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Accident Compensation Cases

Robinson v Pacific Seals New Zealand Ltd (EMC, 09/07/14)

Judgment Text

Cur Adv Vult
Judge Inglis
Introduction 
[1]
Mr Robinson was seriously injured when a car drove through a large glass window in his workplace, through part of the building and came to rest at his work station in June 2011. He was hospitalised for some months. His recovery is not yet complete. He was, and remains, on accident compensation. 
[2]
Mr Robinson's employer, Pacific Seals New Zealand Ltd (Pacific Seals), is a small engineering enterprise which operates out of an office and warehouse in Petone. Following the incident, Pacific Seals topped up Mr Robinson's accident compensation payments for nearly a year (at a cost of around $120.00 per week) and took a number of other steps to support him during this time, including assisting with some immediate financial concerns. The Managing Director, Mr Wilton, also visited Mr Robinson on a number of occasions, both while he was in hospital and later at his home. Eleven months after the incident, Mr Wilton terminated Mr Robinson's employment. 
[3]
Mr Robinson pursued a personal grievance, alleging that his dismissal was unjustified and that he had been unjustifiably disadvantaged in his employment. The Employment Relations Authority (the Authority) upheld his grievance,1
| X |Footnote: 1
Robinson v Pacific Seals (NZ) Ltd [2013] NZERA Wellington 101Has Litigation History which is not known to be negative[Blue]  [Authority determination]. 
and awarded a global sum of $5,000 by way of compensation for humiliation, loss of dignity, and injury to feelings under s 123(1)(c)(i) of the Employment Relations Act 2000 (the Act).2
| X |Footnote: 2
At [86]. 
Mr Robinson was dissatisfied with that outcome and has challenged the Authority's determination. The essence of the challenge is that the award of compensation ought to be increased, including having regard to an alleged breach of the defendant's health and safety obligations under the Health and Safety in Employment Act 1992 (the HSE Act). 
[4]
The challenge is pursued on a non-de novo basis. That means that the Authority's findings of unjustified dismissal and disadvantage cannot be disturbed. As I have said, the focus of the challenge is on the quantum of compensation payable. That issue requires an analysis of the facts and the evidence that was before the Court on the challenge, in accordance with earlier directions made by Judge Couch relating to its scope and nature.3
| X |Footnote: 3
Robinson v Pacific Seals New Zealand Ltd WRC20/13, 6 December 2013
 
