A recent decision of Judge Corkill in the Employment Court in Cronin-Lampe v The Board of Trustees of Melville High School focuses on the interplay between common law causes of action and personal grievance claims, stemming from breaches of health and safety obligations (amongst others). It is a reminder to all employers of their responsibility to be vigilant in identifying the risks and hazards that exist in the workplace, including mental fatigue and stress, and implementing measures to reduce workers’ exposure to those risks where reasonably practicable.
Executive Summary
Extreme trauma suffered by two counsellors sees the highest award of damages since 1992. Claims that their workplace, a school, had not met its health and safety obligations were upheld by the Employment Court, leading to considerable damages for non-economic loss, along with a range of other financial remedies.
The Facts
Mr and Mrs Cronin-Lampe were employed at Melville High School (MHS) as counsellors from 1996 to 2011. During the period of the Cronin-Lampes employment, there were around 32 deaths in the community, including student suicides, fatal crashes, terminal illness and murder. The Cronin-Lampe’s assisted students, staff and the wider community in managing the crisis response and grief that followed each tragedy. In addition, the Cronin-Lampe’s claimed they were overworked, under resourced, under supervised and ultimately working in an environment with several strained professional relationships.
In 2012, the Cronin-Lampes were diagnosed with post-traumatic stress disorder (PTSD). Soon after their diagnosis, they raised an unjustified action grievance asserting that the school’s health and safety and/or workplace obligations had not been met. The Cronin-Lampes claimed that during this time, MHS breached its health and safety obligations to them, alleging that MHS knew about the impact that their work was having on them, and did not do enough to minimise the impact on them or to support them.
The proceedings were paused in the Employment Court in 2017 while the Cronin-Lampes made applications for cover for work-related mental injury through ACC.
In August 2023, Judge Corkill granted leave to the Cronin-Lampes to raise disadvantaged grievances from 2 December 2010 on the basis of exceptional circumstances.
The Findings
It held that MHS knew, or ought to have known, about the impact their work was having on them. MHS was held to have breached its health and safety obligations, including by failing to manage workload issues (and stress levels), failing to provide training and professional development (specifically around handling trauma and suicide), and failing to provide adequate supervision. Through these breaches, MHS was held to have unjustifiably disadvantaged the Cronin-Lampes.
Judge Corkill then considered damages for the breach of contract claims and also remedies under the Employment Relations Act, awarding whichever was the higher.
Remedies awarded
The Cronin-Lampes argued that MHS’s failures lead to them developing PTSD, which had flow on effects over a significant period of time, and caused them significant financial loss. The Employment Court agreed and awarded the Cronin-Lampes close to $1.8 million, collectively. This included: damages for non-economic losses of:
- Damages of non-economic losses of $130,000 to Mrs Cronin-Lampe and $97,500 to Mr Cronin-Lampe (representing 75% of the amount awarded to his wife) for past present and on-going mental harm suffered;
- Lost income and interest;
- Lost superannuation and interest;
- Capital loss for sale of rental property and interest;
- Rental income loss and interest; and
- Medical expenses.
In considering the damages for non-economic losses, we note that Judge Corkill considered what amounts may otherwise have been awarded for hurt and humiliation. Applying the bands system, compensation would have been in band three, being $85,000 for Mrs Cronin-Lampe and $63,750 for Mr Cronin Lampe. As they were entitled to the higher of the two, remedies were awarded on the basis of the contractual causes of action.
Key takeaways
The extreme trauma suffered by the Cronin-Lampes and the length of time the PTSD was present makes this case an outlier.
It does demonstrate though, the Employment Court’s willingness to make large awards where appropriate and also its ability to look beyond the traditional remedies (such as s123 compensation, lost wages and reinstatement) and award the actual financial loss suffered, even where this harm may seem remote (such as the lost value of a house).
The Cronin-Lampe case highlights how important it is to proactively consider and address the more insidious health and safety risks to mental health. If employees are exposed to traumatic experiences, it is important that an employer effectively monitors the ongoing impact on the employees. In the Court’s view, had MHS more closely monitored the impacts of the work on the Cronin-Lampes’ mental health, as well as provided additional supervision and training, this would have gone a long way to preventing the harm to the Cronin-Lampes, and satisfying its health and safety obligations.
The amounts considered for compensation in band 3 for hurt and humiliation of $85,000 and $63,750 are the highest awards seen for compensation under s123(1)(c)(i) of the Employment Relations Act and indicate there may be significantly larger awards in the future.
