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                by the

New Zealand Council of Trade Unions –
          Te Kauae Kaimahi

                on the

       The Review of Part 9 of

 The Employment Relations Act 2000:

        Personal Grievances

              March 2010
NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

Section One – Overview
1.    Introduction

1.1. This submission is made on behalf of the 39 unions affiliated to the New Zealand
      Council of Trade Unions – Te Kauae Kaimahi (CTU). With 350,000 members
      represented by those 39 unions, the CTU is the largest democratic organisation in
      New Zealand.

1.2. The CTU acknowledges Te Tiriti o Waitangi as the founding document of Aotearoa
      New Zealand and formally acknowledges this through Te Rūnanga o Ngā Kaimahi
      Māori o Aotearoa (Te Rūnanga), the Māori arm of Te Kauae Kaimahi (CTU) which
      represents approximately 60,000 Māori workers.

1.3. There are three sections to this submission. The first section provides an overview of
      the importance of personal grievance rights. The second section responds to the direct
      questions in the Department of Labour discussion paper. The third section includes 10
      case studies of real personal grievances that illustrate the points made in the first two
      sections of this submission.

2.    The right to protection from unfair treatment at work

2.1. The rights to fair processes and protections at work, particularly in relation to
      dismissal, are recognised in the UN Declaration of Fundamental Human Rights:

      • The right not to be subject to arbitrary attack on a person’s honour and reputation,
      • The right to just and favourable conditions of work; and
      • The right to protection against unemployment.
2.2. Rights for both process and institutional support are also included in the Standards of
      the International Labour Organisation and, in particular, ILO Convention 158
      Termination of Employment 1982:

      • Article 4: The employment of a worker shall not be terminated unless there is a valid
         reason for such termination connected with the capacity or conduct of the worker or
         based on the operational requirements of the undertaking, establishment or service;
      • Article 7: The employment of a worker shall not be terminated for reasons related to
         the worker's conduct or performance before he is provided an opportunity to defend
         himself against the allegations made, unless the employer cannot reasonably be
         expected to provide this opportunity; and

March 2010                                                                                        2
     • Article 8: A worker who considers that his employment has been unjustifiably
        terminated shall be entitled to appeal against that termination to an impartial body,
        such as a court, labour tribunal, arbitration committee or arbitrator.

2.3. New Zealand is known for its generally good labour laws. This is not only important for
     our own values and culture but enhances our reputation internationally. At a time when
     New Zealand is seeking new relationships with countries such as the USA, the regard
     we give to the rights of workers is under scrutiny. Recognition of international
     obligations is a reputational issue and needs to be regarded in the discussion around
     personal grievance rights.

3.   Limited jurisdiction

3.1. It is important to remember that any employee who wishes to challenge a dismissal or
     any aspect of it in any court must bring the matter to the Authority as a personal
     grievance (Employment Relations Act 2000 s113). In its statutory context, this rule
     precludes any common law action for damages; and also severely limits the right to
     bring judicial review proceedings against public sector employers. There is also no
     right to strike in relation to a dismissal. Any removal or restriction on the right to take a
     personal grievance therefore has the potential to have far-reaching and dangerous
     effects, namely depriving some workers of any remedy at all, or unjustly limiting
     access to justice and remedies, so as to breach New Zealand’s international

4.   Business competence

4.1. Much of the rhetoric around any reason to reduce protection from unfair treatment is
     based around the idea that the law is too complex, particularly for small businesses.
     But the evidence does not support this, with many small and medium size employers
     (SMEs) clearly employing and managing staff successfully. This level of success
     shows that the law is straightforward and the requirement to comply with it is no more
     or less arduous than any other regulatory and legal requirements a business might
     need to contend with (food safety, health and safety, taxation etc).

4.2. Being a good employer is a fundamental factor in the success of any business.
     Holding on to good staff, training them, letting them know how they are performing and
     other good management practices will often determine whether or not a business
     survives. Having legal requirements around the employment of staff encourages
     business to think about these issues and to seek training and advice in this area.
NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

4.3. Allowing lower standards has two detrimental impacts: the first is clearly for workers in
      SMEs if employers do not have legal requirements to treat them fairly; the second is
      for the SME itself, it is more likely to fail without expectations of good staff processes.

4.4. The New Zealand economy will not thrive unless our small business sector is
      developed to be competent in the full range of skills required to run a successful

5.    Training and Support

5.1. The CTU supports the provision of more training and support for business and workers
      to become more competent in how to manage successful employment relationships.
      We think this is an area where many employers could do much better and gain long
      term benefits. We totally oppose any reduction in either the procedural or substantive
      grounds for personal grievances which will bring about the opposite result.

6.    The 90 Day Provisions

6.1. The CTU opposed the legislation to remove grievance rights during the first 90 days of
      employment for workers who are employed in small businesses. Many of these
      workers have no access to union advice and the terms and conditions under which
      they are employed are not covered by a collective agreement. Their terms and
      conditions are usually unilaterally set by the employer.

6.2. In response to concern at the changes, the CTU has offered advice to any worker
      dismissed under the new provisions regardless of whether or not they are in a union.
      We have had a large number of calls regarding dismissals in the first 90 days of
      employment. To date, in all cases, we believe the worker has been unfairly treated but
      in many cases they have been left without rights.

6.3. The damage to those workers in this situation has been significant, and is not limited to
      monetary damage. It also includes damage to reputation, dignity and confidence.
      Many have been young workers. The feeling of injustice is palpable and greatly
      increased by the fact of having no recourse to justice.

6.4. The CTU believes the reasons advanced to support the introduction of this law have
      proven to be invalid:

      • It was claimed it would create employment. It has not created employment and in
         fact unemployment is higher now than when the law was introduced.
      • It was claimed it would reduce the burden on SMEs. It is not been proven that
         SME’s find the employment obligations difficult or technical.

March 2010                                                                                          4
NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

      • It was claimed that those workers marginalised from the workforce would get a
         chance at employment. The CTU has seen no examples of people who are long
         term unemployed finding it easier to gain employment. In fact, long term
         unemployment figures have increased and youth unemployment has risen steadily.
         All workers who have made contact with the CTU regarding unfair treatment by
         employers using this law have been in previous employment for some time.
6.5. We are very concerned that the discussion paper hints strongly at an extension of the
      90 day provisions to workplaces of up to 50 employees. This would encompass 99% of
      New Zealand enterprises and mean 45% of the workforce or 875,000 people would be
      in enterprises where new workers have no appeal rights against dismissal. This is a
      major extension of a policy for which the proposed benefits are not evident and the
      downside is major.

6.6. Around 700,000 people are estimated to start a new job each year. If these new starts
      are spread evenly and the no rights period is extended to firms up to 50, then 45% of
      700,000 or 315,000 people each year would be employable under an agreement that
      removes their right of appeal against dismissal in the first 3 months.

