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Accident Compensation Cases

Scissor Platforms (1997) Ltd v Brien (EMC, 22/10/99)

Judgment Text

COLGAN J (reserved):
Scissor Platforms (1997) Ltd (“SPL97”) appeals against the decision of the Employment Tribunal given on 26 April 1999 finding that it had dismissed Les Brien unjustifiably and awarding the respondent compensation of $12,240 for lost remuneration and $7,400 under s 40(1)(c)(i) Employment Contracts Act 1991. The Tribunal subsequently awarded costs of $2,400 in Mr Brien's favour. 
In an earlier decision issued on 19 August last (AC64/99) I dealt with a number of interlocutory matters including allowing SPL97 leave to introduce new issues, explanations or facts on the appeal. I was not greatly assisted by the appellant's additional evidence except in one respect and this was accepted by Mr Brien in any event. This additional evidence was given at the start of the hearing of the appeal. To the extent that such new evidence has assisted me in determining it, I propose to incorporate my findings in the following narrative of the relevant events before considering the appeal. 
For all his working life of about 45 years Mr Brien had been a mechanic. In 1993 he began work for the appellant's predecessor, Scissor Platforms Ltd (“SPL”), as a mechanic/operator. That company operated, as does its successor the appellant, a fleet of vehicles equipped with different means of gaining access to high or other awkwardly located places. These vehicles are hired (with or without a skilled operator) and, of course, the fleet requires ongoing maintenance. Mr Brien's job was both to maintain the vehicles in the fleet and to operate the elevated platforms on them when they were hired out. 
SPL was sold to the present appellant in 1997. The new company (“SPL97”) took over the operations of the predecessor and there was new management in the form of the owners of the new company. David Heilbron, who ran the predecessor company, stayed on to work for the appellant for a period to provide continuity and advice. Mr Brien remained on doing the same job, albeit with a new employer. Although Mr Brien's hourly rate of pay continued under the new employer, this was increased about one month after SPL97 took over. It does not appear that SPL97 reduced any of its employment arrangements to writing, even the fundamental aspects of its contracts with employees. That absence of any written records of dealings between the parties characterised the events with which this case is concerned. 
One of the appellant's considerations in operating the new business was to assess the performance of existing staff including Mr Brien. Mr Heilbron's input was important in this regard. SPL97 purported to require that there be a 2-month trial period of employment for all staff although Mr Brien appeared not to have known about, let alone agreed to, this stipulation. As the Tribunal found, it is not material to this case because Mr Brien's dismissal took place after the expiry of that period in any event. The Tribunal noted, however, that this illustrated what had occurred between the vendor and purchaser of the enterprise but which had not involved others vitally affected including employees. That failure to communicate between employer and employee was significant to the Tribunal's decision about dismissal. 
Mr Brien's case in the Tribunal and which the adjudicator accepted, was that on Sunday 2 November 1997 he suffered personal injury by accident in the course of his work. On that day, he was operating a “cherry picker” vehicle contracted to Telecom at a cellular telephone tower site in Mt Eden. Mr Brien jumped from the cab of the vehicle on uneven ground and, he believed, twisted his ankle. Mr Brien remained working on that day and indeed for several days afterwards but the pain in and swelling of his ankle became such that he visited his doctor and learned that he had fractured it. Although he worked for several days after the diagnosis of fracture and the encasement of his ankle in plaster and wished to and attempted to return to work before the plaster was removed, he was absent from work in receipt of accident compensation payments from about 13 November. Mr Brien planned to return to work on 2 December 1997. On the evening of 1 December 1997 the appellant's Rick van Swet summarily dismissed Mr Brien in the course of a brief telephone call to him at his home. 
Mr and Mrs van Swet later suspected that Mr Brien suffered his broken ankle elsewhere than at work on 2 November. They base their suspicions upon an incorrect date entered by Mr Brien on his initial ACC claim form at his doctor's offices on 6 November and what another SPL97 employee told them Mr Brien had said were his plans to work on a shed that weekend. 
