Employer & employee views of the personal grievance process
The nature of the non-random sample of this study means that many of the employees and employers interviewed were focused on somewhat different circumstances: employers on having to respond to weak or vexatious claims and employees on the barriers they faced in initiating a grievance. Perhaps related to this sample, employers expressed greater dissatisfaction with the process than employees. Employers' dissatisfaction was associated with their experiences of feeling obliged to settle at mediation despite considering that the employee had a meritless claim. Employee's dissatisfaction was associated with feeling it was too difficult to go through the grievance process; those who went to mediation were largely satisfied.
Employment relationship problems negatively affected workplace productivity, consuming resources and affecting other staff. It is difficult to assess, though, how the current grievance system affects workplace productivity. It might be considered, for example, that settling at mediation and forgoing the opportunity to go to the Authority supports productivity by shortening the grievance process.
There were barriers for employees in pursuing a claim and for employers in responding to one, and many of these barriers were the same - stress and the fear of costs, both of which were exacerbated by the thought of a drawn out process.
The process was stressful for both parties, however, employees tended to discuss the effects of stress more intensively, perhaps because they faced loss of work (and income), and a comparative lack of security and control compared to employers.
The cost of a possible Employment Relations Authority hearing (expected to be in the range of $10,000-$20,000) was a significant factor in decision-making for some employees but all employers. The possibility of having significant legal expenses if a grievance got to an Employment Relations Authority hearing was an influence on employees' decision-making not to make a claim at all or to settle at mediation; however the fear of costs was often combined with other factors such as the fear of damage to their reputation, a desire to move on from the problem, or ill health. Employers were also deterred by legal expenses from going to the Employment Relations Authority, and instead settled at mediation or privately with an employee, even if they felt the employee's case was unjustified and that the employee would not be successful at an Employment Relations Authority hearing. Both employers' and employees' expectations of costs were centred on lawyers' fees (not, in the employers' case, a possible settlement to an employee).
Perceptions of the potential duration of a personal grievance were also largely centred on a case not being settled at mediation and going to the Employment Relations Authority. Both parties expected that waiting for an Authority hearing would be a long process (12-18 months). Employers faced the particular uncertainty of whether an employee who had notified them they intended to make claim would actually do so. As with the fear of costs, fear of a drawn out process deterred some employees from initiating a claim, and it encouraged both employees and, more particularly, employers to settle at mediation even if the settlement offered scant satisfaction.
Experience of mediation
Although most participants in the research felt the mediators did a satisfactory job within the parameters of the role, mediation was not necessarily an appropriate forum for many of the cases discussed. The employment relationship was, in general, over when parties went to mediation or soon afterwards, and a number of the participants had gone to mediation seeking what the Employment Relations Authority is intended to provide - an inquisitorial hearing, followed by a decision.
Perceptions of the process
Supporting previous New Zealand research on perceptions of the process (Woodhams 2007), there were employers who considered the process favoured the employee, and employees who considered that employers had more power outside of the process. In general, when thinking about whether the system was fairly balanced between employers' and employees' interests, employers and employees focused on quite different aspects of the process. Of those who were dissatisfied with the balance, employers felt they could be compelled to participate in a process of unknown dimensions irrespective of the merit of the employees' case, with no prospect of compensation for the costs they faced. Employees considered there were major inequities in power with the employer able to pursue various courses of action with much greater financial resources (for example, restructuring the workplace, hiring lawyers, engaging in delaying tactics).
It was acknowledged by both employers and employees that there was a need for a consistent process to be followed so that people knew what to expect and could be informed. Employees' lack of familiarity with the process was a factor in getting legal advice and representation prior to mediation, while employers felt that it was not possible to be completely conversant with all necessary procedure in all possible circumstances. The processes followed by either party did not necessarily figure largely at mediation, but fear of making a procedural error contributed greatly to employers' decisions to settle at mediation regardless of their dissatisfaction with the settlement.
There was also concern expressed by both parties that the current personal grievance process did not support good faith in employment relationships because when an employer approached an employee about an issue such as poor performance, or an employee had an issue with an employer's behaviour or actions, they were not able to be open 'in good faith' without the threat of a personal grievance in the former case or being 'restructured out of a job' in the latter.