7.    Conclusion

7.1. The CTU is concerned that the Government is reviewing personal grievance rights. We
      believe the current system works well, is fair and is accessible to workers and
      employers. Even so the current provisions still mean that getting justice for workers
      who are unjustifiably dismissed can be difficult. Reinstatement is the only remedy that
      truly restores the benefit the worker has lost from the dismissal but this is often difficult
      to achieve, particularly in mediation. Current costs of access to personal grievance
      provisions can be high for workers who are not in a union and compensation is very
      low and not nearly enough to truly compensate for the damage caused. Emotionally
      workers are often very badly affected. Removing protections will not only exacerbate
      all of this, but give employers a licence for this kind of damage to be perpetrated.

7.2. Governments need to provide protection for all citizens. Equal with the need to have
      successful businesses in the New Zealand economy is the need to have decent jobs.
      Policy that supports both these requirements does not need to be mutually exclusive.
      Good businesses have good staff practices and Governments can encourage this, as
      well as protect workers from the worst excesses of employer power by having fair
      protections in law for unfair dismissals and by having good programmes of support and
      education readily available to ensure they seldom occur.

March 2010                                                                                        5
NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

Section Two: DOL Review Response Form – CTU Response


Please ensure you complete this form and return it by fax, email or post no later than
5pm, on 31 March 2010.

Please email your completed response to (preferred) or post
it to:

Review of Personal Grievances
Workplace Policy Group
Department of Labour
PO Box 3705

Please see for further information.

If you are completing the questionnaire electronically, please feel free to expand the length of the
spaces provided for your answers and to attach any supporting documents. If you are completing it on
paper, please feel free to add other pages but make clear which question your answer refers to.
Specific examples of what you think is working well, or could be improved would be welcome.

Personal / organisational information

1. Your full name*

Helen Kelly

2. Name of your business or organisation (if applicable):

New Zealand Council of Trade Unions – Te Kauae Kaimahi

3. Postal address

PO Box 6645, Wellington 6141

4. Email address

5. Telephone number(s)

(04) 385 1334

March 2010                                                                                         6
NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

6. Relevant activities you or your business/organisation are involved with

The CTU is the internationally-recognised peak body for trade unions in New Zealand.

7. Size of business/organisation
The CTU represents 39 affiliated unions with over 350,000 members between them.

8. Are you comfortable with the contents of your submission being a matter of public
record i.e. this submission may be requested under the Official Information Act 1982
(personal details will be automatically removed)?

9. How did you find out about this consultation? For example: public notices in the
newspaper, the Department of Labour website, employer/employee networks and
associations, friends and family, business advisors, other websites, media such as radio or

* Please note that your name and contact information will remain confidential to the
Department of Labour to the extent that the law allows. The Department of Labour is the
intended recipient and holder of the information and can be contacted at PO Box 3705,
Wellington, New Zealand. In accordance with Privacy Principle 7, you have the right to
access and correct any personal information you provide.

Part C: Operation of the Personal Grievance System

Question 1: Have you been involved in a personal grievance?
a)     If so, when was your most recent experience of a personal grievance?
b)     Were you an employee, employer, a representative for an employee or employer,
       or involved in some other capacity in the personal grievance process?
c)     How many personal grievances have you been involved in?

The CTU does not directly represent union members or workers generally in personal
grievance cases. However we have numerous calls to our offices from workers seeking
advice about grievances at work – some of which we advise on and others we refer on to
appropriate unions. Equally the unions affiliated to the CTU have represented workers in
thousands of grievances.

The CTU has a leading role in the establishment of employment policy through the National
Affiliates Council of the CTU - the governing body of the 39 CTU affiliated unions. Personal
grievance policy is a matter of major interest and importance to all unions.

March 2010                                                                                     7
NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

Question 2: If you have been involved in a personal grievance case, which employment
institutions were involved? (for example, mediation services, the Employment Relations
Authority or the Employment Court?) What was the outcome?
(If you have been involved in more than one case can you describe the institutions
involved and the outcome from the most recent case?)

The CTU does not directly represent union members or workers generally in personal
grievance cases. However the CTU does facilitate a network of union lawyers that discuss
these issues on a regular basis. The CTU also meets regularly with the members of the
Employment Relations Authority.

Question 3:
Costs in regards to employers:
a)     Do you think the average cost of settling an employment relationship problem
       such as a personal grievance of $5,000 (or $3,000 - $4000 in the instance of an
       SME) is reasonable?
b)     In your experience are these costs higher or lower than other civil or legal
c)     If you think costs for resolving a personal grievance are not reasonable, what
       would be a reasonable cost?
Costs in regards to both employers and employees:
d)     To what extent (if any) does the average cost of settling a personal grievance
       have on your decision whether or not to make/defend an allegation of a personal
       grievance through the Employment Relations Authority?
e)     Do you have any suggestions for how the cost of either defending or raising a
       personal grievance can be reduced?
f)     Are there any other comments you would like to make in regards to costs,
       financial or otherwise?

The “personal grievance system” is designed to resolve workplace disputes at the lowest
level and with the least possible cost. In this respect unions play a valuable role in the
effective running of the system. Workplace delegates and union organisers with specialised
professional experience help to resolve and manage most disputes within the workplace well
before third-party mediation is ever required. Most union organisers, who would each
represent thousands of workers, would only access the assistance of the mediation service
once or twice a year. Of those, less than 1 in 20 would ever escalate further and require the
involvement of the Authority, let alone the Court. There is simply no incentive for unions to
take unwinnable or frivolous cases.

However, this is not the same for workplaces without union representation. Without the
mechanism for representation in the workplace and dispute resolution experience that the
union provides, aggrieved employees can feel they have no option but to “lawyer up” to have

March 2010                                                                                      8
NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

their grievance heard or face abandoning their case altogether. Employers respond to
employee claims by employing lawyers of their own and further raising the stakes. On both
sides, lawyers have a commercial incentive to see the greatest possible use of their
services. The CTU knows that many people (possibly the majority of people) who are
unfairly treated at work take no action at all. But, where they do, across New Zealand there
are numerous examples of workers who have pursued a grievance with legal representation
and, even if they win and are awarded a settlement, find themselves unable to cover their
costs, in debt to a lawyer and forced into a weekly repayment schedule to service that debt.

This points to a further key issue – rather than being an issue of high cost, there is clear
evidence that settlements in “personal grievance” cases are far too low. The impact of losing
your job is immense and an average settlement of $2800 cannot balance the direct loss of
immediate income, let alone the broader financial costs, stress on families, personal
psychological strain and risk to future employment opportunities and potential earning. Even
on the average wage, an average settlement represents less than 3 weeks basic wages.

Under New Zealand’s employment relations framework, workers have given up the right to
strike on “personal grievance” issue. The right to strike is a fundamental human right
internationally established by numerous instruments. The Act also precludes any common
law action for damages. The clear and absolute quid pro quo is a robust and accessible
dispute resolution mechanism for personal grievances. Part of that is low-access costs, but
with fair settlements that reflect the severity of the issues being addressed.