Having had the benefit of evidence about these matters, I am satisfied, on the balance of probabilities, that Mr Brien did suffer the injury to his ankle as he described when he jumped from the cab of a truck onto uneven ground while he was at work on 2 November. I accept that when, on 6 November, he recorded on the first ACC claim form that the accident had occurred on 1 November, this was a mistake made 4 days after the event. The initial prognosis by Mr Brien of his injury (a twisted or sprained ankle) is consistent with his continuing to work on that day and on subsequent days. It follows that it is quite explicable that Mr Brien may have, after a short period, continued to work although with progressively observable discomfort but that the fact of or results of the injury may not have been completely apparent to others on 2 November. Mr Brien's evidence contradicting the van Swets' assertion that he injured himself while installing roofing iron on a shed at his property discounts comprehensively the van Swets' suggested circumstances of the injury occurring. It is very clear that Mr Brien neither roofed his shed on 2 November nor, of course, suffered his injury doing so. I accept that this job was done by someone else on another day much earlier than these events. 
Although Mr and Mrs Brien were wrong when they gave evidence to the Tribunal to the effect that Mr Brien's accident compensation payments ceased at about the time of his dismissal, I do not think that this taints the veracity of their other evidence which the Tribunal accepted. This was an error which was not pursued in cross-examination of them. Had it been, I am satisfied that the Briens would have acknowledged that error and would not have persisted in an inaccuracy. 
The company's justification for its dismissal of Mr Brien was that his work performance had begun to deteriorate and that he made a number of errors which both incurred financial cost to it and, it said, potentially endangered safety. The company's case was that it had drawn these matters to Mr Brien's attention and had warned him of the consequences of further poor performance and that his employment was at risk. The Tribunal did not accept, as a matter of fact, that such advice and warnings had taken place. It considered that although Mr Heilbron and Mr van Swet had spoken with Mr Brien about some mistakes that the respondent had made and had counselled him, these discussions did not amount to the advice and warnings asserted by the employer. The Tribunal accepted evidence of the informality of his discussions with Mr Brien about these matters and accepted as reasonable the respondent's surprise at subsequently being told that he had been formally disciplined and warned on those occasions. 
Turning to what the Tribunal described as a crucial meeting between Messrs Brien and van Swet on 11 November, it found that Mr van Swet engaged Mr Brien in lengthy conversation at the end of the respondent's working day and at a time when he was suffering from a broken ankle and, the Tribunal said, even by Mr van Swet's own account, was in “excrutiating pain”. This “meeting” took place whilst Mr Brien stood beside his own motor vehicle ready to go home. Mr Brien described it as an amiable chat, the first real occasion on which he had been able to do so with his new employer. Mr van Swet, by contrast, said that it was a meeting about Mr Brien's work performance at the end of which he gave the respondent a formal and final warning. The Tribunal found that although Mr van Swet could not say what mistakes made by Mr Brien he discussed with him, he terminated the meeting by indicating to him that a failure to make necessary improvements in his work or the subsequent discovery of any other mistakes would have adverse consequences for his continued employment. 
The Tribunal found: 
“On balance, the respondent has not satisfied me that on 11 November any warning, let alone a final warning, was given to Mr Brien. Even if I was satisfied that words capable of being construed as a warning were said, such a warning would in my view be unjustified given the unfair and inappropriate environment. It is noted that Mr Brien received no prior notice of this ‘meeting’ and as such was deprived of his right to elect representation and deprived of an opportunity to consider any allegations before responding. ”
(p 7)
Mr Brien had first visited his doctor on 6 November at which time the fracture to his ankle was diagnosed. He continued working, his ankle in plaster, until 13 November when, at his doctor's direction, he took leave. He began to receive earnings related accident compensation payments. 
