Employer’s health and safety failings result in award of $1.79 million
The recent Employment Court case of Cronin-Lampe v The Board of Trustees of Melville High School (No 2) saw unprecedentedly high awards of damages made.[1] Plaintiffs Ron and Kath Cronin-Lampe (the Cronin-Lampes), were awarded nearly $1.8 million between them for extreme trauma suffered during their employment with Melville High School (MHS).
This decision stands as an acute reminder to employers of the importance of monitoring health and safety risks, especially relating to mental health hazards, and working to isolate, mitigate, and eliminate these hazards. The case dealt with issues relating to whether MHS had breached their health and safety obligations owed to the Cronin-Lampes. These issues were explored through both common law and personal grievance claims.
Summary of facts
The Cronin-Lampes were employed at MHS as guidance counsellors for differing periods between 1996 and 2012. Over 16 years they witnessed and supported the school community through a vast number of challenging and traumatic experiences. This included 32 deaths, many of those being student suicides. On the request of both the school and families, Mr Cronin-Lampe would often officiate the funerals, and both would visit whānau and help them deal with the grief of these tragedies. Many responsibilities fell on the Cronin-Lampes at times of tragedy and came in addition to an existing heavy workload, this included their cell phone numbers being given out on business cards to students and families with 24/7 availability.
The Cronin-Lampes alleged the prolonged and frequent exposure to traumatic material was exacerbated by a lack of resourcing and support for the guidance team. Examples of these resourcing issues included the Cronin-Lampes having an ever-diminishing budget for supervision and resources. The amount of time they spent each term attending supervision was gradually eroded to much less than what the New Zealand Association of Counsellors’ guidelines recommended. There were instances where they had to pay for guidance resources personally, including paying to attend a conference in Canada. The Cronin-Lampes argued their exposure to trauma and the school’s response to these issues caused them to develop Post Traumatic Stress Disorder (PTSD), resulting in both husband and wife applying for medical retirement from MHS in 2012.
Procedural history
These claims have a long procedural history, culminating in two judgments from Judge Corkill. In the first judgment of August 2023, the Cronin-Lampes were granted leave to raise a personal grievance beyond the 90-day limitation period due to their medical condition. Judge Corkill found the Cronin-Lampes’ vulnerable state, limited ability to assess their personal problems, and lack of information about their diagnosis meant their delay in raising the personal grievance was occasioned by exceptional circumstances.
In this later judgment, Judge Corkill determined both the common law and grievance claims of the Cronin-Lampes.
Common law claims
The Cronin-Lampes advanced three common law causes of action:
- Breach of terms implied by common law;
- Breach of terms implied by the Health and Safety in Employment Act 1992 (HSE) (now superseded by the Health and Safety at Work Act 2015); and
- Breach of implied and express terms derived from the Secondary Teachers’ Collective Agreement (the Collective).
Whilst each cause of action differed, the arguments were analogous: MHS failed to manage workload and workplace conditions adequately and did not meet its health and safety obligations.
It was found there was a clear and foreseeable risk of workplace stress by at least 2007. Obligations were imposed by developments in health and safety law through the HSE, the Ministry of Education’s health and safety codes of practice and the Collective’s references to obligations of the employer. In light of these obligations, the steps taken by MHS to maintain and provide a safe working environment were not adequate. MHS knew of the significant level of trauma the Cronin-Lampes’ were required to deal with in their roles. Despite this, MHS did not take any proactive steps to identify the stress increased workloads were having on the Cornin-Lampes, who were already vulnerable staff.
MHS contended the Cronin-Lampes did not inform principal Clive Hamill of their stresses. He felt he could rely on them to inform him if sufficient protective measures were not in place. It was noted this contravenes the positive requirements the HSE places on employers to ensure the health and safety of employees. MHS did not do anything to support the Cronin-Lampes with their workload issues, further damaging their mental health. MHS also constrained resourcing for the Cronin-Lampes’ professional development, meaning they were less able to handle the trauma they were witnessing than other professionals.
