INTOUCH : Recession Boosts Employment Claims

Article excerpt

When the job market is tight, employees are more likely to fight dismissal and thata[euro]s helping push up employment claims.

Employment law specialist Margaret Robins, from Workplace Law, told a recent Liability Symposium that mediations were up 26 percent in two years, and employers were more likely than ever to be on the receiving end of an employment dispute. However, because of the potentially high costs of such disputes for both parties, 80 percent are resolved at, or before mediation.

Robins noted that although there was definitely a perception in the business world that employers get a rough deal in employment disputes, she believed the awards to employees for compensation in standard cases were not outrageous and that because of litigation costs, employers were better to settle at mediation than go to a hearing.

a[euro]The costs of both the process and the awards made, mean that even if successful, an employee will be out of pocket after a standard hearing before the Employment Relations Authority which is one step beyond mediation.

a[euro]This means that most disputes, for both the employee and the employer are settled at mediation and both parties walk away grumpy. A success all round.a[euro]

Typical legal costs for the employer to defend the dispute at mediation are between $2500 and $7500, compared with between $10,000 and $30,000 in the Employment Relation Authority (ERA), and $10,000 to $50,000 for the Employment Court.

While therea[euro]s a perception employers get a rough deal in disputes, Robins believed awards to employees for compensation were not outrageous and because of litigation costs, employers are better to settle at mediation.

She said that generally higher earners (those earning over $100,000), were awarded higher awards for hurt feelings. a[euro]There seems to be an assumption by the ERA and the Employment Court that higher earners have finer feelings.a[euro]

Factors which increase risk and costs include such things as a claim of workplace bullying, claim for reinstatement, and a very senior employee or specialised employees whose prospects of new employment are small. …