Equally, the absence of strong penalties sends a dangerous message to employers that
there are no real repercussions for bad behaviour and that the price of infringing on workers’
basic rights is marginal.

Given it is a fundamental right, the CTU can see a number of ways to help ensure workers
have their workplace grievances addressed. The first is greater support for unions. As shown
by the Department of Labour’s study, the earlier a dispute is resolved the lower the cost and
the better the outcome. Unions are an effective tool in the quick resolution of employment
relationship problems in-house and before they reach mediation. Anything that supports the
greater involvement of unions in resolving employment relationship problems will reduce
costs. Second, there should be a reversal of the almost 50 per cent cut in funding to
community law centres, which help to provide lower cost advice that is less driven by a need
for confrontation and escalation than some other legal representatives. Thirdly there could
be improvement and extension of the legal aid provisions around action through the
Authority and Court. Fourthly an increase in awards for grievances would help to cover the
real cost of a justified grievance to an employee.

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

Employment relationship problems do occur in the workplace. Some of those problems will
become the basis for personal grievances. But as the Department of Labour’s 2007 study
shows, the number of employment relationship problems is very small – 1.5 problems per
100 employees. Personal grievances are a subset of employment relationship problems and
their occurrence will be even rarer. The same study finds that the total direct cost of
employment relationship problems in the private sector is equivalent to 0.4 per cent of total
private sector wages. Even adding in an assessment of total indirect costs to employers
(such as productivity loss) the amount only rises to 0.6 per cent of total private sector wages.
In the public sector, lower incidence of employment relationship problems would make these
costs even lower. Both in relation to the total amount of money that employers are spending
on wages to purchase labour, and relative to the cost of business functions that support
employment such as recruitment, these costs are tiny and simply do not support the
assertion that “it is expensive to resolve employment relationship problems”. In fact
recruitment costs relative to the private sector wage bill would be approximately ten times as

Question 4: Have you received representation in a personal grievance case?
a)     If so, can you describe the type of representation used e.g. “no win, no fee”
       employment advocate, barrister or solicitor, union advocate, employer represent-
       ative or other type of employment advocate? If other, can you please specify?
b)     What was your experience of the representative in relation to:
       i) process
       ii) outcome and
       iii) cost?

The CTU does not directly represent union members or workers generally in personal
grievance cases. However the CTU does facilitate a network of union lawyers that discuss
these issues on a regular basis. Our first point would be to re-emphasise the value of unions
in the efficient and effective resolution of workplace disputes. Their ability to settle these
disputes ensures a very small number of disputes require the input of Mediation Services,
and an even smaller proportion require escalation to the Authority or the Court. As stated
earlier, the cost of engaging Mediation Services or appearing before the Authority and Court
must be kept to an absolute minimum in recognition of the loss of the right to strike in
relation to personal grievances. At the same time penalties awarded by the “personal
grievance system” do need to be significantly increased to reflect the severe impact of,
particularly, being unfairly dismissed from your job. They also need to send an effective
message to employers that they cannot simply weigh up the costs and put a de-facto price
on discarding workers.

March 2010                                                                                       10
NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

Question 5: If you have any concerns about the quality or representation in personal
grievance cases, how would you suggest the quality of representation in personal
grievance cases could be improved?

If there is wider concern about the activity of non-union advocates, the CTU is not opposed
to some form of registration (and/or further mechanisms of accountability) for these
representatives. However, as the Discussion Paper notes there are 200 such advocates,
only 30 of whom adopt a “no win-no fee” approach, operating across of a workforce of more
than two million.

Question 6:
a)     Do you think the personal grievance system provides a fair balance between
       employers’ and employees’ interests? For example, does the law fairly balance
       the duties and rights of employers and employees?
b)     Is the balance of fairness about right under the current personal grievance
       system? If the balance is not fair, how could it be improved to provide a better

It is absolutely clear that the current “personal grievance system” does provide a fair balance
between employers’ and employees’ interests. As noted above, the employment relations
framework in New Zealand does not a allow worker the right to strike over personal
grievance issues. The absence, therefore, of this fundamental human right places significant
weight on the robustness of the “personal grievance system”. In terms of its place in that
system, Part 9 of the Act is only a mechanism and is neutral on the relative weight of the
inputs to and outputs from that mechanism.

The only basis for claiming imbalance is to argue the grounds for a personal grievance are
biased against employers. But, surely, no one would argue employees should not have a
right to ask whether they have been unfairly treated when they are dismissed,
disadvantaged, discriminated against, or harassed in the workplace? If the question is
referring to s119 of the Act and the provision that there is a rebuttable presumption in
discrimination cases, it would be suggesting that requiring an employer to answer an
allegation is an “imbalance”. Any change to that provision would give an employer the
grounds to ignore an allegation. Not only would this be contrary to natural justice, it would be
even more unfair in the context of the unequal power relationship identified in s3 of the Act
which states one of its objectives to be, “acknowledging and addressing the inherent
inequality of power in employment relationships”.

The procedural requirements of the personal grievance law are common to most processes
where the importance of natural justice is a recognised component. They include the right to

March 2010                                                                                      11
NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

be told of a concern, to respond and to have that response considered, to be given a chance
to improve and to be represented in any decision making forums. The experience of the CTU
is that this process itself avoids many potential personal grievance claims from escalating.
Many perceived concerns are explainable. Denying workers these basic rights, afforded in
most circumstances when discretionary decisions with serious consequences are being
considered, would be outrageous.

Question 7:
a)     Do you consider the personal grievance system to be too complex and difficult to
       understand? If so, can you describe what parts of the system create complexity?
b)     The Act contains an objective test for justifiable dismissal. Do you think the
       current test is appropriate or does it create uncertainty? If it creates uncertainty,
       can you please describe the areas that create uncertainty?
       For example:
       i) what are your views on whether sufficient or too much emphasis is given to
       process rather than substance in a case?
       ii) do you think minor irregularities in process should be given less emphasis than
       the actual substance of the personal grievance claim?
c) What test would you consider appropriate if the current test of justification were to
       change? For example: what would you consider to be a fair process for
       addressing an employment relationship problem, such as a personal grievance?

The “personal grievance system” is not complex. Nor is it difficult to understand. It is
important to separate complexity and flexibility. The “personal grievance system” is designed
to be open and flexible– as s101 states the objective is, “to recognise that, in resolving
employment relationship problems, access to both information and mediation services is
more important than adherence to rigid formal procedures”. Thus the system cannot be
excessively prescriptive.

The CTU believes the test of justification is entirely valid and should not be changed. Such
tests are widespread in common law and any change would make employment law the
exception. If we take the term “objective” to mean not depending on personal opinions or
prejudices, this doesn’t mean the outcome of an objective test will be standardised. The
outcome depends on the weights of the objective measures in a particular instance. The
legislation does not assign relative weight to process over substance (or vice versa) it merely
presents a mechanism by which the substance is assessed. As it stands, the Authority and
Court already give minor irregularities in process less emphasis in personal grievance
decisions. In fact, as decisions such as Air New Zealand v Sutherland [1993] show, minor
irregularities are not only given less emphasis but can be clearly outweighed by substance.

