Commissioner of Police v Hawkins
[2009] NZCA 209
•28 May 2009
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IN THE COURT OF APPEAL OF NEW ZEALAND
CA397/2008
[2009] NZCA 209BETWEENCOMMISSIONER OF POLICE
Appellant
ANDROBERT CRAIG HAWKINS
Respondent
Hearing:4 and 5 February 2009
Court:Hammond, Ellen France and Baragwanath JJ
Counsel:J C Holden and A L Martin for Appellant
C P Brosnahan for Respondent
Judgment:28 May 2009 at 3 pm
JUDGMENT OF THE COURT
A The appeal is dismissed.
BThe appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements.
REASONS OF THE COURT
(Given by Hammond J)
Table of Contents
Para No
INTRODUCTION [1]
BACKGROUND [6]The Employment Court decisions [10]
Consent and s 114 ERA
Introduction [12]
Implied consent [16]
Must consent be pleaded by the employee? [26]
Was the personal grievance raised outside the 90 day period? [31]
Voluntary disengagement and personal grievances
Introduction [32]The Police Act [37]
THE COMMISSIONER’S SUBMISSIONS [40]
Mr Hawkins’ submissions [44]
Evaluation [46]
Remedies [51]
Reinstatement [52]
Loss of income [57]
Compensation for humiliation [63]
Reinstatement or new job? [78]
Decision [84]
Introduction
[1] The Commissioner of Police (“the Commissioner”) appeals against two judgments of Judge Shaw in the Employment Court. The first is a judgment on liability: [2007] ERNZ 762. The second is a remedies judgment: [2008] ERNZ 284.
[2] This Court has granted leave to appeal the judgment on liability on the following questions of law ([2008] ERNZ 238):
(a)Does s 114(1) of the Employment Relations Act 2000 (“ERA”) require the employer to have turned its mind to the 90 day period and agree (expressly or impliedly) to proceed?
(b) Does consent have to be pleaded by the employee?
(c)Can a voluntary disengagement under s 28D of the Police Act 1958 be reversed by way of a personal grievance?
[3] This Court has also granted leave to appeal the remedies judgment on the following questions of law ([2008] NZCA 219):
(a)Was it open to the Court to reinstate Mr Hawkins, given that he had previously disengaged on medical grounds under s 28D of the Police Act?
(b)Did the fact that Mr Hawkins disengaged under s 28D of the Police Act preclude the making of an award for loss of income to Mr Hawkins?
(c)Was the Court’s award for compensation under s 123(1)(c)(i) of the ERA excessive, given the decision of this Court in NCR (NZ) Corporation Ltd v Blowes [2005] 1 ERNZ 932?
[4] In granting leave to appeal the remedies judgment, this Court reserved the question as to whether leave should be granted on the following question, for further argument at this hearing:
(a)Was it open to the Court to reinstate Mr Hawkins given that nearly seven years had passed since his departure from the police which was found to be constructive dismissal?
[5] The remedies judgment was recalled by the Employment Court to increase the award for loss of income. This Court agreed to the parties substituting the amended remedies judgment for the judgment that was originally the subject of the grant of leave to appeal.
Background
[6] Mr Hawkins was a police officer holding the rank of sergeant. He was stationed at Taumarunui. On 10 May 2001, he applied to disengage from the police on medical grounds under s 28D of the Police Act. That was the day after the police commenced an inquiry into allegations that Mr Hawkins had assaulted two young men in the police cells on 4 March 2000.
[7] Mr Hawkins’ application to disengage was supported by reports from two medical professionals, as required by s 28D, and was accepted by the Commissioner on 21 June 2001, taking effect immediately. Mr Hawkins ceased to be a member of the police at that date, although for superannuation purposes his service did not conclude until November 2001.
[8] Upon the completion of the investigation into the events in the cells, Mr Hawkins was charged with two counts of assault on 22 May 2001. In 2003, he was discharged under s 347 of the Crimes Act 1961 in relation to those charges.
[9] After the s 347 discharge, in September 2003 Mr Hawkins actively began to pursue a personal grievance on the basis of constructive dismissal. He had already signalled his intention to pursue that course in a letter of 18 September 2001, and in more detail in a letter of 4 October 2001. The heart of his complaint was that he considered he had been driven out of the police by a sustained course of bullying tactics by his commanding officer. He had felt obliged, for medical reasons, to “perf”, which is the colloquial term for accessing the Police Employment Rehabilitation Fund.
The Employment Court decisions
[10] In the judgment on liability, the Employment Court held:
(a)The Commissioner impliedly consented to the personal grievance being raised outside the 90 day time limit.
(b)The fact that Mr Hawkins disengaged voluntarily under s 28D of the Police Act did not prevent him raising a personal grievance but might be relevant to the question of remedies should his claim succeed.
(c)Mr Hawkins was constructively and unjustifiably dismissed from his employment as a police officer.
(d)The cause of Mr Hawkins’ resignation was the ongoing betrayal of his trust and confidence in the police administration through its failure to address the systemic dysfunction in the Taumarunui police station which caused Mr Hawkins to become seriously unwell.
(e)His resignation was actively and wrongly encouraged by the actions of Inspector Allan. Both his impending resignation and the reasons for it were foreseeable to the Commissioner.