The facts 
[5]
Pacific Seals leases a building. It has large glass windows on the street frontage, which lies at the base of a “T” intersection directly opposite a residential street. I accept Mr Wilton's evidence, which was supported by the evidence of Mr Petrie (a road safety auditor and traffic engineer with many years' experience), that the street has a low traffic volume passing along it. There is a give way sign at the intersection. A footpath runs alongside the front of the premises, together with a concrete curb and a car parking area which is approximately six metres wide. 
[6]
On 22 June 2011, a motorist travelling up to the intersection suffered a medical seizure. Her vehicle crossed the intersection, mounted the curb, travelled through the carpark area in front of the building, drove through the glass frontage, through a counter and a partition wall and finally came to rest at a concrete wall near Mr Robinson's desk. He sustained significant injuries to his legs as a result of the accident. The motorist also suffered serious injury. In evidence the witnesses agreed that the total distance from the curb to the work stations in the office is 18 metres. 
[7]
No such event had occurred previously. The defendant's witnesses described it as a freak, unforeseen occurrence. Mr Robinson took a different view. He gave evidence that he had raised concerns about the glass frontage being a potential health and safety hazard with Mr Wilton on previous occasions. This was disputed by Mr Wilton. He could only recall one comment that Mr Robinson had made about the glass windows, that was casual and made in passing. The Office Manager, Mr Wilkin, gave evidence that Mr Robinson had never raised any concerns with him, and nor was he aware of Mr Robinson raising any concerns with anyone else. He described Mr Robinson as being vocal in his opinions and said that he did not hesitate in raising issues of concern with him as Office Manager. Mr Wilkin expressed the view that if Mr Robinson had raised a concern with Mr Wilton it is likely that it would have been drawn to his attention. 
[8]
I am satisfied that if Mr Robinson were to have had a concern about the glass frontage he would have had no hesitation in raising it with management. While I accept that he had previously made reference to the glass frontage in casual conversation, that was in the nature of a throw away comment. It is apparent that no one within the office had any particular concerns about the glass frontage, including Mr Robinson, until after the incident had occurred. 
[9]
I am fortified in that view by the fact that Mr Robinson did not raise any issue about his employer ignoring his concerns until after his dismissal, some 12 months later. I find it inherently unlikely that if Mr Robinson had raised health and safety concerns about the glass frontage with his employer as he says he did, and they had been ignored, he would neglect to draw this to attention in a timely manner after the incident, even having regard to his medical condition. 
[10]
Shortly after the incident Pacific Seals arranged for a barrier to be erected in front of the glass. Mr Wilton said that this was more for psychological reasons than anything else. 
[11]
Mr Wilkin gave evidence that a routine OSH inspection had been undertaken a few weeks before the incident and that no concerns about the glass had been noted. Mr Wilkin also provided evidence that an OSH inspector had visited the building after the incident and advised him that it was a traffic accident, was being dealt with by the Police on that basis, and was of no concern to them. The OSH inspector did not give evidence, as Ms Kennedy (counsel for the plaintiff) pointed out. However, there was nothing before the Court to suggest that OSH had taken any steps, other than an initial visit, in relation to the incident. 
[12]
Mr Robinson was hospitalised and then underwent rehabilitation at home. Pacific Seals took a number of steps to engage with Mr Robinson during this period, particularly in the early stages, and extended a considerable amount of support to him, including financial support. Mr Robinson tended to downplay his employer's actions during the course of his evidence. 
[13]
Mr Wilton told Mr Robinson that his job would always be there for him. As Mr Wilkin pointed out, the comment was made shortly after the incident and before the extent of Mr Robinson's injuries, and duration of his incapacity, was known. 
[14]
It is clear that Mr Wilton was becoming increasingly concerned about the length of time it was taking for Mr Robinson to return to the workplace and whether there was an end in sight. He decided to go and see Mr Robinson at his home to talk about their “respective predicaments” on 25 May 2012. While he may have had a clear idea about the purpose of the meeting, Mr Robinson did not. 
[15]
Mr Wilton said that he raised concerns about the indeterminate timeframe for a return to work and the need to employ a new worker to replace a long-term employee who had been filling in for Mr Robinson and who wished to retire. Mr Wilton also said that he promised to offer Mr Robinson a position if he had a suitable one when the time came. His evidence was that Mr Robinson showed no surprise by this turn of events and indicated that he had realized that it would come this. Mr Wilton says that he handed Mr Robinson a pre-prepared letter advising of his dismissal as he was leaving, telling Mr Robinson that it formalised what had been discussed. 
[16]
Mr Robinson accepts that he received the letter. It stated that: 
“Dear AJ 
I have recently spoken with your ACC Case Manager, … who informs me that there is no end in sight to your re-habilitation and indeed there are planned operations on your legs that are still looming. 
It seems clear that you will not be able to work at full capacity for at least another 3 months. 
I have not had contact from you for quite some time now, in spite of my continued support and my attempts to contact you. I get snippets of information about your progress via others whom you have had contact with. I am now at the stage where I can no longer keep your job open. I will need to employ a new staff member permanently to replace your position, which means your employment needs to end. 
I am still terribly upset about the situation that occurred back on 22 June last year, and wish to continue support for your unfortunate predicament that was such a freak accident, but nothing can go on forever. As you are not able to work and have had all your entitlements paid out, there is no notice and no final pay calculation. We will of course continue to top up with ACC benefit by 20% until termination, which will be on 30 June 2012. 
Yours sincerely 
Graham Wilton 
PACIFIC SEALS (NZ) LTD 
PS Once you are fully recovered and able to carry out full duties, then I can promise you a job, should I have a suitable vacancy. ”
[17]
Mr Robinson could not recall the details of the conversation but denied various aspects of it. Nor did he accept that he had shown no surprise at the termination of his employment. 
[18]
Mr Robinson responded to the letter on 6 June 2012 advising that he considered the workplace was unsafe and raised a personal grievance. He made no mention of any earlier discussions or of the safety concerns that he now says he raised prior to the incident. A statement of problem was lodged on 20 September 2012, alleging unspecified breaches of good faith, unjustified disadvantage in respect of the 25 May 2012 letter, and unjustified dismissal. 
[19]
The Authority found that there had been no failure by the company to be responsive and communicative and that Mr Wilton had legitimate concerns about the length of time Mr Robinson needed for recovery and whether additional surgery would be required. It determined that:4
| X |Footnote: 4
Authority determination, above n 1, at [45]. 
 