March 2010                                                                                     12
NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

Question 8: Do you consider there are barriers to raising or defending a personal
grievance? If yes,
a)     What are the barriers to raising a personal grievance case?
b)     Are there greater barriers faced by particular groups? For example: women,
       youth, migrants, part time or casual employees?

The most obvious barrier to raising a personal grievance is faced by a worker in the first 90
days of their employment with an employer with less than 20 staff. As a result of the changes
in 2008, such a person has no right to raise a personal grievance. If the law actually
recognises a person’s right to raise a personal grievance, the next most significant barrier
faced by an employee who wants to raise a personal grievance is the risk to the ongoing
employment relationship, the security of their employment and loss of future earnings.
Escalation, especially beyond mediation, and particularly without union representation, may
mean incurring legal costs that the employee is unable to meet. Anecdotal evidence
suggests that significant legal debts are relatively common among employees who have
individually pursued grievances through the courts. This is particularly so, given the relatively
low level of settlements, especially where a decision is made in favour of the employee but
the employee is not reinstated. Given the denial of the right to strike over personal grievance
issues, and the absence of common law pursuit of damages, this raises significant issues.

In this context, the relative vulnerability of a worker will increase that worker’s reluctance to
pursue a grievance. In the circumstance of a casual worker, the largest barrier they face in
raising a grievance is that they are very unlikely to be offered any further casual work. But all
the groups identified in the question – women, young workers, migrants, ethnic minorities,
part time and casual workers –are generally more vulnerable. Whether due to their reduced
employment security, reduced ability to incur legal costs, lack of knowledge of the law or
social and cultural barriers, it is essential that all workers have the right to raise a grievance.

Question 9:     What are the barriers to defending a personal grievance case?

There are no actual barriers to defending a personal grievance case, except those posed by
the cost of legal escalation. However those barriers are likely to be far less compelling for an
employer than those faced by the individual employee raising the grievance.

Question 10: Do you have any suggestions for how any barriers to either defending or
raising a personal grievance case can be reduced?

The key to ensuring employees can raise personal grievances is ensuring real recognition of
their rights and ensuring a robust and effective mechanism for addressing their concerns.

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

The continued emphasis on resolving grievances at the lowest level and maintaining
reinstatement as the primary remedy work to minimise any barriers.

The key to ensuring employers feel they can defend a personal grievance, would appear to
be the same, along with more education, particularly for small employers, to overcome their
perception of imbalance.

Question 11: Have you experienced delays in raising or defending a personal grievance?
a)     If yes, where have these delays occurred in the personal grievance system and
       what effect has this had on you?

The CTU is aware of significant problems when a problem escalates beyond a solution
within the workplace. Mediation cannot take place without the consent of the employer and
all too often employers will ignore requests to attend meditation, forcing employees to go to
the Authority seeking an order for mediation. That bad faith behaviour is particular damaging
where reinstatement is being sought (given the correlation between speedy settlement and
successful reinstatement) and is also wasteful of the Authority’s limited resources.

Question 12: Do you have suggestions on ways to improve the responsiveness and
timeliness of
a)     the Department’s mediation services,
b)     the Employment Relations Authority or
c)     the Employment Court for resolving employment relationship problems?

As it stands, the Mediation Service will not offer to provide mediation services without the
prior agreement of the employer. Given the scenario outlined in the previous answer, there
would be significant merit in empowering the Mediation Service to request, or require,
employer participation in mediation. The CTU would also favour greater emphasis on
education in the workplace – both with employers and supporting the valuable work already
performed by union delegates.

Question 13: What are your views on getting a final and binding decision from the
Department’s mediation services during mediation?

The CTU fully supports the existing scope for mutual agreement on binding resolutions to be
reached at mediation. However, any attempt to introduce an element of compulsory
adjudication at mediation without the mutual consent of the parties would completely
undermine the process of mediation and be entirely counterproductive.

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

Question 14: SMEs can experience greater challenges in resolving workplace problems
due to a number of factors, such as a lack of specialist human resources and/ or lack of
union presence.
a)     Is there more that the Government can do to assist SMEs in resolving
       employment relationship problems such as personal grievances? What would
b)     Has the use of trial periods by employers reduced the incidence of personal
       grievances they have experienced? Please explain.

The CTU would fully support provision of further training and education for SME employers
around good employment practice and dispute resolution. But the CTU does not believe trial
periods make any useful contribution to the resolution of workplace problems. The CTU is
not aware of any studies or statistical data in relation to the impact of trial periods on the
incidence of personal grievances overall. Obviously the fundamental denial of rights in the
first 90 days of employment with a small employer will reduce the number of grievances in
the first 90 days.

In particular, those people who are unfairly fired during that period will never get the chance
to raise a grievance. But for those who remain in employment beyond 90 days, there is no
reason to assume that any poor employer behaviour that would have given rise to a
grievance (if the employee had the right to take one) would alter after 90 days and any
dispute is likely to continue or reoccur. However, employees’ perception of their ability to
address any issues and feel secure doing so will inevitably be reduced. Thus an extension of
the no-rights period beyond 90 days cannot be justified on any grounds.

Equally there is no evidence from the experience in small enterprises to suggest medium-
sized enterprises now need access to the 90-day no right provisions. There is little to support
the argument that effective resolution of workplace problems should be deemed beyond the
capacity of small, or indeed medium-sized, employers. Given the significance of employees
in any business, it seems both unjustified and entirely short-sighted to cherry-pick dispute
resolution as a requirement from which SMEs are exempted. All businesses have to meet a
range of regulatory requirements – from paying tax to health and safety. If businesses are to
grow sustainably, they need to start off on the right foot.

Question 15: Should different eligibility rules apply to different types of employees when
raising a personal grievance? If yes, can you please describe what these might be? For
a)      What are your views on limiting the ability of employees earning over a specific
        salary amount from raising a personal grievance for unjustified dismissal under
        the Act, e.g. a salary cap?

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

There is absolutely no justification for any difference of eligibility applying to different types of
employees. The right to raise a personal grievance is a fundamental principle of natural
justice. None of the five “possible options for consideration” listed in the discussion should
be considered.

Length of service – whether a trial period or otherwise – is an entirely arbitrary denial of
rights. The CTU deems these rights absolute (as does the ILO). But, even if they weren’t,
there is no logical connection with length of service. For example, why should a person who
has been offered and accepted a new job on the basis of their excellent employment record
suddenly lose their rights? This is a barrier to employment flexibility. When the 90-day no-
rights legislation was passed by the current Government the spurious argument was made
that this would increase employment opportunities. There was absolutely no evidence then
or now to support this statement, but to change the argument and assert that denial of rights
is now necessary to improve the functionality of the “personal grievance system”,
undermines the credibility of both arguments and suggests the real motivation for this
proposal is a drive to increase the ability of employers to act with impunity in the way they
treat their staff.