(f)It was not open to the Commissioner, acting fairly and reasonably, to have taken the approach it did to Mr Hawkins’ case, even in the light of the complaints made against him. Judge Shaw said (at [112]):
While there can be no criticism of the police for the decision to lay criminal charges against Mr Hawkins, it is incumbent on the Commissioner to ensure that the presumption of innocence applies to police officers as it does to all citizens.
(g)The question of remedies, including reinstatement, was reserved for later determination.
[11] The orders made by the Employment Court in the remedies judgment, as subsequently varied, were:
(a)Mr Hawkins is to be reinstated immediately to his former position or to a role no less advantageous to him.
(b)Mr Hawkins is entitled to payment of a sum representing his loss of remuneration from 21 June 2001 until his reinstatement. This sum is to be calculated based on the salary a sergeant would have earned during that period. It will take into account the contributions the Commissioner would have made to Mr Hawkins’ superannuation scheme and will be reduced by the amount of remuneration received by Mr Hawkins personally as drawings or salary as shown in his accounts for that period.
(c)The defendant is to pay Mr Hawkins the sum of $35,000 as compensation under s123(1)(c)(i).
(d)The Commissioner is ordered to pay $56,000 plus GST to the plaintiff being 66 per cent of Mr Hawkins’ costs and the disbursement of $21,532.50 for Mr Bass’ account as it relates to the personal grievance.
(e)As the questions of the manner of reinstatement and the arithmetical calculation of Mr Hawkins’ loss of income have been left for the parties to resolve, leave is granted for either party to apply to the Court on one month’s notice for any orders arising from those matters should that be necessary.
Consent and s 114 ERA
Introduction
[12] We first consider the grounds of appeal relating to consent and s 114 of the ERA.
[13] A claim that an employee has been unjustifiably dismissed is a “personal grievance” for the purposes of the ERA: s 103(1)(a). The procedure for raising such a grievance is set out in s 114 of the ERA:
114 Raising personal grievance
(1)Every employee who wishes to raise a personal grievance must, subject to subsections (3) and (4), raise the grievance with his or her employer within the period of 90 days beginning with the date on which the action alleged to amount to a personal grievance occurred or came to the notice of the employee, whichever is the later, unless the employer consents to the personal grievance being raised after the expiration of that period.
(2)For the purposes of subsection (1), a grievance is raised with an employer as soon as the employee has made, or has taken reasonable steps to make, the employer or a representative of the employer aware that the employee alleges a personal grievance that the employee wants the employer to address.
(3)Where the employer does not consent to the personal grievance being raised after the expiration of the 90-day period, the employee may apply to the Authority for leave to raise the personal grievance after the expiration of that period.
(4)On an application under subsection (3), the Authority, after giving the employer an opportunity to be heard, may grant leave accordingly, subject to such conditions (if any) as it thinks fit, if the Authority—
(a)is satisfied that the delay in raising the personal grievance was occasioned by exceptional circumstances (which may include any 1 or more of the circumstances set out in section 115); and
(b) considers it just to do so.
(5)In any case where the Authority grants leave under subsection (4), the Authority must direct the employer and employee to use mediation to seek to mutually resolve the grievance.
(6)No action may be commenced in the Authority or the Court in relation to a personal grievance more than 3 years after the date on which the personal grievance was raised in accordance with this section.
[14] Leave to appeal was granted on the following questions in relation to s 114. First, does s 114(1) of the ERA require the employer to have turned its mind to the 90 day period and agreed (expressly or impliedly) to proceed? Secondly, does consent have to be pleaded by the employee? As this Court noted in its first leave decision, the issue of what constitutes consent has not been considered by this Court in the context of s 114(1) before: at [13]. Leave did not extend to the factual matter of whether what the Commissioner did in this case amounted to consent.
[15] In granting leave, this Court held it to be common ground between the parties that Mr Hawkins’ personal grievance was raised outside the 90 day period: at [8]. Before us, Mr Brosnahan, counsel for the respondent, said that was not Mr Hawkins’ position in the Employment Court, although he conceded that it was the course he had adopted in applying for leave. When the panel, in the course of oral argument, began to look at the correspondence more closely, Mr Brosnahan began to change his position. By the end of the hearing, he had made a very late application to add an appeal point as to whether the personal grievance was indeed raised outside the 90 day period. That application was vigorously opposed by the Crown. We gave leave, albeit reluctantly, for Mr Brosnahan to file a formal application and we gave directions as to submissions, without prejudice as to whatever view we might take of the merits of that application.
Implied consent
[16] The first issue raised by the Commissioner is whether s 114(1) requires the employer to have turned its mind to the 90 day period and agreed (expressly or impliedly) to proceed. We are not persuaded that the issue was aptly phrased by the leave Court, but we will first set out how the Employment Court saw matters.
[17] In the Employment Court, Judge Shaw concluded that the personal grievance was not properly raised before the expiry of the 90 day period. However, she held that the appellant’s lack of protest and active engagement with Mr Hawkins in relation to the grievance after that date was sufficient evidence of implied consent: at [20].
[18] The first matter before the Judge was whether the letter sent by Mr Brosnahan to District Commander Lammas on 18 September 2001, 87 days after Mr Hawkins’ application to disengage was accepted by the Commissioner, raised the grievance as required by s 114(1) and (2). That letter read:
I have been retained on behalf of Sgt Craig Hawkins in relation to a personal grievance claim he wishes to pursue against the New Zealand Police.
