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Workplace research released, code to be developed

Workplace research released, code to be developed

A Code of Employment Practice aimed at helping employers and employees to more easily resolve workplace relationship problems is to be developed, Labour Minister Trevor Mallard said today.

"The decision to develop the code follows research into the resolution of workplace relationship problems and a review of possible improvements to the current system. The code will be developed in consultation with key stakeholders, including employer and employee representative groups.

"The review I am releasing today found that the current system worked well, but could be built on. What we are looking at is how we can make the system work even more effectively, and continue to ensure the integrity of advice given to those experiencing relationship problems in the workplace.

"Alongside the development of the code, Cabinet has also agreed to undertake further work on six options for improving the system. These are aimed at enhancing the professionalism of advocates, better informing employers and employees about how to better manage employment relationship problems at the firm level, increasing confidence in and use of informal resolution processes and reducing the cost of and length of the time taken to resolve employment relationship problems using formal processes."

The six options for improvement are:

    1. increasing educational resources and support for employees, employers and their representatives, including improving Department of Labour guidance to employees and employers on employment relationship problem resolution and employment termination
    2. exploring the extent to which the quality of paid representation by employment advocates – excluding barristers, solicitors, registered unions and employer advocates – could be better assessed
    3. assessing whether the provisions in the Employment Relations Act for reducing remedies - to reflect substantive justification and contributory conduct – were effective
    4. assessing how provisions relating to a ‘mediator decision by authority of the parties’ (section 150 of the Employment Relations Act) could be strengthened to encourage its use where agreement cannot be reached, and discourage unreasonable withholding of consent by either party
    5. increasing Department of Labour capacity to deliver mediation services and improve the capability of mediators to improve services, as identified in the Department of Labour Mediation Practice Development Project
    6. exploring options to reduce the time taken to investigate and determine cases in the Employment Relations Authority, including considering changes to Authority processes.

There will be a report back to the Cabinet on this work and the development of the proposed code by next July.

Background and the key findings of the research.
The report on the research on employment relationship problems Employment Relationship Problems: Costs, Benefits and Choices, the Cabinet paper and minute are at:
The Department of Labour research on employment relationship problems took place in two phases: a short-term research phase focussing on specific questions about different employment relationship problem resolution methods, and longer term research on the costs and benefits of employment relationship problems.

The short-term research programme was carried out by the Department of Labour and included a survey of mediations carried out over a one month period, a review of Employment Relations Authority determinations over the same period and a series of focus groups. It was released in July.

The long-term research was conducted by McDermott Miller Ltd and the Department of Labour and included a survey of businesses, a survey of public sector organisations and case studies of 15 disputes.

Differences between the research findings
The short-term research investigated the perceptions of employers and found that focus group participants believed that many employers were choosing to pay out large ‘informal’ settlements to employees, to avoid going through formal resolution processes.

However, the long-term research found that the anecdotal evidence that large, informal ‘payouts’ were common was not supported. In fact, the actual costs reported by the majority of surveyed employers who settled outside formal processes were relatively low, even when third parties such as lawyers or advocates were involved.

The key findings of the long-term research include:

  • The overall incidence of employment problems was low. The survey found that in the past year, businesses experienced 1.5 employment relationship problems per 100 employees.

  • While direct comparisons are difficult, the available evidence did not suggest any increase in the incidence of employment relationship problems since 2000.

  • The median direct cost of all employment relationship problems in the survey of private sector employers was $5000, of which $2800 represented payouts to employees.

  • The total direct cost of employment relationship problems in the private sector was estimated at 0.4 per cent of private sector wages and salaries for the year.

  • There was no evidence that the presence of “no win no fee” advocates has greatly changed the environment for employment relationship problems.

  • The lowest costs of employment relationship problems arose where resolution took place entirely in-house.


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