Similarly, the extension of no-rights periods from small to some medium enterprises runs
entirely counter to evidence and previous arguments. Small employers were deemed to lack
the capacity to effectively address personal grievances in the first 90 days. Now that
exclusion is being extended to enterprises with greater resources.

There is nothing excessive about a 90-day window in which to raise a personal grievance. It
simply represents a fair amount of time to try to resolve the issue through ongoing
communication in the workplace – including gathering information and informal and formal
discussions within the workplace.

Equally there is nothing excessive about the three-year limitation period of lodging
grievances with the authority. As the discussion papers states , “From the period 2007 to
2009 there has been one personal grievance case that was filed with Employment Relations
Authority within [sic] the three year limitation period after being firstly raised with the
employer”. The three-year limitation can also be contrasted with the six-year limitation in civil

Lastly, the suggestion that rights should be limited by income is entirely unjustified. For
example, if you earned $100,000 a year and the law said you weren’t allowed to raise
personal grievances, and you were sacked for no reason, you would still have been treated
unfairly. Furthermore you wouldn’t be earning $100,000 any more. Nowhere in that scenario

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

is there a justification for why you should be allowed to be harassed or sacked unfairly just
because of what you earn.

Question 16: Do you consider the 90 day limitation period for raising a personal
grievance with an employer is adequate and/or appropriate?
    a) If not, what would you consider is an adequate and/or appropriate period of time
       to raising a personal grievance with an employer?

The 90-day limitation period is entirely fair. It allows employees to try to resolve problems
within the workplace, including opportunities for union delegates and organisers to
contribute, informal and formal meetings, information gathering and attempts to reach and
apply an initial resolution. Any attempt to shorten it will inevitably deny resolution of
legitimate personal grievances or drive cases that could be settled at the workplace into the
Authority. In cases where redundancy is challenged as an unfair dismissal, the first an
employee may know about it is when they see their old job re-advertised – something which
might not take place until well into or after 90 days.

Question 17: Do you consider the three year limitation period for lodging a personal
grievance in the Employment Relations Authority and the Employment Court is
a)       If not, what would you consider is an appropriate period of time for lodging a
personal grievance in the Employment Relations Authority and the Employment Court
after it has been raised with the employer?

Again, the 3-year limitation period is entirely fair. As the Discussion Paper notes the
Employment Relations Authority has only heard one case outside the three year limitation
period – suggesting it is an entirely appropriate limit. But the 3-year limitation in personal
grievances can be contrasted with the 6-year limitation in civil cases. Again, any attempt to
shorten it will inevitably deny resolution of legitimate personal grievances.

Question 18: What are your views on reinstatement as a primary remedy? Are there
circumstances in which reinstatement is not appropriate as a primary remedy? If
possible, can you tell us about any experiences you have had regarding “reinstatement”
as a primary remedy?

It is essential that reinstatement is the primary remedy in a personal grievance case.
Reinstatement is the only remedy that truly restores the benefit the worker has lost from the
dismissal. The primary objective of our employment relations legislation is to build productive
employment relationships through promotion of good faith. Any legislation that did not

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

promote reinstatement as the first option would create a bad faith incentive for employers to
put a price on every grievance, send a signal that the focus was not on building a
relationship and have the perverse consequence of encouraging employers to unfairly
dismiss staff if they wanted to and the price was right. At all times, but particularly in the
current economic climate, it is important to keep people in employment. Equally, progress to
more productive employment relations requires an outlook that favours development of
ongoing employment relationships rather than relationships that are more easily terminated
than maintained.

The CTU accepts that, in some circumstances, reinstatement may not be practical. But the
data on the number of reinstatements awarded by the authority does not count all the
settlements reached through dialogue in the workplace or at mediation and therefore ignores
all the effective reinstatements that may have taken place before a grievance escalates to
the Authority. Equally, it would seem safe to assume that cases that escalate to the Authority
are generally those which are more hotly contested and less likely to be easily resolved. As
noted before, the speed with which a reinstatement can be achieved is vital to the success of
that reinstatement. Measures, such as greater union involvement, which support low-level
resolution, make reinstatement more effective.

Question 19: Remedies are intended to rebuild productive employment relationships
and help people learn from mistakes.
a)     What are your views on the effectiveness of current remedies available for
       personal grievance cases?
b)     Do you have any suggestions on how to improve the current range of remedies
       available for personal grievance cases?

Between them, the remedies listed in s123 of the ERA offer an effective range of solutions for
settling grievances. There also appears to be little merit in the list of “possible options for
consideration” that is presented in the Discussion Paper. The meaning of “regulating costs and
remedies” is unclear but implies either a ceiling on costs that could limit access to justice or a
ceiling on reimbursement and/or compensation that would reduce the effectiveness of the
remedies. When the discussion paper proposes an “increase [in] the financial remedies
available”, there seems little that would fall outside the range of s123 (1) (a) and (b) of the Act
in terms of any wages or other money lost, compensation for humiliation, loss of dignity and
injury to the feelings of the employee or loss of any benefit, whether or not of a monetary kind,
which the employee might reasonably have been expected to obtain. However, if this proposal
is suggesting an increase in the monetary amount of financial remedies, this is supported by
the CTU. In the context of helping people to learn from mistakes, the amount of compensation
paid to employees as a remedy is often too low to act as a disincentive to employers.

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

Question 20: What changes to the current employment relations legislation would make
the most difference to productivity in your workplace? Why?

This question is outside the scope of this review and should not be included in the

However, the CTU believes that workplace productivity is a vital component in overall
productivity. For instance, even if the returns to labour and capital each improve, it is
important to get a lift in multifactor productivity which includes areas such as work
organisation, adaptation to new technology, the relationship between workplace culture and
discretionary effort, and the ability to network and innovate.

The CTU has supported a major project (the Workplace Productivity Education Project)
which ran courses for thousands of union delegates and officials on key issues in workplace
productivity. We also support projects in both the public and private sector that aim to lift
productivity through higher levels of worker engagement.

We believe that increases in productivity are more likely to come from increased investment
in capital, higher levels of skill and diffusion of best practice across enterprises. There is
increasing evidence that agglomeration and scale make a big difference to the rate of
productivity increases. There is however little evidence that improvements in productivity are
being reflected in wage increases.

The CTU therefore does not believe that changes to the Employment Relations Act should
be seen as a priority means of lifting productivity. However, there are changes that we
believe would be complementary.

We believe restoring personal grievance rights to all workers including those in the first 90
days of employment would improve employment practices and improve productivity in

Question 21: If some areas of the current personal grievance system were to change,
what would be the three main areas you would like to change? If possible, can you
provide examples of the change you would like to see?