Please note you have been put on notice that Sgt Hawkins is raising a personal grievance against the New Zealand Police.
Due to my recent instructions in this matter and the fact that I am in a High Court trial through until 1 October 2001, I am providing notification of Sgt Hawkins’ intention to pursue a personal grievance against the New Zealand Police and will provide full particulars and details of the said personal grievance upon my return to my office.
[19] Judge Shaw characterised the letter of 18 September 2001 as “no more than a formal notice that a grievance, in the sense of a particularised set of allegations, was to be raised in the future”: at [15]. That characterisation was accepted by counsel for the Commissioner and leave to appeal against the finding was not sought. However, the sufficiency of the 18 September 2001 letter is squarely within the purview of Mr Brosnahan’s late application (see [15] above), which we will discuss later in this judgment.
[20] Turning to the issue of consent, Judge Shaw rejected the Commissioner’s submission that consent under s 114(1) must be expressly given as inconsistent with Phillips v Net Tel Communications [2002] 2 ERNZ 340, where the Employment Court followed its earlier decision in Jacobsen Creative Services Ltd v Findlater [1994] 1 ERNZ 35. Those cases were decided under s 33(2) of the Employment Contracts Act 1991. In Jacobsen, Judge Palmer held (at 54):
If … a particular employer to whom a grievance is submitted outside the 90 day period provided for by s 33(2) of the Act is ignorant of the time constraints affecting that grievance, but purposefully seeks to resolve the contended grievance through, say, a process of negotiation or mediation with the affected employee or his representative, then such an employer has plainly consented, I hold, to the submission of the stale grievance to him. In any given case it is a matter of fact and degree, I hold, as to whether what has materially occurred comprises a consent by a particular employer to the submitted stale grievance.
[21] On appeal, the Commissioner submits that, on a proper construction, the term “consent” in s 114(1) means that the employer has either expressly turned its mind to the 90 day issue and agreed that a grievance can be raised out of time, or that it can be inferred that the employer has turned its mind to the 90 day issue and agreed to a grievance being raised. The Commissioner concedes that acquiescence can be sufficient but only if there is evidence that the employer has turned its mind to the 90 day issue and then sat on its rights. The Commissioner’s argument entails a finding that the decisions in Phillips and Jacobsen are wrong or inapplicable to the new s 114 procedure, because they render the strict limitation period in s 114(1) as an affirmative defence, which can be overcome by an employee seeking the leave of the Employment Relations Authority to proceed under s 114(3).
[22] Mr Brosnahan contends that s 114(1) imposes no obligation or establishes no criteria that would require consent to be expressly given. In any event, it is capable of inference that District Commander Lammas or Mr Gibson, the Human Resources Manager for the New Zealand police, had turned their mind to the 90 day issue and decided to continue to interact in respect of the grievance.
[23] We turn first to such authority as there is in this area. Although they were decided under earlier legislation, Phillips and Jacobsen correctly recognise that whether what has occurred constitutes consent must be a matter of fact and degree. In Jacobsen, following the submission of a grievance appreciably out of time, the employer entered into correspondence with the employee’s representatives, and also attended informal mediation. Following the filing of a notice of intention to defend, the employer’s representatives raised the issue of the 90 day limit and argued that consent had not been given for a late submission. Judge Palmer expressly rejected a requirement for informed consent because such a requirement was expressly absent from the section and there was no justification for implying it. On the consent point, Judge Palmer concluded (at 54-55):
Section 33(2) of the Act does not conclude with the words “unless the employer consents to the personal grievance being submitted after the expiration of that period [knowing of his exercisable right to withhold his consent]” (the emphasis is mine). The effect of Mr Burley’s submissions concerning the imperative need for an “informed consent” by an affected employer is to require that the words I have immediately emphasised must necessarily be implied into the subsection, notwithstanding their express absence. To so proceed extends in my view wholly beyond statutory construction and becomes, with respect to counsel’s argument, a process of misplaced and objectionable judicial enactment.
[24] This is a case in which the employer did not expressly consent. That however is not fatal, and the Commissioner concedes as much. However, the issue as framed by the Commissioner is something of a red herring. The real issue is not whether, in formal terms, the Commissioner “turned his mind” to the extension, but rather whether he so conducted himself that he can reasonably be taken to have consented to an extension of time. On the facts of this case, the answer to that question is in the affirmative. Indeed, as noted (at [14]), there was no grant of leave to take issue with the Employment Court Judge’s findings of fact under this head. Further, as Mr Brosnahan rightly said, it is almost inconceivable that District Commander Lammas and Mr Gibson, in continuing to deal with Mr Hawkins’ situation, would have been unaware of the 90 day time limit in respect of the raising of personal grievances: there was no red light to him – nor even an orange showing – with respect to time.
[25] Whether it is seen as an implied consent, or what would reasonably be regarded by the objective observer, the result is the same: the claim is not out of time.
Must consent be pleaded by the employee?
[26] The second issue under this head is whether consent must be pleaded by the employee. It should be apparent from the foregoing discussion that an analysis of s 114 does not lend itself to doctrinaire formalism. In terms of the issue of who must plead consent, it seems that the Commissioner did not expressly seek leave to appeal on the point; rather, the question was actually framed by this Court: see [13] of the first leave decision.