Ultimately the common law causes of action were established. The PTSD suffered by the Cronin-Lampes was a result of the breaches of express and implied contractual duties owed by MHS. Judge Corkill found it was foreseeable the Cronin-Lampes would suffer harm if the employer did not take steps to limit the hazards of their occupation.
Personal Grievance
In addition to the common law claims made by the Cronin-Lampes, a personal grievance claiming disadvantage was also found to have been established. It was considered, based on the breaches established in the plaintiffs’ common law claims, the Cronin-Lampes suffered a significant disadvantage. Four further relationship problems were found which contributed to the Cronin-Lampes’ disadvantage, which could not be made out under the common law claims:
- Failure to provide time off and cover;
- Issues with Mrs Cronin-Lampe feeling bullied;
- Inconsistencies in disciplinary processes creating a further disadvantage for Mr Cronin-Lampe; and
- Uncertainty around Mr Cronin-Lampe’s status at MHS.
These actions were not how a fair and reasonable employer could have acted in all the circumstances and the personal grievance was established.
Affirmative defence relating to the Accident Compensation Act 2001
MHS attempted to argue the statutory bar of s 317 of the Accident Compensation Act 2001 applied to Mrs Cronin-Lampe, claiming she had cover for mental injury under s 21B. If MHS could have established one event was the operative cause of the mental injury, then s 317 of the Act would have barred Mrs Cronin-Lampe from advancing her personal injury claim. MHS contended her first visit to a whānau home in the wake of a student suicide was an ‘event’ (under s 21B of the Act) which caused the PTSD she now suffers from. It was determined Mrs Cronin-Lampe’s mental injury was not a direct outcome of the specific suicide which MHS contended it was. Judge Corkill did not find in favour of MHS regarding causation, because the expert evidence suggested the Cronin-Lampes’ PTSD was more an effect of the accumulation of trauma, rather than one discrete event.
The court found the statutory bar of the Accident Compensation Act was not effective against Mrs Cronin-Lampe’s claims for relief.
Result
The Cronin-Lampes sought damages for their common law claims and statutory remedies available under the Employment Relations Act 2000 for their personal grievance claim. Judge Corkill took the approach of electing the higher award where one cause of action results in a higher outcome than the other.
Judge Corkill determined a notional end date needed to be formulated for the period of damages. The Cronin-Lampes had suggested a 10-year period up to the date of the hearing would be suitable. Judge Corkill shortened this because the Cronin-Lampes had spent approximately two and a half years of that period seeking ACC cover and not pursuing their claims in the Employment Court. Judge Corkill established a period starting with 2012, ending with the notional date of 31 March 2019.
The damages and remedies were calculated and considered as below.
Non-economic loss remedy & compensation for humiliation, loss of dignity and injury to feelings
Judge Corkill notably reviewed the quantum awarded in Gilbert v Attorney-General[2] and Brickell v Attorney General.[3] Both were awarded $75,000. Adjusted for inflation, this was considered an appropriate amount given the similarities in the cases.
Judge Corkill determined Mr Cronin-Lampe should receive 75 percent of what Mrs Cronin-Lampe received. This is because Mrs Cronin-Lampe suffered more serious impacts than her husband, and therefore the quantum for the non-economic loss remedy was taken from the $75,000 awarded in Gilbert and adjusted for inflation up to $130,000. Mr Cronin-Lampe’s quantum was calculated to be $97,500.
The loss suffered by the Cronin-Lampes would be at the higher end of the Court’s banding approach, being in the third band. The court would have awarded Mrs Cronin-Lampe $85,000 and Mr Cronin-Lampe $63,750. Ultimately the Cronin-Lampes were awarded the higher common law non-economic loss damages.
Lost remuneration
Expert evidence of Brendan Lyne was accepted as to what would be a fair assessment of the loss of remuneration the Cronin-Lampes had suffered. The timeline of November 2012 to 31 March 2019 was used for the assessment of lost wages, which both were entitled to interest thereon. Mrs Cronin-Lampe received $457,803 and Mr Cronin-Lampe received $601,874. The Judge then compared it with the alternative personal grievance assessment of lost wages. In Betta Foods (NZ) Ltd v Briggs, Judge Travis stated that awarding 18 months of lost wages is on the higher end of the Court’s discretion.[4] Therefore the common law damages were awarded.
