Restructures and potential impact on mental health .... This recent ACC case may provide further redress for employees: 

While restructures in our workplaces are often categorised by our courts as being part of management’s prerogative, employers should be mindful that it does have an impact on their employees.

Losing your job may be one of the most stressful things a person may experience. It may lower self esteem and worthiness. It may cause financial turmoil. It may effect family and loved ones. And it may effect a workers health, sometimes significantly.

Ironically, the effect on the health of an ex-Accident Compensation Corporation employee was so significant that she appealed ACC’s decision not to accept her work-related mental injury in the Wellington District Court.

Ms Phillips was employed by ACC for about six years. Originally based in Whangarei, when her dream job came up in Christchurch, she successfully applied for it. Ms Phillips, her husband and two teenage daughters sold up and moved to Christchurch in 2017.

In 2019 ACC underwent a significant restructure. Ms Phillips’ position was disestablished and she was required to apply for alternative roles or face redundancy.

The medical evidence concluded that during the redeployment phase that Ms Phillips’ mental health was severely effected. The first instance arose when Ms Phillips raised her concerns about ACC failing to fulfil its obligations to her while she was in the “redeployment pool”. Her manager requested a meeting with her and a HR Representative. The meeting was said to be confrontational and aggressive. Ms Phillips says that she was not shown any support by her manager, instead the manager made it clear she was to stop pursuing her grievance. She left the meeting in tears and was extremely distressed. She consulted her doctor and was placed on stress leave.

Later, Ms Phillips accepted a lesser role that was two bands below her disestablished position. She was placed at 110% of the remuneration banding and was told that it was the maximum allowable in accordance with ACC policy. Ms Phillips shortly after found out that a colleague had been moved to a lower band but was offered 119% of salary to align her old and new pay. Ms Phillips asked to be treated similarly, but her request was declined. She consulted her doctor and was again advised to take stress leave.

There followed a further incident where Ms Phillips tried to return to the workplace to email an updated medical certificate to her manager from her work laptop. There she was confronted by her new team leader and the assistant Branch Manager and humiliated and demeaned in front of about 20 other staff.

Ms Phillips was diagnosed with acute stress reaction, depression and post traumatic symptoms. This was confirmed in a later report by another psychiatrist.

In coming to his decision, the District Court Judge accepted that Ms Phillips had an identifiable mental injury, and that the injury was caused by a series of events, the most notable being the meeting when she sought to understand the redeployment process with her manager. The Judge said that the test is whether or not people generally in Ms Phillips’s position would suffer mental injury in the way she did. He concluded that the answer was yes: people generally who had uprooted family from Whangarei to pursue a dream job in Christchurch would suffer mental injury from the events Ms Phillips went through.

The decision means that Ms Phillips can get financial support through ACC and the therapy she needs to help recover.

Successful claims for work-related mental injuries are not common. ACC says that it accepted 81 claims for work-related mental injuries last year, but it could not easily identify how many of those related to workplace bullying.

Claims for compensation for “humiliation, loss of dignity and injury to feelings” are a common form of remedy sought in personal grievance claims in the Employment Relations Authority. In redundancy situations, compensation awards tend to be at the lower end of the scale for the manner of the dismissal, rather than compensation for the shock and injury to feelings for losing the job. Egregious behaviour on behalf of the employer will usually significantly increase this.

Whatever jurisdiction a worker seeks redress in, they will need to establish solid evidence of their injury and its impact on them. Given that it should be clear that the loss of a job will be a significant and a potentially damaging event in a workers life, it is important that they are treated respectfully and fairly.

Ms Phillips’ case may make it easier for workers to pursue a further avenue of redress if their mental health is significantly damaged in the workplace.

David Burton is an employment law barrister and can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..

The case of Takamore v Clarke is not well known in employment law circles. But, this Supreme Court decision has laid the foundation for greater implementation of tikangaMāori in New Zealand’s legal system.  The case concerned tensions between the application of the common law relating to burial and the application of tikanga Māori, but it is far reaching in its comments on the country’s legal development.  More ...

We have been learning daily about the development of successful vaccines to prevent coronavirus.

What are the obligations of employers when the vaccine arrives?

The United States, Australia, as well as about half of European countries have various forms of quasi-mandatory vaccination requirements.

In the US, vaccine mandates are often implemented by requiring proof of vaccination or of an acceptable exemption at school entry.

In Australia, many states have school entry requirements. Sometimes this goes to denying childcare benefits to vaccine refusers who do not have acceptable exemptions. Many families cannot afford to survive without these benefits. Non-medical exemptions have been eliminated in Australia.

With the elimination of diseases such as measles, some people have turned their fear to the vaccines themselves. Despite a really high safety record, vaccines are not perfect and concerns can remain.

A dictatorial approach of forcing vaccinations on people can always backfire.

In the city of Leicester, 150 years ago, 20,000 anti-vaxxers and libertarians protested a smallpox vaccine – a very large number for those days. The United Kingdom ultimately restored a non-medical conscientious objection.

In 2012, the European Court on Human Rights heard a case brought by Ukrainian Sergey Solomakhin.

He opposed his having been vaccinated against diphtheria in November 1998. It was compulsory in the Ukraine at the time due to an epidemic.

The applicant claimed to suffer from a series of health conditions caused by a vaccine which he said he was compelled to take. He said the vaccine was of poor quality. He further alleged it had been improperly stored.

He died in 2010 in his mid-40s.

In 2012, the court released its decision and held that compulsory vaccination was an interference with the applicant’s private life but that it was justifiable in a democratic society for the purpose of protecting public health.

