Employment dispute stats

June 6th, 2013 at 11:00 am by David Farrar

Laura Walters at Stuff reports:

Trade unionists have labelled a suggestion by the Employers and Manufacturers’ Association to double the current 90-day trial period for employees as “disgraceful”.

An EMA study of all personal grievances last year showed only 15 per cent of employers successfully defended performance-related grievances in front of the Employment Relations Authority .

EMA manager of employment services David Lowe said it was hard to manage employees with fluctuating performance, and extending the 90-day trial to 180 days would allow employers to identify potential issues with workers.

It’s not a disgraceful suggestion. One can debate it without hysterics. However on the substance of the issue, I’m more inclined to the CTU view that the EMA view that it should remain at 90 days. Of course the CTU thinks there shouldn’t be one at all, but that is a different debate. I think 90 days is adequate to identify a dysfunctional employee. In fact in my experience i often becomes apparent within a few weeks. So I think 90 days is an appropriate period of time for a trial period.

Claims in favour of employers:

Redundancy grievances: 29 per cent (23 out of 80)

Misconduct: 26 per cent (48/122)

Performance: 15 per cent (6/41)

Constructive dismissal: 46 per cent (26/56)

Disadvantage: 27 per cent (18/66)

Claims for reinstatement: 50 per cent (5/10)

The 15% stat for performance claims reinforces my view that it is almost impossible to dismiss an employee legally, just for being incompetent.

The EMA analysis showed 34 claims were made in 2012 by employees whose employment finished within the first 90 days, and 91 per cent of them won.

People forget the 90 day trial provision is not mandatory. It is an option.

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34 Responses to “Employment dispute stats”

  1. burt (7,791 comments) says:

    People forget the 90 day trial provision is not mandatory. It is an option.

    That might be why they don’t like it – It isn’t nanny enough for them in it’s implementation.

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  2. scrubone (3,044 comments) says:

    Sounds like the EMA is trying it on, which is probably why the union is so upset -they’re nicking their tactics.

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  3. Nigel Kearney (864 comments) says:

    If I was applying for my first job and had no track record, I would much prefer the employer to be able to offer me a contract with a one year trial period. Others may prefer the employer not be allowed to do this, for rather obvious reasons.

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  4. scrubone (3,044 comments) says:

    The 15% stat for performance claims reinforces my view that it is almost impossible to dismiss an employee legally, just for being incompetent.

    One wonders what’s cheaper on average – just telling a person they’re fired (with minimal process) or trying to follow the proper process? Is the difference in % of complaints enough to justify the extra effort. Seems that if you’re going anyway you might as well cut down on your paperwork up front.

    Which I guess makes me wonder if the process actually ends up encouraging employers to act more badly.

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  5. bc (1,332 comments) says:

    Agree DPF. A leopard can’t change its spots – 90 days is more than enough time to identify any issues.

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  6. rolla_fxgt (311 comments) says:

    Simple solution to make emloyment action more affordable for all, get rid of the lawyers from the ERA. Keep them for the Employment court or above. Would lessen the chance of those with the best lawyer winning, and make the results about the facts.

    Keep the trial at 90 days, if you can’t judge an employee in 90 days, you don’t deserve to be in business

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  7. Ultima (29 comments) says:

    Totally agree on 90 days, unless EMA can provide practical examples. Unsuitable employees are more likely to quit anyway, 90 days or not.

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  8. DylanReeve (179 comments) says:

    That is hardly a useful source of such statistics though, is it. After all, we’re talking only about cases the Employment Relations Authority has had to rule on. To get to that point there has to have been a reasonable case to start with.

    The VAST majority of dismissals never get taken to the ERA.

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  9. MD (62 comments) says:

    In my industry, 90 days is not really sufficient. While you’ll weed out the no-hopers (didn’t the selection process identify them)? The reality is it takes a good staff member 90 days to be operating effectively, some take longer. You don’t yet know they can’t reach the required performance level. It’s probably 6 months before it’s clear if they haven’t come up to speed that they really aren’t going to get it. Perhaps limiting it to a 90 day trial in fact would encourage getting rid of those staff where you have doubts rather than persisting to see if they can get it. Having said that; we can, and did, manage with the 90 day provision we just put an awful lot of effort into the selection process to minimize risks / costs. 90 days is a reasonable trial period for most jobs, but not all.

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  10. KiwiGreg (3,169 comments) says:

    It’s good that the state (and David as well apparently) knows the maximum amount of time an employer needs to determine if they have made a mistaken hire, just as the state knows the minimum price to be paid for that hire, the consequences of not following the state’s processes for terminating employment, the appropriate days for having holidays and indeed even the appropriate methods for observing such holidays.

    Without the state’s all-knowing wisdom and regulation of all aspects, employment would undoubtedly descend into anarchy.

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  11. bhudson (4,734 comments) says:

    To get to that point there has to have been a reasonable case to start with.

    The VAST majority of dismissals never get taken to the ERA.

    Exactly. Clearly, in the vast majority of instances the employer is in the right and has treated the employee fairly.