Superannuation loss
Mr Lyne’s evidence was again accepted, and it detailed where the Cronin-Lampes’ superannuation funds would have been if they had continued contributing, having not suffered the breaches of MHS. Mrs Cronin-Lampe was awarded $58,869 and Mr Cronin-Lampe was awarded $17,142. Judge Corkill confirmed the analysis under s 123(1)(c)(ii) of the Employment Relations Act would have been the same.
Claims relating to their investment property
The Cronin-Lampes had to sell their investment property to sustain themselves in 2014 due to the lack of income. Two separate awards were given in relation to this loss, the loss of net rental income and the sale of the property at less than its market rate. Taking the capital value data of the property at the nominal date of 31 March 2019 ($440,000) minus the sale price adjusted to inflation to 21 March 2018 ($307,305), $132,695 was determined to be the appropriate figure.
The rental income the property could have received was calculated on the assumption of a 3.8% rental yield, equating to $22,174. Judge Corkill noted that even if both the rental loss and sale loss assessments had been done under the Employment Relations Act, the quantum would have been the same.
Expenses and costs
The Cronin-Lampes were awarded their claims for expenses for the likely psychological treatment they would need to undergo for their PTSD.
Mrs Cronin-Lampe was denied contribution towards her dental costs she claimed arose as a result of the stress as it was considered there was insufficient evidence to that effect.
Contribution
The Cronin-Lampes were found to have behaved in a way that contributed to their health issues, to an extent justifying a reduction by 5% to their remedies. Although Judge Corkill had made findings that the school had occasionally been made aware of the pressure the Cronin-Lampes were facing, they could have taken opportunities to explain their challenges more.
Exemplary damages
In Gilbert it was noted that exemplary damages were a penal award, requiring a deliberate nature to the conduct which gives rise to the breaches. It could not be found that MHS acted deliberately or intentionally when breaching its duties to the Cronin-Lampes.
Counterclaims
MHS’ claims the Cronin-Lampes breached their contractual obligations were dismissed.
Significance of this case
Employers need to be aware of decisions and policies which exacerbate vulnerabilities inherent to the circumstances of their employee’s work. Not all school counsellors would be exposed to regular traumatic experiences, but given the school community the Cronin-Lampes served and the many issues the school faced throughout their time as counsellors, MHS should have known the Cronin-Lampes were vulnerable. The court made it clear it was not enough to expect employees to inform their employers of issues they are facing. Rather a positive duty lies on employers to protect their employees.
One of MHS’ largest failings was the lack of resourcing for professional development and supervision given to the Cronin-Lampes. The Cronin-Lampes were severely set back by not being up to date on modern practices and skills. They did not have the ability to debrief the trauma they were suffering with a supervisor, which limited their ability to carry out their onerous roles. Where an employer employs staff to undertake roles that create vulnerabilities, they must ensure they are supporting their employees to complete the work safely.
It is possible, given the large quantum delivered in a wide range of remedies, this decision will be appealed. It will be interesting to see what higher courts may determine in respect of the wide package of relief given to the Cronin-Lampes.
Assistance
If your organisation needs any assistance in ensuring its health and safety protocols are up to standard, specifically looking after your employees’ mental health, our lawyers are here and happy to assist. Talk to a member of the Dyhrberg Drayton Employment Law team today.
Lachlan Spence, Law Clerk and Imke Kitchin, Lawyer
[1] Cronin-Lampe v Board of Trustees of Melville High School [2023] NZEmpC 221.
[2] Attorney-General v Gilbert [2002] 1 ERNZ 31.
[3] Brickell v Attorney General [2002] 2 ERNZ 529 (HC).
[4] Betta Foods (NZ) Ltd v Briggs [1997] ERNZ 456 (EmpC).
