Grievance gravy train picking up speed

Media statement Tuesday, June 6th, 2006

Grievance gravy train picking up speed

The number of personal grievances heard by the Employment Relations Authority (ERA) against employers rose 28 per cent last year compared to 2004. The ERA heard 340 cases in calendar 2004 and 436 in 2005.

The decisions of the ERA Members are analysed each year by the Employers & Manufacturers Association (Northern).

“Both Government and employers are concerned about the rise of the employment grievance industry,” said David Lowe, Employment services Manager for EMA (Northern).

“The figures add solid support for the type of probationary period of employment currently before Parliament.

“The reasons for the rapid increase of case seem to be twofold. Employers must follow complicated procedures in dealing with workplace problems and managing them seems just too difficult for many smaller employers.

“Second, increasing numbers of employees are trying their luck to see if their employer can be tripped up.

“The bounty hunter advocates –‘ambulance chasers’ - who charge for their services only if they win encourage employees to try their luck.

“Unsuccessful employees end up owing their employer for legal costs but the amounts are small compared with what they stand to gain if they win.

“Employees were more likely to win their cases last year than in 2004; the average number of decisions in favour of an employee increased from 52 per cent to 58 per cent.

“South Island employees, with a 65 per cent chance, are more likely to win than those in Wellington (62 per cent) and those in Auckland
(54 per cent).

“Hurt and humiliation awards continued the worrying trend of previous years with wide variations awarded between individual Authority Members - the Wellington Authority averaged significantly higher awards than those in Auckland and Christchurch.

“The awards for hurt and humiliation are key areas as their amounts are at the discretion of each Authority member where as the other award categories follow a formula.

“Average awards for hurt and humiliation increased in Wellington 15 per cent to $7,208; Auckland increased 9 per cent to $4,825; but Christchurch was down 22 per cent to $4,809 after a 25 per cent increase in 2004.

“The statistics show the Authority can still be a lottery with amounts awarded depending on who hears the case.

"Some Authority members have a much higher ratio of ‘decisions in
favour of the employee’, and compensation awards also varied significantly between Authority members.

“Hurt and humiliation awards ranged from one Member awarding an
average $8,933 with 62 per cent in favour of employees, while another Member awarded an average $2,150 with a 38 per cent in favour of employees.”

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(see attachment for more analysis and results for ERA members)

Personal grievance awards analysis - Employment Relations Authority 2005, 2004.

Employers & Manufacturers Assn (Northern) June 2nd 2006

Location In favour of employee 2005 Average hurt and humiliation award Change from last year 2004 Average hurt and humiliation award
D Asher Wellington 15 out of 24 (62%) $8,933 -3.7% $9,278
A Dumbleton Auckland 11 out of 23 (48%) $7,855 +55% $5,040
L Robinson Auckland 15 out of 24 (62%) $6,433 +61% $4,000
P Stapp Wellington 16 out of 27 (59%) $6,300 +29% $4,867
Y Oldfield Auckland 15 out of 30 (50%) $6,017 -31% $8,697
G Wood Wellington 16 out of 23 (70%) $5,973 +26% $4,717
P Cheyne Christchurch 16 out of 28 (57%) $5,466 -17% $6,625
H Doyle Christchurch 29 out of 38 (76%) $5,286 -6.3% $5,647
D King Auckland 21 out of 31 (61%) $5,206 +41% $3,700
J Scott Auckland 13 out of 25 (52%) $5,020 +101% $2,500
M Urlich Auckland 15 out of 23 (65%) $4,346 +11% $3,912
J Crichton Christchurch 14 out of 24 (58%) $4,321 -54% $9,500
P Montgomery Christchurch 12 out of 20 (60%) $4,208 -10% $4,701
R Arthur Auckland 5 out of 7 (71%) $4,160 n/a n/a
V Campbell Auckland 15 out of 23 (60%) $3,950 -14% $4,600
R Monaghan Auckland 12 out of 29 (41%) $3,481 +26% $2,750
K Raureti Auckland 3 out of 5 (60%) $2,233 -30% $3,206
K Anderson Auckland 10 out of 26 (38%) $2,150 -27% $2,964
Chief of the Authority, James Wilson, heard five cases and found in favour of the employee once awarding $10,000.

2005 2004
Auckland 136 in favour of employees out of 251 claims (54%) 102 in favour of employees out of 208 claims (49%)
Wellington 47 in favour of employees out of 75 claims (62%) 29 in favour of employees out of 45 claims (64%)
Christchurch 71 in favour of employees out of 110 claims (65%) 47 in favour of employees out of 87 claims (54%)
National 254 in favour of employees out of 436 claims (58%) 178 in favour of employees out of 340 (52%)

2005
Average hurt and humiliation award 2004
Average hurt and humiliation award 2003
Average hurt and humiliation award
Auckland $4,825 $4,421 $4,036
Wellington $7,208 $6,238 $6,383
Christchurch $4,809 $6,169 $4,926
National $5,244 $5,609 $5,115

ENDS

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