Personal grievance awards break records

Personal grievance awards broke records in 2008 in all directions, says David Lowe, Employment Services Manager for the Employers and Manufacturers Association (Northern).

An analysis of the decisions last year (see attached) shows new records were set for both the highest and lowest payouts.

“A record 521 personal grievances were heard in 2008, and in another new high, 67 per cent of decisions favoured employees,” Mr Lowe said.

“But the average compensation award went down by 26 per cent from $6,804 in 2007 to $5,067 in 2008, which was below 2004 levels.

“The increase in the number of cases was not in relation to restructuring and redundancy. They were up 20 per cent whereas the overall increase in cases increased by 25 per cent.

“In fact it was the number of cases claiming disadvantage and about dismissal for poor performance that doubled.

“It pays most to make a claim in Wellington – the average pay out there for hurt and humiliation was $6,474 whereas in Auckland it was $4,851, and in Christchurch $4,896.

“Awards made by individual Authority members varied hugely, with the highest awarding more than double the lowest.

“The analysis also revealed that 49 per cent of personal grievances are taken by employees in their first year of employment.

“While the law says reinstatement to a job is the primary remedy, only 17 out of 521 employees were reported to have claimed it.

“Getting expert advice clearly pays off with 60 per cent of EMA employers winning their personal grievance compared to the regional average of 31 per cent.”

Commenting on the analysis, Mr Lowe said the claim that some employees see personal grievances as an alternative to buying a Lotto ticket has some foundation.

“Employers want to do the right thing, but what is right is far from clear,” he said.

“Employers report the uncertainties around personal grievance law are a real barrier to productivity improvement.

“The law needs to be clear for both employers and employees when they are in the stable workplace figuring out what to do, not when they are in the court room after the grievance horse has bolted.

“The Government needs to go a step further than its policy at present and tidy up the messy personal grievance law.”

*NB: Personal grievance awards analysis attached

Example: $1 million damage earns written warning

Under New Zealand employment laws, an employer that dismisses someone for losing them $1million may well be told they are an unfair and unreasonable employer.

According to a recent Employment Relations Authority decision, Mr Morgan was operating an excavator at the Stockton coalmine near Westport when it over-balanced and rolled over. The repair bill was $1 million, not to mention downtime. Mr Morgan was dismissed.

The Authority found that in all the circumstances, a fair and reasonable employer would have issued Mr Morgan a written warning. It then went on to order his reinstatement to the same position.

Total average costs (all PGs – Authority and Court)

Length of Service

Settlement figures