[27] Mr Hawkins did not plead that the Commissioner consented, whether expressly or impliedly, to him raising a personal grievance outside the statutory 90 day period for doing so. This was because, in his statement of claim before the Employment Court, it was averred that formal notification of the grievance was given to the Commissioner in the 18 September 2001 letter, meaning that consent was entirely unnecessary.
[28] Before us, counsel for the Commissioner suggested that the raising of a personal grievance within the statutory period is a critical element of the s 114 cause of action, and that consent should have been pleaded. The onus would have been on Mr Hawkins to prove consent, whether express or implied. Reliance was placed on reg 11 of the Employment Court Regulations 2000 which requires specification in the statement of claim of the general nature of the claim, the facts upon which the claim is based, the relief sought and the grounds of the claim.
[29] Mr Brosnahan noted that the Commissioner made nothing of the lack of specific pleadings in relation to consent at the close of the liability hearing in the Employment Court, nor at any time prior to the lodging of the appeal. He suggests that it could just as easily be argued that, if there is an obligation to plead consent, it is upon the employer raising a breach of s 114(1) to assert that the 90 day period was not complied with and to assert that the employer did not consent.
[30] On a pleading issue of this character, we are not minded to advance an inflexible rule, especially in a statutory context where good faith is a central feature: s 4 ERA. Further, Judge Shaw did not have to deal with this procedural issue because she held there was implied consent. In the absence of full argument in the lower Court, we simply note that consent need not be pleaded by the employee in all cases. Rather, it may well be more appropriate to the scheme of the legislation to leave it to the employer to raise the 90 day time bar if he or she wishes to, to which the employee can then respond. Employment legislation is an area of the law in which many laypersons become involved. The time element may come up in a variety of ways, most commonly by the employer taking a firm stand on time from the outset. But the Court itself could also conceivably raise the issue. While the issue of time cannot be avoided because it is in the legislation, it is hardly a suitable candidate for doctrinaire rules of the character suggested.
Was the personal grievance raised outside the 90 day period?
[31] Because we have found in favour of Mr Hawkins on the two consent issues on which leave to appeal was granted, it is not now necessary for us to consider the application for leave to add a further appeal point (see [15] above). We dismiss that application.
Voluntary disengagement and personal grievances
Introduction
[32] The central concern here is whether a police officer can bring a personal grievance claim after “perfing”.
[33] In the Employment Court, Judge Shaw held that voluntary disengagement from the police on medical grounds under the Police Act did not preclude a claim for constructive dismissal.
[34] This Court granted leave to appeal on the question of whether a voluntary disengagement under s 28D of the Police Act can be reversed by way of a personal grievance. Leave was expressly restricted to the issue of principle, and did not extend to the Commissioner’s challenge to the Employment Court’s fact-finding on the statutory disengagement point.
[35] The Commissioner’s argument on appeal is that the statutory decision to permit a police officer to voluntarily disengage under s 28D stands until lawfully set aside by the High Court on judicial review: s 194 ERA. The termination of Mr Hawkins’ employment by operation of statute means that he neither resigned nor was dismissed by the Commissioner, constructively or otherwise.
[36] Mr Brosnahan submits that a disengagement under s 28D is simply a resignation by another name, albeit one that carries certain financial advantages. Where it is the Commissioner’s actions that have created the medical grounds that lead to the voluntary disengagement, it would not be Parliament’s intention to deprive a police officer of the opportunity to redress that breach of the employment contract.
The Police Act
[37] The thrust of the discussion in the Employment Court and the submissions on appeal involved a close analysis of s 28C of the Police Act, pertaining to compulsory disengagement, and s 28D, pertaining to voluntary disengagement. By virtue of s 87 of the Police Act, the personal grievance provisions in Part 9 of the ERA apply to personal grievances by sworn members of the police. It should be interpolated that the Police Act was repealed by the Policing Act 2008 as from 1 October 2008.
[38] The Police Act contains various statutory procedures by which officers cease to be members of the police. The terms of the Act limit the basis upon which sworn members might voluntarily leave the police or be required by the Commissioner to do so. Section 14 provides for resignation on 14 days notice. The mechanisms for medical disengagement include compulsory disengagement, where the Commissioner is satisfied that the member of the police is incapable of performing police duties (s 28C), or by way of application by a member for voluntary disengagement (s 28D). Under both s 28C and s 28D, the Commissioner’s decision is made after considering medical reports. The Commissioner may approve a s 28D application if he or she is satisfied that the member is incapable of performing police duties competently.
[39] Judge Shaw noted “two material differences” between s 28C and s 28D (at [24]-[26] of the liability judgment). First, s 28C disengagement is compulsorily imposed on a police officer, whereas s 28D disengagement only occurs if the member initiates an application which is accepted by the Commissioner. Secondly, s 28C(4) provides:
Where the member takes a personal grievance action under section 87 of this Act in respect of the requirement to leave the Police, the member shall remain a member of the Police until the action is disposed of; but if reinstatement is not ordered, the member shall cease to be a member of the Police on the date on which written notice of the decision disposing of the action is given to the member.
There is no similar provision in s 28D. Section 28D(2) provides:
Where the Commissioner decides to permit any member to leave the Police under this section, the Commissioner shall give to the member written notice of the decision, and the member shall cease to be a member of the Police on the date specified in that behalf in the notice.
