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Accident Compensation Cases

Northern Distribution Union v Sherildee Holdings Ltd (EMC, 26/08/91)

Judgment Text

JUDGMENT OF THE COURT DELIVERED BY COLGAN, J 
Colgan, J, Messrs J A Butterworth and E I Poole
This is the judgment on appeal from a decision of a Mediator as chairperson of a personal grievance committee the other members of which had been unable to settle the grievance of Lisa Prince. The Mediator found that the privative provisions of s 27 of the Accident Compensation Act 1982 precluded Ms Prince from recovering compensation arising out of the allegedly disadvantageous actions of her former employer (the respondent) which had caused Ms Prince to suffer personal injury by accident. 
On appeal, the union's case was advanced upon on a wholly different basis to that which it had been before the grievance committee. One aspect of the new case advanced by the union was the subject of advance notice to the Court and to the respondent. The respondent, through its counsel, consented to that change which went to altering the legislative provisions relied upon for remedy. At the end of the appellant's opening submissions, however, Ms Monaghan for the respondent, submitted that her client was taken by surprise at the union's stated reliance upon events preceding Ms Prince's injury. Before the grievance committee, the accident which she suffered had been alleged to form the basis for her claimed loss. The case advanced by the union on appeal was, however, consistent with that set out in its original statement of grievance. Following a short adjournment during which Ms Monaghan took instructions, we began the hearing with the respondent prepared to answer the appeal both by way of evidence and submissions as Ms Harre had averted to in her opening. 
In essence, the union's case is that the respondent, as Ms Prince's employer at the relevant times, took actions in relation to her operation of machinery which placed the worker's employment, or one or more conditions thereof, at a disadvantage. It is contended that Ms Prince suffered distress, humiliation and embarrassment as a result of being required (or at least permitted) to operate unsafe machinery. Shortly after that disadvantage occurred, according to the union, Ms Prince suffered personal injury by accident as a result of so operating the respondent's machinery. It is contended that she thereafter continued to suffer those effects of the disadvantageous actions of the employer and an unspecified amount for compenstion is sought. 
We find the following relevant facts established to our satisfaction upon the balance of probabilities. The respondent company owns and operates the New World Supermarket at Titirangi. For the last several years at least the butchery department of this supermarket has used a mechanical meat mincing machine which, although having originally included a guard over the throat into which meat is introduced to the machine, was unguarded at all relevant times. The butchery manager at the supermarket was an experienced and appropriately qualified butcher, Peter Farrelly. In April 1990 Ms Prince was aged 17 years. She had then worked for another supermarket, Foodtown, as a meat packer for two years. In that job she was one of a large number of employees in the butchery department. There was a meat mincing machine of a similar sort to that at New World but which Ms Prince was aware contained a guard of the sort that had been long removed from the respondent's machine. Ms Prince did not operate the meat mincing machine at Foodtown. Within a matter of only days of beginning at New World, Titirangi, Ms Prince was expected to use the meat mincing machine. This was described to us as being, in effect, a mechanised, larger and more powerful version of the hand-operated, domestic meat mincers with which people born in the first six decades of this century are likely to have been familiar. It consists of a circular throat approximately 10 centimetres in diameter into which the meat or other material to be minced is introduced. A metal worm conveys the meat to a mechanical knife where it is minced and ejected. Ms Prince's duties involving the mincer were for the preparation of meatloaf ingredients and included the blending of meat, vegetables and spices. Although it was, from the beginning of her employment, one of Ms Prince's duties to clean the meat mincing machine, this was apparently undertaken after production had ceased and the machine was able to be partially dismantled with the electric power to it switched off. There was a wooden paddle able to be used by the machine's operator to assist in introducing meat into the throat of the machine and also, if the contents became overloaded or otherwise obstructed, to assist in clearing the machine. Mr Farrelly told us that compression of the meat in the machine resulted in a deterioration of its condition and, we infer, for this reason further compression of already overloaded meat in the machine was discouraged. Rather, we infer, the respondent and Mr Farrelly preferred either the removal of some of meat from the throat of the machine or, as a final remedy, the dismantling of the machine to enable the blockage to be removed. The existence and location of the wooden paddle were not drawn to Ms Prince's attention. The presence of a guard on the meat mincing machine not only precluded, as it was intended, a human hand or other similar item being drawn into the worm drive but necessitated the introduction of smaller pieces of meat and made the mincing process slower. Mr Farrelly candidly acknowledged that the guard had probably been removed from the machine to permit it to work more quickly and efficiently. 
