A recent media article highlighted the actions of an individual in Otago who had raised Personal Grievances against at least seven local businesses within a short period of time. He had successfully been paid at least $10,000 in compensation payments over a period of approximately two weeks.
The Employee claimed to be an experienced chef. However, within days of commencing a new role, he threatened legal action with his grievances being settled by Confidential Settlement Agreements – and lump sum-tax free-compensation payments.
The existence of ‘Confidential Settlement Agreements’ enabled the Employee to move from job to job without being discovered.
The Employee was however exposed after he applied for yet another chef role, where he was asked to complete a ‘trial shift’ prior to a formal offer being provided. However, prior to the trial occurring, the business owners became aware of concerns related to the Employee and elected not to proceed, with them advising him that there would be no job in their company for him. This resulted in the Employee advising them that he would be raising a Personal Grievance as he had already turned down another job offer in order to work for them, stating that his employment with them had already been agreed.
The Employee therefore claimed he had been Unjustifiably Dismissed and he sought a compensation payment of $3,000 for the hurt and humiliation suffered, and 40 hours wages. He asked that the payment be recorded within a Confidential Settlement Agreement. This offer was rejected by the employers who then went to the media to expose the Employee before he could continue this pattern of behavior with other businesses in the area.
Employment disputes are commonly resolved by a Full and Final Settlement Agreement pursuant to section 149 of the Employment Relations Act 2000, making all details entirely confidential to the parties involved. Unfortunately, employees are often more aware than Employers of how these operate and therefore it is not an uncommon scenario to encounter employees who have raised grievances against multiple employers in order to seek confidential settlement payments.
We have experienced this trend on several occasions with it becoming a common practice of individuals who, after experiencing one successful payout, believe that raising fictious grievances after only a short period of employment is far more lucrative than actually having to work for a living. Unfortunately, this practice is also supported through the No-Win-No-Fee advocacy companies who stand to profit a reasonable fee for drafting and filing the settlement agreement with MBIE for endorsement.
Employers who are uncertain of their employment rights, or of correct legislative obligations and processes, can easily be the target of ‘opportunist’ employees. Such employers often succumb to the threats and pressures of the employee in order to resolve the dispute, before legal costs are incurred. However, as was the case in the Otago scenario, this approach unfortunately feeds the cycle and encourages such employees to take similar action with the next or subsequent employers.
With our support, many employers have stood up against such “money grab” behaviours with this resulting in the employees disappearing and all claims being dropped.
Quality reference checking prior to any employment offer being provided will go a long way to avoiding these situations. However, in the event that you have employed a person and you become suspicious of their actions, either where they appear to be deliberately seeking to ‘manufacture a grievance’ or they appear ‘well-skilled’ on their rights, it is best to seek professional advice prior to engaging with them.
Given the nature of these concerns many clients are now using us to undertake an independent reference check on candidates prior to any employment offer being provided, with this adding an extra layer of protection to ensure that the person you recruit is who they actually say they are. Given our extensive client network, this recently enabled us to identify an individual presenting themselves to a company in a very positive light, where we were already aware that they had recently being exited by another company for non-performance.
If you need any assistance with any of these matters, please feel free to contact us directly.