The Commissioner’s submissions
[40] Lengthy arguments were advanced for the Commissioner, seeking to render voluntary disengagement under s 28D conceptually distinct from compulsory disengagement under s 28C and resignation under s 14. The key distinction was that termination in the voluntary disengagement context is by operation of statute and can only be set aside in judicial review proceedings. Counsel for the Commissioner made an initial distinction between proceedings flowing from any medical incapacity caused by antecedent breaches of employment duties and causes of action that challenge the justification for termination itself. For the Commissioner, the method of exit, whether by resignation or voluntary disengagement, is irrelevant in claims founded on medical incapacity because loss of income is recoverable by reference to the actionable breach of contract, rather than by challenging the justification for the termination. See Commissioner of Police v Cartwright [2001] 1 NZLR 265 (CA).
[41] The method of exit assumes importance when claims are brought in respect of the termination itself. Resignation may form the basis of a personal grievance alleging constructive dismissal because resignation does not involve termination by operation of statute. Compulsory disengagement under s 28C may be challenged in personal grievance proceedings because this is expressly provided for by s 28C(4). However, a voluntary disengagement under s 28D is not open to challenge by way of a personal grievance because the employee is terminated by operation of statute. Moreover, the financial benefits from voluntary disengagement which flow from the statutory discharge from service vis-à-vis resignation were manifest in a lump sum payment of approximately $228,000 from the Government Superannuation Fund to Mr Hawkins.
[42] All of that said, the Commissioner’s central proposition is that because Mr Hawkins opted to “perf” under the voluntary disengagement regime and because he alleges no ongoing medical incapacity, the only avenue of challenge open to him is judicial review proceedings rather than personal grievance proceedings. By adopting administrative law validity principles, whereby even an unlawful administrative act is operative until set aside by a Court (see Murray v Whakatane District Council [1999] 3 NZLR 276 at 320 (HC)), the Commissioner considers that the statutory decision to permit a member to voluntarily disengage stands until lawfully set aside.
[43] It is easy to see why the Commissioner has such an antipathy to this claim – a policeman “perfs”, but later says, “yes but I was driven out of office”. By “perfing” and then claiming a grievance, there are undoubtedly tactical and financial advantages which flowed to Mr Hawkins. That said, it would be an unusual result, redolent of 19th century procedure, to then have to go to another court altogether with great expense and delay, outside the employment law regime.
Mr Hawkins’ submissions
[44] Mr Brosnahan contends that the decision of the Employment Court was correct at law and consistent with the statutory framework of the ERA and the Police Act. Although he concedes that a complaint about acceptance of a voluntary disengagement by the Commissioner does not generally raise the spectre of a grievance, he argues that the dual emphasis on s 28C(4) and the absence of an equivalent provision in s 28D is tantamount to an evasion of responsibility for misconduct on the employer’s part.
[45] Counsel also drew our attention to decisions of the Employment Court under the Employment Contracts Act which held that a s 28D voluntary disengagement does not preclude a claim for unjustifiable constructive dismissal: Merritt v Commissioner of Police EmpC AK AEC16/98 16 March 1998; Cairns v Commissioner of Police EmpC CHCH CEC58/97 11 June 1999.
Evaluation
[46] We consider that, at the level of principle and where the facts warrant it, a s 28D voluntary disengagement need not operate as a bar to personal grievance claims. With respect, the question whether a voluntary disengagement can be reversed by way of a personal grievance mischaracterises the issue, which is simply whether or not the claimant’s decision to “perf” was caused by conduct which can appropriately give rise to a grievance.
[47] Despite the Commissioner’s concerted efforts to persuade us otherwise, we are unable to conclude that judicial review is the only forum for redress in the s 28D voluntary disengagement context. Moreover, the employee’s choice of exit method should not be as determinative as the Commissioner suggests. As Judge Colgan stated in Merritt (at 8):
Constructive dismissal as the concept has been developed and articulated by the Courts focuses not so much on labelling the means by which termination of employment comes about (dismissal or resignation) but rather examines the relevant conduct of the parties leading to the termination of employment.
[48] We agree with Judge Shaw’s assessment of this issue (at [30]):
While a personal grievance for unjustified dismissal requires the grievant to show that there has been a dismissal, in the case of constructive dismissal this is not so. A person who apparently voluntarily resigns or otherwise leaves their employment is not precluded from bringing a claim for constructive dismissal by reason of that action. That is because the very nature of a claim for constructive dismissal is dependent on the events which preceded it. It is artificial to separate the events leading up to a constructive dismissal and the way in which an employee actually left their employment. As the Court of Appeal said in Auckland Electric Power Board v Auckland Provincial District Local Authorities Officers IUOW Inc [[1994] 1 ERNZ 168 at 172], it is necessary to examine all the circumstances of the resignation, not just the terms of the notice or the way the employee has tendered the resignation.
Claims for constructive dismissal do not require an analysis of the method of the dismissal because the employee invariably makes the decision to leave in such cases. The focus of such claims is on the employee’s motivation for that decision; whether the motivation arises from the breach of the employer’s duty or other actions by the employer; and whether the leaving was reasonably foreseeable to the employer. The mode of leaving is not part of the inquiry into whether the constructive dismissal occurred. It is therefore possible for a claim for constructive dismissal to be brought even where the procedure leading to an application for disengagement is not challenged.
