Workplace bullying leads to ACC compensation payment for work-related mental harm

The District Court this month ruled that an employee subject to workplace bullying was entitled to ACC cover related to her work-related mental injury.[1] The ACC legislation [2] does not prevent an employee who receives ACC compensation from raising a personal grievance under the Employment Relations Act, leaving open the possibility that an employee may be entitled to ACC cover, and compensation for hurt and humiliation arising from a personal grievance. 

Ms Phillips and ACC – the background facts 

Yvette Phillips was an experienced ACC worker. In 2017, she relocated to Christchurch from Whangarei with her family for her dream job, after reassurance by ACC that her new role would not be affected by signalled plans to restructure. 

In 2019, ACC commenced its restructuring process and Ms Phillips was told her role would be affected, and she would need to apply for alternative roles or face redundancy. She made multiple applications but was unsuccessful.  

Ms Phillips emailed her manager with concerns about how the redeployment process had been handled, and a meeting was called. Ms Phillips had anticipated she would receive clarification about why her applications for redeployment had been unsuccessful. However, instead, she was questioned about why she wanted the information and was repeatedly told she should not try to “relitigate” the restructure outcomes. She described her manager as “confrontational and aggressive” and that she left the meeting in tears, feeling “ambushed”, “blindsided” and “extremely distressed”. 

Ms Phillips subsequently took a period of sick leave resulting from the stress of the restructure process. She emailed her employer explaining that the meeting was very difficult, the approach of her employer was unexpected, unhelpful and extremely unsupportive. She stated that the impact on her health was significant and she would be seeing her doctor. Her doctor placed her on immediate leave based on stress. 

After returning to work, Ms Phillips (through an employment lawyer) raised issues with her employer. she attended an arranged facilitation and was given the opportunity to interview for a role within the restructure. She found the interview intimidating, and was subsequently advised that she was unsuccessful. Ultimately, she accepted a role two bands below her current position in order to maintain employment. 

Ms Phillips met with her doctor and was advised to take stress leave. She decided that she did not want to have communications from her workplace using her personal email, after the manner in which her employer had contacted her seeking a more descriptive medical certificate and demanded to speak with her had made her feel “violated and unsafe”. She wanted her work laptop to submit her medical certificate and access an email trail on her work email account for her lawyer. Ms Phillips went into the office to collect it. She had made arrangements for a colleague to collect the laptop on her behalf, but her colleague reported it was no longer on her desk, and she would therefore need to obtain it herself. 

Upon entering work, Ms Phillips was confronted by her new Team Leader (who she had not yet started working for) and another Manager in front of other staff. They questioned why she needed the laptop, and sought her explanation. She told them she needed it to send a document that her supervisor had requested . 

Another manager phoned her Manager and also approached her in front of other staff, telling her that the manager had never asked her to undertake the task, that she could not take the laptop, and it was not needed while she was on sick leave. Essentially, she was accused of lying in front of her colleagues the laptop was taken from her, after her being only allowed to use it in the office under watch. Ms Phillips was shocked and distraught. She left the workplace humiliated and confused. 

Ms Phillips was diagnosed with depression and post-traumatic stress from these experiences at work. Further contact with work caused an acute stress reaction for her. 

Ms Phillips’ claim 

Ms Phillips filed a work-related mental injury claim with ACC for acute stress, post-traumatic stress disorder, and reactive depression. However, her claim was denied.[3] She was informed that the events experienced were not severe and would not be reasonably expected to cause mental injury. 

Ms Phillips appealed the decision to the District Court, after an initial review of her application was unsuccessful. The Court was asked to determine whether she had suffered a work-related mental injury (under section 21B of the Accident Compensation Act). 

Accident Compensation Act – Work related mental injury 

A successful work-related mental injury claim under ACC requires:  

1. An identifiable mental injury; 
2. That the injury was caused by a single event or series of events; 
3. That the event(s) were experienced by the individual directly; and 
4. That the events could reasonably be expected to cause mental injury to people generally.[4] 

The employer submitted the Court should consider the ACC guidelines of “Mental Injury Assessments for ACC” which suggest that an injury event should: 

• Be outside the range of normal experience. 
• Be capable of provoking extreme distress in most people. 
• Involve a real threat of significant harm to self or others. 
• Induce feelings of horror, alarm and shock in most people. 

The Court noted that while the guidelines were helpful in identifying what Parliament was intended with the law, they do not have force in law. Ultimately, each alleged qualifying work-related mental injury needs to be assessed on its merits to see whether the statutory criteria is satisfied. 

The Court found that Ms Phillips had suffered an identifiable mental injury, relying on her Doctor’s diagnosis, with a Psychiatrist’s confirmation of major depression, anxious distress, panic disorder, and unspecified trauma related disorder.    

The Court also held that her mental injury was caused by the series of events at work, notably the restructure meeting and interaction with the Team Leader and Manager when she attempted to collect her laptop. The Court highlighted that events had occurred against the backdrop of Ms Phillips uprooting her family to another city to pursue her dream job. 

The move had placed strains on family relationships. The sacrifices made by moving were significant and added to her vulnerability. She was a new, unfamiliar environment, to which she had no connection. The move had placed pressure on Ms Phillips and her family, turning what she had thought would be a dream job into a nightmare.   

In determining whether the events could reasonably be expected to cause mental injury to people generally, the Court deemed that people generally, would suffer mental injury from the events that Ms Phillips had gone through. In those circumstances, the meeting regarding her redeployment, and laptop incident resulted in feelings that the Court considered anyone in her position would reasonably feel.   

Accordingly, the requirements of the ACC Act were satisfied, and the Court held that Ms Phillips was entitled to ACC cover for her work-related mental injury. 

The potential for recovery of compensation under both ACC and employment  

It is not well known that individuals who have suffered as a result of mental harm in connection with the workplace, such as mental injury resulting from workplace bullying, may be entitled to ACC cover (i.e. compensation). The usual course for an employee is to claim compensation under the Employment Relations Act (section 123(1)(c)(i)) for hurt, humiliation and loss of dignity suffered as a result of the employer’s unjustifiable action(s), such as bullying. However, the District Court case in Phillips v ACC demonstrates the ability for employees who suffer from mental harm as a result of their employment to apply for ACC cover. 

Where an employee is receiving ACC cover for a work-related injury, they are not prohibited from raising a personal grievance.[5] Accordingly, an employee may also be entitled to further compensation for the mental harm suffered, under the Employment Relations Act. However to date, whether compensation will be granted, and/or whether the quantum of compensation awarded is affected by any ACC payment, is untested.   

Our specialist team at DTI Lawyers are experienced in dealing with sensitive matters including workplace bullying, wellbeing, and mental health matters at work. You are welcome to call on 07 282 0174 or email the team directly.