing Kathryn Beck and Hamish Kynaston “Remedies – we’ve been thinking…” (paper presented to New Zealand Law Society 10th Employment Law Conference, October 2014)
2. Awards included in this table have been limited to compensation awards over $25,000 under s 123(c)(i) of the Employment Relations Act 2000, and have excluded breach of contract claims, Employment Contract Act 1991 claims and Health and Safety Act 1992 claims.
3. Retrieved from Ministry of Justice “Schedule of damages awarded”. (www.justice.govt.nz/tribunals/human-rights-review-tribunal/decisions-of-the-human-rights-review-tribunal/schedule-of-damages-awarded).
4. See NZ Refining Co Ltd v Garrity EC Auckland AEC69/97, 9 July 1997.