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  12. The Scorned (719 comments) says:

    How about leaving the decision to each business as they choose and just butting the fuck out of it…? The to and fro of the market will soon settle what works and what doesn’t.

    Well said KiwiGreg……Right-wingers….too many blue on the outside and pink within….;-)

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  13. labrator (1,744 comments) says:

    That is hardly a useful source of such statistics though, is it.

    The VAST majority of dismissals never get taken to the ERA.

    Right, so the actual statistics provided aren’t good enough for you but the ones that you don’t provide (as they don’t exist) are much better.

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  14. Weihana (4,496 comments) says:

    DPF,

    The 15% stat for performance claims reinforces my view that it is almost impossible to dismiss an employee legally, just for being incompetent.

    Why do you come to this conclusion rather than an equally plausible conclusion, that too many employers pay little regard to what their legal obligations are? It is not enough for an employee to be incompetent. A process has to be followed. 15% followed that process. Why didn’t the rest of them? Indeed as someone else already pointed out, what about all the dismissals that didn’t end up in dispute?

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  15. Weihana (4,496 comments) says:

    The Scorned (593) Says:
    June 6th, 2013 at 12:18 pm

    How about leaving the decision to each business as they choose and just butting the fuck out of it…? The to and fro of the market will soon settle what works and what doesn’t.

    All heil the market… the one true faith. :)

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  16. DylanReeve (179 comments) says:

    Right, so the actual statistics provided aren’t good enough for you but the ones that you don’t provide (as they don’t exist) are much better.

    I doubt there’s any count on number of dismissed employees… But if you add up all the ERA claimants (375) I’m certain that would only be a small fraction of the total number of employees dismissed every year. If you just use the successful ERA claimants (249) then it would be even lower.

    DPF’s statement that it is “almost impossible to dismiss an employee legally” is ridiculous, unless he does have some information that we’re not privy to here.

    Also the mention of 34 cases arising from the 90-day period is also meaningless, regardless of how many of them won their ERA cases.

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  17. Weihana (4,496 comments) says:

    scrubone (2,355) Says:
    June 6th, 2013 at 11:27 am

    One wonders what’s cheaper on average – just telling a person they’re fired (with minimal process) or trying to follow the proper process? Is the difference in % of complaints enough to justify the extra effort. Seems that if you’re going anyway you might as well cut down on your paperwork up front.

    Which I guess makes me wonder if the process actually ends up encouraging employers to act more badly.

    Just my opinion, but it is much much cheaper to follow the process. Unfavorable rulings can cost a heck of a lot of money.

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  18. Rightandleft (627 comments) says:

    I don’t have a problem with the 90-day trial as it seems likely to help increase employment by letting employers give people a chance. But I think expanding it beyond that 90 days is a bit much. The law really schould be designed to weed out the no-hopers. Those who aren’t clearly incompetent after 90 days but who aren’t meeting the required standard later on are probably capable of improvement with more or better training. If not they can still be dismissed using the normal methods. The system here is still far more worker-friendly than the US where basically you can be fired at will even after years in a job.

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  19. slijmbal (1,210 comments) says:

    “The 15% stat for performance claims reinforces my view that it is almost impossible to dismiss an employee legally, just for being incompetent.”

    Have to agree. I didn’t bother trying to dismiss staff who were incompetent for incompetence in the end as if they were litigious I got the blame for not trying hard enough to improve their performance anyway and we ended up paying them off before it got to the ERA as that was the cheapest way out of the recruitment mistake.

    I’ve even been involved in a case where an employee had been dismissed for attempted blackmail and deliberate deception of their managers with actual email evidence. Still ended up cheaper to pay them off a certain amount at mediation than going to court unfortunately.

    It seems to me the whole ERA process fails as many of those who do get the boot unreasonably don’t have the gumption or wherewithal to use the system but those with street smarts who know how to work the system get themselves paid out regardless of justice.

    As an ex-employer via a relatively small business I was part owner of it also seems many, even those one would expect to have a more sophisticated view of the world, really do not understand what a small business owner goes through. I have had periods of no personal pay of many months when cash flow was bad. I kept staff on in a downturn where in hindsight it would have been better for both them and myself to let them go earlier. The delay made it harder for them to find employment and cost me a 6 figure sum etc.

    When it’s your own money you tend to think about employment differently.

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  20. dime (9,356 comments) says:

    90 days is the correct number.

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  21. dime (9,356 comments) says:

    funny how those on the right are happy to disagree with a right wing organisation. something the left never seem to do.

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  22. David Garrett (6,309 comments) says:

    I also agree that 90 days is about right.

    It would also be useful to know how many of the cases in which the employer was held liable were cases where failing to follow process led to a finding of unjustifiable dismissal as opposed to a lack of substantive reasons.

    When I was most active in this field of law, 90% of employers who lost failed because of lack of correct process rather than the dismissal being substantively unjustifiable. It was actually money for jam for any half decent lawyer acting for employees….and some of the large employers were no better at getting it right than the small ones.

    dime: You are being silly again! The unions are ALWAYS right…

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  23. labrator (1,744 comments) says:

    DPF’s statement that it is “almost impossible to dismiss an employee legally” is ridiculous, unless he does have some information that we’re not privy to here.

