Facing A Personal Grievance?A Snapshot Of Remedies
The first question that we are usually asked by an employer facing a personal grievance claim by an employee or former employee, is "Will they win?". If they don't like the answer to that question, the next is typically "So, what will they get?".
The Auckland Employment Relations Authority has collated and published statistics for personal grievance determinations over the period 1 January 2008 to 28 May 2008. Out of 193 determinations issued in that period, the Authority awarded remedies for unjustified dismissal or disadvantage in 50 cases. Of the remaining 143 determinations, 30 include where dismissal or other employer actions were found justified and 113 other determinations were for costs, consent, wage recovery, compliance orders, etc.
Reinstatement
Although reinstatement is the primary remedy under the Employment Relations Act 2000 ("ERA"), only two employees were successfully reinstated – this is probably indicative of the Authority's reluctance to reinstate an employee in circumstances where there is any evidence of a breakdown in the relationship between the employee and the employer.
Lost wages
Lost wages were awarded in 31 cases (62%). Although the general "rule of thumb" is to award three months lost wages to a successful grievant (section 123(1)(b) of the ERA), the quantum of lost wages awarded by the Authority varied depending on, among other things, the extent to which the employees mitigated their loss and any finding of contribution by the Authority. The Authority found that 28% of successful applicants (ie in 14 cases) failed to take adequate steps to mitigate their loss by, for example, submitting evidence of job search and earnings.
Compensation for hurt and humiliation
In six cases, the Authority awarded the successful grievant more than $10,000 under section 123(1)(c)(i) of the ERA. In 2 of those cases, awards of $25,000 were made. In more than half of the remaining cases, compensatory awards for hurt and humiliation were between $3,000 and $8,000.
Contribution
In five cases (10%), the Authority determined that any remedies awarded to the employee for unjustified dismissal or disadvantage, should be reduced by 100% for contributory conduct. In other words, the Authority determined that it was necessary to reduce the remedies that would otherwise have been awarded, due to the actions of the employee and the extent to which they contributed to the situation that gave rise to the personal grievance (section 124 of the ERA). In 11 other cases (25%), the Authority reduced awards by between 10 and 50%.
What does all this mean?
It is always important to assess likely remedies (if any) at the outset of any personal grievance claim. Of course, this assessment should parallel consideration of liability issues. Thorough and thoughtful consideration of both of these issues will mean that steps taken to either resolve or defend the claim should be made in order to maximise the best outcome for your business.
If an employee or former employee has raised a personal grievance (or is likely to), please do not hesitate to contact us. Our approach is to manage most personal grievances and other employment relationship problems in a way that avoids the necessity for litigation. Our employment partners in the team have gained LEADR accreditation and are highly skilled mediators. When litigation is unavoidable we have a record of acting successfully for clients in significant litigation.
For more information, please contact:
Erin Davies
Partner
t: +64 9 979 2177
m: +94 29 622 2300
e: Erin Davies
Last updated: 16 September 2008 |