The employer's case in the Tribunal was that over the period of about a fortnight after 11 November it became aware of some mistakes that it believed Mr Brien had made. The Tribunal found that in the last days of November Mr van Swet decided to dismiss Mr Brien. He did so without any further discussion with the respondent after 11 November. The Tribunal found that this decision was “predetermined, without proper foundation and poorly implemented”
As to the events of the evening of Monday 1 December the Tribunal's decision contains what is ultimately a materially undisputed account of these events. At about 7 pm Mr van Swet, who was at the company's office, telephoned Mr Brien who was at home. Mr van Swet asked when Mr Brien's plaster cast was due to come off. Mr Brien replied that this would not be until 5 December but that he would be back at work on the following day. Mr van Swet told Mr Brien not to bother to come back to work again. This was SPL97's summary dismissal of Mr Brien. 
The Tribunal, having seen and heard witnesses to these telephone discussions including Mr and Mrs Brien and Mr van Swet, rejected Mr van Swet's account of what occurred, preferring Mr Brien's, where these were in conflict. Even by Mr van Swet's account, the employer announced its dismissal of Mr Brien almost immediately. Mr van Swet said that he asked Mr Brien whether he could come to the latter's home to meet with him. Mr van Swet said that Mr Brien asked about the nature of the intended meeting whereupon Mr van Swet told Mr Brien of his summary dismissal. Mr van Swet's account was that Mr Brien then said that he did not wish Mr van Swet to come to his home. The Tribunal preferred Mr Brien's account of the conversation confirmed in part by Mrs Brien's evidence. Nothing said in support of the appeal has persuaded me that the Tribunal's assessment of what happened on this occasion was wrong. Even if Mr van Swet's account of the conversation had been accepted, it could not be said that the dismissal was justified. 
There was strong evidence, which the Tribunal accepted, of the effects of the sudden and unexpected summary dismissal of Mr Brien on him and, indirectly, on his family. Mr van Swet, in a letter to Mr Brien shortly after these events, set out the reasons for his dismissal including the following: 
“It was not a decision I came to easily, as while your efforts operating the Cherry Pickers were appreciated and I never felt we had a personality clash, I could no longer accept your sub-standard performance in the workshop. 
The business we are in is totally reliant on a perfect safety record. I could never forgive myself if someone was injured using our machines, and with the on-going mistakes you were making in the workshop, it was only a matter of time before an accident would occur. With human life at stake, this was not a risk I was prepared to take. 
I am sorry it came to this conclusion, but as there was no improvement after several warnings, I had no alternative. I am sure you can appreciate the standard of safety I am committed to maintaining. ”
The Tribunal did not accept that Mr van Swet had given Mr Brien “several warnings”: even on the company's own evidence, this would have been one, on 11 November, which the Tribunal did not accept constituted more than an informal discussion about problems at work. 
The Tribunal found that SPL97 had not discharged the onus of establishing that its summary dismissal of Mr Brien was justified, that is a fair and reasonable action of an employer. It noted that it may have been open to SPL97 to have justifiably dismissed Mr Brien for lacking the requisite skills or willingness to perform the job for which he was employed. It said, however, in these circumstances, that the employer was obliged to sufficiently convey to the employee the nature of its concerns, the time-frame within which they were to be rectified, what would be the consequences if they were not addressed, and with a sufficient degree of formality and clarity to ensure that the warning was understood to be such. 
The Tribunal found both that Mr Brien's “misconduct” was not sufficiently serious to warrant summary dismissal and that the way in which SPL97 went about dismissing Mr Brien was so unfair that it was unjustified. The Tribunal rejected Mr Burley's submissions for SPL97 that Mr Brien's conduct “destroyed the basic confidence and trust” between employer and employee. The Tribunal accepted that although Mr Brien may not have been working “up to standard”, trust and confidence was destroyed, if by anyone, by Mr van Swet. The Tribunal found that the conduct complained of by the employer did not “deeply [impair] … [or was not] destructive of the trust of that basic confidence or trust that is an essential of the employment relationship”: Northern Distribution Union v BP Oil NZ Ltd [1992] 3 ERNZ 483; (1992) 4 NZELC 96,601 (CA). The Tribunal said that the circumstances were such that a reasonable and fair employer would not have summarily dismissed Mr Brien as SPL97 did. 
