Personal Grievances
February 22nd, 2010 at 9:49 am by David FarrarVernon Small writes in the Dom Post:
The Government is considering a revamp of personal grievance laws.
The moves include a crackdown on frivolous claims and new rules to control “no win, no fee” advocates who have been seen as ramping up claims against employers.
But unions are concerned that the Government is using the review to reduce employees’ rights when they are sacked, including claims based on unfair process.
Getting the process largely right is important, but it is very difficult for small businesses to get it perfect. They do not have inhouse lawyers. They do not have HR departments. And they are the ones who can least afford losing a claim.
Prime Minister John Key has said the Government “shares concern from many quarters about the fairness and consistency of personal grievance claims”.
Ms Wilkinson said she wanted to ensure the regime was fair to both sides. “You hear stories anecdotally from employers who say, `Oh well, it’s just too hard we will just pay some money to make it go away.’ And that’s not justice.”
She had also heard that some of the “no win, no fee” industrial law advocates “know their way around the procedures so well that, whatever the merits of the case, the employer might pay out”.
In the public sector, three months salary is quite normal to settle claims, regardless of their merits.
CTU president Helen Kelly said “no win, no fee” advocates tended to operate among non-unionised workers and moves to regulate them would not concern the CTU.
I love how the CTU doesn’t mind the Government clamping down on their competitors 
But it had major concerns about other elements of the document. She said the Government saw procedural fairness and natural justice as an impediment when an employee was dismissed.
The remedies won through personal grievances were too low, she said. Surveys had found the average cost to employers was $5000, of which compensation paid to workers averaged $2800.
I wonder if that takes into account the cases settled out of court?
Thousands of employment relationships ended unfairly and employees did nothing about it, so a lot of employers got off lightly. The number of grievance cases was low, considering that about 600,000 people left their jobs each year.
Most people go from one job to another better job, so obviously no grievances tend to occur there. What I would like to know is how many employees get dismissed each year, and what proportion of those result in a settlement or a court case.
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February 22nd, 2010 at 10:05 am
This is about time. I had an employee that when I wound up a business organised three other jobs for him to choose from of which he took one. On the 90th day one of those no win no fees outfits got hold of him encouraging him to have a go at a claim after all what could he lose? In the end I settled by arbitration for $2500 just to make it go away. You should have seen the lies and false evidience they came up with. A total rip off!!
Vote:February 22nd, 2010 at 10:36 am
DPF said: I love how the CTU doesn’t mind the Government clamping down on their competitors
The no-win, no fee advocates are not in competition with unions, They don’t have any ongoing relationship with their clients, don’t negotiate employment agreements, and don’t provide any services other than advocating over personal grievances.
I agree that many of them take claims that would be untenable if they were to go to hearing. The answer to that is to allow employers to recover from a claimant the full actual cost of defending a claim if it were found to be frivolous or vexatious. Then they could afford to defend such claims, rather than just throw a couple of grand at them to make them go away, which many feel is the only option at the moment.
Greater encouragement for unionisation of workers, such as clamping down on freeloading where non-union employees automatically get offered the same conditions as that which has been negotiated by the union, would also help to address the issue. In my experience, and I am a former union official, unions don’t pursue frivolous or vexatious claims – unlike “no win – no fee” advocates, they have nothing to gain financially from doing so.
Vote:February 22nd, 2010 at 10:59 am
its a bit early (even for a green) to start lying isn;t it toad?
i have seen plenty of situations where unions have pursued grievances and defended ‘clients’ where there is no case.
heres one: teacher attacks student for laughing during karakea (sp?). school attempts to discipline and remove teacher. teacher via union threatens grievance case becuase they decided the decision to remove teacher was motivated by race. then try to claim that it was due to cultural differences and wanted the teacher to get paid out a lot of money to go away. btw student was also maori.
as for freeloaders, what about those people who are not allowed to negotiate their own contract? i have seen the PPTA for years try to claim that non members should not get the payrises, but its not like the teachers can negotiate on their own.
i doubt the unions provide any more service than the bare minimum to keep people members. i have spoken to enough teachers who have only joined so they don;t get grief around contract time and so that the they don;t get abused for not being members, but the union and members. these same teachers say its a career ender in some schools if you don;t go on strike with everyone else, even when you disagree with what they are striking about, and would rather be teaching.
the only encouragement unions need is a long walk off a short pier.
Vote:February 22nd, 2010 at 11:14 am
“and I am a former union official”
(sarcasm) you could have knocked me over with a feather (/sarcasm)
If the claim is frivolous or vexatious I suggest the advocates get to wear the cost and the client pays nothing.
That sort of thing focuses the mind.
There are only very few industries where people will “give it a try” and still get paid. I think all advocacy should be on a no-win no-pay basis, but penalties should be in place for incompetent, negligent or predatory behaviour.
