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One of the key remedies available to an employee who has successfully established a personal grievance in the Employment Relations Authority (Authority) or the Employment Court (Court) is compensation for humiliation, loss of dignity, and injury to feelings. This is sometimes referred to as compensation for “hurt and humiliation”.
The Court has recently revised the framework that guides compensation awards for injury to feelings in the recent decision GF v Comptroller of the New Zealand Customs Service [2023] NZEmpC 101 (GF). In this case, the Court considered whether Customs’ dismissal of a port worker who failed to get vaccinated during the COVID-19 pandemic was justified.
The banding framework
In the 2017 case of Archibald v Waikato DHB [2017] NZEmpC 132 (Archibald), Chief Judge Inglis introduced the concept of “bands” which were instituted as a framework to help guide the awards of compensation for “humiliation, loss of dignity, and injury to feelings”.[1]
While ascertaining compensatory awards is highly fact-specific, and each award of damages will be based on the individual’s specific circumstances and the harm that they have suffered, the aim of these bands is to achieve greater certainty and consistency in the employment jurisdiction for employees and employers.
The bands introduced in Archibald for the level of loss or damage awarded in respect of injury to feelings were:
- Band 1: (low-level loss or damage): up to $10,000;
- Band 2: (mid-level loss or damage): $10,000 – $40,000; and
- Band 3: (high-level loss or damage): over $40,000.
For any award of compensation, the Authority or Court will expect to see evidence of the impact on the employee. This is usually by way of verbal evidence (e.g. the employee or friends/family explaining the manner in which the employee has suffered an injury to feelings) but may also be supported by medical evidence (e.g. information about doctors’ visits, details of counselling sought, or reports from psychologists/psychiatrists). Where the employee is alleging very significant damage or injury, the Authority or Court would usually expect to see some form of corroborating evidence – typically medical evidence.
The Authority and Court’s adoption of the banding approach
Despite the introduction of these bands in 2017, the Authority and its members appear to have shown a reluctance to adopt or refer to the concept in their determinations when ascertaining the appropriate levels of compensation.
For example, from January 2020 to December 2021, there were 260 determinations where compensation for injury to feelings had been awarded. From those determinations, only 40 referenced either Archibald or Richora[2] (another leading case from 2018 where the Court provided further direction on the banding approach), and of those only 21 addressed the principles that dealt with banding.
While it is possible that this may be due to the fact that parties’ submissions failed to refer to these cases, it is also likely that in many instances members have chosen not to adopt the bands.
What has changed?
In the GF case, the Chief Judge acknowledged that it had been some time since the quantum of the bands in Archibald were reviewed and that times have moved on since their implementation. As a result, the Chief Judge updated the bands to ensure that they accounted for inflation.
The Reserve Bank’s inflation calculator was applied to the bands in Archibald and the revised bands are as follows:
- Band 1: (low-level loss or damage): up to $12,000;
- Band 2: (mid-range loss or damage): $12,000 – $50,000; and
- Band 3: (high-level loss or damage): over $50,000.
Where to next?
Following GF, it appears that the Authority and Court have applied the new banding approach to the calculation of quantum. This has been evidenced in at least 17 reported cases in the last 8 months.
We foresee this trend continuing not only in future Authority and Court cases but also in the compensatory awards sought and provided to individuals in confidential records of settlement (signed by a mediator in accordance with s 149 of the Employment Relations Act 2000) for employment related matters.
It is also likely that the bands could increase again in future cases, as indicated by the Chief Judge in GF.
If you have any questions about employment related matters or potential compensatory awards, please get in touch with our Employment Law Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
[1] Employment Relations Act 2000, s 123(1)(c)(i).
[2] Richora Group Ltd v Cheng [2018] NZEmpC 113.