    On what basis is it ridiculous? The fact only 15% of performance based dismissals are upheld by the ERA? It seems you’re ignoring the rest of his statement which was “… for incompetence”.

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  24. The Scorned (719 comments) says:

    Whine harder: All heil the market… the one true faith. :)

    The market is the mirror of the people….;-)

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  25. KiwiGreg (3,169 comments) says:

    don’t forget employers who go to the ERA have already decided that their case is so strong it is worth paying actual, charge by the hour lawyers to go to bat. Employees will almost always be represented by no win no fee lawyers (or cunts, as I call them). So a 15% win rate when all the marginal cases have been settled (because it’s almost always cheaper to just pay the extortion then go to court) sends a clear message on “impartiality”.

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  26. DylanReeve (179 comments) says:

    On what basis is it ridiculous? The fact only 15% of performance based dismissals are upheld by the ERA? It seems you’re ignoring the rest of his statement which was “… for incompetence”.

    The ERA doesn’t rule on all dismissals. Only those which have reached them – ie. those people have a case.

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  27. Weihana (4,496 comments) says:

    The Scorned (595) Says:
    June 6th, 2013 at 2:51 pm

    The market is the mirror of the people….;-)

    As is democracy. :)

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  28. scrubone (3,044 comments) says:

    The ERA doesn’t rule on all dismissals. Only those which have reached them – ie. those people have a case.

    Don’t follow the news much, do you?

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  29. David Garrett (6,309 comments) says:

    Kiwigreg: Well, you have just demonstrated your ignorance…not that that worries you…the “no win no pay c…ts” as you sho charmingly put it are invariably NOT lawyers…lawyers who will work on that basis are very few and far between, and generally not very good…thus they have to work that way in order to get any work

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  30. slijmbal (1,210 comments) says:

    DG Says

    “It would also be useful to know how many of the cases in which the employer was held liable were cases where failing to follow process led to a finding of unjustifiable dismissal as opposed to a lack of substantive reasons.

    When I was most active in this field of law, 90% of employers who lost failed because of lack of correct process rather than the dismissal being substantively unjustifiable. It was actually money for jam for any half decent lawyer acting for employees….and some of the large employers were no better at getting it right than the small ones.”

    Just had to go through a cluster of employment issues. Suffice to say 2 were dismissal cases – pretty serious at that (we’re talking illegal acts not relatively minor stuff like misconduct) and one an unfortunate redundancy of a manager because of revenue issues.

    I can confirm that there is still an enormous focus on process. In once case I had stated my original provisional decision to dismiss was unchanged after a meeting to review my provisional decision which allowed the employee to respond to the decision rather than stating they were dismissed. The lawyer said this was probably worth a couple of $k in some mythical personal distress based on letting staff know she no longer was employed (note the reason for lack of employment was not told to the staff) prior to dismissing the employee.

    In effect, by saying a provisional decision was unchanged after the employee was given the right to respond to the decision and that the only reason for it to be provisional was to allow the employee to respond is not the same as stating it is an actual decision. Jesuitical type arguments.

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  31. Mike Readman (356 comments) says:

    Inland Revenue took 3 and a half years to find that I was “dysfunctional”. Although, we are talking Inland Revenue, they take a hell of a long time for a lot of things.

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  32. Andronicus (219 comments) says:

    When studying the stats it needs to be remembered that only the worst cases get to the Tribunal.

    Dismissing a worker for incompetence is not hard, so long as you follow a simple set of procedural rules.

    1) Give thre employee the right to representation
    2) Spell out clearly the faults causing you concern and the standard of work you require
    3) Listen with an open min to the employee’s response
    4) Discuss what training the employee has received, and what further training is needed
    5) Set a timetable for training and for the employee to reach the standard required

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  33. slijmbal (1,210 comments) says:

    @Andronicus

    By which point you’ve paid a further 2-3 months of pay for an incompetent employee plus notice period ……

    Most employers don’t want to sack employees – they cost time and effort to recruit and train. You’ve normally come to the point of realising that no amount of training will fix an employee and then need to get them off the books. As an employer you want your employee to succeed, you try and make them better as it generally makes more money for both the employer and employee. The fact that they aren’t up to the job is not really a cost that the employer should bear.

    The above process appears reasonable but is utter bollocks and has no relevance to the real world.

    “When studying the stats it needs to be remembered that only the worst cases get to the Tribunal.”

    Once again I say bollocks – getting to the Tribunal is a measure of stubbornness as it’s normally a Pyrrhic victory once you take in to account legal costs. That is why most cases are sorted out by mediation.

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  34. Viking2 (11,125 comments) says:

    Why arethere any rules. Employment is no different from any other contract between willing parties. It’s only when ot goes sour that matters and a sour relationship is good for neither.
    People change, standards change and required results change. Time goes by. Get a life and a new job.

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