Autumn 2018 Newsletter

Alternative Dispute Resolution Series: How It can help You – Mediation in Employment Disputes

Alternative Dispute Resolution (“ADR”) methods are alternatives to going directly to court. Using ADR methods instead of pursuing the matter in court is usually more cost effective for all the parties involved, takes less time to resolve the dispute, and also relieves the court of cases they believe can be resolved between the parties without court assistance.  This particular article will focus on mediation in the context of employment law and form a part of our ADR article series which will include articles on formal/informal negotiation and arbitration over the next two newsletters.

Mediation is essentially a voluntary process where an independent person (a “mediator”) assists the parties attending the mediation. This typically involves an employee and employer in an employment dispute, working through legal and emotional issues and developing solutions together to repair the employment relationship problems in a semi-formal and confidential environment.

Attending mediation is not like attending court as you are not under oath and are not cross-examined. Mediation requires the employee and employer (“the parties”) to attend the mediation, or it cannot proceed. Each party is entitled to bring representation and a support person to the mediation. At the beginning of the mediation, the mediator will outline the process of the mediation and ask the parties if they have any questions about the process.  During the mediation, the mediator will ask each party questions to identify and refine the issues. The mediator will give each party the opportunity to speak; interruptions are not permitted. If the parties are not able to adhere to this rule, the mediator may put each party in separate rooms and talk to each party individually to attempt to reach a resolution.

Anything said during mediation and all documents

prepared for the mediation, including the terms of the resolution, if one occurs, are confidential. Because of this, what happens in mediation may not be able to be used as evidence in the Employment Relations Authority (“ERA”) or Employment Court. Confidentiality encourages the parties to be honest and forthcoming with their information to increase the chances of reaching a resolution.

When preparing for mediation, the parties are encouraged to prepare written statements, accounts of events, and collate any evidence and documents such as texts or emails to support their position. To get the most out of mediation parties are encouraged to:

  1. Listen to the other parties’ point of view, even if they do not agree;
  2. Acknowledge anything they may have done differently or better;
  3. Be honest and open;
  4. Have an open mind for resolutions; and
  5. Be willing to bend a little to reach an agreement.

Even if a resolution is not reached between the parties, they can request the mediator to recommend a non-binding solution under section 149A of the Act that the parties can consider. The mediator will make a written recommendation. The recommendation will include a date when the recommendation will become binding; the parties may consider accepting or rejecting the recommendation. Please note that if either party does not reject the recommendation before the specified date, it will become a full and final settlement and enforceable.

The parties also have the option of requesting a binding recommendation under section 150 of the Act.

Some advantages of resolving the dispute at mediation are:

  1. The cost is significantly less than hearing the dispute in court; and
  2. Mediation lets the parties have a degree of control over the agreement reached.

The disadvantages of mediation are that it may not result in a resolution, in which case the process will add to the legal costs.

Where the mediator feels that mediation is unlikely to produce a resolution, the mediator will usually conclude the mediation. The parties’ options at this point are to refer the matter to arbitration or the ERA or to stop pursuing the matter altogether.

If you are an employer or an employee and facing this situation, it is best to seek legal advice.

Watch this space for our article on Arbitration in our next newsletter.

Katherine Taurau, lawyer at McLeods Lawyers, is a trained mediator accredited with LEADR and can assist you with any queries about mediation.

Phone Kath on 09 407 0175.


Proposed changes to the Employment Relations Act 2000 – What you need to be aware of

During Labour’s election campaign, the Party released a plan which detailed their intentions for their first 100 days in office (“100 Day Plan”). Since the campaign, the Labour-led Government has released the proposed changes to the Employment Relations Act 2000 (“ERA”) which are predicted to affect New Zealand’s employment landscape significantly. In this regard, it is important to be aware of what changes

Labour are proposing and how the changes may affect you.

The proposed changes are recorded as:

  1. The amendment of the existing 90-day trial period as implemented by the former National Government (“trial period”);
  2. The doubling of Labour Inspectors (“Inspectors”);
  3. Minimum wage increase from $15.75 to $20.00 by 2021;
  4. Introduction of Fair Pay Agreements;
  5. Extend paid parental leave; Feb 2018 – Apr 2018 Page 4 of 4

Compiled by New Zealand Institute for Business Research © 2018

  1. Changes to redundancy provisions; and
  2. The abolition of youth rates.

Removal of the 90-day trial period

Section 67 of the ERA addresses Probationary Agreements and outlines the particulars of the existing 90-day trial period. Labour is set to change the ERA to allow employees to bring a claim against employers where they feel they have been unfairly dismissed during their trial period. These claims will be heard through short hearings without lawyers. The remedies available to workers may be reinstatement or damages of up to a capped amount. Labour will release more information regarding the trial period reform in the coming months. In the meantime, it is recommended that employers become acquainted with what constitutes unfair dismissal under the current employment legislation.

Doubling of Labour Inspectors

Inspectors monitor and enforce compliance with employment standards. They use investigations and audit programmes to find and investigate potential breaches of employment standards and to enforce compliance.

Currently, only 60 Inspectors are inspecting the entire

country. Labour has proposed to increase the number of inspectors to 110. The increase implies that New Zealand has transitioned out of the education and compliance phase of the implementation of the ERA and into the enforcement phase.

For any businesses that are not fully aware of their

obligations under the ERA, or are not fully compliant, it is recommended to seek the advice of an employment lawyer.

Minimum wage increase

The minimum wage is set to increase from $15.75 to $16.50 per hour by 1 April 2018 with the goal to raise gradually to a minimum wage of $20.00 per hour by 2021.

Fair Pay Agreements

A key and controversial piece of Labour’s workplace relations package has been to develop and introduce a system of collective bargaining for each industry. This system is intended to allow unions and employers, with the assistance of the Employment Relations Authority, to create Fair Pay Agreements that set minimum conditions, such as wages, allowances, weekend and night rates, hours of work and leave arrangements for workers across an industry, based on the employment standards that apply in that industry.

Paid Parental Leave

A commitment was made during the campaign to increase paid parental leave from 18 weeks as it currently stands, to 26 weeks by 2020.

Changes to redundancy provisions

Consultation is to start on changing the minimum

redundancy provision protection for workers.

Recommendations such as the development of initiatives that smooth the transition of people made redundant into alternative jobs, made back in 2008, have been identified as the basis on which to change the provision. However, no further details have been offered by the Labour-led Government.

Abolish youth rates

Labour has also proposed to remove youth pay rates. Youth pay rates are 80% of the adult minimum rates. The proposal has been endorsed by Labour’s coalition partner, NZ First.

A majority of these proposed changes are expected to be passed in Parliament in the coming months. If you are a business owner or an employee, make sure you watch this space.

Contact Kath Taurau (407 0175) or Sarah Wynyard-Davis (407 0178) for advice about employment.


McLeods Lawyers Limited

The start of 2018 brought some background changes to McLeods.

We have now incorporated as McLeods Lawyers Limited and are operating as a company.

Sarah Jury is the director to the new company and Graeme McLelland is enjoying a slight change in role – moving to employed lawyer.

Otherwise it is business as usual.

All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter.  It is recommended that clients should consult a senior representative of the firm before acting upon this information.



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