The Dollar Cost Of Bullying: Case Study

February 16th, 2022 - Barbara Buckett

The Employment Relations Authority has awarded an employee $20,000 in compensation, lost wages and good faith penalties for being constructively dismissed and unjustifiably disadvantaged.

Constructive dismissal cases (when an employee resigns as a result of the employer’s conduct) are generally more difficult to pursue than actual dismissal cases (when an employee dismisses) as the circumstances must fit within one or more of three categories of constructive dismissal, the conduct of the employer must cause the resignation and the employer’s conduct must be of sufficient seriousness to make it foreseeable the employee would discontinue employment.

This case hinged on the below facts:

  • The salon’s owner-employee threw a hairbrush, which had hair dye on it, at the employee stating “this is the wrong f*cking brush”. This occurred while the employee was washing a customer’s hair.

  • The owner-operator stated, “I’m f*cking sick of teaching you so many times how to cut”.

  • The owner-operator said she would “top herself” if the employee left employment. This was said in response to the employee raising concerns about the toxic work environment.

  • The owner-operator regularly brought her domestic relationship issues into the workplace, including frequently arguing with her partner at the workplace and on one occasion the partner yelling and kicking the locked door to the business.

The Authority found the employer-owner/operator had bullied the employee and failed to provide a safe work environment. The employer had also failed to provide the employee with a written employment agreement, despite multiple requests, and failed to provide access to pay information upon request.

The employer’s failure to provide an employment agreement and access to pay information were held to be distinct disadvantage grievances. In finding that the employee had been unjustifiably dismissed, the Authority determined that the employer’s failure to provide an employment agreement, access to pay information and a safe and healthy work environment constituted a breach of the employment’s obligations which were sufficiently serious to make it foreseeable the employee would resign. The impact of the behaviours resulted in psychological harm to the employee (a depressive episode, panic attacks and loss of sleep, motivation and confidence) justifying a globalised award of $20,000 in compensation. As the unreasonable behaviours were repeated, and the employer failed to be responsive to the employee’s concerns, the Authority awarded a $4,000 penalty of which 80% is to be paid to the employee.

For employers the case highlights the importance of:

  1. Providing staff with a written employment agreement and retaining a copy. To not to do so is a breach of sections 64 and 65 of the Employment Relations Act 2000 and can form distinct unjustified disadvantage grievances.

  2. Providing staff with information about their pay (gross and net payments, any deductions and holidays/annual leave balance) upon request and keeping good payroll records. To not do so is a breach of s 130 of the Employment Relations Act 2000.

  3. Ensuring staff have a safe and healthy work environment. Although bringing domestic issues into the workplace, swearing at staff and throwing items at them are extraordinary circumstances, it is vital that all employers create work environments where staff feel comfortable bringing health and safety issues to the employer’s attention, systems and processes are in place for promptly addressing those concerns and all health and safety issues are taken seriously.

  4. Seeking legal advice – if you are an employer and a health and safety concern has been raised it is crucial that you understand your obligations.

For employees the case highlights the importance of:

  1. Keeping a good record of events and putting concerns in writing, particularly when you are experiencing unreasonable behaviours from a colleague (the employee kept a diary of the bullying behaviours and raised concerns with her employer via text message).

  2. Raising health and safety concerns and putting the employer on notice that ongoing employment is untenable unless circumstances change (the fact the employee raised her concerns with the employer, the employer subsequently failed to change her behaviours and the employee had put the employer on notice the employment was untenable before she resigned all appear to have been influential factors).

  3. Speaking to your doctor and loved ones about the impact (the employee’s husband was able to provide persuasive evidence of the severe impact on the employee as a result of the employer’s behaviours and loss of employment and similarly medical evidence was able to be provided to support).


BuckettLaw has extensive experience managing bullying cases from both an employer and employee perspective.  Contact us for a confidential discussion.

Note: BuckettLaw takes no responsibility for the consequences of any actions taken on the basis of our articles. Any views expressed or comments made in an article are the writers option only. The content in our articles does not constitute legal advice. If you need legal or expert advice you should obtain specific advice about your case or matter from a professional. For legal advice based on your individual situation please contact us to speak with one of our expert lawyers.

Enjoy a complimentary 15-minute phone call as a first-time offer.

Barbara Buckett

Barbara Buckett is a highly experienced senior employment lawyer with over 35 years of practice in New Zealand. She provides expert advice on all areas of employment law and has a proven track record of delivering excellent results for clients. Barbara has extensive experience in resolving workplace issues and is an experienced litigator. In her free time, she enjoys reading, traveling, working out, and fine wine and dining with friends.

Get new posts delivered to your inbox

Never miss anything!The BuckettLaw team will keep you up to date with employment law news & legal updates.

More Reading...

Free Phone Call With Our Expert Employment Lawyers

Consult our experts about your employment questions. Get a free 15 minute phone discussion.