Employment restructuring processes trip up 74 per cent of personal grievance cases

Employers lost three quarters of the personal grievance claims brought against them when they restructured last year because their processes were inadequate, says David Lowe, Employment Services Manager for the Employers & Manufacturers Association.

The finding is from the annual analysis of the decisions made by the Employment Relations Authority by EMA. The analysis showed the number of grievances overall continued to grow but at a more moderate rate compared to previous years.

EMA assessed 591 claims for the year in review (2010) compared to 579 for the previous period (2009).

“Businesses are being discouraged from seeking to improve themselves because of the complicated procedural requirements of our employment law,” Mr Lowe said.

“Overall employers lost 69 per cent of all restructuring related personal grievances.

“A recent example was Massey University losing for not giving an employee’s interview and assessment notes to another employee who was also involved in the change.

“Making it hard for firms to change is of no benefit to anyone in the long-term,” Mr Lowe said.

“Because of the employment challenges they must deal with, some businesses delay making any changes until they are faced with a crisis and forced to take sudden action rather than adopt an incremental approach.

“This year the cost of an employer to defend themselves successfully was $9,880.

“The total bill for an employer who slipped up was an average of $34,411.

“For employees who win their cases, the average pay out is $11,023 after legal fees. Employees who lose are left with an average bill of $13,508.

“’No win no fee’ advocates who feed off the employer’s defence costs and use them to extract payments from those who have done nothing wrong are exacerbating the situation

“This practice of ‘ambulance chasing’ should be banned.

“Disadvantage claims which are usually used as a back-up to an otherwise doubtful dismissal claim continue to make up 42 per cent of all personal grievances; employers lose 64 per cent of them.

“The overall chance of success for employees was the same as the previous year at 59 per cent for employees and 41 per cent for employers.

“The success rate for employers who are members of EMA was 61 per cent compared to a success rate of 37 per cent for other employers in the region.”