For many centuries, courts could not grant remedies for damage caused to intangible “feelings”. This is still a part of the ordinary civil law. However, employment law is relatively unusual because it allows an employee who has been treated unfairly to obtain a remedy if they have suffered “humiliation, loss of dignity, and injury to feelings”. When awarding compensation to address such damage, the courts provide monetary remedies.
What can immediately be seen is a difficulty in setting a remedy which fairly represents any damage that has been done. After all, how can you compensate in monetary terms something which cannot easily be shown to have given rise to a monetary loss?
The Employment Court has recently provided substantial guidance in addressing these issues. In two recent cases, the Chief Judge of the Employment Court has set monetary “bands” that will guide the setting of remedies for compensation for “humiliation, loss of dignity, and injury to feelings”.
These bands are:
- Band 1 (low level damage or injury): awards up to $10,000;
- Band 2 (mid-level damage or injury): awards between $10,000 and $40,000; and
- Band 3 (high level damage or injury): awards above $40,000.
In Richora Group Limited v Cheng, the employee was found to have been constructively dismissed. She had been locked out of the workplace by the employer changing the locks and without her being told why.
This had come after it appeared the employer thought the employee had contacted IRD to complain about the employer; the employee had not. She was dismissed, as the Court described it, in “no uncertain terms”, and without the employer hearing from the employee, who was unwell at the time.
The Court described the effects on the employee of the employer’s actions. The employee attempted suicide and her physical and mental health declined. She required medical intervention. She also experienced depression, acute stress and anxiety.
The Court found that these effects were all as a result of the plaintiff’s unjustified actions. It found that the damage was within Band 3. This would have meant that an award of over $40,000 would have been made, however, the employee had only sought $20,000 compensation and so that was the maximum the court could award.
In Archibald v Waikato DHB, the employee was made redundant. The Court found that the substantive redundancy was justified, but the process was not. The employee had been offered a redeployment opportunity but that would have involved her travelling two hours 45 minutes per day for a period of up to 9 months. She described that travel as “filling her with dread”, that she physically could not do it, and it would “destroy her”. The employer did not engage with the employee, and simply presented her with the option of the redeployment role or being made redundant.
The Court again described the effect on the employee. This was described as being “a deep sense of hurt” that she had not been listened to, that her concerns had been unceremoniously brushed to one side, that she felt cornered by the actions of the employer, and became very upset and anxious. She also experienced stress and worry.
While the Court put aside any possible damage that might have occurred due to the loss of the job (because it found the redundancy was justified), the Court found that damage had been suffered by the employee due to the employer’s unfair treatment. It found that the damage was around the middle of Band 2, and awarded $20,000.
Over recent years, there has been a noticeable increase in these sorts of awards being made. However, any claim of damage still has to be supported by evidence. And it goes without saying that an employee needs to have established that they have been unjustifiably dismissed or disadvantaged in the first place.