The Business Advisory Blog

The Business Advisory Blog

Insight, news and updates from Alliott NZ Chartered Accountants, Auckland New Zealand. The views expressed here are the views of the author and should be discussed in further detail should an article be relevant to your individual circumstances.

While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.

Ross Henderson
Published on

Is there room for improvement?

Mediation Services crows about its rates of problem resolution and that this service is highly regarded.

gavelHowever, there is another side of the system that allows scandalous employee conduct to go unpunished and for the unscrupulous to use the system for significant personal gain.

So how could this system be reformed? HR Specialist Ross Henderson offers 15 ideas worth considering:

1. Register all Employment Advocates

Ensure that they have appropriate qualifications and adopt a professional code of practice, or they cannot operate. Make this an annual licence with fees going to the registration body which will administer and advocate as well as deal with unruly members. Exclude unlicensed advocates from Mediation Services or the ERA.

Give the registration body powers to discipline its members, just as with the Law Society and the Real Estate Institute, Medical Association or Chartered Accountants. There must be a proper complaints process with teeth and with the ability to levy fines or remove the right to practice for Advocates. This may stop unethical behaviour. Three counts before the registration authority and you are deregistered as a provider and can no longer practice.

2. Make all Advocates carry professional practising insurances

Make them available to be sued for unscrupulous practice. This will have the effect of shutting down the fly-by-night advocate operations that cannot afford to pay for this insurance or have no intention to. This could also be administered by the registration body. No insurance; no license to practice. This also evens the playing field with employment lawyers who have to carry these costs.

3. Develop submissions standards for mediations services and the ERA

Make the standards of documentation required before the mediation service and ERA much more detailed. Empower Mediation to reject applications until the standard is met.

This will stop those who simply provide the most basic of details in order to satisfy ERA requirements and force an employer into the mediation/ERA merry-go-around in order to justify making a costs-based settlement.

4. Recruit more people to mediation and ERA roles with practical commercial experience

This may encourage a greater empathy with the employer as well as the employee perspective in decision making on these cases. The net effect may well be more balanced solutions. Pay more for the best in the field.

5. Improve the selection of Mediators and Members

Review selection processes for any inherent bias, to make certain that only candidates with the right character and credentials are selected and ensure selection processes are altered accordingly.

6. Improve the quality of mediations by improving and training the quality of mediators

Mediators need appropriate graduate and post-graduate training. They need training in appropriate dispute resolution techniques. Few are expert in these matters.

7. Performance manage Mediators and Members

Determinations at both levels to be regularly reviewed by Departmental chiefs for bias. Statistics to be published in public forum and released to media.

8. Empower Mediators to decide cases and determine costs and penalties with right to appeal to the ERA

This would also have the effect of simplifying the process and reducing defence costs.

9. Ensure that all Applicants and Respondents have to pay a bond to access mediation and the ERA

This bond should fully reflect half of the costs of operating the service and be at risk to the loser of any claim. These bonds to go to the Government. Allow advocates to pay these bonds if they want to take a case on. Make sure Applicants have some “skin in the game” and that they are also at risk, as is the employer in any litigation.

10. Truncate the mediation service process

Ensure that all mediations are held by phone but allow for full written submissions to the Mediator. No personal attendances.

This at least would have the effect of speeding up the mediation process and ensuring reducing costs.

11. Make mediations public like ERA hearings

This would allow for media coverage. Collect all claims to a database that is available to the public just as with ERA cases. The employee would lose their anonymity as would the employer. This may assist is discouraging more frivolous employment actions and make all actions discoverable. 

12. Mediation/ERA to penalise for breaches of good faith and contribution both ways

Normally these claims would rebate off any determination in an Applicants favour. Allow this to run into penalties against the employee. Establish national schedules. Make these significant and equivalent to the penalties that employers may face.

13. Ensure a level playing field in respect of fines with clear guidelines issued to all

Employee bias is obvious at present. Produce schedules for fining employees. Publish all results. Hold employee feet a little closer to the fire as with employers.

14. Should a mediation determination come to appeal, empanel Members to weed out inadequate cases before the ERA Hearing

Why not have three members empanelled to read every Application to the mediation and the ERA and weed out those that are obviously unmeritorious or there is just not enough evidence just as the Court of Appeal does to Applicants?

15. Ensure that Members can serve attachment orders to an Employee Applicant’s pay with system to be administered through IRD

This may assist in preventing employees who are unsuccessful and are penalised or who have cost claims against them from simply disappearing into the system and paying nothing to the aggrieved employer who has won the case but still bears their own costs.

Ross Henderson is a full HR services provider so can meet your needs in any HR area, and not just in employment law or recruitment and assessment.

If you need assistance with any of these or any other HR or employment relations matters, please email Ross or phone HR Contracting on 02 7294 0301.

Topics: employees employment human resources Inland Revenue Department Insurance IRD Penalties Performance