Turning to remedies, the Tribunal likewise rejected Mr Burley's submission for the employer that even if dismissal had been unjustified, Mr Brien had so contributed to the circumstances giving rise to it that he should be disqualified entirely from any remedy. Contrary to that, the Tribunal found that Mr Brien's actions did not contribute the situation giving rise to his personal grievance: s 40(2) Employment Contracts Act 1991. 
The Tribunal found that Mr Brien was unemployed for a period of 18 weeks after his dismissal until he secured new employment in April 1998. It referred to the evidence given at the hearing by Mrs van Swet that Mr Brien continued to receive compensation payments until January 1998 but declined to admit this evidence. In any event, the Tribunal said that, following James and Co Ltd v Hughes [1995] 2 ERNZ 432, any accident compensation received was not to form the basis of a deduction from compensatory awards. The Tribunal found that Mr Brien actively sought alternative employment and fulfilled his obligations to mitigate his losses. The Tribunal awarded reimbursement compensation for the full 18 weeks that Mr Brien was without remuneration, that was the sum of $12,240. 
As to distress compensation, the Tribunal accepted Mr Brien's case that he was deeply affected by his dismissal. After a long and successful working life, he was summarily “sacked” for the first time. The Tribunal was clearly impressed by the evidence called for Mr Brien of the degradation and humiliation that he suffered. The Tribunal described the consequences as including “real anguish” and awarded $7,400. 
It is now common ground that Mr Brien continued to receive accident compensation payments from the date of his dismissal on 2 December 1997 until 26 January 1998. There is some question, however, that he received at least some of these payments at the lower rate of 80 percent of an average or notional wage and not at the higher rate of 80 percent of his actual pre-accident earnings rate as a result of SPL97's failure or refusal to complete earnings documentation for accident compensation purposes. That is not decisive for remedies purposes, however, because, as I will subsequently set out, the accident insurance payments that Mr Brien received after his dismissal are not to be deducted in assessing what the employer should be required to contribute to his losses. 
Mr Brien was ready and able to return to work on 5 December, although still suffering the effects of his injury. Having been dismissed on 1 December, however, it is only logical that his broken ankle and recovery from this precluded him from immediately obtaining alternative employment. Whilst he may have continued to work for SPL97 in that injured state, it is improbable that any other employer would have taken him on for this sort of work until he had recovered. 
SPL97's challenge to the Tribunal's decision is comprehensive. Mr Burley's summary of argument runs to 35 pp. It has required me to read fully the transcript of evidence at first instance. The grounds of appeal are, however, encapsulated in three broad submissions. First, counsel submitted that the Tribunal erred both factually and in law in concluding that SPL97 did not have cause to summarily dismiss Mr Brien. In support of that contention counsel submitted that the evidence of Messrs van Swet, Heilbron and even of Mr Brien himself established that he did engage in behaviour that destroyed the basic confidence and trust between the parties in that he failed to adequately perform specific responsibilities warranting his dismissal. Mr Burley submitted that SPL97 concluded genuinely that Mr Brien had so misconducted himself following a complete evaluation of the information before it. 
Second, SPL97 challenges the Tribunal's conclusion that the decision to dismiss was arrived at unfairly. More particularly, counsel points to evidence showing, Mr Burley said, that Mr Brien had been given “at least two warnings”, one of which was a final warning on 11 November including that he would be dismissed if the employer discovered further faults. Mr Burley submits that such were discovered after the final warning and, accordingly, SPL97 was justified in reasonably believing that a serious breach of confidence and trust had occurred and that it was justified in summarily dismissing. Counsel submitted that Mr Brien was given “every opportunity” to explain the various performance concerns raised with him up to and including 11 November but was not able to do so. Mr Burley described the employer's subsequent discovery of “seriously faulty workmanship” as a breach of trust so serious and of such a nature to warrant a fair and reasonable employer deciding that there should be summary dismissal. 
