Appendix A: Relevant Employment Law and Practice

A.1
This Appendix describes the procedures set out in the Employment Relations Act 2000 for resolving employment disputes, and the main remedies available to employees in the event that a personal grievance is found to be valid.

Procedures

A.2
The Employment Relations Act encourages parties to maintain good relationships and voluntarily resolve any disputes that arise during the employment relationship. The Act promotes mediation as the primary problem-solving mechanism.

A.3
The Department of Labour provides a mediation service for this purpose. Parties to a dispute can use the Department’s mediation services in two ways:

• They can seek the active involvement of a mediator – using a process which is confidential unless the parties agree otherwise. If the mediation results in a settlement, the mediator can sign the agreement – making the settlement enforceable against either party.¹⁷
• Alternatively, the parties can negotiate an employment settlement independently of the mediation service, but then ask an authorised mediator¹⁸ to sign the agreement. This is a common approach, which achieves the same result in terms of enforceability.

A.4
The mediator plays a facilitative role. We understand this may involve alerting the parties to the risks involved in a particular approach to settlement – such as those associated with large tax-free payments. In general, however, the parties are responsible for the terms of any settlement and bear the risks associated with it.

A.5
Similarly, the mediator’s responsibility when signing an employment settlement is usually limited to ensuring that the parties understand the final and binding nature of the settlement.¹⁹ It would be unusual for a mediator to question the terms of an agreement – although this does sometimes happen when the agreement appears to be substantially inconsistent with what would have been awarded had the case been submitted to binding determination.

A.6
If the parties cannot reach a settlement at mediation, they may agree to the mediator making a binding decision.²⁰ Alternatively, either party may submit the dispute to the Employment Relations Authority for investigation. The Authority will consider the merits of the dispute and issue a binding determination.²¹

A.7
If either party is dissatisfied with the determination made by the Employment Relations Authority, they can ask the Employment Court to:

• grant a full hearing of the matter; or
• determine a question of law or fact.²²

A.8
There is a further right of appeal to the Court of Appeal on questions of law.²³

Remedies

A.9
If the Employment Relations Authority or the Employment Court determines that an employee has a valid personal grievance, it can provide for one or more of the following remedies:

• reinstatement in the former position or one that is no less advantageous;
• reimbursement of lost wages or other money; and
• a payment of compensation, including compensation for:
  • humiliation, loss of dignity, and injury to feelings; or
  • loss of any benefit (monetary or otherwise) which the employee may reasonably have expected to obtain.²⁴

A.10
Reinstatement is the “primary” remedy. In other words, the Authority or the Court must order reinstatement where it is practicable to do so – irrespective of whether any of the other remedies are provided.²⁵

A.11
Reimbursement of lost wages is usually limited to the lesser of:

• the amount actually lost; or
• three months’ remuneration.²⁶

A.12
The amount payable under a remedy may be reduced if, and to the extent that, the employee’s actions contributed to the situation that gave rise to the personal grievance.²⁷

17: Section 149(1) of the Employment Relations Act.

18: Meaning a mediator authorised by the Department of Labour.

19: Section 150(2), (3) of the Employment Relations Act.

20: Section 150 of the Employment Relations Act.

21: Sections 159 and 160 of the Employment Relations Act.

22: Section 179 of the Employment Relations Act.

23: Section 214 of the Employment Relations Act.

24: Section 123(a) to (c) of the Employment Relations Act. Additional remedies are available in cases involving sexual or racial harassment: section 123(d).

25: Sections 125 and 126 of the Employment Relations Act.

26: Section 128 of the Employment Relations Act. There is discretion to award a larger or lesser amount in appropriate cases.

27: Section 124 of the Employment Relations Act.