Information, advice & representation
Few employees or employers made decisions about dealing with an employment relationship problem without legal advice, or went to mediation without representation. The role of representatives was an issue because of the cost of pursuing or even investigating pursuing a claim; thus there was interest in limiting the use of lawyers in the process. However, a number of employees were deterred from pursuing a claim by lawyers' or union officials' advice and a number of employers settled at or outside of mediation on lawyers' advice. Thus the net effect of lawyers in the process was not clear. It must also be noted that many employees and employers relied on legal advice and in many cases legal representation; restraining the use of lawyers in the process may place a further barrier to engagement in the process. Participants were generally happy with the quality of advice received - although few employees had anything to compare it with. The effect of contingency fee lawyers - an issue previously raised in New Zealand (Department of Labour 2007a, Woodhams 2007) - is unexplored in this research as no employee had used one.
Both employees and employers considered the process should be accessible to all employees. There was no support from participants for excluding employees based on salary or seniority. There were mixed views from employers on the trial period exclusion: it was felt by some that it could logically be extended to all firms, and by others that firms should have sufficient processes to deal with issues without the need of a trial period exclusion. The length of the trial period was also debated, though no one suggested it be shorter.
There were similarly mixed views on the 90 day limitation period for notifying an employer of making a claim and the three year limitation period for lodging a claim with the Employment Relations Authority or the Employment Court. While some employees interviewed felt they could decide on their actions in a shorter period of time, there was a view that any shortening of the periods would advantage employers rather than employees. There was also some confusion as to when these periods started in the process.
Participants' views on remedies that the Employment Relations Authority might deliver were focused on the reality that the employment relationship was generally over when a personal grievance claim was taken. Compensation for lost income set at a level that gave former employees a reasonable length of time to find another job was an acceptable remedy for employees 'with a case to answer,' but compensation for hurt and humiliation was seen as more contentious by employers as the circumstances in which it might be awarded were seen as more arbitrary. However, as has been shown in British research (Peters et al 2010) apologies are important to employees, and it is possible that these are effectively expressed through compensation for hurt and humiliation. Obliging employers to address workplace issues was also of interest to employees. Reinstatement was seen by both parties as generally unfeasible but an important remedy to retain.
Changes to the process
Participants were interested in having more information about the personal grievance process, however the need was for information tailored to the circumstances of the case, and there were some reservations that a suggested online tool would be able to deliver this. A more systemic approach by mediation services might improve workplace processes but most participants were focused on the process for dealing with cases where the employment relationship was over. Mediation was not necessarily the most appropriate forum for this. Thus there was interest in a type of 'pre hearing' being introduced in which a judgement would be made by an independent authority on the quality of a case with penalties for employees who proceeded and were unsuccessful. There were both employers and employees interested in receiving a binding decision from mediators (that could be appealed) but the current mediation process was not thought a suitable method for this, as such a process would need to be more like that of the Employment Relations Authority.
This research was focused on eliciting the views of employees and employers who had settled a personal grievance outside of the Employment Relations Authority (either in mediation or privately), and employees who considered but did not proceed with a personal grievance. The research drew on a non-random sample of people with these particular experiences of the process.
A range of views were expressed by both parties on the questions raised by the Personal Grievance Review Discussion Document: this range included some commonality between employers' and employees' views and some divergence within each group. Having a personal grievance system available to all employees was considered important by all but two themes emerged strongly: employees face barriers to taking a grievance, and employers, in being obliged to respond to any and all grievances, may end up settling with an employee at mediation rather than challenging their case at the Employment Relations Authority. The influences on both of these unsatisfactory decisions had much in common: fear of legal costs incurred in going to the Authority, and a desire to end the stress and uncertainty of the situation.
It was clear from the research that there are some employers and employees for whom the current system has not achieved a fair balance between employer flexibility and employee protection, and that the system does impose unnecessary costs or obligations on some employees and employers. The research has provided indicative evidence that there are both employees and employers for whom the current system is not efficient and effective, and further, that the objectives of Part 9 of the Act are ill-suited to some peoples' actual experience of employment relationships. However, the proportion of employees and employers so affected is not apparent from this qualitative study. Nor were the overall effects of the personal grievance system on workplace productivity clear.
The improvements sought by employees and employers, as described in this research, centre on the provision of accessible and independent information that addresses their particular circumstances, provides some clarity around the case they have, and perhaps provides an initial judgement. In relation to this last point, it was notable that the employment relationship was generally effectively over when most of the participants went to mediation. There was therefore a call for a more appropriate way of addressing such grievance cases, in the first instance, with an inquisitorial rather than a mediative approach.
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