Third, the appellant attacks the Tribunal's orders for compensation saying that they were excessive, having particular regard to what is said to have been Mr Brien's employment of “approximately eight months”. That matter can be dealt with quite shortly. In a legalistic sense, it can be said that SPL97 employed Mr Brien for that period. The reality was, however, that he had been employed by SPL doing the same work on the same fleet of vehicles for a much longer period. He was not a new employee when the van Swets purchased the business. Rather, they were a new employer. His length of service was acknowledged. Just as SPL97 would no doubt have wished, in its trading activities, to have presented itself as a long established, well known and reliable business experience, so too is the reality that Mr Brien had not merely been working as he did since SPL97 purchased the business. As a consideration of equity and good conscience for the purpose of assessing the consequences of unjustified summary dismissal, it cannot be said that Mr Brien was an employee of the business of only 8 months. 
On this third aspect of the appeal, against remedies, Mr Burley has submitted that the compensation under s 40(1)(c)(i) of $7,400 was not only manifestly excessive in the circumstances of the case but “out of kilter” with awards generally made in the Tribunal and Court. 
Next, counsel submitted, the Tribunal was in error to have found that Mr Brien did not contribute to the situation giving rise to his personal grievance in terms of ss 40(2) and 41(3), citing the specific instances of poor performance identified by the employer. Challenged also is the reimbursement of lost wages of $12,240 ordered by the Tribunal. Finally, Mr Burley says that the Tribunal erred in law by failing to give reasons for an apparent exercise of discretion under s 41(2) by awarding reimbursement equivalent to more than 3 months' remuneration. 
As I indicated at the conclusion of Mr Burley's long and comprehensive submissions on behalf of the appellant, nothing said on its behalf persuaded me that the Employment Tribunal's decision that Mr Brien's dismissal was unjustified, was wrong. Although Mr Burley criticised the Tribunal's methodology in reaching that conclusion, it was both conventional and appropriate for this case. Mr Burley submitted that the Tribunal ought to have made strong and stark findings of credibility in each instance where the accounts of witnesses differed and ought to have given comprehensive reasons for doing so. Although in some instances the Tribunal did do just that, in others it preferred to say that even if it had accepted the case for SPL97, dismissal would still have been unjustified. That is an appropriate way of addressing matters where the onus of establishing justification for dismissal falls on the employer. It is a methodology that justifiably avoids making strong and critical findings about the veracity of witnesses' evidence where it is unnecessary to do so. 
Even if, as witnesses for SPL97 asserted but I, like the Tribunal, find probably did not occur, Mr van Swet had justifiably and fairly warned Mr Brien on 11 November that if there were further instances of unsatisfactory performance of his job by him, he would be dismissed, the following events are irrefutable. Mr van Swet said, on 11 November, that Mr Brien would be given an opportunity to improve his performance. Mr Brien only worked for a further 2 days before the pain from his broken ankle became such that he was forced to go on leave. The promised opportunity for him to establish an improvement did not occur. It is also irrefutable that whatever the truth or otherwise of what Mr van Swet said were further instances of poor performance of work, no opportunity was given to Mr Brien to know of these, let alone to respond by contradiction or explanation before he was summarily dismissed by telephone on 1 December. Mr Burley was driven to argue that long established law of fundamental fairness leading to decisions to summarily dismiss would have to be completely ignored or set aside if the employer was to succeed on appeal in having the summary dismissal found justifiable in these circumstances. I am satisfied that this was such an unattainable result on appeal that it ought not responsibly to have been pursued. Nothing said has persuaded me that the Tribunal was wrong to have found Mr Brien's dismissal unjustifiable. Indeed upon my review of the evidence it was clearly right to have so concluded. 
I therefore confirm the Tribunal's finding of unjustified dismissal and now turn to the employer's challenges to remedies. 
The more meritorious arguments advanced by the appellant relate to the remedies granted by the Tribunal and to points such as whether the adjudicator did have and ought to have had regard to any reduction of remedies by reason of contributory fault, whether receipt of accident compensation payments after the unjustified dismissal should detract from compensation for reimbursement of moneys lost and amount of compensation ordered. 