So far, 100% of my dealings with the legal profession from all sorts of angles has left me in a position where I will go to the ends of the earth to settle a dispute rather than engage legal “help”. If ever the word “parasite” was appropriate…
Apologies to those are are capable and honourable – I somehow have yet to run into one of you.
Vote:February 22nd, 2010 at 11:23 am
“Greater encouragement for unionisation of workers, such as clamping down on freeloading where non-union employees automatically get offered the same conditions as that which has been negotiated by the union, would also help to address the issue. ”
Ha ha ha……….. Dreamer.
What can I say other than:
We won. You lost. Eat that!
Vote:February 22nd, 2010 at 11:45 am
” such as clamping down on freeloading where non-union employees automatically get offered the same conditions as that which has been negotiated by the union, ”
Wow, a totalitarian cheering for compulsory unionism. Instead of finding why many (most?) employees don’t want to join a union, and addressing that problem reasonably and realistically, Toad reaches for that old socialist standby, force. Regulation rather than persuasion.
Workers do not like unions becasue they take people’s money and give it to the Labour party Toad. Severe your union’s ties with Labour. That is the problem you will not face up to.
Vote:February 22nd, 2010 at 12:24 pm
No-win no-fee lawyers are a product of the free market. Banning them will be an even greater miscarriage of justice. Want to disagree? Just ask yourself: Out of the employee or the employer, who is the most likely to have the financial means to obtain legal assistance? It’s a no-brainer – the employer can afford the lawyer far more than the employee can.
Employers who complain about no-win no-fee should actually look at the substance of their case. If the case is frivolous, call the employee’s bluff and have it taken to court! It will teach the law firm a quick lesson about the financial implications of its largesse. The “pay to make it go away” approach is a reflection on your lack of testicular fortitude, not the “injustice” of the system. Nobody is forcing you to settle!
Vote:February 22nd, 2010 at 12:29 pm
the problem is blaim (and i do agree with your sentiment though), is that too many employers loose out on form not substance.
its a rediculous process you have to follow and if you get one thing wrong, you can lose even if the client is caught red handed.
i have heard from a friend who does industrial relations work for employers of employers having to pay out when employees are caught stealing. the union advocate comes in all heavy, they are shown the video evidence, but becuase the person who caught them (not the employer) says something like “ciaght you, now you are for it”, it can be argued as pre determining the outcome and the employer loses.
i have no issue with the no win/no fee people, but it would be nice to have the law softened a bit so that as long as the employer has shown good faith and not been a weasel, they don’t lose becuase they got one part of the process a bit wrong (even when it has no bearing on the outcome of the disciplinary meeting).
Vote:February 22nd, 2010 at 12:48 pm
@Redbaiter
I don’t support compulsory unionism. Compulsory unionism would take us back to the ’70s and ’80s where many unions just collected the membership fees and did little for their members.
I support closed shops, under which if a majority of employees in the workplace vote to join the union and negotiate a collective agreement, all employees become a party to the agreement and pay a fee to the union. Unfortunately, I haven’t managed to persuade the Green Party to support that position, despite having tried through their internal policy process.
My union (the one I worked for and the one I am still a member of) has no ties with Labour and gives no money to them.
@Gredel 10:59 am – I don’t know the details of that individual case, so can’t really comment on it. I was talking about my experience, not saying that unions never take frivolous or vexatious cases. But because unions don’t get paid for winning settlements in grievance cases, unlike “no win – no fee” advocates, there is no financial incentive for unions to pursue cases that have no merit. Actually, the financial incentive runs the otehr way, because if the employer digs his/her toes in it is likely to cost the union a lot of money to do so.
Vote:February 22nd, 2010 at 1:35 pm
I’m not going to get into the anti-union bile. Just wanted to respond to something DPF asked about in his post – whether the surveys with the $5000 total cost ($2800 paid to employees) on average was likely to include those settled out of court.
Probably.
Usually when a settlement is reached, even without the involvement of the Mediation Service, Authority or Court, the parties will lodge a record of the terms of that settlement with the Mediation Service, and most surveys that I have seen include these settlements in their calculations about average pay outs etc. This is easily done by simply drawing up a written terms of settlement, photocopying it three times, getting each party to sign all three copies, then send them to the local Mediation Service offer with a covering letter that states that you want them to sign it off (can’t remember the precise language, it’s ages since I did one). Each settlement is then assigned to a mediator who rings both parties, check that they did sign it, and then they keep one copy on file and send the other two back, one to the employer, one to the employee, with an official stamp and a form that says it’s been authenticated. This does not cost either party anything, it’s a service the Mediation Service does free of charge in the interest of supporting low level resolutions to employment issues.