[49] The existence of the s 28C(4) mechanism to challenge compulsory disengagement by way of personal grievance does not automatically preclude the use of the personal grievance procedures under s 28D. Cartwright remains a correct statement of the law governing the interface between compulsory disengagement and the personal grievance process, where a claim for unjustifiable action (or “disadvantage”, in ERA parlance) rather than a dismissal grievance is appropriate by dint of s 28C(4), which keeps the relevant member of the police in employment while the grievance is disposed of. However, s 28C(4) should not be regarded as the “statutory exception that proves the rule”, to adopt the Commissioner’s phrase.
[50] It is also more in keeping with the respective statutory schemes of the Police Act and the ERA to permit the s 28D voluntary disengagement regime to be challenged by way of personal grievance, rather than by way of judicial review. It is distinctly unhelpful to transpose the vexing debates about the validity of administrative action to the employment law arena. The bewildering smorgasbord of options when characterising the validity of decisions made under operation of statute would not be germane to a statutory scheme whose partial object is to facilitate, rather than impede, the raising of personal grievances with employers: s 101(b) ERA.
Remedies
[51] We turn now to the various remedial issues which were raised before us.
Reinstatement
[52] This Court granted leave to appeal on the question of whether it was open to the Court to reinstate Mr Hawkins, given that he had previously disengaged under s 28D. Although Mr Hawkins’ employment was terminated on 21 June 2001 when his application to disengage was accepted, he only sought reinstatement in 2003 following his discharge under s 347 of the Crimes Act.
[53] Judge Shaw reinstated Mr Hawkins immediately to his former position as sergeant at the Taumaranui police station, or to a role no less advantageous to him. She considered that the Commissioner had not discharged the onus of proving that it would be impracticable to reinstate Mr Hawkins, even after a seven year time period. She rejected the Commissioner’s argument that reinstatement should not be ordered because Mr Hawkins had voluntarily disengaged under s 28B.
[54] Ms Holden’s argument on appeal is that it was not open to the Employment Court to reinstate Mr Hawkins, since the termination of his employment by operation of statute stands until set aside on judicial review by a court of competent jurisdiction.
[55] Mr Brosnahan argued that once there is a finding of constructive dismissal, it is open to the Court to reinstate: s 123(1)(a) ERA. Indeed, there is a statutory obligation to reinstate wherever practicable: s 125 ERA.
[56] Because we do not regard a s 28B voluntary disengagement as precluding a personal grievance claim alleging constructive dismissal, we similarly consider that it is open to the Employment Court to order reinstatement where practicable in the situation where a constructive dismissal personal grievance is made out, notwithstanding the s 28D method of exit. In short, reinstatement is a stand-alone remedy in the ERA scheme that is not ousted by the voluntary disengagement procedure.
Loss of income
[57] The next remedial issue on which leave to appeal was granted, is whether Mr Hawkins’ disengagement under s 28D precluded the making of an award for loss of income to him. The quantum of the award actually made was not in issue before us.
[58] Judge Shaw ordered that Mr Hawkins was entitled to the payment of a sum representing his loss of remuneration from 21 June 2001 until his reinstatement. The sum was to be calculated based on the salary a sergeant would have earned during that period, and was to take into account the contributions the Commissioner would have made to Mr Hawkins’ superannuation scheme. It was to be reduced by the amount of remuneration received by Mr Hawkins personally as drawings or salary as shown in his accounts for that period.
[59] In granting leave, this Court explicitly noted that resolution of this issue would substantially depend on the Court’s decision on the two earlier questions pertaining to the impact of a s 28D voluntary disengagement on a subsequent personal grievance and reinstatement.
[60] The Commissioner’s argument was that the s 28D disengagement precluded an award for loss of income. Alternatively, any loss of income flowed from the valid operation of statute and not from any antecedent unjustifiable action on the Commissioner’s part until the statutory disengagement was set aside by the Employment Court in their judgment on liability.
[61] Mr Brosnahan said compensation for loss of income fell within the Court’s discretion in s 123(1)(b) of the ERA to provide for the reimbursement to the employee of a sum equal to the whole or any part of the wages or other money lost by the employee as a result of the grievance.
[62] In our view, given the reasoning we have already set out with respect to the relationship between the relevant provisions of the Police Act and the ERA, a s 28D disengagement does not preclude the making of an award for loss of income.
Compensation for humiliation
[63] Leave to appeal was granted on the question of whether the Employment Court’s award for compensation was excessive, given the decision of this Court in Blowes.
[64] In the Employment Court, Mr Hawkins sought compensation for humiliation under s 123(1)(c)(i) of the ERA, which provides:
(1)Where the Authority or the Court determines that an employee has a personal grievance, it may, in settling the grievance, provide for any 1 or more of the following remedies: …
(c)the payment to the employee of compensation by the employee’s employer, including compensation for –
(i)humiliation, loss of dignity, and injury to the feelings of the employee.
[65] Judge Shaw said of this provision (at [34]-[35] of her remedies judgment):
The assessment of compensation for hurt and humiliation is necessarily an inexact science. Section 123 of the [ERA] confers an unrestricted discretion to award such compensation and the cases reveal a wide range of awards because of necessity they are fact specific. While awards must be in accord with principle, any concept that such awards should fall within a permissible range such as that stipulated in [Blowes] is not in accord with statutory discretion. Principles to be applied include consideration of the injury suffered by the employee and the avoidance of penalising the employer. A comparison with like cases is also of assistance. In the case of constructive dismissal where the events leading up to the termination of employment are part of the dismissal process, the effects of the employer’s treatment on an employee before termination are also relevant.