For a more detailed analysis, please see below:
Causes of Action
There were three contractual causes of action brought, for:
- Breach of terms implied by common law;
- Breach of terms implied by the Health and Safety in Employment (HSE) Act 1992; and
- Breach of the implied and express terms of the Secondary Teachers Collective Agreement.
In short, the claimants contended that the Board of Trustees failed to meet its health and safety obligations, and failed to manage workload and workplace conditions adequately.
Mrs Cronin-Lampe was granted leave to raise disadvantage grievances from December 2010 on the basis there had been exceptional circumstances, occasioning the delay.
The key considerations were:
- Whether the conduct of MHS was reasonable when measured against knowledge reasonably obtained by employers mindful of their responsibility;
- The relevant steps taken in respect of the elimination, isolation or minimisation/monitoring of hazards; and
- Whether the pleaded duties were breached, and if so, when.
The key allegations were:
- Health and safety breaches;
- Workload issues;
- Training and professional development issues;
- Managing and monitoring stress levels;
- Failure to provide time off and cover during absence;
- Adequacy of supervision and resourcing;
- Alleged bullying; and
- Issues with a staff member.
Legal framework
In considering foreseeability of the relevant harm and its risk, Judge Corkill noted that hindsight was not permissible. Given the HSE legislation, MHS had to be aware of its obligations. The definition of harm was specifically amended to refer to “physical or mental harm caused by work-related stress’. The definition of “hazard” was amended to make it clear that a person’s behaviours could be a hazard. The MOE’s guidelines for school Boards regarding their health and safety obligations, combined with codes of practice and the obligations set out in the CEA’s meant there was a clear and foreseeable risk of workplace stress which gave rise to an obligation on schools such as MHS, to be proactive in identifying potential hazards, for example mental fatigue or traumatic shock.
Judge Corkill considered the Board was no doubt well aware of the substantial trauma the school had faced since 1997 and via its Principal, knew of the onerous workload implications for the school counsellors created by those traumatic events. It had sufficient information that there was a foreseeable risk to their health and safety and no proactive steps were taken. For example, there was no formal health and safety plan, funding for supervision was constrained, the workload increased due to a restorative practice initiative, they had problems taking time off in lieu and difficulties arranging professional development. Relationship issues within the workplace then developed.
In terms of causation, the totality of the multiple traumatic events occurring over the course of the claimant’s employment caused the PTSD.
Judge Corkill found, in relation to the breach of contract claims that:
- MHS breached express and implied contractual health and safety duties;
- Each of the claimants suffered mental harm in the form of PTSD as a result of those breaches;
- It was foreseeable that they would suffer harm; and
- Section 113 of the Act does not operate as a statutory bar to the breach of contract claims, because they did not seek to challenge a dismissal – there was no dismissal in the circumstances.
Personal Grievance Claims
Judge Corkill noted that there was substantial overlap of the personal grievance claims and the contractual causes of action. There were a range of disadvantage claims including: failure to provide time off and cover during absences; bullying allegations and issues raised with how they were handled; and a challenge to their employment status (all of which were considered by Judge Corkill).
Judge Corkill found that the actions of MHS, and how it acted, were not steps which a fair and reasonable employer could have taken in all the circumstances and the personal grievances were therefore established.
Accident Compensation Legislation
MHS pleaded that the statutory bar (s 317) precluded Mrs Cronin-Lampe from seeking damages because under s 21B of the Accident Compensation Act 2001 she had cover for mental injury. To determine whether there was a qualifying mental injury (to the extent the statutory bar would operate) the Court needed to consider:
- How the definition of “event” is to be construed and applied;
- Whether the requirements of s 21B(2) are made out; and
- Whether causation is established.
There was discussion about attending the family home and seeing the rope marks around the student as “sudden” and not foreseeable in the ordinary course of employment. While elements of the visit may not have been foreseen and were shocking for Mrs Cronin-Lampe, (including being the victim of verbal abuse and potential assault, attendance at the family home itself was not a “sudden event and the essential elements of s 21B were not made out. There wasn’t sufficient immediacy between the suicide (the sudden event) and the attendance at the family home as well as the occurrences that then took place. There was ‘delayed exposure to the event’. Even if those events were to have qualified, there is no evidence that such circumstances would reasonably be expected to cause mental injury to people generally. Further there was not sufficient evidence to give rise to a finding of causation.
As the criteria of s 21B were not made out, s 317 of the Accident Compensation Act 2001 didn’t act as a bar in respect of Mrs Cronin-Lampe’s claims for relief.
Damages / Remedies
Both damages and statutory remedies were sought. Attorney-General v Gilbert[1] confirmed that an employee may seek remedies both at common law and under statute. Given the claimants had established contractual claims and claims under the Act, Judge Corkill took the approach that where one approach results in an outcome which is higher, he would award the higher amount (while ensuring there was not double recovery).
