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.
Naturally, 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 ross@hrcontracting.co.nz should you wish to discuss any related matter, without obligation.