“Having considered Pacific Seals' limited resources as a small business with respect to staffing, alongside the 11 month duration of Mr Robinson's incapacity at that date, the length of time before planned surgery, as well as on-going uncertainty about when Mr Robinson would be fit to return to work, I consider it was reasonable of Pacific Seals to conclude it could no longer continue to hold open Mr Robinson's position. I find there were substantive grounds to terminate Mr Robinson's employment. ”
[20]
However, the Authority concluded that Pacific Seals had not acted in a procedurally fair manner. Mr Robinson had not been directly told of the purpose of the meeting, what it was about and that it might result in his dismissal. It would, the Authority member pointed out, have been prudent for Mr Wilton to have used the 25 May meeting as a platform to advise Mr Robinson of ACC's view, inform him of Pacific Seals' concerns for ongoing employment and allow an opportunity for Mr Robinson to comment on ACC's information and/or provide additional medical information, before reaching a decision to terminate his employment.5
| X |Footnote: 5
At [54]. 
The meeting process was accordingly found to be procedurally flawed and that as a result he was unjustifiably dismissed.6
| X |Footnote: 6
At [57]. 
 
[21]
The Authority also concluded that Mr Wilton had failed to provide Mr Robinson with information he had received from ACC just prior to the 25 May meeting, and which influenced his decision to terminate Mr Robinson's employment. This, the Authority found, amounted to an unjustifiable disadvantage and a breach of Pacific Seals' obligation to act in good faith pursuant to s 4(1A)(c) of the Act.7
| X |Footnote: 7
At [61]. 
The company's failure to consider whether Mr Robinson's dismissal could be avoided by a return to work on light duties was also found to constitute an unjustifiable disadvantage.8
| X |Footnote: 8
At [62]. 
 
[22]
The Authority dismissed Mr Robinson's claim for $20,000 general damages in relation to an alleged breach of an implied duty to maintain a safe workplace, finding that there was no evidence to support a conclusion that safety rails or bollards would have prevented the accident, and Mr Robinson's subsequent injuries, from occurring. Nor did the Authority accept that Pacific Seals could have reasonably foreseen the events that led to his injuries.9
| X |Footnote: 9
At [69]. 
The Authority member went on to observe that even if she had accepted that Pacific Seals had failed to maintain a safe workplace and that Mr Robinson had been injured as a result of that breach (which she did not), the claim would fall foul of the statutory bar under s 317 of the Accident Compensation Act 2001.10
| X |Footnote: 10
At [70]. 
 
[23]
The Authority dismissed Mr Robinson's claim for lost wages on the basis that as he had received ACC payments during the period following his dismissal, he had “been compensated accordingly”. The Authority member went on to note that: “I regard his claim for the shortfall between compensation and salary is in effect a claim for damages arising directly or indirectly out of his personal injury and is barred.”11
| X |Footnote: 11
At [78]. 
 
[24]
In relation to compensation under s 123(1)(c)(i) the Authority held that:12
| X |Footnote: 12
At [81]-[82]. 
 
“Mr Robinson gave evidence about the distress on his family, the effects on his health and his anxiety. An award of compensation pursuant to s 123(1)(c)(i) must be related to the effect of the dismissal and/or disadvantage and not for distress caused by the injury which is subject to the accident compensation system. 
I accept that news of his dismissal ‘came out of the blue’ for Mr Robinson and that he was shocked when he realised his job was gone particularly when he had relied on Mr Wilton's promises that his job would be held open for him. I accept he felt distressed by the suddenness of his dismissal in the circumstances and I award $5,000 as compensation for his distress associated with his unjustified dismissal. ”
Breach of the company's implied obligations? 
[25]
It is common ground that the company owed an implied duty to Mr Robinson to maintain a safe workplace. The content of the implied duty is informed and given content by the HSE Act.13
| X |Footnote: 13
Attorney-General v Gilbert [2002] 2 NZLR 342 (CA)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  at [69]-[75]. 
Section 6 of the Act provides that employers are to take all practicable steps to ensure the safety of employees while at work. Employers are obliged to have effective methods in place for systematically identifying existing and new hazards, and assessing whether they are significant. Where there is a significant hazard the employer must take all practicable steps to eliminate, isolate or minimise it.14
| X |Footnote: 14
Sections 7-10. 
A significant hazard is defined as including “an actual or potential cause or source of serious harm”.15
| X |Footnote: 15
Section 2. 
 
