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Employment Update – July 2017

Home Insights Employment Update – July 2017

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Contributed by: Kylie Dunn, Charlotte Evans and Emma Peterson

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Published on: July 12, 2017

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The Cost of Bullying

Bullying has become a hot topic in New Zealand employment law. Most cases have focused on situations where an employer fails to investigate a complaint or identify bullying behaviour. But what if an employer does these things, but then fails to follow through and implement appropriate corrective action? Recently, workplace bullying attracted the attention of the headlines when a bullied employee received a pay out of 17 months' lost remuneration following a determination of the Authority.

T v K

In February 2017 the Employment Relations Authority awarded 17 months' lost remuneration and $15,000 compensation to a kindergarten teacher who was found to be unjustifiably summarily dismissed following a refusal to return to work under a head teacher who was found to be bullying her. 

This case involved three key players; the Kindergarten, "Mrs T" the ex-employee of the Kindergarten who was bullied by the head teacher, "Ms X". After accepting employment with the Kindergarten, Mrs T discovered she was employed to replace a previous teacher who had left following a bullying complaint made against Ms X. The Kindergarten had upheld the complaint. As a result, Ms X was disciplined and the previous teacher was moved to a different location operated by the Kindergarten.

In March 2015 Mrs T made a written complaint about being bullied by Ms X. Mrs T was placed on special paid leave while this complaint was investigated. In June 2015 the complaint was upheld and Ms X was disciplined but was not dismissed. By late July/early August 2015 the parties agreed in principle that Mrs T would return to work under Ms X. As part of Mrs T's return to work, the Kindergarten arranged for all staff to attend a mediation session on 11 August 2015. This did not go well, and Mrs T felt she was ganged up on. Mrs T had concerns that Ms X would go through the motions of complying with the corrective action and not actually change her behaviour, as this was what had occurred after the previous complaint. The Kindergarten elected to keep Mrs T on special paid leave until further arrangements could be made.

On 18 September 2015 the parties attended mediation with a mediator from the Ministry of Business, Innovation and Employment. This was unsuccessful, and there was significant further communication between Mrs T and the Kindergarten. Mrs T was not prepared to return to work under the conditions the Kindergarten was proposing. The Kindergarten wrote to Mrs T informing her that if she did not return to work on the basis they suggested her actions would be treated as a resignation. Mrs T indicated she wanted the outstanding issues she had raised to be addressed. As she did not agree to return, the Kindergarten terminated her employment on the basis of an alleged resignation.

The Authority found that Mrs T had not freely, genuinely or voluntarily resigned. The Kindergarten gave Mrs T an ultimatum and this ended the employment. Mrs T was found to have been dismissed by the Kindergarten, and this was held to be both procedurally unfair and substantively unjustified. 

The Authority held that the Kindergarten's first sanction and corrective action had failed to adequately rectify Ms X's bullying behaviour. The Kindergarten's subsequent actions in the mediation, telling Mrs T that she would not receive an apology from Ms X and attempting to compel Mrs T to agree to returning on their terms when she had the right to return to a safe work environment were not sufficient remedial steps. As a result it was found that Mrs T's dismissal was both procedurally and substantively unjustified.

Mrs T attempted to mitigate her loss by taking proactive steps towards further employment. The Authority awarded lost remuneration from 8 October 2015 until 28 February 2017. Mrs T was awarded a further $15,000 as distress compensation and costs were awarded against the Kindergarten.

An employer's obligations in relation to alleged bullying

This determination serves as a timely reminder of an employer's obligations when there is an allegation of bullying in the workplace. WorkSafe has defined bullying as being repeated and unreasonable behaviour directed towards a worker or a group of workers that can lead to physical or psychological harm. Although it does not necessarily follow that the Authority or Court will adopt this definition of bullying, it does serve as a useful starting point.

It is well recognised that bullying can lead to physical or psychological harm. An employer has a number of obligations that relate to the need to protect employees from bullying and the related effects. Specifically under the Employment Relations Act 2000 there is a duty of good faith which incorporates the need to act fairly and openly as well as being responsive and communicative. Further obligations are also imposed by the Health and Safety at Work Act 2015. An employer must ensure, so far as is reasonably practicable, the health and safety of their workers. Employers are required to eliminate risks to the health and safety of their employees. When it is not possible to eliminate the risk, the risk must be minimised so far as is reasonably practicable. A hazard or a risk in the workplace includes a person's behaviour where that behaviour has the potential to cause death, injury, or illness to a person. Employees also have duties to take reasonable care to keep themselves and others healthy and safe when carrying out work.

In addition to the obligations that are found in the Health and Safety at Work Act 2015 there is an implied duty in all employment agreements that the employer will provide a safe place of work. A failure to adequately respond to allegations of bullying and a failure to provide employees with a safe place of work could result in a personal grievance being pursued for unjustified dismissal, a personal grievance for constructive dismissal, an action for breach of contract or a prosecution by WorkSafe. 

In T v K, the employer identified and investigated the issue. But, after then developing a plan of action, it failed to appropriately implement it. In T v K, the Kindergarten was responsible for the action it took in relation to the situation, rather than Ms X's bullying behaviour (which was accepted as bullying by the Kindergarten, but which is not outlined in the decision). Importantly, employers in the Kindergarten's situation will have obligations (often conflicting) to both the alleged bully (Ms X) and the employee complainant (Mrs T). In this case, the Authority found that the Kindergarten did not effectively fulfil its obligations to Mrs T.

Please feel free to get in touch with a member of the team if you would like to discuss any issues raised above in more detail.


This publication is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.

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