JurisdictionNew Zealand
CourtEmployment Court
JudgeA D Ford
Judgment Date23 May 2011
Date23 May 2011
Docket NumberARC 37/07

[2011] NZEmpC48


ARC 37/07


In the Matter of a Challenge to a Determination of the

Employment Relations Authority

Wendy Anne Clear
Waikato District Health Board

Mr Mark Hammond, Counsel for the Plaintiff

Mr Geoff Bevan, Counsel for the Defendant

Challenge to a determination of the Employment Relations Authority – plaintiff was employed by defendant, first as a registered nurse and then a midwife for 36 years – after making a fourth formal complaint about her Unit Manger's conduct plaintiff returned to work at the request of the defendant but left shortly after on indefinite sick leave after suffering a breakdown – the plaintiff's employment was subsequently terminated – a claim of unjustifiable dismissal was upheld in the Court of Appeal but observations were made as to extent of defendant's liability – whether plaintiff's pre-existing condition limited defendant's liability.

Held:The starting point for an assessment of remedies under s123(1)(b) ERA (remedies) was whether C could show on the balance of probabilities that her loss was caused by the breach claimed. The breach had to be a material factor. The WDHB was not able to satisfy the Court that C would have suffered her breakdown even had she not returned to work. The evidence relied on by the WDHB was from Dr Prestage (“Dr P”) who never met C until the Court hearing and based his evidence upon information assembled from a perusal of medical records and reports, together with relevant documents and evidence from the liability hearing. Dr P lost some credibility because of his decision not to examine or interview C. Dr P thought that C had been back at work for two weeks following the fourth complaint with no evidence of any deterioration in health before she suffered her breakdown, but there was further evidence before the Court that C had been in considerable distress shortly after her return to work when she realised that nothing had changed. C had disclosed her feelings at an early stage to a neuropsychiatrist who interviewed her. There was no reason to doubt that she would have disclosed them to Dr P had he chosen to interview her. It was clear that C was in a fragile sate, suffering from a significant underlying illness immediately prior to her return to work, but because of the limitation cut-off the WDHB could not be held liable for that. C's pre-existing disability was assessed at 60 per cent which meant that only 40 per cent of C's proven economic loss could, as a matter of law, be attributable to the WDHB.

In terms of future economic loss, it was a distinct possibility, even had the WDHB fully met its obligations in relation to C's return to work, that C would not have continued working for the WDHB until the time claimed. C would have had no option but to accept that the WDHB had met its obligations and things were not going to get any better and it was likely that she would have elected to resign as a result. This contingency warranted a 60 per cent deduction from C's proven economic loss.

Award of $40,443 to C pursuant to s123(1)(b) ERA.



The hearing before me was confined to one aspect of the plaintiff's prayer for relief, namely her claim for loss of earnings and certain medical and related expenses. Issues of liability had been dealt with in this Court by Judge Shaw back in 2008 when Her Honour heard Ms Clear's challenge to a determination 1 of the Employment Relations Authority (the Authority). The hearing before Judge Shaw was confined to liability only. Counsel had requested the opportunity to present further evidence and submissions on the issue of remedies. In her judgment on liability, 2 Judge Shaw upheld the plaintiff's claim of unjustifiable dismissal and disadvantage.


The defendant (the Board) then sought leave to appeal Judge Shaw's decision on liability. The Court of Appeal granted leave 3 and in its substantive judgment 4 it dismissed the appeal but made some important observations in relation to the nature and extent of the defendant's liability. Subsequently the parties were able to settle the plaintiff's claim for non-economic loss and the issue of costs in connection with both the Authority and Court of Appeal hearings. The issue of costs in relation to the hearing in this Court before Judge Shaw is yet to be resolved.


Before turning to consider the issues involved in relation to Ms Clear's economic loss claim, it is necessary to refer briefly to the relevant factual background and the findings made by Judge Shaw as clarified and confirmed in the Court of Appeal judgment.