The current personal grievance system is generally fair. The right to raise a personal
grievance at work is a fundamental right that must not be denied to any worker. In
responding to this questionnaire, the CTU has identified two steps that could be taken within
the current legal framework that would improve its effectiveness:

    •   An increase in the average amount of monetary remedies awarded to employees.

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

    •   Encouraging the Mediation Service to request employer participation in mediation.

The CTU would also call for the immediate repeal of the 90-day no-rights period for new
employees with small employers.

Question 22: Do you have any other further comments that you would like to raise on
issues or proposals for improvements to the current personal grievance system that
have not been discussed above?

Please see Section One of this submission.

Part D: Assistance to resolve problems at an early stage
Question 23: In what ways could mediation be made more flexible to suit the needs of
the parties?

The CTU believes s144 and s145 of the Act already provide significant flexibility in the
delivery of mediation.

Question 24: In what way could mediation services be adapted to meet your needs
when working with specific groups?

The problem with providing mediation for temporary migrant workers is not the mediation
service (or the technology it uses) but the fact that temporary migrant workers are more
vulnerable and have their work rights limited by their temporary status. On top of the
possible language barriers they may face, temporary migrants often have greater
dependence on their employer because of accrued debt with the employer or reliance on
their job for their right to stay in New Zealand. All of this acts to suppress their ability to raise
grievances but cannot be addressed by mediation alone.

Question 25: Would you use mediation services in relation to health and safety matters?

The CTU would support the creation of a new personal grievance right specifically when
poor health and safety practices are endangering worker safety. Currently the level of
prosecutions under the Health and Safety in Employment Act is very low and they seldom

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

occur prior to an accident happening. This is partly due to a lack of resources for
enforcement of the Act in the Department of Labour. Providing for a grievance where an
employer has ignored a health and safety issue likely to cause harm would add extra
strength to the current health and safety regime.

Question 26: To what extent would you support the mediation services applying a
systemic approach to problem resolution in your workplace by identifying trends,
providing feedback and options for addressing issues?

The CTU values the work done by the Mediation Service. Any positive initiative to build
productive workplace relations would be supported by the CTU and drawing on mediators’
experience to identify and address patterns and trends in disputes has obvious merit.
However the CTU would be concerned if any of this new activity was at the expense of the
mediators’ current capacity.

Question 27: If Department of Labour were to provide new mediation services, what
could these services be?
a)     How helpful would these services be?
b)     Can you think of other ways in which mediation services could provide
       organisations with help to prevent and resolve problems in the workplace?

Again, the CTU supports any positive initiative to build productive workplace relations – in
this case in the SME sector. But the caveat would remain that the CTU would be concerned
if any of this new activity was at the expense of the mediators’ current capacity.

Question 28: What are your views on early intervention mediation services?

Again, the CTU values the work done by the Mediation Service. In the example given
where “the mediator may undertake a diagnostic assessment to determine the most
appropriate response and then facilitate a solution with the team at the workplace,”
this would have value but it is not the same as the facilitated dialogue that mediation
supports. The resolution of personal grievances becomes increasingly deterministic
as it escalates to the Authority and Court, and an attempt to put a more deterministic
solution before mediation might both undermine the mediation process and contradict
the inherent logic of the “personal grievance system”.

Question 29: Would you use an online employment problem resolution tool if this were

An online tool could have some value but the “yes/no” nature of many online tools would be

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

an overly linear approach to addressing many of the subtleties of the employment
relationship. The CTU could see some value providing broad information but it would be
counterproductive if it crowded out the more flexible approach of mediation.

Question 30: What other services would be helpful to you in avoiding
and/or resolving employment relationship problems at an early stage?

Unions play an effective role avoiding and/or resolving employment relationship problems.
As the Department of Labour’s 2007 Study “Employment Relationship Problems: Costs,
Benefits and Choices” shows, early resolution is the best and most cost-effective outcome to
an employment relationship problem. In this context delegates within the workplace play a
key role facilitating in-house resolution – identified as the quickest form of settlement. Union
officials are external parties that the study identifies as the second quickest form of

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

Section Three: Personal Grievance Case Studies
8.    Case Study One: CO

8.1. This personal grievance, settled at mediation, was a claim of unjustified constructive
      dismissal and unjustified disadvantage by a major bank with a well-funded human
      resources department. The case involved an employer attempting to procure the
      resignation of an employee using unreasonable pressure, without providing the
      employee a clear opportunity for representation. The case represented a failure of
      contractual processes and a failure to use clear processes for dealing with concerns
      regarding medical incapacity.

8.2. CO was a long serving staff member, approaching 50 years of service with the
      employer. This was a significant milestone for the employee. The employee was
      experienced and previously had management responsibilities. CO had developed
      cancer. Though previously having had time off for cancer treatment, CO had been
      working his contracted time consistently.

8.3. CO’s manager approached him with concerns over his health and encouraged CO to
      resign. CO emphatically responded that he would not consider resignation prior to
      reaching 50 years of service. On not less than six other occasions, over a two month
      period, CO was encouraged to resign. CO’s wife rang the employer and told them that
      CO had no intention of resigning and that the continual persistence in seeking CO’s
      resignation was causing CO significant stress. Despite this, the manager still
      encouraged CO to resign. Eventually CO did tender his resignation. However, before
      CO’s termination of employment he spoke with his employer and asked them to
      reconsider their decision and said that he did not wish to leave. CO was told that
      nothing could be done.

8.4. Despite the employer’s stated concern about CO’s health, CO believed that the
      employer’s motivation for wanting his resignation was related to not meeting sales-
      based incentive targets. Despite stating that they had encouraged CO to resign
      because of medical concerns, the employer had not sought or received either any
      evidence regarding CO’s medical capacity or followed the medical retirement clause in
      the CEA. This clause provided a process for assessment of an employee’s health,
      including an independent doctor's reports. If an employee is considered medically unfit
      to work, it provides the employee with a termination of employment payment.

8.5. An additional issue of concern was the employer’s significant delay in responding to
      the grievance. Though the grievance was raised by the union in December 2008, there

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

      was no substantive response until June 2009. The failure by the employer to take
      reasonable steps to respond to the grievance in a timely manner compounded the
      significant emotional stress for CO.

8.6. The case was resolved in mediation to the satisfaction of both parties. The personal
      grievance procedure worked well.

9.    Case Study Two: RL

9.1. This case study involved the dismissal of a staff member that was not only
      substantively unjustified but also effected in a procedurally unfair manner. The
      personal grievance provisions and the test for justification as stated in s103(a) of the
      Employment Relations Act enabled the dismissal to be challenged.

9.2. RL worked for a health care provider and was dismissed as a result of an allegation of
      serious misconduct – that RL had bullied other staff and undermined management
      through inappropriate behaviour and comments.