When considering the correct period for the assessment of loss, Corkill noted that their treatment for PTSD was deferred until after the hearing. They also paused proceedings for 2.5 years to enable the ACC claim to be heard. Judge Corkill noted that the longevity of their mental health conditions, with the flow on impact on the assessment of damages, was in part due to the hearing being deferred whilst the ACC steps were undertaken.
The Judge determined a notional date of 31 March 2019, being the date a judgment would have been received had the ACC claims not been advanced.
Non-Economic Losses
Compensation for humiliation, loss of dignity and injury to feelings
Judge Corkill considered the $75,000 awarded in Gilbert[2] and also the $75,000 awarded in Bricknell.[3] He determined that accounting for inflation based on the CPI Index the equivalent value of $75,000 at the time of Gilbert would now amount to $130,000. Consequently, he awarded $130,000 to compensate for past, present and ongoing mental harm suffered by Mrs Cronin-Lampe. Mr Cronin-Lampe was awarded 75% of that amount, being $97,500. Both amounts were for non-economic loss.
Turning to the quantum for personal grievances, and applying the bands, Judge Corkill was satisfied that the awards would be in band 3, being $85,000 for Mrs Cronin-Lampe and $63,750 for Mr Cronin-Lampe. Because they were entitled to the higher of the two, the judgement was entered on the basis of the contractual causes of action, however this does set a new benchmark for compensation in band 3 for hurt and humiliation.
Economic Losses
Lost remuneration
Mrs Cronin-Lampe was unable to work due to ongoing PTSD and Mr Cronin-Lampe remained affected. Judge Corkill in referring to Telecom v Nutter[4] commented it is clear that compensation greater than 12 months can be awarded. Judge Corkill considered approximately 7 years of lost wages was appropriate for the Cronin-Lampe’s (reduced by 5% for contribution) being $457,803 and $601,874, with interest on top for each. Given the common law damages awards are greater than the amount which is appropriate for reimbursement under the Employment Relations Act, the Judge noted it was inappropriate to make a formal order for payment of this particular remedy.
Superannuation
But for the breaches it was acknowledged that both Mr and Mrs Cronin-Lampe would be contributing a percentage of their earnings to superannuation. Accordingly, Mrs Cronin-Lampe was awarded $58,869 and Mr Cronin-Lampe $17,142. Judge Corkill confirmed for completeness that the analysis for the lost superannuation entitlements, if considered under s123(1)(c)(ii) of the Act, would have produced the same award.
Sale of rental property
The claimants owned a house which was on a subdivided property adjacent to their home. In 2014 they sold it to their daughter to meet living expenses in the absence of work-related income. The capital value in 2012 was $291,944 (the value of which on 21 March 2018 was $307,305). The capital value in September 2018 was $440,000. Judge Corkill fixed the lost capital gain as the difference being $132,695, subject to contribution. He noted he would have reached the same conclusion had the assessment been carried out under s123(1)(c)(ii) of the Act.
Claim for lost net rental income
Had the claimants continued to own the property beyond 2014 (after Mrs Cronin-Lampe’s mother ceased to occupy it) they would have rented to a third party at arms’ length market rental. Based on the key assumptions of a rental yield of 3.8%, expenses on gross rental and interest applied on civil debt rates and tax, this amount was awarded.
Expenses and costs arising
Dental costs of $26,377 (claimed on the basis they were as a result of stress) was not allowed.
Costs for psychologist sessions for both claimants of $10,560 were allowed, subject to contribution.
Contribution
MHS asserted that both claimants as experienced counsellors and supervisors should have informed MHS if their workloads were excess and/or if they were at risk of suffering harm. Judge Corkill found that at times the school were advised by Mr and Mrs Cronin-Lampe of their health pressured and workplace stress, however he accepted they could have referred to their health issues with greater specificity in 2011. There was an obligation to disclose the impacts of the circumstances to their employer, whether directly or via the PPTA, but this did not happen. To this extent, there was contributory behaviour justifying a reduction by 5%.
Exemplary Damages and Counter claims
The claim for exemplary damages and counter claims for breach of contractual, loyalty and fidelity obligations were dismissed.
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[1] Attorney-General v Gilbert [2002] 1 ERNZ 31.
[2] Gilbert (CA), above n 1.
[3] Brickell v Attorney General [2002] 2 ERNZ 529 (HC).
[4] Telecom New Zealand Ltd v Nutter [2004] 1 ERNZ 315.
