6 Oct 2016

Record damages raises questions about Employment Court payouts

5:44 am on 6 October 2016

The record damages payout in former Conservative Party leader Colin Craig's employment case has reignited debate that workers are being shortchanged by the Employment Court.

Colin Craig speaks to reporters outside the High Court in Auckland after the jury delivered its verdict.

Colin Craig after he was found to have defamed the Taxpayers' Union founder Jordan Williams. Photo: RNZ / Mohamed Hassan

After a decision by the Human Rights Review Tribunal, Mr Craig was ordered to pay nearly $129,000 for breaching the confidentiality of a settlement with his former press secretary, Rachel MacGregor.

In May 2015, Ms MacGregor and Mr Craig attended mediation and reached the confidential settlement, which resolved issues around a pay dispute and a sexual harassment claim.

But Mr Craig breached that settlement on a number of occasions in media interviews and in the leaflet that was at the centre of his recent defamation trial, which he lost.

Employment lawyer Phillipa Muir of Simpson Grierson said the $129,000 payout ordered to Ms MacGregor for emotional harm could see aggrieved employees taking their cases directly to the Human Rights Review Tribunal.

Ms Muir said typical damages at the Employment Court or Employment Relations Authority (ERA) were in the realm of $5000 to $10,000.

However, in 14 cases in the last two years tribunal has awarded an average of $38,000.

"It's very significant in terms of awards of compensation for distress because we've had the Court of Appeal in the employment arena say that awards of around $25,000 to $35,000 were pretty much the high-water mark," Ms Muir said.

"That's in relation to Authority and Employment Court decisions. Here we have got the Human Rights Review Tribunal, a separate institution, deciding that for serious wrongdoing they are going to go well over $100,000."

The tribunal can only hear claims of sexual harassment, discrimination or, as in the Ms Macgregor case, privacy breaches, though Ms Muir said serious disputes of this nature were not uncommon.

Employment Court judges twice last year expressed sympathy for the view that the damages the court and the ERA award have fallen "woefully behind" the tribunal.

Ms Muir said what was needed was a big case to provide new benchmarks.

"We haven't had Court of Appeal review of any Human Rights Review Tribunal decisions at this level. We may see some movement from the Employment Court - I understand there may be a full court decision coming up soon on remedies.

"That may give some more guidance to us all."

CTU calls for a law change

The Council of Trade Unions, however, wants a law change.

Its lawyer Jeff Sissons said damages payouts under employment law were languishing under a cap set in a case 11 years ago.

"We agree with the Employment Court that awards in the employment jurisdiction have fallen significantly behind the times," Mr Sissons said.

"The quickest, the most democratic way to fix this would be to amend the Employment Relations Act. The cap on stress, hurt and humiliation should be lifted."

But he warned that most mid-range claimants would get a similar payout from the ERA as at the Human Rights Review Tribunal - and that cases like Rachel MacGregor's, or the $98,000 payout to a Hawke's Bay woman in the case of a cake iced with an expletive, were the exception.

The Employment Relations Authority did not answer RNZ's question about whether its payouts had fallen behind, but it said it and the Human Rights Review Tribunal were operating under different laws and were not comparable.

Get the RNZ app

for ad-free news and current affairs