9.3. RL first became aware of the allegations that led to this dismissal when they were
      summonsed to a meeting. No prior notice as to the purpose of the meeting was given.
      RL was informed of the general nature of the allegations and informed of suspension
      pending further investigations. RL was not provided with an opportunity to comment on
      the proposed suspension before it was effected, nor provided with copies of the
      allegations. Management initially refused to divulge the statement on the basis of
      privacy concerns. Only after strenuous effort by the union was the statement provided
      to RL.

9.4. RL was then dismissed. On viewing the statement it immediately became apparent
      that the statement in question not only referred to the alleged action of RL, but also the
      action of another employee suspended at the same time, and facing an identical
      allegation of serious misconduct. The allegations regarding the other employee were
      of a more serious nature than the allegations regarding RL, which were not of a
      serious nature.

9.5. In the letter of dismissal the employer referred to a number of additional grounds of
      concern it had with regard to RL, notwithstanding that these concerns had not been
      identified by the employer, much less responded to by RL, prior to notice of dismissal.

9.6. A personal grievance claim of unjustified dismissal was raised by the union with
      remedies sought for lost wages and compensation. The employer failed to sufficiently
      differentiate between the allegations made about the two employees and there was a
      conflation of allegations as a whole which was highly prejudicial to RL.

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

9.7. The union filed proceedings on behalf of RL alleging that:

      • The allegations did not constitute serious misconduct and the employer failed to
         distinguish between the allegation made in the statement regarding RL and the
         other employee resulting in prejudice to RL
      • The allegations made in the statements were so vague and imprecise as to deny
         RL an opportunity to respond to the allegation
      • A number of allegations were made by the employer in the letter of dismissal for
         which there was no proper evidentiary basis nor due investigation
      • That a fair and reasonable employer would not have dismissed RL on the basis of
         the allegation made in all the circumstances at the time the dismissal occurred.
9.8. Reinstatement was not sought. Mediation did not settle the matter despite all parties
      attending. The matter was resolved by the parties prior to the Employment Relations
      Authority Investigation Meeting by way of a confidential settlement between the

10. Case Study Three: AW

10.1. This case study addresses a situation where assurances about employment were not
      honoured by the employer. In addition there were contractual breaches of a CEA.

10.2. AW took up a position as a customer services representative at a local council. AW
      was of the clear understanding that the position was an 18-month part-time fixed-term
      position and that the position would become permanent over that time. AW was
      offered additional hours (up to a full time week) on a casual basis until then.

10.3. However AW was offered a casual contract. AW questioned this and was told that it
      was for the additional “casual” hours. AW again questioned her manager over this and
      was given reassurance in an email in November 2008. AW signed the contract.
      Subsequently AW regularly sought written reassurance about the position and her
      employment status over the next year. AW was regularly reassured a permanent job
      was coming up and was also told that she would get a pay increase.

10.4. AW checked with a new manager about the pay increase, which commenced a
      discussion about AW’s employment status. Based on the law and the current CEA in
      the workplace, she was not a casual employee. AW had regular hours and days each
      week and had worked each week for about a year. The definition in the applicable
      CEA for a casual was, “An employee engaged for less than four weeks on any one
      engagement shall be termed a casual employee”.

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

10.5. The email to AW in November 2008 was on a fixed term employment basis for 18
      months. The employer, however, was also in breach of Section 66 of the ERA as there
      was no reference to any specified reason for the fixed term and it was not included in
      AW’s signed contract.

10.6. In an attempt to resolve the matter, the council asked AW to sign a “new” fixed term
      agreement, with a termination date that was the same as the original 18-month offer,
      and stated she would then “revert back” to a “casual contract”. It was also suggested
      to AW that she may have received overpayment of wages due to a casual loading and
      there would need to be recovery of money.

10.7. When this employment dispute could not be resolved, mediation assistance was
      sought to confirm AW’s ongoing employment on a permanent part-time basis. AW
      initially returned to work but later accepted a settlement outside of mediation.

11. Case Study Four: BW

11.1. This case study demonstrates a failure by a major employer to meet the contractual
      requirements of an agreement, meet expectations it has raised and use fair processes
      related to ongoing employment.

11.2. In 2008 BW was appointed to a position in a local council under a fixed-term
      agreement as a qualified health professional. The agreement indicated this
      employment was covering a vacancy. During the year this arrangement was changed
      by letter to an offer of casual employment. However, during the period 1 January 2008
      to 1 July 2009, BW worked 8 hours per day, 3 days per week.

11.3. When a new full time position was created, BW applied for it and was led to believe he
      would be the successful applicant. BW was informed he was not the successful

11.4. BW requested a review of the selection process, including the advertising of the
      position. The Local Government Act 2002 requires that all appointments are made on
      the basis of the best suited person for the job.

11.5. There were also breaches of the CEA that covered the position in relation to the filling
      of a position by a new employee when BW had been performing the work for some

11.6. The issue went to an internal Review Authority who found a number of deficiencies
      with the interview process. Specifically, that BW was a qualified and specialised health
      professional and it was understood that the successful applicant did not have the
      qualification expected for the role. Other deficiencies included not following the

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

      redeployment provisions in the CEA, not consulting with BW’s referees and not
      properly taking BW’s qualifications and experience into account. However, this Review
      Authority did not recommend overturning the appointment and the Council was not
      able to offer other employment to BW.

11.7. So a personal grievance for unjustified dismissal was lodged on the grounds that the
      employer’s action was not in line with the change management clause of the CEA and
      that they didn’t meet the requirements of the ERA in relation to fixed term agreements.

11.8. Mediation was sought with a claim for reinstatement, reimbursement of salary and
      compensation. A settlement was reached which is confidential. Reinstatement was not
      one of the outcomes.

12. Case Study Five: AB

12.1. This case illustrates that basic procedural errors can prejudice the right of workers to a
      full and fair investigation of allegations made against them.

12.2. AB was a train manager. In April 2008, AB was accused by a colleague of sexual
      harassment alleged to have occurred on a train service. Both the complainant and AB
      had witnesses. AB’s witness provided a written statement which was consistent with
      AB’s assertion denying the allegation.

12.3. The company interviewed the complainant and the complainant’s witness several
      times. AB’s witness was not contacted. Neither was another employee who had
      witnessed the event. All witnesses were company employees and readily accessible.

12.4. There were inconsistencies in the statement by the complainant and inconsistencies
      between the statement of the complainant and the witness.

12.5. AB was summarily dismissed. Sixty of AB’s colleagues signed a petition attesting to
      his good character. AB maintained innocence and a personal grievance was lodged.
      Mediation failed and the matter went to the ERA. The company was questioned about
      the investigation process it had undertaken with reference to the failure to interview all
      witnesses and the failure to clarify inconsistencies.

12.6. The Employment Relations Authority held that procedural defects in the investigation
      rendered the dismissal unjustified.

