The Employment Court has awarded a deceased worker's estate a record amount of compensation after he was unjustifiably dismissed and committed suicide.

Transmissions and Diesels employed Mark Matheson as Wellington Branch Manager.

In 1998, a staff member, Marc Drummond, resigned. The company's directors decided that his replacement should report directly to director, Steve Wooff, and not to Mr Matheson. It became clear at the Court hearing that this change coincided with other significant events concerning Mr Matheson.

Around 24 July 1998, Mr Wooff phoned Mr Matheson and told him about the new appointment and the change to the management structure. On 31 July, he phoned Mr Matheson again to complain about the purchase of some parts from a competitor. Mr Matheson became upset, and said that he would resign. When director, Alister McLaughlin heard about this, he phoned Mr Matheson to make sure that he did not resign.

In the meantime the company received "inferences and innuendo" that the Wellington staff were having difficulty dealing with Mr Matheson. Mr McLaughlan contacted Marc Drummond and asked why he had resigned. Mr Drummond told him it was because of Mr Matheson.

Mr McLaughlin and Mr Wooff flew to Wellington to talk to Mr Matheson. Mr Matheson was red-faced, very tense, and in tears from the start. He told them that he had been belittled in a previous job and did not want it to happen again. Mr McLaughlan and Mr Matheson then spoke with the Wellington staff.

On 18 December 1998, the Wellington branch held a Christmas function for its customers. Mr Wooff flew from Christchurch to attend. Prior to the Christmas function, Mr Woolf spent the day in the Wellington branch workshop talking to staff about Mr Matheson. Mr Matheson was present in the workshop, but Mr Wooff did not tell him what he was doing.

At the Christmas function, Mr Wooff spent some time talking to Mr Hodgson about the situation at the Wellington branch. Mr Matheson was hurt by not being involved in the discussion and, on 21 December 1998, he complained to Mr McLaughlan that he was being undermined.

On 21 December 1998, Mr Wooff told Mr McLaughlan that another staff member, Angela McAdam, had said that Mr Matheson was intolerable to work with and that she was thinking of leaving. Mr McLaughlan spoke to Mr Matheson about this and told him to do something or there would be no staff left.

By the beginning of 1999, Ms McAdam had had enough of Mr Matheson and resigned. Mr McLaughlan telephoned Ms McAdam and asked her what it would take for her to stay. Ms McAdam said that could not work with Mr Matheson any more. Mr McLaughlan also spoke to two other staff members who also said that they intended to leave as soon as they could.

Mr McLaughlan immediately flew to Wellington and met with Mr Matheson. He did not warn him that he was coming. He told the Court that he went into Mr Matheson's office and said "you know what I'm here for. What are you going to do about all of this?" Mr Matheson started crying and said "I guess I had better do the decent thing and resign". Mr McLaughlan immediately accepted his resignation, and offered him $10,000. He explained that he offered this money because it "seemed like the right thing to do".

Leaving Mr Matheson to gather himself, Mr McLaughlan he went to the workshop and told staff that Mr Matheson had resigned. Mr Matheson then went home.

Mrs Matheson told the Court that her husband had a very bad headache and had difficulty in breathing when he got home. He told her that he had been put off. About 4pm, Mr McLaughlan phoned Mrs Matheson to see how her husband was. Ms McAdam had reported to him that she had seen Mr Matheson driving home and that he looked so upset she was concerned that he was suicidal. During their phone conversation, Mr McLaughlan said, referring to Mr Matheson leaving, "it was the hardest thing I have ever had to do".

The following day, Mr Matheson committed suicide. He left behind two records, a note to his wife and a computer disk. The records made mention of the difficulties he was having at work and concluded by saying "I still say I was set up as you were quick to point out that the Company was restructuring and that you did not have a position for me."

Mrs Matheson, as executrix of Mr Matheson's estate, brought a personal grievance and breach of contract action against the company. She claimed, amongst other things, that the company had unjustifiably dismissed Mr Matheson, and had failed to provide him with a safe working environment.

As regards the working environment, the company had a contract to service the engines on the Mana Seacat fast ferry, which had given no end of trouble. Mr Matheson had worked long hours over a sustained period fixing these engines. In fact, an expert witness, Professor Taylor, used an Australian model to analysed the effect of fatigue on Mr Matheson caused by working such long hours, and concluded that the fatigue was greater than someone who was legally drunk.

Before determining the case, the Court had to rule on whether an estate could bring a personal grievance, or whether the action was extinguished by the death of the grievant. The Court ruled that personal grievances survived the death of the grievant, and that Mr Matheson's wife, as executrix of his estate, could therefore prosecute the claim.

The Court went on to reject the claim that the company had breached its duty to provide Mr Matheson with a safe working environment. "The work he was doing was hard and required, on occasions, long hours but it was not the fault of the employer that led to Mr Matheson's long work hours. They were self imposed", Judge Coral Shaw said.

The Court also rejected the claim that the Company had actually dismissed Mr Matheson. However, it held he had resigned because of a breach of duty by the company, and that he was therefore constructively dismissed.

The breach of duty consisted of the company's behavior, principally through Mr Wooff, which began in August 1998 but reached an unacceptable level at the 18 December Christmas party. "Steve Wooff's actions through that day and at the Christmas party were predictably going to make an already stressed man feel extremely vulnerable. It was clear to everyone, including Mr Matheson, that Steve Wooff was asking questions about him and discussing management issues without engaging him in any meaningful way. Mr Matheson told Mr Hodgson that he was being undermined as branch manager. Mr Wooff left without giving Mr Matheson any chance to give his views or to be given the opportunity to rectify the problems that obviously existed" Judge Shaw said.

Judge Shaw awarded Mr Matheson's estate $50,000 compensation for the distress and humiliation, and noted that "his dismissal was a contributor but not the only cause of his suicide." This was in addition to the $10,000 that the company had already paid him.