[26]
As the Court of Appeal observed in Central Cranes Ltd v Department of Labour:16
| X |Footnote: 16
Central Cranes Ltd v Department of Labour [1997] 3 NZLR 694, [1997] ERNZ 520 (CA)Has Cases Citing which are not known to be negative[Green]  at 701, 527. See also Linework Ltd v Department of Labour [2001] 2 NZLR 639, [2001] ERNZ 80 (CA)Has Litigation History which is not known to be negative[Blue]  at [3]. 
 
“the Act adopts a preventative approach to maintaining and promoting health and safety in the workplace. Its principal object is to provide for the prevention of harm. To achieve this object employers are required to promote safety in the workplace and both employers and others associated with the workplace are subject to the duty to take all practicable steps to ensure such safety or ensure that employees and others in the workplace are not harmed … The Act does not then adopt a prescriptive approach to the duties of those made responsible for safety in the workplace. 
It provides a comprehensive set of general principles but leaves the detail of acceptable practices to be worked out and implemented by regulations and codes of practice within the various industries. ”
[27]
The obligations cast on employers have been described as both uncompromising and onerous.17 They do not, however, include an obligation to guarantee a working environment in which injuries can never occur or an obligation to identify any potential source of harm, however far-fetched. Nor is an alleged breach to be assessed with the benefit of hindsight. 
[28]
The plaintiff alleges that the defendant failed to identify the glass frontage as a hazard, that it was a foreseeable risk that a vehicle could make contact with or drive through the glass frontage, and that it failed to take all practicable steps to ensure the safety of its employees while at work. 
[29]
The requirement to take all practicable steps to ensure an employee's safety only arises where an employer knows, or ought reasonably to know, about the circumstances giving rise to the risk of harm. This threshold requirement is reiterated in s 2A(2), which provides that: 
“To avoid doubt, a person required by this Act to take all practicable steps is required to take those steps only in respect of circumstances that the person knows or ought reasonably to know about.] ”
[30]
An objective assessment is required. 
[31]
It is well-established that the informant bears the burden of proof in prosecutions under the HSE Act, including establishing beyond reasonable doubt that the employer has failed to take all practicable steps.18
| X |Footnote: 18
See for example Martin Simmons Air Conditioning Services Ltd v Department of Labour [2008] DCR 777 (HC)Has Litigation History which is not known to be negative[Blue]  at [13], [15]. 
The present case is not, of course, a prosecution. Rather the plaintiff asserts that the defendant has breached its implied HSE obligations to him. It is for the plaintiff to satisfy the Court (on the balance of probabilities) that a compensatable breach has occurred, not for the defendant to establish that it has not.19
| X |Footnote: 19
Crook v Sovereign Services Ltd EmpC Wellington WC34/07, 18 December 2007 at [9]; Gilbert, above n 13, at [83]. 
 