We are satisfied that Ms Prince, as a result of her experience at Foodtown, was aware that the machine should have been guarded. We are also satisfied that she mentioned her concern to Mr Farrelly on 11 April, the date of her accident, but that after many years of accident-free operation of this and like machines, the butchery manager indicated that there was no need for a guard and that operations would continue with the machine as it was. Ms Prince was a 17-year old and very new employee. With the exception of one other person, only she and Mr Farrelly worked in the butchery department. Ms Prince and Mr Farrelly were on good terms and no doubt both were anxious to foster and maintain a harmonious working relationship. Although we accept that Ms Prince was concerned at the prospect of operating a machine which she believed should have contained a guard, she did not press the matter more strongly on 11 April. We are satisfied that she did not refuse to operate the machine, as we are that Mr Farrelly did not specifically direct her to do so in the face of a clear refusal on her part. Ms Prince may well have thought that a refusal to do this aspect of her work would disadvantage her employment, perhaps even put its continuation at risk. Likewise, we are satisfied, having seen and heard both Ms Prince and Mr Farrelly, that the latter intended that work should continue on the mincer despite Ms Prince's reservations about the machine not being guarded. 
As to the actual operation of the machine, we are satisfied that with the exception of a short period of training and supervision amounting to some 10 or 15 minutes in the first few days of her employment, Ms Prince was not sufficiently instructed in the operation of the mechanical mincer and in particular as to the potential dangers of introducing meat into the machine literally by hand, especially when it became overloaded and needed clearing. 
On the early afternoon of 11 April Ms Prince and Mr Farrelly were together using the mincing machine for the purpose of meatloaf preparation. Mr Farrelly was called away to a customer enquiry. The machine became blocked and Ms Prince placed her hand into the throat of the machine in an attempt to rectify this problem. Her right hand was drawn into the mechanised worm and as a result she lost four fingers and a substantial proportion of her right hand. 
The respondent was prosecuted in the District Court at Henderson in relation to this unfortunate incident. It pleaded guilty to three charges under the Machinery Act 1950. The more significant of these charges were that it failed to properly instruct and supervise Ms Prince in the operation of the mincer and that it operated an unsafe machine. In addition, the company was convicted of failing to give proper notice of the accident. It was ordered to pay fines of $3,200 together with Court costs and solicitor's fees. The District Court directed that a proportion of the fine be paid to Ms Prince and she received, by her own account, approximately $1,500. The respondent was prohibited from using the mechanical meat mincer until a guard was fitted and approved by the Department of Labour. The machine has subsequently continued to operate in this properly guarded fashion. 
With the assistance of the union, Ms Prince sought earnings related and lump sum compensation under the provisions of the Accident Compensation Act 1982. She did not return to work at the New World supermarket in Titirangi. Ms Prince received earnings related compensation for some months during which period she undertook some work experience including a short period at a Foodtown supermarket. She has not, however, obtained any employment since her accident and is now in receipt of an unemployment benefit. 
For the loss of her fingers and hand, Ms Prince was awarded the sum of $17,000 lump sum compensation. This is a figure which is calculated by reference to a scale under the Accident Compensation Act 1982. For pain and suffering and loss of enjoyment of life Ms Prince was awarded, by her account, some $3,900 as lump sum compensation under s 79 of the Accident Compensation Act 1982. Again by her account, no appeal against this award was taken. We note that the maximum award of such compensation is $10,000. Having seen and heard Ms Prince we must say that we are surprised that such a modest level of compensation was decided upon by the Corporation and that this award was not appealed. It is not our function, however, to assess, determine or review such awards. This view arises solely from the evidence which we heard and saw including the evidence which was placed before the Corporation in support of her claim for lump sum compensation. 