There are definite advantages for all parties in doing this, so it is probably pretty widely practiced, certainly by unions and any decent employment advocates (whichever side they represent). It makes the settlement more enforceable, which is good for both sides. And it allows for the DOL to come up with figures that probably pretty accurately represent the averages. The bigger the settlement, in cash terms, the more likely it will get lodged in this manner.
It’s worth noting however that such settlements are not always about money. In my experience the thing most often sought is an apology, which of course is free. It’s also the hardest thing to get.
Vote:February 22nd, 2010 at 1:36 pm
“If the claim is frivolous or vexatious I suggest the advocates get to wear the cost and the client pays nothing.”
great idea. Solves the whole problem for both sides.
Vote:February 22nd, 2010 at 3:26 pm
I totally agree with GJ. I have a small hospitality business and dismissed a staff member for stabbing a customer in the face with a broken glass. Went through the process, Police, suspension for 3 days, invited staff member back to explain with a support person. Staff member said she would do the thing again given the same circumstances. Fired her, to a get PG for $32k for humiliation and loss of income within days. My lawyer (after a fee) advised to offer $5k for it to go away otherwise it could cost more to win!
Vote:February 22nd, 2010 at 3:30 pm
That’s shit JCL
Vote:February 22nd, 2010 at 4:21 pm
No win, no fee has regulation has some merit in stopping frivilous claims. I am not sure what the legal aid eligibility is around these matters but for a civil claim some prospect of success has to be shown. I have advised clients before that they may as well write a cheque for, say, x to avoid the cost of mediation and potential hearing which will be 3x and possibly costs (that are likely unrecoverable). It is frustrating and I sense that there are some operators who realise that by filing the client will get a couple of grand, they take a cut and everyone goes home.
Having said that I would have to say the myths about how hard it is to sack someone are largely that. The process is not that difficult (pitch it around being polite and getting feedback before making up your mind and you’ve got it) and does not require an inhouse lawyer. The odd ERA decision gets publicised that raises as an eyebrow but it really is not as bad as it is made out.
One of the issues I see is that there is a pretty litigious process for awards of a few thousand dollars plus, potentially, lost wages. The later can get up there (3 months) but in the grand scheme of things it is not big money.
To try and reduce the costs the ERA process is, in theory, investigative but few parties go without lawyers so the cost is still reasonable.
And then the appeal is both (almost always) de novo and at the High Court level. So over an award of, say, $20k suddenly it’s being battled out in the High Court (Employment Court = High Court) and because the ERA is not recorded which ever party lost has plenty of time to tidy up their story. All at enormous expense.
Just thinking out loud but perhaps:
Vote:1. Claims under $5k (and no more than $5k in lost earnings – ie:$10k total) go to ERA with limited supporting paper work and just the parties. ERA member does inviestigation and makes decision. Limited appeal similar to Disputes Tribunal. No lawyers, no costs awarded.
2. Over that amount goes to ERA in normal way except costs discretion if in wrong jurisdiction. So if ERA finds that employee A was unjustifiably dismissed an awards, say, $3k can reduce award for being in wrong jurisdiction. Reinstatement probably remains here also. Other change is that all evidence is recorded and made available to EC if appeal lodged.
3. Reduce de novo appeals by using evidence garnered in Court below or at least restrict questioning taking into account ERA investigation.
February 22nd, 2010 at 4:42 pm
This is sensible policy from Key, so many people I know in business factor in the cost of a personal grievance when deciding to dismiss a non performing staff member, one in particular just writes a cheque on the same day as he sacks them.
No good honest worker should be afraid of this policy, it is only the slackers and union scum who will see this as a threat.
Vote:February 22nd, 2010 at 6:52 pm
GPT1 says
“Having said that I would have to say the myths about how hard it is to sack someone are largely that. The process is not that difficult (pitch it around being polite and getting feedback before making up your mind and you’ve got it) and does not require an inhouse lawyer. The odd ERA decision gets publicised that raises as an eyebrow but it really is not as bad as it is made out.”
Sacking someone is difficult. In my case above I took advice from an HR expert and followed procedure. It is clearly wrong when a staff member can go to a no win, no fee advocate and walk away with more money than they ever held in their hand at one time.
Vote:February 22nd, 2010 at 11:04 pm
Sacking someone is very difficult here. I have read most of the claims have been in favour of the employee. What about the plasterer apprentice trying to steal petrol from his employer, writing sware words on the wall of Christian customers and then writing swastikas on the walls of jewish customers. He was fired and awarded 40,000. The contractor was trying to help this employee out by giving him a chance, a job. Also, what about the seamstress who got fired because she falsified samples of her work in the interview. The samples were done by someone else. She lied. Normally, this would be reason enough to fire someone, but she got awarded some money. Why?? Pretty soon, these sleazy lawyers will have classes on how to screw your employer and make millions. I have a feeling some of the comments above were made by these sleazy lawyers.
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