The Employment Relations Act (Act) recognises a number of personal grievances – categories of claims an employee can bring against an employer. By far the most common is a personal grievance alleging unjustified dismissal. There are another eight specific types (discrimination, harassment, duress in relation to union membership and breaches of specific legislative provisions), and then there is the “unjustified action causing disadvantage”.
It is difficult to give a precise definition of what might amount to an unjustified action causing disadvantage. According to the Act, the question of whether something is justified involves assessing “whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances at the time”.
The Employment Court has confirmed that an action (which can include an omission) is any step taken in relation to the employment relationship. This includes:
– Issuing a warning;
– Making a decision about a promotion or appointment;
– Conducting a process or investigation;
– Determining terms of employment;
– Providing incorrect information to an employee;
– Delaying a decision
The disadvantage caused by such an action need not be solely economic, but it must be real – that is, it must have a genuine impact on an employee’s employment.
Disadvantage claims are frequently regarded as the poor sibling of dismissal claims. However, the Employment Court has indicated that it is willing to treat such claims on the same level as dismissal claims.
In Waikato DHB v Archibald in 2017, the Employment Court set out “bands” for awards of compensation pursuant to s123(1)(c)(i), with harm caused by a dismissal fitting into three categories: low, mid and high band, with $20,000 representing an award “around the middle of band 2”.
Recently, in Johnson v Chief of NZ Defence Force, the court considered a disadvantage claim by Mr Johnson, who had been accused of sending an email to Winston Peters which was likely to bring the Defence Force into disrepute. The Court held that Mr Johnson was disadvantaged by the manner in which the investigation had been conducted by the Defence Force, and by it effectively placing an onus on Mr Johnson to prove he had not sent the email.
The Court noted the relatively small number of cases dealing with compensation for a disadvantage grievance. The Court also referred to the bands set out in Archibald, and compared Mr Johnson’s evidence of medical and emotional suffering, concluding that this case fell within band 2. He was awarded compensation for humiliation, loss of dignity and injury to feelings in the sum of $20,000.
So, the question of what compensation might be available on a disadvantage grievance will turn on evidence of non-economic loss suffered (ie humiliation, loss of dignity and injury to feelings). A relatively minor disadvantage might usually give rise to relatively meagre distress. However, that would not always be the case. There may be circumstances where the harm is significant, and there is no legal impediment to compensation at a level usually seen in dismissal claims.
