Will Employers Pay More For Personal Grievances In Future?

If you raise a personal grievance against your employer, you can ask the Employment Relations Authority to decide whether you have a claim and whether your employer should pay you anything for it.

If a Member of the Authority considers that you have a valid personal grievance, they can order that your employer pay you (among other things) compensation for the hurt and humiliation you suffered because of your employer’s unfair actions.

The amount you will be awarded under this heading will vary depending on how severely you have been affected. This is a matter of judgment for the Authority Member to make after considering your version of events. But it is most common for an award of compensation to be around $5,000.

However, that may be about to change.

Recent soundings from the Employment Court suggest that compensation awards for hurt and humiliation are woefully inadequate, and it appears those concerns are being heeded.

So what level of award of compensation might you expect if you take a personal grievance against your employer in future?

THE CURRENT LEVEL OF AWARDS

Recent data suggest that the medial level of awards of compensation in the Authority are between $5,000 and $6,000. In the most recent year for which these data have been published, only six cases resulted in an award of compensation greater than $15,000.

In the Employment Court the awards are slightly higher, with the average awards at around $9,500.

Of course these figures reflect awards made for all manner of personal grievances. The level of awards can vary depending on:

  • the type of personal grievance, which may be an unjustified dismissal or an unjustified disadvantage not amounting to dismissal;
  • the level of distress that the Authority or Court actually accepts has been suffered by the employee bringing the grievance; and
  • whether the employee has contributed to the grievance in a way that means the compensation award should be reduced.

That is to say, every case must be decided on its merits.

IT’S NOT JUST ABOUT CONSISTENCY BETWEEN CASES

But that has not stopped the Employment Court from noting in one case that the average awards have not even kept up with the rate of inflation. They have stagnated at around the same average levels for the past 20 years.

As a result, the Court has considerable sympathy for the view that awards have been too low and has warned against keeping the levels of awards artificially low by maintaining consistency with other cases.

In other words, the Court appears to be encouraging an approach that takes into account not only awards in other cases, but also when those cases were decided and whether the level of awards is at least keeping pace with inflation.

Further, the Court has expressly noted elsewhere that some awards for distress compensation issued by the Human Rights Review Tribunal, in cases of breach of privacy or harassment in an employment context, have been well in excess of the current averages in the Court or the Authority. In one case the Tribunal awarded $98,000 and in another $45,000.

The Court has taken that as a further signal that both it and the Authority may have fallen behind the times when issuing awards of compensation.

WHAT MIGHT AWARDS BE IN FUTURE?

To date there have only been a handful of cases where the Court’s concerns about the level of awards of compensation have been expressly noted and applied.

Yet of those cases, there seems to be a trend towards adopting a higher starting point (even if the awards have been reduced in some cases for the employee’s contribution to the events).

The starting points in those cases have been:

CONCLUSION

The Employment Court’s concerns about the level of awards for hurt and humiliation compensation may mean employees see an increase in these types of awards in future.

Already it appears the starting point for awards of compensation is being increased. While bearing in mind that every case turns on its own facts, it may not be unrealistic to expect the average award of compensation in the Authority to be twice its current rate if the above starting points are any indication.

Employers now have even more incentive to ensure that they cannot be criticised for acting unfairly and ensure that they act fairly and reasonably when dealing with staff.