13. Case Study Six: Test for Justification

13.1. This case study relates to the test of justification. If the law was changed to a
      subjective test of "what factors could a fair and reasonable employer consider”, as
      compared to “what factors would a fair and reasonable employer consider”, it would be

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      a return to the position where the employer need only determine that the conduct
      complained of amounts to serious misconduct and the employer would not have to
      consider all the other relevant factors that surrounded the employment issue. If the
      employer can do that then the outcome becomes dismissal where there is a finding of
      serious misconduct. Any other factors would be treated as matters that the employer
      "may" consider should it chose to be merciful and would not be considered relevant for
      the purposes of justification. A subjective test limits the enquiry to the conduct of the
      employee (i.e. is it serious misconduct) excluding the contribution of the employer (was
      the dismissal justifiable having regard to all the circumstances).

13.2. The EPMU is currently pursuing a personal grievance for a union member on the basis
      that the current objective test (s.103A) requires an analysis of "all the circumstances".
      Viewing the matter from the perspective of a fair and reasonable employer, as
      opposed to the specific employer and taking into account all relevant circumstances,
      the union believes it has a strong case. The general details of the case are:

      • The employee has worked for the employer for some 25 years
      • The employer is large employer
      • The employer's business is located in a small town and is the primary employer in
         the area
      • The community is a small, tight knit community
      • The employee is an active member in the community
      • The employee lives in a company house
      • There have been tragic events in the employee's personal life in recent months
      • There were a number of people whose conduct was also a factor in the particular
      • The conduct for which the employee was dismissed could, if viewed in isolation,
         amount to serious misconduct
13.3. If the law provided for a subjective test the union would have to advise this particular
      member that because the conduct complained of can amount to serious misconduct it
      would be virtually impossible to win the case. Such an outcome would be totally
      immoral and unjust in this particular example.

14. Case Study Seven: Reinstatement

14.1. This case study relates to reinstatement as the primary remedy and any cap on
      compensation awards and demonstrates how any change to reinstatement as the
      primary remedy would severely disadvantage employees.

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14.2. A case is currently being pursued on behalf of a union member seeking interim and
      permanent reinstatement. The broad facts of the case are:

      • The employee works for a company that subcontracts to the principal company to
         provide certain services
      • The employee suffered a work related personal injury and had a total of
         approximately 6 weeks off work over a period of six months
      • The principal has advised the employer that they do not want the employee
         providing the services
      • The principal told the employer to get rid of the employee
      • The employer "manufactured" spurious reasons to dismiss the employee
      • The employee is married with three dependent children and considerable financial
14.3. If the employee is unsuccessful in his claim for reinstatement the consequences for
      him and his family will be severe. If reinstatement was not the primary remedy and the
      employee was only entitled to compensation it would do little to assist him and his
      family (even under the current system). If compensation awards are capped and/or
      reduced combined with removing reinstatement as the primary remedy the injustice in
      this case would be enormous. Such amendments would result in the very thing Chief
      Judge Goddard warned against in Ashton v Shoreline Hotel [1994] 1 ERNZ 421when
      he said "To routinely award compensation instead of reinstatement is to create a
      system for licensing unjustifiable dismissals”.

15. Case Study Eight: PP

15.1. This case study demonstrates the value of skilled mediation. A settlement was agreed
      after an employee of long standing was dismissed due to health problems that she had
      acknowledged. The skilled mediator enabled the employer and the employee to arrive
      at a settlement that was in the best interest of both parties and repaired a damaged

15.2. PP developed a long term health problem which affected her stamina. PP wrote to the
      employer seeking to relinquish part of her job and suggested other people who were
      willing to cover these tasks. The employer’s reaction was dismissal. The union called
      for mediation. The mediator judged the situation to be tense: the employer would not
      meet with the employee party. A form of shuttle diplomacy was conducted.

15.3. From talking with PP, the mediator concluded that a return to work would not be in the
      best interests of PP’s physical and mental health. The mediator assisted the parties to
      arrive at a principled settlement with a commonly agreed statement of settlement. The

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      mediator effectively addressed the employer’s overuse of bad language. The wider
      relationship between the employer and the employee was somewhat repaired.

16. Case Study Nine: PT

16.1. This is a case study of a situation where skilled mediation led to an improved
      relationship between the employee and the employer.

16.2. PT was a part-time teacher in a small low-decile urban school. PT taught a key
      specialist subject, but had been denied permanent tenure since starting at the school
      three years earlier.

16.3. This was in breach on Section 66 of the ERA and the union made efforts to resolve the
      matter by direct negotiation with the principal and the Board of Trustees. A personal
      grievance was submitted after numerous efforts at direct negotiation were
      unsuccessfully pursued. The union requested mediation.

16.4. At mediation the employer stated that the school roll was uncertain for the next year,
      that the school was experiencing financial difficulties and was considering the
      possibility of closure. The employer was prepared to offer some non-permanent hours
      in the following year and would consider a modest payment for stress and humiliation.

16.5. There was a high level of tension in the situation and relationship. PT felt significant
      anger towards the principal and was requesting that the part-time position be made
      permanent at 0.6 FTE. After several hours negotiation there was progress toward a
      settlement. The mediator persuaded PT of the need to be realistic.

16.6. The mediator assisted the employer to offer some degree of permanent tenure to PT
      and take seriously the level of stress and humiliation the process had caused PT. A
      reasonable but modest settlement was reached.

16.7. PT still works at the school in a part-time permanent position and on occasions works
      extra hours when needed. The relationship between PT and the employer is
      reasonably good.

17. Case Study 10: MT

17.1. This case study is a complicated example involving an employee not attending work
      when he was informed about a change of shift pattern when he had previously
      informed his employer he was unavailable for those shifts because of personal
      circumstances relating to marital change, major emotional stress and changed
      circumstances. The employee was disciplined and then dismissed for failing to follow

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NZCTU Submission on the Review of Part 9 of the Employment Relations Act 2000

17.2. MT has been employed in a casino for over five years. During that time he had
      received two employee awards. When marital difficulties started, MT told his manager
      that he had to quit his job as he could not work evening or weekend shifts due to
      weekend childcare commitments and evening counselling sessions. Arrangements
      were made for him not to work weekend and evenings.

17.3. MT was subsequently approached and told that he would be returning to the shift
      pattern that involved weekend and evening work. MT stated this was not possible and
      that there was an arrangement in place for him to work day shifts. His marital issues
      were still unresolved and there was still significant emotional stress in the situation.

17.4. Despite MT making it clear that his personal circumstances were such that he couldn’t
      work these shifts, the shift change went ahead. Leave was requested but the request
      turned down. MT failed to turn up for his first new shift. He was summoned to a
      disciplinary hearing at a time he had informed the company he couldn’t attend. A letter
      of warning was given followed up with a dismissal letter.

17.5. The union position, on which the personal grievance was lodged, was that there was a
      conflation of issues, that the CEA does not allow for unilateral changes of shift; that
      there are provisions for dealing with alteration of hours in the CEA; that the employer
      had a practice for providing employees with extended leave when there were personal
      problems; and that the employer’s conduct was far from the notion of what is fair and

17.6. This outcome from mediation was unconditional reinstatement and payment of all lost

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