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Disrupting Employment Law: Time for Revolutionary Change

Call me an idealist, but I believe it is time for a change in the Employment Law industry. COVID-19 showed New Zealand the importance of employment law and employment law representation, but it has also highlighted the flaws in the system; an archaic system which highlights privilege and promotes inequality.


I have claimed before that I am not here to make friends; I am here to make change.


I am a disruptor.


Uber disrupted the taxi industry. Airbnb disrupted the hotel industry. Netflix disrupted the TV and film industry. Now it is time to disrupt the legal industry, by focussing on what I know best: employment law.


On 22 and 23 October 2020, I attended the bi-annual Employment Law Conference, which focused on my favourite topic: Access to Justice. While I have criticised many elements of the conference, I was particularly drawn to Chief Judge Inglis’ observations that a radical change may be required to truly promote access to justice in employment law.


I agree … But what does this look like?


In an earlier article, I explain some of the issues with employment law, focusing on what I call the “New Employment Relationship”: Employer, Employee and their Representatives. In this article, I controversially claim that many employment law representatives are only interested in access to justice, so long as it preserves their place in the employment relationship.


My views were largely substantiated by the “take home” message of the Conference: If we do not take meaningful action to promote access to justice, then parliament will … and the solution may not involve us.


Naturally, this thought intrigued me: employment law without employment representatives?


Unfortunately, but unsurprisingly, this idea was not canvassed in detail by the presenters. However, there appeared to be several proponents to this theory, and some ideas were provided over the course of the conference.


In this blog post, I wanted to canvass one potential alternative structure, which I believe would promote simplicity, improve access to justice, and would provide a true non-legalistic problem resolution service; which was the intended purpose of the Employment Relations Act 2000.


I will preface this post by stating that I am an idealist. I do not claim to be an expert, nor do I claim to have the answers. My aim is to start discussions and to promote meaningful change in employment law.


Employment Law Controlled by the Judiciary


Firstly, I believe Employment Law needs to be taken back by the judiciary. This means that the proposed institutions will be controlled, governed, and monitored by the Employment Court (as opposed to the current system whereby mediation services is offered by the Ministry of Business, Innovation and Employment). Yes, this would involve a radical change of the current Employment Court as we know it, but I believe that the system must be controlled by a legal body. Not a parliamentary body.


The “Employment Court” would be the first contact for an applicant, and the process would be streamlined and managed by this team. The applicant would fill out a simple online application form and would state their issues. The current “Statement of Problem” as used by the Employment Relations Authority is too difficult for many applicants to complete, and when they do, they face barriers from opposing counsel regarding the information they may, or may not, have provided.


This online application would provide a simple check-box mechanism that applicants could use to define their claim, similar to that used by the Human Rights Commission or by the Disputes Tribunal. This would provide applicants to easily define their claims as being a wages issue, a holiday pay issue, an employment agreement issue, an ongoing relationship issue, and/or a personal grievance issue. Applicants would then be asked to provide their preferred mode of resolution:

  • On-the-Papers Determination

  • Mediation

  • Employment Relations Authority

  • Removal to the Employment Court (exceptional circumstances only)

This application would then be presented to the other party, who would be provided an opportunity to respond. This would again be completed in a simplistic way, removing the requirement for employment representatives. The other party would also be asked to provide a preference for resolution.


The Employment Court would have a team who manage these preliminary applications, and who would consider the parties’ preferences for resolution, and then refer the matter to the appropriate institution. This team would monitor the matters and would provide assistance throughout the entire journey; as opposed to the current system where mediation services, the Employment Relations Authority and the Employment Court are three distinct bodies which do not overlap.


If the preferred method is for the matter to be removed to the Employment Court, then a legalistic process would then ensue; similar to that already available.


On-the-Papers


An on-the-papers determination would be appropriate for simple claims which are traditionally not pursued due to disproportionate legal costs required to raise a claim. These are claims which do not traditionally benefit from the mediation process, because the remedy sought is (largely) non-negotiable. Examples could include statutory claims for lost wages, minimum wage claims, annual leave claims and claims for breach of employment agreement, including issues relating to benefits and bonuses, restraints of trades, non-solicitation clauses, failure to provide notice period, and so on.