It needs hardly be said that Ms Prince suffered and continues to suffer as a result of this tragic incident. It is entirely understandable that she should seek further compensation in all of the circumstances and that she does so against the respondent, her former employer. Two elements of the case which we heard, although strictly irrelevant to the proceedings in this Court, may help to explain Ms Prince's motivation. The first was her complaint that the manager of the supermarket (not Mr Farrelly with whom she has remained on good terms) failed to visit her in hospital after the incident. We do not know what steps the manager and governing director of the respondent company took following the accident nor the reasons that he might have had for not showing the concern which Ms Prince was still clearly upset to think that he had not. The second matter was the company's continued denial of responsibility for Ms Prince's action as illustrated by the managing director's grudging acknowledgment that it had pleaded guilty to the District Court charges only on the strong advice of its solicitor. We can only infer that the respondent still maintains that it adequately trained and supervised Ms Prince and that it did not operate unsafe machinery. We note that this was not the view of the butchery manager, Mr Farrelly. 
Ms Prince said this concerning the events which followed the discussion in which she referred to the absence of a guard and Mr Farrelly dismissed the significance of this and encouraged her to continue to operate the machine: 
“ … I was worried about an accident happening. In fact I was freaking out about that possibility. I felt really angry before the accident even happened that I was being told to use the mincer without the guard. I was also fearful that I would lose my job if I did not use the mincer. 
… I was very angry and upset at the time about having to use the mincer without a guard and I made my objections known to Mr Farrelly. I am still very angry about the employer's failure to guard the machine properly. At the time I was fearing for my job which I could have lost if I had not used the mincer. …  ”
As our foregoing summary of the facts discloses, we have not found in favour of the appellant in respect of all of those contentions. Nevertheless, we are not satisfied that the effects of Ms Prince's continuing to use the mincer following her concern that it was unguarded amounted to “humiliation, loss of dignity or injury to her feelings” which are the effects for which the appellant claims compensation pursuant to s 227(c)(i) of the Labour Relations Act 1987. 
We understand that as a result of the significantly different and more narrow approach to the case taken by the union in this Court, the provisions of s 27 of the Accident Compensation Act 1982 are now of relatively little importance and certainly of significantly less than they were before the grievance committee. Section 27 provides materially as follows: 
27. Act to be a code - 
(1)
Subject to this section, where any person suffers personal injury by accident in New Zealand or dies as a result of personal injury so suffered, or where any person suffers outside New Zealand personal injury by accident in respect of which he has cover under this Act or dies as a result of personal injury so suffered, no proceedings for damages arising directly or indirectly out of the injury or death shall be brought in any Court in New Zealand independently of this Act, whether by that person or any other person, and whether under any rule of law or any enactment. 
Ms Harre, counsel for the appellant, expressly disavowed any reliance upon such potentially interesting questions as whether the proceedings for compensation for disadvantage of employment under the Labour Relations Act were for “damages” and whether such claims commenced by a statutory mandatory process of discussion followed by committee meeting, as a result of which this Court came to be seized of the matters only on appeal, were proceedings “brought” in a “Court” according to the section. Because these matters were not advanced and argument not addressed to them, we need not be concerned with them further. Rather, as counsel for the respondent tacitly acknowledged, the appellant's case is now so constructed that the disadvantage for which compensation is claimed arises out of an action of the employer which preceeded and indeed specifically excludes the worker's personal injury by accident although the consequences for which compensation is claimed are said to have remained following the injury. In this sense, we accept, the claim does not arise directly or indirectly from the event for which Ms Prince was compensated, the accident to her hand. 
The union contends that the “action” of the employer by which Ms Prince was disadvantaged in her employment (s 210(1) (b) of the Labour Relations Act 1987) was the company's breach of its implied obligations under its contract of service with Ms Prince to provide safe conditions of work. It may also be said, we find, that it was an implied term of her contract of employment that the respondent would act in compliance with such relevant statutory provisions as those of the Machinery Act 1950. We are satisfied that the respondent was in breach of those terms of its employment contract with Ms Prince by requiring her to use the unguarded mechanical meat mincer and to do so without having had proper sufficient training and/or supervision. Such a duty on the employer extends, we think, to simply permitting an employee to dangerously operate such plant. In any event we are satisfied that Ms Prince was operating the machinery as a result of an instruction to do so by her employer's representative. We also accept the appellant's submission that these actions of the employer were unjustified. It is almost trite to say that an employer cannot act justifiably by requiring, or permitting, to be done what the respondent did in relation to Ms Prince's use of the mechanical meat mincing machine on 11 April 1990. We accept also that the respondent's actions disadvantaged Ms Prince in her employment in that they placed her at risk of serious injury as subsequently occurred. We therefore find that Ms Prince has a personal grievance in terms of s 210(1)(b) of the Labour Relations Act 1987. 