[32]
The defendant had a system of identifying hazards, although not a particularly sophisticated one.20
| X |Footnote: 20
As the Authority pointed out, the steps required must be linked to the size and nature of the employer. 
The glass frontage had not been identified. No-one had really turned their mind to the issue. There was no evidence of industry practice or knowledge that glass frontage of the sort at issue in this case might comprise a significant hazard and present a risk of serious harm. And the evidence relating to the nature and extent of traffic in the vicinity, the roading conditions and configuration of the intersection, the distance of the road from the building, and the likelihood of a vehicle colliding with the glass, point away from reasonable forseeability. 
[33]
While an employer cannot absolve itself of responsibility to take all practicable steps simply because its employees have not raised an issue,21
| X |Footnote: 21
the alternative threshold of reasonable foreseeability must nevertheless be negotiated if a claim is to be successfully made out. 
[34]
Mr Petrie confirmed that 68 crashes had occurred in New Zealand within the last 10 years involving a vehicle failing to turn at a T-intersection. Only one of those crashes had resulted in injury to a person other than a vehicle occupant, and that incident was the one at issue in these proceedings. In Mr Petrie's opinion (which I accept) there was a five hundredth of a percent probability of a crash with a building at a similar location, putting to one side any supervening medical condition, and that this represented an extremely low likelihood occurrence. As it happens, Mr Petrie works on the ground floor of a glass clad building directly opposite an urban T-intersection. The glass frontage is not identified as a potential hazard and nor does Mr Petrie consider that it ought to be. It seems to me that if Mr Petrie, with his wealth of technical road safety knowledge and experience, does not perceive an issue with a glass fronted office building next to a similarly configured road, a reasonable person in the defendant's shoes is unlikely to. 
[35]
While, as Ms Kennedy points out, Mr Petrie is not a health and safety expert (and did not purport to be), he is a road safety expert able to give evidence about the likelihood of a vehicle colliding with the glass frontage, having regard to a range of circumstances. There was no other expert evidence before the Court. The incident that caused Mr Robinson's injuries was the result of a freak occurrence. Nor was it otherwise reasonably foreseeable that a car would leave the road and collide with the glass at such speed that it would present a risk to those working inside the building. 
[36]
Cars routinely parked outside the building. Mr Wilton had, on at least one occasion, nudged the glass frontage with his car when parking. It was put to Mr Wilton in cross examination that in these circumstances the glass might shatter and a shard of glass might then lodge itself in an employee's eye. Mr Wilton refuted this saying that the glass was thick laminated safety glass and would remain in place, although broken, in the hypothetical situation that had been put to him. In response to the line of questioning advanced by Ms Kennedy, Mr Wilton confirmed (and I accept) that he had worked in a motor vehicle glass factory for many years and had extensive knowledge of the characteristics of safety glass. Ms Kennedy also raised the issue with Mr Petrie and the following exchange unfolded: 
“Q But you accept, just as Joe Blogs walking down the street, you look at a building and a car parking immediately in front of it, and there's nothing to stop it but the glass, there's a risk isn't there, a real risk of something …  
A That would never even enter my head. ”
[37]
The evidence reinforces the conclusions I have reached about reasonable foreseeability. I pause to note that the evidence would also have been relevant to an assessment of what practicable steps ought to have been taken, but were not, if the threshold had otherwise been overcome. Determination of what would have been practicable is a matter of fact and degree,22
| X |Footnote: 22
requiring consideration of a range of factors including an assessment of the nature and severity of the harm that may be suffered and the current state of knowledge of the likelihood of that harm.23
| X |Footnote: 23
Section 2A(1)(a) and (b). 
There are obvious difficulties with the Court attempting to determine these issues in an evidential vacuum. The relative paucity of evidence directed at the s 2A(1) factors would have further undermined the plaintiff's attempts to establish to the requisite standard that the defendant breached its obligations, even if the threshold requirements of s 2A(2) had been met. 
[38]
Ms Kennedy invited me to draw an adverse inference from the defendant's failure to call evidence from a health and safety expert, citing STAMS v Denhards Bakeries Co (No 2) in support of this proposition.24STAMS concerned a claim of unjustified dismissal. The Court resolved a conflict in the evidence in the plaintiff's favour, observing that the defendant could have called further corroborating evidence but chose not to do so.25
| X |Footnote: 25
At 948. 
The case does not provide authority for the proposition that an employer is obliged to call expert evidence in a claim such as this and, if there is a failure to do so, an adverse inference can be drawn that such evidence would not have assisted their case. That would effectively turn the burden of proof, which lies with the plaintiff, on its head. 
[39]
I am not satisfied, based on the evidence before the Court, that the defendant knew, or ought reasonably to have known, about the circumstances giving rise to the risk of harm to the plaintiff. There was accordingly no obligation in the particular circumstances to take all practicable steps. 
[40]
I agree with the Authority's conclusion that the defendant did not breach its obligations to the plaintiff in the particular circumstances. 
The interrelationship between the remedies provisions under the Act and the Accident Compensation Act 
[41]
The Authority member observed that even if she had accepted that Pacific Seals had failed to maintain a safe workplace and that Mr Robinson had been injured as a result of that breach (which she did not), the claim would fall foul of s 317 of the Accident Compensation Act 2001.26
| X |Footnote: 26
Authority determination, above n 1, at [70]. 
 
