What happens when I get a personal grievance letter?

by | Apr 12, 2016 | Redundancy & Restructuring

Don’t Panic

And don’t ignore it!

Sadly, there are a lot of no-win-no-fee lawyers who understand that for employers, personal grievance claims often come down to a fiscal decision. It may be cheaper to pay money to an ex-employee, than defend a claim.

At any point during the personal grievance process, you have the right to negotiate a full-and-final settlement agreement. This means that both parties are waiving their rights to take any further legal action against the other, giving you insurance against any future court case.

Begin by assessing the case against you

  • Pure chancer with no claim at all 
    Write back to the claimant with all the details you have saying ‘no claim, and this is why’. Often this will be an end to the matter
  • Pushing their luck, but possibly have some good points
    You may want to think about having a ‘without prejudice’ discussion at this stage, or you may want to write back and refute the allegation.
  • They have a solid case, you are in the wrong
    This is probably a good time to open a ‘without prejudice’ discussion. You are going to have to pay out anyway, so you may as well minimise the legal bill.

An alternative is to can go to mediation and have a mediator from the Department of Labour help you sort out the matter. You will be directed to mediation if you are not able to settle the claim. You have a legal obligation to attend mediation, and to seek to resolve the matter in good faith (more details at https://www.laborlawcc.com/Labor-Law-Posters/New-York-c207/).

What happens at mediation?

  • A date will be agreed by the parties
  • Both parties will arrive at the mediation department and will be put into separate rooms
  • The mediator will brief both parties on the process and then bring them into the room together
  • Without interruption both parties will state their case
  • The mediator will ask some questions, and questions can be asked across the table
  • Once discussions are no longer being productive the mediator will break you back into separate rooms
  • The mediator will then go over the strengths and weaknesses of your cases and the possible liabilities. Most do this by going through your worst case and best case scenario.
  • The average award for an employee to win in court is three months pay plus $7,ooo for hurt and humiliation
  • The mediator will attempt to negotiate a settlement
  • If no settlement is agreed then the parties go their separate ways

What does this mean in practice?

  • You will be in mediation for 4 – 6 hours (sometimes longer)
  • You don’t have to reach a settlement, but the reality is that in most cases you will end up paying over some money in order to make sure the personal grievance claim doesn’t go any further
  • The employee then has two years to decide to take the matter further with the Employment Court
    Employees will not automatically take their case to the Employment Court. With weak cases, a no-win-no-fee lawyer will not waste time defending a case for which they may never be paid

Are claims always made in favour of the employee?

No, that’s not true. The rulings are about 50/50 once you get to the Employment Court.

Your main concern will be that the estimated cost to an employer to ‘win’ in the Employment Court is about $7,000 in legal fees that you can’t recover. If you are awarded ‘costs’, they are based on a set formula ‘per day in court’ and have no relation to the actual costs you have incurred. Finally, an employer then needs to recover these costs which sadly, most employers never actually manage.

The average cost to lose at the Employment Court is $35,000. And that doesn’t account for the loss of time away from your business.

Should I represent myself?

You can represent yourself at the Employment Court, but this is one of those tricky situations where we do not recommend DIY. Don’t spend thousands of dollars unnecessarily, Call us on 0800 HRtoolkit and we will talk you through the most cost effective ways to defend a Personal Grievance.

Contact Us

957 Paihia Road, Opua
Northland, 0282

0800 HRtoolkit