Two Sides to the Coin: NZ’s Dispute Resolution Process is Broken

🪙 I am frustrated with the current system of employment dispute resolution. Representing both sides as I do, the current system often fails to deliver timely, fair, and cost-effective justice for both parties. 

💰 New Zealand prides itself on fair employment laws, designed to protect both employees and employers. However, reality tells a different story - despite legal safeguards, the current system often fails to deliver timely, fair, and cost-effective justice.

👷 The Employee’s Perspective: Delays and Financial Hardship

For employees, the dispute resolution process can be arduous. The Employment Relations Authority (ERA) is meant to provide a quick and cost-effective resolution, but often falls short. Cases can take months or even years to resolve, leaving vulnerable employees in financial limbo. Many workers who raise grievances face employer retaliation, including termination, making their situation even more precarious.

Legal fees are another major hurdle. While employees can theoretically represent themselves, the complexity of employment law makes legal representation almost essential. However, hiring a lawyer or employment advocate is costly, and many workers are forced to accept unfair settlements simply because they cannot afford to fight prolonged battles. Even if an employee wins, compensation is often insufficient to cover lost income and legal expenses.

👩‍💼 The Employer’s Perspective: Costly and Unpredictable

Employers, too, find themselves at the mercy of a flawed system. Even when acting in good faith, they may face unjustified claims from employees seeking undeserved compensation. The burden of proof in personal grievance cases is skewed against employers, forcing them to spend considerable time and money defending claims, some utterly spurious.

Mediation, which is meant to be a neutral first step, often turns into a pressure-cooker situation where businesses feel forced to settle just to avoid the risk of more costly litigation. Small and medium-sized enterprises (SMEs) are particularly vulnerable, as they lack the financial resources to engage in lengthy legal battles.

📖 A System in Need of Reform

Both employees and employers are suffering under a system that does not deliver fair, timely, or affordable outcomes. The backlog of cases at the ERA, high legal costs, and an adversarial process are undermining trust in the system. There is a need for meaningful reform - streamlining processes, increasing funding for dispute resolution services, and ensuring fairer and faster mechanisms for both sides.

New Zealand’s employment laws were designed with good intentions, but in practice, the dispute resolution process is failing. Until reforms are made, the employment relationship will remain like a tossed coin, where both sides risk losing. And the broken coin sends ripples across our economy that we cannot afford to be spending.

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