[42]
Section 317 of the Accident Compensation Act 2001 provides that: 
“(1)
No person may bring proceedings independently of this Act, whether under any rule of law or any enactment, in any court in New Zealand, for damages arising directly or indirectly out of — 
(a)
personal injury …  
 
(2)
Subsection (1) does not prevent any person bringing proceedings relating to, or arising from,— 
(a)
any damage to property; 
(b)
any express term of any contract or agreement (other than an accident insurance contract under the Accident Insurance Act 1998); or 
(c)
the unjustifiable dismissal of any person or any other personal grievance arising out of a contract of service. 
(3)
However, no court, tribunal, or other body may award compensation in any proceedings referred to in subsection (2) for personal injury of the kinds described in subsection (1). ”
[43]
There is no dispute that Mr Robinson suffered a personal injury, and that he received compensation under the Accident Compensation Act in relation to it. Section 317 prevents an employee who has suffered a personal injury from receiving damages for the injury's effects, such as loss of earnings, distress, embarrassment, and humiliation, because such consequences are exclusively compensatible under the accident compensation legislation.27
| X |Footnote: 27
See the discussion in Brittain v Telecom Corporation of New Zealand Ltd [2002] 2 NZLR 201, [2001] ERNZ 647 (CA)Has Litigation History which is not known to be negative[Blue]  at [15]-[23] in relation to earlier provisions in the Accident Rehabilitation and Compensation Insurance Act 1992. 
 
[44]
Ms Kennedy relies on Kim v Thermosash Commercial Ltd where I observed that:28
| X |Footnote: 28
Kim v Thermosash Commercial Ltd [2011] NZEmpC 169Has Litigation History which is not known to be negative[Blue]  at [21]-[22] (footnotes omitted). 
 
“[21]
The Accident Compensation legislation replaced the common law action for damages for personal injury with a statutory compensation scheme. As Blanchard J observed in Wilding v Attorney-General the philosophy of the personal injury compensation legislation is to substitute an entitlement to claim compensation, capped as to amount, on a no-fault basis, for a right to bring court proceedings for damages for the injury. Its purpose is to prevent persons who have suffered personal injury being compensated twice over, not to prevent them from recovering compensation at all. 
[22]
A distinction must accordingly be drawn between injury which is covered and injury or loss which is not. In Attorney-General v B the Court of Appeal held: 
‘We accept that in principle an employer may be liable for breach of duties to an ill or injured employee. There may, for example, be discriminatory conduct towards an injured employee; or in a case like Bint the method of dismissal of an injured employee may cause damage for which compensation is not available under the Accident Compensation legislation by reason of its cause being entirely disjunctive of the injury.’ ”
[45]
Ms Kennedy submits that the increase in compensation sought on behalf of the plaintiff does not fall foul of s 317(1) because the alleged breach of the defendant's health and safety obligations predated Mr Robinson's personal injuries and those failings increased the emotional affect on the plaintiff. She says that the compensation sought by the plaintiff is not a claim for damages arising out of a personal injury covered by the Accident Compensation Act as it is not founded on the injury. 
[46]
I agree with Ms Kennedy that s 317(1) does not operate as a blanket bar to compensation under s 123(1)(c)(i) of the Act. Compensation under that provision remains available where the cause of the hurt, humiliation and/or injury to feelings is entirely disjunctive of the personal injury. A compensatory award under s 123(1)(c)(i) must, however, be causally linked to the employer's breach. Ms Kennedy contends that the cause of Mr Robinson's distress was the defendant's breach of its health and safety obligations. I have already found that there was no such breach. 
[47]
I have also dealt with Mr Robinson's evidence that he had raised concerns about the glass window with his employer, that his concerns had been ignored, and that this caused him significant upset. While, with the benefit of hindsight, he may well consider that his employer was to blame for the injuries he sustained and ought to have done more prior to the incident occurring, I do not accept that the employer's response sustains an award of compensation under s 123(1)(c)(i). 

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