Tales from the employment court: a record bullying payout

Wednesday, 1 January 2025

Alongside society’s growing awareness of the harm that bullying in the workplace causes has come a growing quantum of money paid to those who bring cases based on bullying and harassment to the employment authorities.

In 2023, Chief Employment Court Judge Christina Inglis revised the bands for awards of compensation for hurt and humiliation, applying the Reserve Bank’s inflation calculator to update the bands to as much as $12,000 for low-level loss or damage; $12,000 - $50,000 for mid-level loss or damage, and over $50,000 for hurt and humiliation of the highest kind.

Ruby Hollinshead, a senior associate at law firm Legal Vision, explains that this year saw one of the highest awards for hurt and humiliation ever awarded - to David Parker, who took his employer Magnum Hire Ltd to the Employment Relations Authority in a case called Parker v Magnum. He accused Magnum’s director Liam Field of bullying and psychologically abusive treatment of him, unjustified suspension from work and ultimately, constructive dismissal.

He also alleged Magnum was in breach of its “implied contractual duty” to take all reasonable care to maintain a safe workplace and sought extra mental harm damages, as well as lost bonuses, wages and entitlements.

To be fair, the abuse suffered by Parker was at the extreme end - constant harranging, being humiliated in front of other employees and told he was useless, and other constant insults and slights all leading to Parker starting to have panic attacks, one of which he thought was a heart attack. Another panic attack was so severe he’d ruptured surgical incisions.

He was ultimately awarded $105,000 in a case that saw many witnesses to the behaviour testify on his behalf.

Why was it so much money?

“The claims were separated,” said Hollinshead. “The Authority awarded $50,000 for the bullying in itself…$5,000 alone for that suspension grievance and another $50,000 for the constructive dismissal grievance.”

While it is increasingly common to step out the awards this way, it is also true the bands are higher, the employment law expert says. And that will - hopefully - give employers pause for thought about what they will and won’t accept in terms of behaviour in the workplace.

“I think it probably reflects society's increased understanding of what bullying can do and the harm that it causes and the effects it really has on employees,” she says. “When you read the case, it's very obvious that it's so serious and over such a prolonged period, it makes you think ‘what could be worse? What would an employer need to do to get into that third band of over $50,000?”

Covert recordings

Another interesting case from this year according to Hollinshead was one called Downer vs LM, which examined further the concept of ‘without prejudice’ communications - which are verbal or written communications aimed at settling disputes that can not later be referred to in legal proceedings. The complicating factor in this case was that the communications in question were covertly recorded.

In this case, a female employee called Miss Downer was called into a conversation with her boss in which he said he’d noticed she was updating her CV at work. He suggested this might be serious misconduct. He then offered to pay Downer for two weeks’ work if she wanted to finish (presumably straight away), otherwise he would deal with it “a different way”.

Downer, without telling her boss, recorded the conversation. When the dispute made it to the ERA, and she whipped out the conversation recording, the employer claimed the conversation was “without prejudice” - i.e. could not be used in legal proceedings as it discussed an employment problem. They also took issue with the covert recording of the conversation.

But as long as one person knows about the recording, it is not an illegal recording (another recording in the case, where Downer had recorded her boss speaking to someone else about her case, was judged to be inadmissible as neither conversation participant had known it was being recorded).

But as Hollinshead explains, there are three preconditions to a conversation that can qualify as ‘without prejudice’ - or non usable in court: there must be a dispute between the parties in existence; the communication is intended to be private, and the communication is made in an attempt to settle the dispute.

“The main issue in this one is …there must be a dispute between the parties, an employment relationship problem that could give rise to litigation. So I think the issue here was he'd said something around what she had done, but there'd been no issue [raised prior] …it was just an ‘I'm not too happy’ about this conversation.”

Hollinshead said it was quite common for employers to want to have discussions and pull employees aside, thinking that the conversation will perhaps not make it to an eventual legal proceeding, but in fact “proper processes must be followed” - starting with informing the employee that a disciplinary process would be started.

“Generally, for employers, it's always better to get a process underway and at least actually have it on foot before you would even think of having a ‘without prejudice’ conversation.”