'Disadvantage' latest personal grievance catch cry

Media statement Thursday, August 2nd, 2007

'Disadvantage' the latest catch cry in personal grievance industry

Claims of 'disadvantage' are the latest catch cry from employees trying their luck on the personal grievance gravy train.

EMA's annual analysis of decisions of the Employment Relations Authority (ERA) for 2006 brought up 238 claims of disadvantage, said David Lowe, Employment Services Manager for the Northern Employers & Manufacturers Association.

"In the past year 70 per cent of ERA decisions over disadvantage went in favour of employees," Mr Lowe said.

"Overall, more employees won their cases in 2006 than in previous years and the amount of money they got also increased.

"Personal grievance claims rose 18 per cent which employees won 64 per cent of the time.

"Two years earlier, in 2004, the outcomes between employers and employees were in balance with 52 per cent of decisions in favour of employees.

"Awards for hurt and humiliation last year increased on average by 17 per cent to $6,167.

"Actual and constructive dismissal claims dropped from 312 to 217 which indicates that employers feel they cannot safely dismiss anyone any longer. Instead, they opt for giving out a warning which is then challenged through the disadvantage part of the law.

"The process that employers must follow in dealing with workplace problems has become more than most New Zealand businesses can handle without turning to expert legal advice.

"The personal grievance law is losing credibility; we read decisions by the Authority that are bereft of common sense but probably correct in law.

"But employees should think twice about trying their luck since losing will cost them on average $9,000 by the time they pay legal expenses plus costs awarded to the employer.

"It has been suggested employers encourage the growth of the grievance industry when they make out of court settlements.

"But you can hardly blame an employer for cutting a deal when a successful defence will cost on average $5270 and that they face a 64 per cent chance of losing a dismissal claim, and a 70 per cent chance they would lose a disadvantage claim.

"When the odds are stacked against you 3:1 it amounts to a sensible business decision to cut a deal and run.

"A real benefit from our analysis is that the consistency of awards between individual Authority members has demonstrably improved as a consequence.

"Clearly work has begun on achieving better consistency, and it needs to continue."

ENDS

© Scoop Media