[66] After citing various cases where police officers had been awarded compensation for hurt and humiliation after bringing a successful grievance or other employment-related case, as well as decisions where police officers developed mental stress as a result of their work conditions, the Judge assessed Mr Hawkins’ level of compensation at $35,000 (at [38]-[39]):
In assessing what is appropriate for Mr Hawkins, I take into account Ms Duckworth’s evidence that Mr Hawkins was suffering from untenable stress that had built up over a period of about 18 months resulting in both psychological and psychometric disorders. He was diagnosed with an adjustment disorder. The effects of his eventual termination from the police given that psychological state can reasonably be inferred to have been extreme. In addition, I take into account the humiliation of the publicly voiced views of Inspector Allan at the time that Mr Hawkins’ situation was being discussed at open meetings at the Taumaranui police station. It was made clear to his colleagues that he had no future in the police and this was also conveyed to Mr Hawkins. As a result, Mr Hawkins became suicidal.
In assessing his hurt and humiliation, I discount the stress that arose from the laying of the criminal charges against him. As Mr Brosnahan pointed out in submissions, Mr Hawkins is not critical of the police for commencing the criminal proceedings and there is no suggestion that the police acted improperly in this regard.
[67] Ms Holden’s arguments in relation to compensation for humiliation can conveniently be dealt with under two heads. First, she expressed concern with the Judge’s finding that it was not in “accord with statutory discretion” to, in effect, fix guidelines where the legislation contains none, as in Blowes. Secondly, she considered that the award in this case was excessive, whether Blowes set a prescriptive range or merely provided guidelines in which awards for distress compensation would usually fall.
[68] It is as well to begin with what this Court actually said in Blowes (at [40]):
The circumstances of unjustified dismissals and unjustified disadvantage in employment are infinitely variable. But the $20,000 award upheld by this Court in 1992 in Telecom South v Post Office Union [[1992] 1 NZLR 275] must have been at or near the upper end of the permissible range.
[69] Chief Judge Colgan in Simpsons Farms Ltd v Aberhart [2006] ERNZ 825 has said (at [76]-[79]):
I respectfully conclude that the Court of Appeal could not have established a range within which such awards must fall so, in effect, setting a ceiling in such cases. That is for two reasons. The first is that the statute (unlike some in other jurisdictions) imposes no cap upon awards of what is commonly called distress compensation. In the absence of legislative direction, Courts cannot usurp the statutory function. …
The second reason is more pragmatic. The analysis of cases by the Court of Appeal in the [Blowes] case discloses no reference to a number where awards of distress compensation exceeded the upper level set by the Court of Appeal including cases in which the Court itself either affirmed or did not interfere with substantial distress compensation awards made by this Court.
There is another relevant factor, although one that can only be known anecdotally, albeit confidently. The cases decided by the Employment Court and even the more numerous cases decided by the Employment Relations Authority are only a small fraction of such employment relationship problems, the vast majority of which are settled without litigation or, if proceedings are issued, without a judgment. The Employment Court Judges are aware of the general levels of settlement of compensation for non-economic loss in such cases. They often exceed the sorts of levels examined by the Court of Appeal in [Blowes]. Indeed, the lid kept on awards by cases such as [Blowes] is a persuasive factor in achieving larger settlements in such cases without incurring the unrefundable costs of litigation to do so.
I understand the Court of Appeal in [Blowes] to have intended to signal that most awards will fall within a range up to about $27,000 but that exceptional cases may attract higher awards.
[70] To a similar effect, see Toll New Zealand Consolidated Ltd v Rowe [2007] ERNZ 840 at [104] (EC) and Prins v Tirahanga Group Ltd [2006] ERNZ 321 at [58]-[59] (EC).
[71] With respect, the Chief Judge has correctly stated the proper approach to Blowes. In view of the importance of the compensation for humiliation issue to employment law generally, we would add these further observations.
[72] The first goes to the respective roles of the trial and appellate courts. It is the trial court that makes an award under a highly discretionary provision, with all that comprehends. This Court, in an appropriate case, can review that award, if the application meets the criteria for leave: s 214 ERA. Patently, it will be very difficult to get leave, although in a variety of settings appellate courts have had to resort to what is technically known as “nominalism” to provide guidance, which has sometimes operated as something of a cap. For instance, in the area of personal injuries law, prior to accident compensation legislation, both in this country and other Commonwealth jurisdictions, courts as senior as the House of Lords and the Supreme Court of Canada established upper limits for damages for pain and suffering. In short, “nominalism” is a perfectly acceptable and recognised judicial technique, though the question as to how upper limits are to be established raises real difficulties.
[73] Further to that point, claims for what amounts to damage to dignitary interests are complex and very important. Remedies scholars (and increasingly courts) rightly see this as a particularly important and developing area of the law, which invokes a recognition of the fundamental importance of human dignity as perhaps the legal value in the 21st century. (See Hammond “Beyond Dignity” in Berryman and Bigwood (eds) The Law of Remedies: New Directions in the Common Law (2009)). One of the problems identified with attempts to rigidly “cap” awards in the developing dignity context is that the levels can ossify. At the same time, there has to be a sound basis for such awards, and there are very real conceptual and practical difficulties in establishing a spectrum as to where lines are to be drawn.
