Each year the EMA reports on the statistics coming out of the Employment Relations Authority with respect to two forms of personal grievance claims – unjustified dismissal and unjustified disadvantage.
This year’s results (for the 2023 year) provide some interesting insights into changes in Authority outcomes, some in favour of the employer and others at the employer’s on-going expense.
Unjustified Dismissal
(where the employer has made a conscious decision to dismiss an employee)
Results (outcome in favour of) | 2022 | 2023 |
Employee | 73% | 64% |
Employer | 23% | 30% |
These figures indicate a higher success rate for employers in seeking to defend unjustified dismissal claims. However, while this is positive, unfortunately for those employers being unsuccessful in the Authority the costs of remedy payments have increased considerably.
In the 2022 calendar year, the average financial award for employees who were successful with their unjustified dismissal claims was $11,922, almost exactly the same as that of the 2023 calendar year ($11,912), with the highest compensation payment being $38,770 in 2023, compared to a record high of $112,200 in 2022.
Unjustified Disadvantage
(generally, disadvantage claims are in addition to a dismissal claim although they may also be stand-alone)
Results (outcome in favour of) | 2022 | 2023 |
Employee | 59% | 54% |
Employer | 39% | 43% |
The same trend has continued with Unjustified Disadvantage claims where the employer has been slightly more successful in defending the claims against them. The value of the compensation payments for Unjustified Disadvantage claims have decreased marginally from an average of $12,375 in 2022 to $11,677 in 2023.
What does this tell us about cases going through the ERA?
While there has been a change in direction from previous years where we have seen success rate for employees in the Authority getting to a high of 73% in past years, the pendulum has certainly turned with employers becoming more successful, the success rate for the employer is still below 50%.
However, in reviewing many of the Case Determinations released by the Authority, we can see that many of these went against the employer on errors of process – some very minor but significant enough to warrant the dismissal or disadvantage claim being successful. On this basis, more compliance by employers with respect to the procedural fairness obligations could see a dramatic shift in success rates for employers.
While it is good to see that compensation awards are staying relatively stable, these are often in addition to compensation for lost wages and the employer’s required contribution to the employees’ legal costs. What is not reported this year is the overall costs of either successfully defending or the employer being unsuccessful at the ERA. This can often be hard to quantify as the costs of legal representation differ greatly and any reported costs often do not take into consideration the intangible costs associated with managers and employees having to prepare information and be physically present within the Authority Investigation Meetings. Previous results estimate these costs to be between $35,000-50,000.
At Russell Drake Consulting we have had great success in defending employers in the ERA, at cost effective rates, but also in seeking to resolve matters (personal grievance claims) before they get to the ERA.
If you have a matter that looks like it could end up in the ERA, please feel free to give us a call to talk about how we may be able to assist you in resolving this on a more timely and cost effective basis.