As to the effect of earnings related accident compensation payments made to the grievant after dismissal, the starting point is s 40(1)(a) Employment Contracts Act 1991. Reimbursement is said to be 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”. Here, the evidence is that had Mr Brien not been summarily dismissed on 1 December, he would have returned to work on 2 December. His prospective return was the catalyst for his summary dismissal when that occurred. Had Mr Brien returned to work on 2 December, his earnings related compensation would have ceased. Because he was summarily dismissed, however, and presumably because he faced problems with finding alternative employment as a mechanical operator/mechanic with a fractured ankle in plaster and shortly before Christmas, he elected to remain in receipt of earnings related compensation. 
The Accident Rehabilitation and Compensation Insurance Act 1992 which was in force at the relevant time was, by its Long Title, an Act “to establish an insurance-based scheme to … compensate in an equitable and financially affordable manner those persons who suffer personal injury.”
Mr Burley for the appellant referred me to ss 44 and 45 of the Act. Section 44 applied to Mr Brien's circumstances deeming him to continue to be an employee for the purpose of earnings related compensation even after the termination of his employment. Section 45 is not relevant to the determination of the case. 
In James and Co Ltd v Hughes [1995] 2 ERNZ 432 this Court considered the effect of an unemployment benefit in assessing lost remuneration. It distinguished statutory compensation under s 40 Employment Contracts Act from damages. That was important because in Horsburgh v NZ Meat Processors IUOW (1988) ERNZ Sel Cas 193; [1988] 1 NZLR 698 (CA) the Court of Appeal held that in assessing damages for loss of earnings as a result of a wrongful dismissal, an unemployment benefit which the employee had received as an entitlement had to be deducted from the notional figure of loss. The Court of Appeal had, in Horsburgh, proceeded on the assumption that the benefit was not repayable to the State. By contrast, however, in Hughes this Court found that liability for repayment of a benefit was a question to be determined between the individual beneficiary and the government department concerned. Liability to pay wages, or compensation for wages, however, rested with the employer. Similar reasoning was employed by the Court in Davidson v Christchurch CC [1995] 1 ERNZ 172. Significant in Goddard CJ's analysis of the reasons for not requiring credit to be given for an unemployment benefit received since dismissal was that such a benefit is provided by the taxpayer for the relief of unemployed persons according to their individual needs and is not intended to benefit employers which have unjustifiably dismissed people who subsequently obtain the benefit of such payments. Rather, the Court considered, any refund should go back to the public purse but that is a matter to be determined between the beneficiary and the State. 
The same principles as for non-deduction from remuneration compensation of unemployment benefits apply to earnings related accident compensation insurance payments. Indeed, the principles apply even more strongly because of the insurance nature of the payments. The rule is the same at common law where damages are awarded: see Chitty on Contracts (27th ed), London, Sweet & Maxwell, 1994, para 26-056, p [1247], and, by analogy with pension entitlements, Hopkins v Norcross plc [1993] 1 All ER 565. Avoidance of double recovery is a matter to be dealt with between insurer and insured. The Tribunal was correct not to have deducted earnings related compensation insurance payments from compensation for lost remuneration. 
As to the amount of distress compensation, SPL97 submits that the Tribunal's award of $7,400 was excessive. I was not particularly assisted by tables of average awards made by the Employment Tribunal in all cases. Even without them the Court is well aware of the range of amounts of compensatory orders and of course of recent cautions from the Court of Appeal about both excessively high awards and the need to compensate for the consequences of actionable wrongs. Seven thousand, four hundred dollars is at the upper end of the range. In justification for it, however, there was substantial evidence given to the Tribunal of the cruel effects upon Mr Brien of his unjustified summary dismissal as he was about to return to work, although still injured. Mr Brien had never before been “sacked” as he put it. He was clearly an employee who was prepared to go the extra mile in a business that depended upon employee flexibility. He was proud of his employer's products and services and was loyal. Those attributes were illustrated by his preparedness to continue working after injuring himself. Even when, several days later, he ascertained that his ankle was broken, he continued to go to work in plaster although he would have been entitled to have taken leave on accident compensation. Mr Brien minimised the period of his absence and, as already noted, was about to return to work, although still in plaster, when he was dismissed. The effects on him of sudden summary dismissal of such an employee were thereby the more severe. 

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