Has this personal grievance brought about effects which should be compensated for? It was the union's case that compensation was not sought for consequences, whether direct or indirect, of Ms Prince's injury on 11 April 1990. Such effects of the respondent's disadvantageous actions appear to us to fall into two categories. The first is the effect upon Ms Prince during the relatively short period from the time when she claims to have become embarrassed, humiliated and distressed as a result of her employer's expectation that she operate an unsafe machine until she was injured. The second area in which the union seeks to persuade us of those compensatable effects is a continuation of the first but significantly marked in time as having commenced following her personal injury by accident. 
It is appropriate here to note that Ms Prince did not return to work at the respondent's supermarket following her injury. Although the issue was not specifically addressed by the parties at the hearing, we think that the contract of employment was frustrated by the fact and nature of Ms Prince's injury on 11 April 1990. Although the evidence is that she subsequently attempted some work experience at a Foodtown supermarket, this was unsuccessful. From the evidence of the nature of her job and the duties which were expected of her at New World Titirangi, we are satisfied that it would not have been possible for Ms Prince to have resumed work with the respondent as a meat packer even if she had wished to do so. It follows that the contract of employment between Ms Prince and the respondent was terminated by the accident suffered by her a matter only of perhaps an hour or two at most after the disadvantage to which she was put. 
As we have already indicated, having seen and heard Ms Prince and Mr Farrelly, the only people whom the evidence establishes were involved in the relevant events of that day, we are satisfied that such disadvantage as to which Ms Prince was put in her employment by the respondent did not cause her humiliation or loss of dignity. Even at best from the appellant's point of view, such injuries to her feelings as may have been caused to Ms Prince by the respondent's expectation that she use dangerous machinery was so minimal, if it existed at all, prior to the accident with the mechanical mincing machine that it cannot and should not be the subject of compensation. 
There is no doubt at all that the accident to Ms Prince's hand and its effects caused her distress, embarrassment, humiliation, loss of dignity and injured feelings. Such consequences are, of course, exclusively compensatable under the Accident Compensation Act 1982. That is the effect of the privative provisions of s 27 of that legislation. Even if, as the plaintiff asserted, Ms Prince continued to suffer embarrassment, humiliation and distress arising out of her employer's disadvantageous action in requiring her to operate the mincing machine, we find that such consequences were completely overwhelmed by the accident and its effects from the time of its occurrence. It is difficult, if not impossible, to separate into mutually exclusive categories the distress and injury to her feelings which Ms Prince may have continued to have felt arising from the respondent's earlier instruction or expectation that she operate an unsafe machine and the distress, humiliation and embarrassment which she suffered in and as a result of the accident which soon after occurred. Even if such distress and injury to feelings continued following the accident, we consider that it was overwhelmed by and subsumed under the loss of her hand and its consequences. 
Even if it were possible to identify and, for the purposes of compensation quantify, that distress beyond the time of the accident, s 210(1)(b) restricts the disadvantage which can be compensated for to Ms Prince's employment. When one reads all of the sections of the Labour Relations Act 1987 relating to personal grievances and the compensation which may be awarded where they are found to exist, we take the view that such disadvantage as may amount to a personal grievance under s 210(1)(b) is restricted to the employment relationship between the parties and not to some potential future employment relationship as may be the case, for example, where the grievance is a dismissal under s 210(1)(a). In this sense, therefore, the consequences of the respondent's unjustified action must cease, so far as they make the company liable for compensation, at the conclusion of the employment contract, the occurence of the accident which frustrated it and brought about its termination. 
In all of the foregoing circumstances we find that although Ms Prince had a personal grievance such is not compensatable in the way that the union seeks on her behalf. 
Although Ms Monaghan, counsel for the respondent, submitted that it should be entitled to an award of costs, Ms Harre for the union, advanced the proposition that irrespective of the result, this is a case of such a nature that no award of costs is warranted. We find that to be an appropriate submission and consider that the ends of justice would best be served by each party meeting its own costs of these proceedings. 

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