In New Zealand we have had cases dealing with similar issues.

Our Supreme Court issued a decision in 2018 on water fluoridation. That case decided the South Taranaki District Council did have the power to fluoridate water. It looked at a provision in the Bill of Rights Act where one can refuse to undergo any medical treatment.

However, a general provision in the act subjecting rights to reasonable limits prescribed by law was critical to the decision.

justifiable in a free and democratic society. Fluoridation of the water supply was ultimately legal.

Then there was a case involving Rentokil brought by WorkSafe. A restroom cleaner had contracted hepatitis B. The company recognised the role created the risk of contracting diseases such as hepatitis.

The employer breached its health and safety obligations to take all reasonable steps to ensure the safety of employees. The court decided the company should have “offered” a vaccine to the employee.

In a case involving Air New Zealand and its drug-testing policy, the Employment Court accepted that the airline’s health and safety obligations made it reasonable to include drug testing in safety-sensitive areas.

Regardless, employers need to be astute to objections that have a strong foundation. For example, if the objection is based on the provisions in the Human Rights legislation prohibiting discrimination on certain grounds.

Whether a dismissal for refusal to be drug tested in an airline was justified or not would be dependent on all the circumstances and certainly would not automatically be justified, even where all the policy documents were in order.

The justification for a policy that required employees to take a coronavirus vaccine would be weaker than the justification for drug testing in safety-sensitive areas of an airline – for example for pilots.

The Rentokil case provides a better guideline for vaccines. Employers are likely to have discharged their obligations if they recommend to their staff they take the vaccine and they offer to provide it, preferably free of charge.

Employers could make offers of employment conditional on potential employees providing proof of vaccination, subject perhaps to certain reasonable exemptions. This would be a particularly attractive approach in areas such as the healthcare sector.

New Zealand’s political and public health leaders have taken the community with them by accepting quite intrusive restrictions such as the lockdown. The leadership has encouraged us to care for each other with kindness.

There has been legal support for what has been done, but winning people over has been at the heart of our approach.

I cannot see the Government making it mandatory for people to be vaccinated, even if they have the power to do so.

Employers would also be wise to, at the very least, follow that approach by making vaccines available and encouraging their staff to be vaccinated.

New Zealand has been very successful in keeping the virus out of our community. Now that the vaccine is incoming, I am sure we will be equally successful at vaccinating our population and reopening our borders.

What a year it has been! Employers and employees have been taken into new territory. While it is generally considered that New Zealand has had an excellent health response to Covid-19, businesses have had to grapple with many issues from staff working from home where possible, reducing staff hours and rates of pay, what process to follow where redundancies were inevitable and wage and leave subsidies. While there have been business closures, it is generally considered that New Zealand businesses are now doing better than had been forecasted.

Some employers are still dealing with the legal fallout from the pandemic response, including personal grievances for unjustified dismissals and unjustified disadvantages and arrears of wages claims.

In returning to a new normality, you may have missed some important employment law changes that came into force this year and what is anticipated in the coming year.

The year that was

There are two main changes that may affect employers.

Triangular employment

From June this year, the law now allows employees in triangular employment situations to include a third party to a personal grievance they may have with their employer.

Employees can still raise a personal grievance with their traditional employer where they have grounds to do so. With the changes, an employee can now apply to the Employment Relations Authority to add a third party to the personal grievance if the third party has caused or contributed to the problem.

Common situations where triangular employment happens include where an employee is employed by an employment agency and is sent on work assignments to another organisation (labour hire or temping arrangements). Another situation would include where an employee is on a secondment from their employer to a host organisation. Another possible situation is where a third party provides significant funding to the employer with significant contractual control.

In these cases it may be the behaviour or action of the third party that has contributed to the problem, rather than the employer. Clearly this could include situations where the third party has abruptly terminated the arrangement and the employee is left without work. It may also include bullying or discrimination by the third party. In these situations, both the third party and the employer could potentially be responsible for providing remedies to the employee.

Privacy

From December, if there is a privacy breach, the law now imposes mandatory reporting of breaches where the breach causes or risks causing serious harm. Employers usually hold a lot of personal information regarding employees (or ex-employees). Employers should consider their policy on providing references and ensure permission is given to disclose that personal information as a breach may cause serious harm to a job seeker. If there is a breach, failure to report a breach would be an offence that could result in a fine of up to $10,000.

There is also a new offence of misleading an agency to obtain access to someone else’s personal information (eg. a prospective employer trying to obtain information from the old employer). A further new offence relates to destroying a document containing personal information knowing that a request has been made. 

What is coming up next year

There are a number of proposed changes that may affect employers.

Minimum wage

In preparing wage budgets, the minimum wage will almost certainly go up to $20.00 an hour next year.

Sick leave

Minimum sick leave entitlements will almost certainly go up to 10 days each year, although the maximum number of sick days an employee may accumulate will remain at 20 days.

Fair Pay Agreements

Fair Pay Agreements are perhaps the most contentious of the likely changes coming up. They are agreements that are between unions and employers and set minimum terms and conditions of employment for all employees in an entire industry or occupation. Rolling out Fair Pay Agreements are likely to proceed slowly at first, but are likely to ramp up when “test cases” have been established.

Protections for “dependent contractors”

Dependent contractors are workers who are effectively under the control of an employer. They do not receive the legal protections that are provided to employees by law. They may operate their own business and may use their own equipment, but they may depend on one firm for most of their income and/or may have little control over their daily work.

The new Labour government has said that it will extend collective bargaining and other basic employment rights to dependent contractors including requiring written contracts and introducing a duty of good faith for dealings between the contracting parties.