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

The ERA will not look at a case until mediation is complete

At mediation the Applicant’s advocate will spend some time going over the problem and all the possible remedies that the ERA can enforce and the cost of a possible hearing, in general trying to frighten the employer into settling and, for the uninitiated, it works.

gavelNaturally, you do get an opportunity to respond (and this is where a good employer advocate will be important) but the real issue is the negotiation to settle and sometimes this can be big money and the opposing advocate will get about 20% of the settlement. This simply encourages representatives to hang on as long as possible (even when they have no case) in the hope of achieving an outcome, running up enormous legal bills which you will be expected to pay. 90% of cases settle at Mediation. This is what advocates bank on – this is payday.

This system has to change

A solution may be to bond all Applicants. Lose the case and lose the bond. Or perhaps mediation should be charged for (perhaps even outsourced) with the loser paying costs? The ERA could be empowered to throw cases out that do not have any prospect of succeeding. Full costs awards at the ERA could also take into account the money spent on bringing the matter through Mediation.

If these few changes were made, this merry-go-round might be slowed and that would be a good thing for the industry and natural justice.

Of course, the best approach is to stay away from mediation and the ERA altogether. The conversation has certainly been changing lately and prudent businesses are looking to staffing numbers ahead of an anticipated downturn in the economy later in the year.

The processes around downsizing can be very complicated and one misstep can be very expensive. Ross Henderson has nearly 30 years of experience in this area and can be of help if he gets involved at an early stage in your process.

Ross Henderson is a specialist NZ HR and employment law Associate. He can be reached on 0272940301 or at should you wish to discuss any related matter, without obligation.

Topics: economy employees employers human resources New Zealand staffing