Each year the Employers & Manufacturers Association (EMA) publishes information on the Determination outcomes from the Employment Relations Authority (ERA) using data obtained with permission from Thomson Reuters Westlaw NZ’s Personal Grievance Tracker Analysis.
The most recently released data is related to the 2022 calendar year and provides a good insight into the ongoing trends seen in recent years regarding both the balance of success and the increasing awarded costs being set down.
Overall, the data shows that an employee’s rate of success for an unjustified dismissal and unjustified disadvantage claim was 71.9%. Success rates differ marginally depending on the specific ERA jurisdiction area (Auckland, Wellington, or Christchurch) with the above figure being the national average.
Under the provisions of the Employment Relations Act 2000, the ERA may award compensation to a successful party under three specific provisions – Compensation for Hurt and Humiliation, Lost Wages, and Costs. Compensation awards for Hurt and Humiliation are generally related to a successful unjustified dismissal or unjustified disadvantage claim with the awards determined demonstrating that there is little difference between the two. Successful dismissal claims can however be elevated significantly when an award for lost wages is also made.
Compensation for Unjustified Dismissal
For the 2022 year the average unjustified dismissal claim was $10,845 however this figure does not clearly reflect the fact that 40% of successful claims contained awards of between $10,001 and $50,000, and that the highest award made was in excess of $100,000.
Compensation for Unjustified Disadvantage
In the same calendar period, of the 29 Determinations issued related to hurt and humiliation associated with unjustified disadvantage claims, 59% were in favour of the employee with the average award being $11,305. Six of these claims fell in the $10,001 – $50,000 bracket, with the highest financial award being $23,500.
Costs Awards
Across all successful unjustified dismissal claims that average costs award was $9,354, while unjustified disadvantage claims saw an average costs award of $8,133 being paid.
Penalties
Of all personal grievance claims determined by the ERA, only one party was successful in having a penalty awarded against the employer, with the total penalty to be paid being $2,000.
What does this tell us?
Clearly, it is continuing to be extremely difficult for employers to be successful in defending claims within the ERA. This is leading to many employers wanting to make use of the early intervention processes available to settle any genuine disputes in an amicable, full and final manner prior to costs of representation escalating. However, we are also seeing a growing willingness of employees and employee advocates who, despite the efforts related to early settlements, are determined to “have their day in court” with the belief that they will still secure a greater financial benefit than that being offered to the employee at the early stages of the process. The only mitigation therefore for the employer against such a firm stance, is the presentation of a Calderbank Offer that can then be relied upon at a later date to seek to mitigate an employee’s costs claim, or to enhance the costs to be recovered by a successful employer.
The other factor that is not reflected in the recently released PG statistics is the length of time that processes are taking within the ERA, with this time now becoming excessively protracted. It is not uncommon for an investigation meeting (the term used for a hearing in the ERA), to not occur until at least six to eight months after the Statement of Problem is first lodged in the Authority, and then for a Determination not to be released until between three and eight months after this.
The best course of defence against these costly and protracted steps, is ensuring good process and robust decision making from the outset.
If you have any situations that you believe could end up in a personal grievance occurring, please feel free to contact us directly.
We have provided successful support and representation for a number of our clients in mediation, ERA and Employment Court. Talk to us first.