Increasing compensation awards – a new reality for workplace bullying cases

Higher awards for workplace bullying trending in New Zealand

BY Sherridan Cook and Sarah Lim 06 Jul 2024

The courts are becoming increasingly conscious of the harm suffered by employees as a result of serious bullying and harassment, and this trend is being reflected in higher awards for workplace bullying cases. The case of Parker v. Magnum Hire Limited [2024] NZERA 85 is a good reminder that the employer could be liable for over NZ$100,000 for not preventing and managing bullying and harassment in the workplace.

While employed by Magnum Hire Limited (Magnum), Mr Parker was frequently bullied by Magnum's director, Liam Field, throughout the course of his employment.

Parker was subject to unreasonable personal and task-related attacks from Field. These attacks involved major and minor incidents for a sustained period of time, from at least 2019. Examples of bullying and harassment that Parker experienced included:

False accusations of not doing his job and misuse of company time
Being unjustly reprimanded for workplace issues
Workplace stress, which created an unreliable work environment
Threats towards his employment, including a salary review or reduction
Inappropriate comments made about his mortality
Derogatory public comments.

Compensation for bullying and harassment

Having examined the relevant facts, the Employment Relations Authority (Authority) concluded that the conduct by Field amounted to bullying and Magnum failed to provide Parker with a safe workplace.

In deciding the amount of compensation, the Authority applied the higher banding approach devised by Chief Justice Inglis in GF v. Comptroller of the New Zealand Customs Service [2023] NZEmpC 101. The new bands for compensation are:

Band 1 (low-level loss or damage): up to NZ$12,000 (previously up to NZ$10,000)
Band 2 (mid-range loss or damage): NZ$12,000 - NZ$50,000 (previously NZ$10,000 - NZ$40,000)
Band 3 (high-level loss or damage): over NZ$50,000 (previously over NZ$40,000).

The Authority awarded the maximum compensation available under s. 123(1)(c)(i) of the Employment Relations Act 2000 (ER Act) to Parker. This comprised of:

NZ$50,000 for bullying - which was Parker's disadvantage grievance
NZ$5,000 for suspension
NZ$50,000 for constructive dismissal.

Parker also claimed general damages for a breach of implied contractual obligations to ensure a safe workplace. However, because the Authority already compensated him for bullying under s. 123(1)(c) of the ER Act, it denied additional damages for a breach of implied contractual obligations.

The Authority also made strong recommendations to implement a bullying and harassment policy, code of conduct, and appoint an independent person for complaints against Magnum's director.

Key takeaways

The Parker v. Magnum Hire Limited decision may reflect an increasing desire by the Authority to make higher awards, particularly for workplace bullying and harassment given the serious health and safety risks such behaviour represents. The strong recommendations made in the case also reflect the fact that the courts are putting more emphasis on the prevention of bullying and harassment.

This case is a useful reminder that all employers should implement or revisit their bullying and harassment policy and code of conduct and ensure there is a clear avenue for complaints and reporting of bullying and harassment.

The case of Parker v. Magnum Hire Limited is currently under challenge to the Employment Court, so we will continue to keep a close eye on any developments.

Sherridan Cook is a partner specialising in advocacy and commercial litigation, including employment and health and safety, at Buddle Findlay in Auckland. Sarah Lim is a senior solicitor specialising in employment law at Buddle Findlay in Auckland.