Workplace Relations and Safety Minister, Brooke van Velden, is vowing to overhaul the Employment Relations Act in New Zealand to ensure that employees are not rewarded in the personal grievance system for poor behaviour or performance.
Peak body Retail NZ has backed the move.
“Retail NZ members have told us that receiving a personal grievance claim from an employee is an upsetting and difficult process,” Retail NZ CEO Carolyn Young said.
“Some employers have genuine reasons to pursue performance management or disciplinary action. Where an employee has engaged in serious misconduct, they should not be compensated through the personal grievance system.
“We look forward to the prospect of the Employment Relations Authority and the Employment Court having more leeway to recognise when employees are at fault.”
According to Retail NZ, statistics show that employers are favoured in only about a third of personal grievance claims. Young said it would be interesting to see what the proposed, more simplified process entails, adding that the many small businesses in New Zealand need processes that are simple and easy to follow.
“Retailers need fit for purpose, stable, predictable employment laws that are easy for business owners to navigate and comply with, creating an environment where businesses can prosper, and entrepreneurs can develop and grow new businesses.”
Minister van Velden said simplifying personal grievances and removing the eligibility for remedies if the employee is at fault will strike a better balance and increase certainty for employers so they can focus on their business.
“The Employment Relations Act allows the courts to make reductions to remedies when the employee contributes to the personal grievance, but these reductions have become smaller, while awards to employees have been increasing,” van Velden said.
“The status quo has led to increasing uncertainty and potential costs for employers and has incentivised employees to try their luck at raising a personal grievance in the hope that they will get a financial pay out.
“I’ve heard of personal grievance cases where employees have engaged in serious misconduct such as violence, fraud and theft, yet their former employer has had to pay them financial remedies or reinstate them into their roles.”
Some anecdotes that van Velden has seen include an employee who was dismissed for falsifying information on their timesheet, and yet was able to receive $10,500 in compensation and 13 weeks of lost wages from their former employer.
She also reported that a health professional was dismissed for being physically violent toward a patient, and yet was still reinstated into their role following a successful personal grievance.
Meanwhile, an employee who was dismissed for theft of company food still received $21,000 in compensation from their former employer.
“This is not the balance personal grievances are meant to strike,” van Velden said.
Other proposed changes to the Employment Relations Act include allowing remedy reductions of up to 100 per cent where an employee has contributed to the situation that gave rise to the personal grievance, requiring the Employment Relations Authority and Employment Court to consider if the employee’s behaviour obstructed the employer’s ability to meet their fair and reasonable obligations, and increasing the threshold for procedural error in cases where the employer’s actions against the employee are considered fair.
“Dismissing an employee is often a decision businesses make very reluctantly, given doing so can lower the morale of the workplace, risk harming the employer’s reputation, and because employee turnover is generally costly,” van Velden said.
“Alongside the introduction of an income threshold, the changes will be progressed through the Employment Relations Amendment Bill, which I aim to introduce in 2025.”