These claims could be determined in a similar fashion to ACC reviews. To provide a brief overview, if an application is unsatisfied with a decision made by ACC, they may seek to have the matter reviewed by an independent party. This is a free process and does not usually require representation.


The independent reviewer will then hold a case management conference, conduct a brief hearing, consider the evidence, and then provide a decision. These reviewers are contracted to provide decisions, which reduces the operational costs required for decision-making.


The reviewers would not be held to the same standard as Judges or Authority Members; and nor should they be. The matters I propose be covered in this option would not require significant legal experience. In fact, many existing employment law representatives could provide contracting services by either completely pivoting their business model, or by juggling both responsibilities. There would be some issues regarding conflict of interest checks, and I would welcome further ideas on this.


There would be an opportunity to appeal this decision to the “revolutionised” Employment Relations Authority.


Mediation


In a previous article, I write that human problems require human solutions. I believe that this is true for ongoing employment relationships, and therefore mediation would continue to be the primary service available for these claims. This may also be a great option for parties who have both a personal and employment relationship, or who may have ongoing interests they wish to preserve.


Mediation services are currently provided by legal professionals, who focus on mediation as a form of dispute resolution. However, my hope would be that mediation for ongoing employment relationships would be conducted by professional mediators who have a background in human services, social work, sociology or the like. This is because the purpose of mediation would be to maintain the employment relationship, and this involves a critical understanding of human relationships.


It would be important that these mediators understand the complex issues of bullying and harassment, sexual harassment, racial harassment and mental health as well as understanding issues associated with ‘incompatibility.’ While these issues have legal definitions, it is important to remember that they are not legal issues; they are social issues.


The current ‘shuttle mediation’ would be removed, and a full, flexible, and facilitated face-to-face mediation would be promoted. Settlement targets would be removed and exit strategies would only be discussed as an absolute last resort, with a focus on interests rather than strict statutory remedies.


The removal of the legal approach to mediation should dissuade parties from using the forum for without prejudice exit discussions. These discussions are not conducted in good faith and should not be promoted through employment law structures and processes. If parties are genuinely seeking an exit, they will be able to utilise private mediation services or can have their own without prejudice discussions (often facilitated by representatives).


Where parties fail to resolve issues at mediation, they may be referred to the “revolutionised” Employment Relations Authority for a determination on the matter. However, it is my view that litigation is inherently destructive to an ongoing employment relationship, and I would welcome comment on alternative methods for progressing these claims.


A Revolutionised Employment Relations Authority


The Employment Relations Authority is not currently fulfilling its legislative purpose of providing a speedy, effective and non-legalistic service for problem resolution. During the Employment Law Conference, Chief Judge Inglis spoke about simplicity in employment law. In her accompanying article, provided to attendees of the Conference, she discusses issues with the current employment law institutions, and states:


All of this can be contrasted to, for example, the Disputes Tribunal model which shares a number of comparable policy imperatives to the Authority in terms of its design (namely providing speedy, non-technical, answers to disputes). The differences in approach to achieving what is ultimately a similar goal gives pause for thought. While lawyers are permitted to appear in the Authority, they are not permitted to appear in the Tribunal.

This is revolutionary.


One of the largest barriers to access to justice is the costs associated with progressing claims to the Employment Relations Authority. During another presentation, it was estimated that the representation costs associated with progressing to the Employment Relations Authority is $12,000. This includes the process from start to finish; personal grievance, mediation and a one-day investigation meeting at the Employment Relations Authority. Based on my own experiences as an employment law representative, and previous employment law, I believe that this figure is accurate.


I want to contrast this figure to the nominal figure of $4,500, which is approximately what most successful applicants will be awarded at the conclusion of their one-day investigation meeting. This leaves a shortfall of approximately $7,500. For successful employees, they will then be required to pay their representative’s invoice from the remedies they receive as a result of their personal grievance.


