Claims for personal grievances broke records last year in all sorts of ways. They’re also a major reason why companies join the Employers and Manufacturers Association, since our record in advising on how to avoid them, as well as on how to manage them should one come your way, is the best both in terms of our experience, and at the lowest cost.
A total of 521 personal grievances were heard in 2008 with 67 per cent of decisions favouring employees!
Decisions on personal grievances by the Employment Relations Authority and Employment Courts last year set new low records too for both the highest and lowest payouts. The highest award for hurt and humiliation was $7,200, down almost $1,400 on 2007 though slightly higher than in 2006. The lowest award went down to $3,316 from $6,458 the year before, which was the lowest in the past four years.
Average compensation paid out fell 26 per cent, from $6,804 in 2007 to $5,067 in 2008, which was below 2004 levels. It pays the most for employees to make a grievance claim in Wellington, where the average payout for hurt and humiliation was $6,474 whereas in Auckland it was $4,851, and in Christchurch $4,896.
In one case, an employee cost his employer a $1 million repair bill, but the Employment Relations Authority ruled the employer should have given him a written warning, not a dismissal notice. That person, Mr Morgan, was operating an excavator at the Stockton coalmine near Westport when it over-balanced and rolled over. The Authority found that in all the circumstances, a fair and reasonable employer would have issued Mr Morgan a written warning. It ordered his reinstatement to the same position. The message sent to small and large employers under New Zealand law, is that if you dismiss someone for losing $1million you may well be told you are unfair and unreasonable.
Last year’s grievance figures also show awards made by individual Authority members varied hugely; the highest was more than double the lowest.
Average costs awarded against an employer were $4,207 in Auckland compared with the national average of $4,349 but taking in overall actual costs the total in Auckland was $7,126.
Interestingly, the increase in grievance claims was not in relation to restructuring and redundancy but claims over disadvantage and dismissal for poor performance. These doubled.
The analysis also revealed that the bulk of personal grievance claims (49 per cent) are taken by employees in their first year of employment.
Be assured, getting expert advice does pay off. 60 per cent of EMA member employers won the cases against them compared to the regional average of 31 per cent.
Employers often report the uncertainties around personal grievance law are a barrier to productivity improvement. The law needs to be clear for both employers and employees as they try and figure out what to do in the workplace, not in a court room after the grievance horse has bolted.