Ms Clear is 64 years of age. She was employed by the defendant from 1969 until her dismissal in January 2005. She was based at Tokoroa Hospital. Initially, she worked as a registered nurse in the accident and emergency department and general ward but from September 1987 she was employed as a midwife in the maternity ward. The following passage from the Court of Appeal judgment summarises the basis of Ms Clear's claim:

[2] Ms Clear brought proceedings in the Employment Relations Authority (the Authority) for unjustified dismissal and disadvantage. The proceedings raised issues about the way in which the Board had dealt with complaints made by Ms Clear over a three-year period from 2000. A common thread running through those complaints was Ms Clear's claim she had been bullied by her Unit Manager, Margaret Parata, and that as a result her workplace was unsafe. Ms Clear's proceedings also focused on the effect of the Board's actions on her health, which deteriorated to the point that from early September 2003 she stopped work.

[3] The Authority upheld Ms Clear's disadvantage grievance in relation to a complaint Ms Clear made to the Board in late August 2003 but otherwise found for the Board. Ms Clear's challenge in the Employment Court was largely successful. The Employment Court found that the Board had affected her conditions of employment to her disadvantage and breached its duty to provide her with safe working

conditions. The Employment Court also found that Ms Clear's dismissal was unjustifiable.

During the three-year period between 2000 and 2003, Ms Clear made four formal written complaints to her employer about Ms Parata's conduct. The Court of Appeal described the first three complaints in these terms:

[9] The first complaint [October 2000] focused on the stress Ms Clear said had been caused her by Ms Parata's management style. The hospital manager, Peter Campbell, investigated. He told Ms Clear that there would be changes in the way cases were allocated amongst the midwives and that other improvements would follow.

[10] In the second (April 2001) complaint Ms Clear said that the position had not improved. She referred to what she described as Ms Parata's belittling conduct. Ms Clear discussed the matters with Mr Campbell. She said he was supportive. Mr Campbell spoke to Ms Parata again. After this, Ms Clear noticed an initial improvement but she said that this was short lived.

[11] The third (May 2002) complaint was dealt with by Janice Osborn, who was by then the area manager. The essence of the complaint was that the work environment was unchanged. Numerous matters were raised by Ms Clear all of which, bar one, Ms Osborn saw as historical. Ms Osborn had been advised by the Board's human relations personnel to address complaints as they arose rather than try to fix historical matters. She therefore dealt only with the one new matter, which related to the shredding of a document.

[12] Ms Clear accepted that her relationship with Ms Parata was in an “irreparable” state by June 2003.


The Court of Appeal dealt with the fourth complaint under a separate heading:

The fourth complaint

[17] The Board received Ms Clear's fourth formal complaint on 25 August 2003. This complaint was dealt with by Ms Priestley. Ms Priestley and Ms Cotterall began investigating. The Employment Court noted that it was “apparent that they had very sketchy if any knowledge of the extent of the history of dysfunction when they began??.

[18] Ms Clear returned to work on 30 August 2003. Her manager had organised that she and Ms Parata would work different shifts although occasionally they were there at the same time.

[19] Ms Clear was told on 8 September 2003 that the 32 points in her complaint would be investigated, that Ms Parata and other staff would be interviewed and that the information coming from the investigation would be made available to her. On 9 September 2003 Ms Clear left on indefinite sick leave. Her personal grievance was raised on 12 September 2003. Ms Cotterall in acknowledging the personal grievance said that a full investigation into her complaint was being undertaken.


The Court of Appeal at [29] noted the substance of the Employment Court's findings in relation to Ms Clear's disadvantage grievance: 5

By failing properly to address Ms Clear's complaints and by failing to reach conclusions on the complaints that were properly communicated by her the [Board] seriously affected her conditions of employment to her disadvantage. It also breached its duty to provide her with safe working conditions. On any account the conditions of work in the Tokoroa Maternity Ward were not safe either for Ms Clear or Mrs Parata.


In reference to the limitation period prescribed in s 114 of the Employment Relations Act 2000 (the Act) for the raising of personal grievances, the Court of Appeal recorded that there was no dispute that the limitation cut-off date was 19 September 2002 and that the Board could not be liable for breaches occurring prior to that date 6. In her statement of claim, Ms Clear had recognised that, given the limitation cut-off date, the Board could not be held liable for any disadvantage claim based on the handling of any of her...

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