Putting this in perspective, if an employee is successful in their personal grievance claim, they are entitled to claim:

  • The equivalent of three months’ lost wages, which for a minimum-waged employee working 40 hours’ a week is only $9,828 (less tax). It is worth noting that an employee may not receive a full award of lost wages if they are not trying to mitigate their losses by actively seeking alternative employment. If an employee is successful in seeking alternative employment, any earnings in the three-month period following termination will be deducted from the claimable three months’ lost wages.

  • Compensation for the hurt and humiliation they have suffered. This is a tax-free sum which greatly varies, depending on the circumstances, between $5,000 and $30,000.

  • Compensation for lost benefits, which often includes lost contractual benefits such as health insurance, company vehicle, KiwiSaver, and the like.

Clearly, there is not a lot of money available in the employment jurisdiction. It is therefore unfathomable that an employee should be expected to pay a considerable portion of their representatives to cover their fees in progressing the matter.


It’s time for a change. Remove the representatives from the Employment Relations Authority.


The Employment Relations Authority could operate like the Disputes Tribunal. Not only does it provide a financially viable option for litigants, it would also remove the current publicity concerns of proceeding to the Employment Relations Authority. Disputes Tribunal decisions are published, but they are anonymous.


It is no surprise that the lack of anonymity is a barrier to access to justice. This is the number one threat used at mediation: If matters do not settle, then the Employment Relations Authority will be required to make a public determination, which will survive on the internet until the end of time. This is a legitimate concern for employees who will be inevitably seeking future employment in a world where almost every recruiter will conduct a simple Google search prior to progressing an applicant.


Remove the costs. Create anonymity. Why haven’t we done this already?


I acknowledge that there may be some situations where representation may be required; for example, where the employee is unable to represent themselves due to a disability, language barrier, or other vulnerability. I would welcome that advocates be available in special circumstances to assist these litigants; but great care would be required to remove the legalistic approach of traditional representatives. Perhaps, similar to the Disputes Tribunal, these representatives would have no experience in employment law.


The aim would be to simplify the process. Currently the Employment Relations Authority requires a significant amount of paperwork; which, in my view, would overwhelm the typical applicant. Conversely, the process associated with the Disputes Tribunal is completely online. It promotes an investigatory approach, providing the decision makers with the ability to listen to the parties directly; and not to a representatives interpretation of the facts.


Decisions would be recorded and provided to the parties. Either party would have the right to appeal the decision to the Employment Court. The Employment Relations Authority would also have the right to remove all, or part, of a matter to the Employment Court; which may be appropriate where the Employment Relations Authority is required to determine a complex area of law.


The Employment Court


The Employment Court would continue to function as an appellate body. I believe most parties would engage in legal representation at this level, but it is important that the Employment Court also be simplified to promote self-represented litigants in progressing their claims.


I do not believe that great changes are required at the Employment Court level. The other avenues for resolution are very flexible and informal, and I believe it would be important that a rigid legal structure remain to provide guidance.


I also believe that it is important to retain the ability to apply for removal to the Employment Court, as there will always be matters which have great public interest, or which are too complex for the Employment Relations Authority.


I do not know what changes could be made at this level, but I welcome comment on this.


Conclusion


The time for change is now.


Majority of New Zealanders are either employers or employees, and they deserve a system which benefits them: which is quick, easy, low-cost and which promotes anonymity. The current system does not benefit either party to the employment relationship; in fact, I would say that the one benefiting from this is the employment law industry.


The Employment Relations Act 2000 aimed to promote access to justice by deregulating the market; but all this did was oversaturate the market with unqualified, unregistered, and inexperienced representatives. While I continue to promote regulation of employment representatives, I believe that a greater, more radical, change to our institutions is needed which largely focusses on removing representatives from the process.


We need to start talking about real access to justice.


I have a voice. You have a voice. We need to be heard.


Let’s disrupt employment law. Together.


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