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Cash Remedies for Hurt Feelings

Written by Glenn Finnigan, PARTNER on March 9th, 2015.    

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Humiliation, loss of dignity and injury to feelings

When an employee is dismissed from (or disadvantaged at) work, there will inevitably be a degree of injury to feelings. When that action is not reasonable or justifiable, the impact can be far greater. The Employment Relations Act provides a remedy for humiliation, loss of dignity and injury to feelings an employee suffers as a result of unjustifiable dismissal and unjustifiable actions by an employer.
 
Though there is no maximum amount for the compensation that can be awarded, the amounts tend to be modest. This has reflected the courts’ view that these awards need to be proportionate.

Recent awards - Will we see an increase?

Since around 2007, the average award for hurt feelings has been a little over $5,000. The most recent data from the Ministry of Business, Innovation and Employment shows that in the 6 months from January- June 2014 the majority of awards in the Employment Relations Authority and Employment Court were still in the $4,000 - $6,000 range.
 
However, there were 17 awards over $10,000 in that period and 8 over $15,000. This is significant when you consider that awards over $15,000 were only handed out between 1 and 4 times in each of the previous 6 month periods in 2012 and 2013.
 
Based on inflation alone, average awards of $5,300 in 2007 should be around $6,400 in 20151. However the 2014 figures show that many Authority decisions still appear to be applying a $5,000 starting point and adjusting upwards or downwards depending on the evidence of the degree of emotional harm in each case. The awards for serious cases seem to be increasing, but the average employee appears to still be receiving around $5,000.
 
Interestingly, there have been several recent decisions from the Employment Court (in reasonably serious but not exceptional circumstances) where awards over $15,000 have been granted. There have also been significantly higher awards for similar types of distress from the Human Rights Review Tribunal. We will watch with great interest whether the employment institutions take note of those awards and consider a more generous approach to such compensation awards is warranted. We summarise below some recent cases and the awards made. Each case is unique and the awards reflect the circumstances and the evidence of the emotional effect of, for example, an unjustified dismissal. But these cases do show a tendency, especially in the Employment Court, for more realistic awards (at least from an employee’s perspective).

Case summaries

Edwards v Bay of Islands College – Mr Edwards was the principal of Bay of Islands College. His employment was terminated for a range of reasons, including his management style and alleged performance issues. The Employment Court held his dismissal be unjustified for both substantive reasons and procedural failures by the school. In considering compensation, the Judge found there was evidence of significant embarrassment and humiliation for Mr Edwards, having been dismissed from an esteemed position in a small community.  He also considered the humiliation of experiencing the impact of the dismissal on Mr Edwards’ family. An initial award of $22,000 was reduced by 25% to $16,500 for Mr Edwards’ contribution to his dismissal.

Alatipi v Department of Corrections – Mr Alatipi was a corrections officer at Rimutaka Prison. A prisoner alleged that Mr Alatipi had seriously assaulted him. Following an investigation, Mr Alatipi was dismissed. The Court found that the investigation by Corrections was marred by serious deficiencies. Accordingly, the decision to dismiss Mr Alatipi was not one that a fair and reasonable employer was able to make. The Court considered that Mr Alatipi was dismissed one month before Christmas and acknowledged the significant humiliation, shame and frustration he suffered as a result. The dismissal had physical, emotional and financial impacts on Mr Alatipi. The Court awarded him a sum of $20,000 in compensation.

Hammond v Credit Union Baywide (Human Rights Review Tribunal - 2015) – Ms Hammond’s privacy was breached by her previous employer distributing a photo of an offensively iced cake which she had placed on her personal Facebook account with the privacy settings allowing only “friends” to view the photo. The employer compelled a junior employee to provide the photo and then sent it to recruitment agencies and Ms Hammond’s new employer, causing her to lose her job. We have summarised this case in more detail in a separate article on our website. However, it is worth pointing out that the Human Rights Review Tribunal exercised its discretion under section 88 of the Privacy Act 1999 and Ms Hammond was awarded $98,000 to compensate her for her serious humiliation, loss of dignity and injury to feelings.
 
Hamilton v The Deanery 2000 Ltd (Human Rights Review Tribunal - 2003) – Paula Hamilton is an English model who moved to New Zealand around 2000. Ms Hamilton checked into a substance abuse clinic, The Deanery, for treatment for alcohol issues. After her discharge, there was a breakdown in the relationship with the Deanery’s directors. Subsequently, The Deanery passed personal information about Ms Hamilton and her treatment to the New Zealand Immigration Service and several newspapers. Ms Hamilton was awarded $40,000 to compensate her for what the Tribunal thought was serious humiliation, loss of dignity and injury to feelings.
 
We have included Ms Hamilton’s 2003 case to compare with Ms Hammond’s and demonstrate that, in the area of breach of privacy, damages for hurt and humiliation may be increasing over time. Indeed, the 2015 Hammond decision considered the earlier case, commenting that an award of $40,000 in 2003 may be worth around $66,000 in today’s money. However, it is worth noting that the Tribunal in Ms Hammond’s case also believed her to have suffered more than Ms Hamilton, justifying the significantly increased award.

How we can help

Jackson Russell is experienced in dealing with all aspects of employment and privacy law. We regularly assist employers and employees through disciplinary processes including advice on disclosure of personal and private information. Part of this role is a careful assessment of the potential level of remedies which may be available in any case.

If you would like further information about a disciplinary matter, or require advice on anything related to employment relations, please contact your  usual Jackson Russell  advisor or  our Employment Law specialists.

 

Disclaimer
The information contained in this publication is of a general nature and is not intended as legal advice.  It is important that you seek legal advice that is specific to your circumstances.
 
All rights reserved © Jackson Russell 2015
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Glenn Finnigan 167
Glenn Finnigan, PARTNER
 

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