[74] Finally, with respect to these general observations, this is an area where there is a specialist court, which can be expected to be well placed to know what is happening in industrial relations in New Zealand society, including, for example, the pattern in relation to extra-judicial settlements. That is a real advantage which points against the desirability of frequent incursions by this Court as to the appropriate level of awards.
[75] To return to this particular case, the Commissioner’s argument is that the Judge exceeded “the norm” by quite a margin. For Mr Hawkins, it is said this was a discretionary award, and one which was appropriate having regard to the nature and extent of the breaches which were found to have occurred.
[76] Undoubtedly, this was a “high” award, although there have been higher awards in the s 123(1)(c)(i) jurisdiction for similar kinds of claims. See Ogilvy & Mather (NZ) Ltd v Turner [1996] 1 NZLR 641, where this Court considered $50,000 in damages for humiliation and distress to be within the proper range in the circumstances of that case. In this case, the Employment Court found that a police sergeant was, in simple terms, “hounded out of office”. This is not a claim for exemplary damages, but one would expect to see a significant award for the effect that this undoubtedly had on Mr Hawkins. He had a significant and respected community role which was taken from him, and the downstream effects on him personally are still with him.
[77] We cannot say that it was not within the jurisdiction of Judge Shaw to make this award under s 123(1)(c)(i). There is a plusage over the norm, but unsurprisingly so in this particular case.
Reinstatement or new job?
[78] This Court reserved the question as to whether leave should be granted on the following question for further argument at the substantive hearing: was it open to the Employment Court to reinstate Mr Hawkins given that nearly seven years had passed since his departure from the police which was found to be constructive dismissal?
[79] Judge Shaw held that the length of time since Mr Hawkins’ departure was only relevant to the extent that it impinges on whether or not the reinstatement would be practicable. She found that it was practicable to reinstate Mr Hawkins to a supervisory role at Taumaranui police station, notwithstanding his seven year absence from the police and the fact that the events leading to his personal grievance had arisen at that station.
[80] In reserving this matter, this Court expressed doubt as to whether the question met the test for the granting of leave, predominantly because the finding which the Commissioner seeks to challenge is essentially factual: s 214(3) ERA. In its decision in Bryson v Three Foot Six Ltd [2005] 3 NZLR 721, the Supreme Court of New Zealand held (at [25]-[26]):
An appeal cannot, however, be said to be on a question of law where the fact-finding Court has merely applied law which it has correctly understood to the facts of an individual case. It is for the Court to weigh the relevant facts in the light of the applicable law. Provided that the Court has not overlooked any relevant matter or taken account of some matter which is irrelevant to the proper application of the law, the conclusion is a matter for the fact-finding Court, unless it is clearly unsupportable.
An ultimate conclusion of a fact-finding body can sometimes be so unsupportable – so clearly untenable – as to amount to an error of law: proper application of the law requires a different answer.
[81] The Commissioner’s submission is not that Judge Shaw’s reinstatement decision was irrational. Rather, the argument is that the Employment Court erred in law in reinstating Mr Hawkins after some seven years because what the Court had done amounted to giving him a new job. Ms Holden’s concern is that reinstatement in this context really means that Mr Hawkins has gone into new employment at a senior level in an operational policing environment.
[82] Mr Brosnahan submits that each case must be dealt with on its facts. He says that it would be arbitrary for this Court to assert that no one can be reinstated after a seven year gap, independent of any factual assessment. He noted in passing that Mr Hawkins has been reinstated to his original position and there is nothing to suggest that the reinstatement has been anything other than completely successful.
[83] We decline leave to appeal on this reserved question. The Commissioner did not proffer evidence on this issue at the hearing. In any event, the general issue is a discretionary remedial one. It neither raises a question of law nor is amenable to appellate factual determination in the absence of evidence.
Decision
[84] The Commissioner’s appeal against the liability and remedies judgments in the Employment Court is dismissed.
[85] For convenience, we reiterate our answers to the questions of law which the Commissioner was granted leave to appeal on:
(a)Does s 114(1) of the ERA require the employer to have turned its mind to the 90 day period and agree (expressly or impliedly) to proceed? No.
(b)Does consent have to be pleaded by the employee? No.
(c)Can a voluntary disengagement under s 28D of the Police Act be reversed by way of a personal grievance? Yes.
(d)Was it open to the Court to reinstate Mr Hawkins, given that he had previously disengaged on medical grounds under s 28D of the Police Act? Yes.
(e)Did the fact that the respondent disengaged under s 28D of the Police Act preclude the making of an award for loss of income to Mr Hawkins? No.
(f)Was the Court’s award for compensation under s 123(1)(c)(i) of the ERA excessive, given the decision of this Court in Blowes? No.
[86] We decline to grant leave to appeal on the following questions:
(a)Was the personal grievance raised outside the 90 day period?
(b)Was it open to the Court to reinstate Mr Hawkins given that nearly seven years had passed since his departure from the police which was found to be constructive dismissal?
[87] The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements.
Solicitors:
Crown Law Office, Wellington
Debbie Goodlet, Wanganui, for Respondent
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