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The "New Employment Relationship": Employer, Employee and their Representatives

When I became Ashleigh the Advocate, I did so with the aim of truly promoting access to justice. This meant not only reflecting on my own business model and pricing structures, but also questioning the current establishments and processes.

Too often I see the term “Access to Justice” being thrown around in the legal field, without any plan, policy or direction. In some sense, it can be similar to a company’s stated dedication to Te Tiriti o Waitangi, LGBTQIA+ rights, and the Black Lives Matter movement. For some, it is used as a buzzword with baseless application. A marketing ploy. A social strategy. A distraction.

Take Nike for example, who has declared their support for the Black Lives Matter movement. In their official statement, they make a commitment to racial equality in America. However, history has shown that Nike has profited from racially motivated oppression in Asia.

The same can be said about the buzzword “Access to Justice.” Promoting access to justice is often misunderstood as making a tangible difference. However, many employment lawyers and representatives are only interested in promoting access to justice, so long as it preserves their importance in the employment relationship.

That brings me to question what I call the “new employment relationship”; where employment representatives have unnecessarily inserted themselves to every aspect of the traditional employment relationship. In this article, I discuss the purpose of the Employment Relations Act 2000, which I believe was to promote access to justice by removing the requirement for costly representation.

I discuss the roles of the Representative and the Employment Relations Authority in creating and promoting the “new employment relationship”, and I ask: What came first, the chicken or the egg?

  • Have Employment Law Representatives trumped up their own importance and value in an employment relationship?

  • Has the Employment Relations Authority applied the Act so narrowly that employees and employers are unable to navigate their obligations alone?

Like the chicken and the egg, these are not questions that I will be able to answer. However, it is important that we have these discussions. New Zealand is entering a recession, and our employment law institutions are already overwhelmed by COVID-19 related claims. The need for employment law is arguably more important than ever, and it is important that we take this opportunity to consider meaningful change.

The current system does not truly serve the employee or the employer’s best interests.

The Purpose of the Employment Relations Act 2000

The Employment Relations Act 2000 provides the legal backdrop for all relationships between employees, employers and unions. It is my view that the purpose of the Employment Relations Act 2000 was not to include lawyers and representatives into this relationship, and rather to promote access to justice by providing employees and employers with ‘human’ solutions to ‘human’ problems.

As was stated in the Explanatory Note to the Employment Relations Bill:

This Bill implements Government policy to repeal the Employment Contracts Act 1991 and introduce a better framework for the conduct of employment relations. That framework is based on the understanding that employment is a human relationship involving issues of mutual trust, confidence and fair dealing, and is not simply a contractual, economic exchange.

It is important to reiterate: the employment relationship is a human relationship. It involves human issues, and the purpose of the Employment Relations Act was to place a “strong emphasis … on the prior resolution of problems by the parties themselves.” The Bill introduced:

… a range of services, bodies and judicial institutions designed to support good faith and the overall objectives of providing informal, accessible and effective means of problem resolution that, in turn, are intended to support and enhance ongoing employment relationships where possible.

As a result, the Employment New Zealand website was created, and good content was distributed to employees and employers. Mediation services have been established, providing employees with a free and independent forum to progress their claims themselves.

The Employment Relations Authority was created, providing a non-adversarial and informal means to dispute resolution; whereby the Authority Member conducts the investigation themselves.

It appears to me that every mechanism introduced by the Employment Relations Act 2000 was designed to remove lawyers from the equation. I therefore ask, what went wrong?

The Chicken: The Representative

Recently, I published a post on LinkedIn where I took aim at the archaic and privileged structures that lawyers and advocates use to sell their knowledge. In this post, also posted on Facebook, I stated that I was not the gatekeeper of knowledge, and that knowledge was not mine to sell.

Understandably, I received some backlash from the legal community. In discussing access to justice, one lawyer stated:

In order for an employee to file an employee complaint that will actually be listened to – it needs to create risk for the company. To create risk it needs legal quality.

In my view, this was not the purpose of the Employment Relations Act 2000. The employee’s good faith obligations require them to raise their concerns directly with their employer, and the employer’s obligations require that they be active and constructive in maintaining the employment relationship. This will include making decisions and taking action that is fair and reasonable, in the circumstances.

Technically, there is no need for a legal representative to become involved at this point. The employee should be able to detail their concerns to their employer, and their employer should be able to investigate the matter themselves:

  • Initially, the employer is required to make a finding of fact; did the conduct occur? If there are concerns about an employer’s ability to be impartial or independent, they may seek to appoint an independent investigator.

  • Secondly, they will need to decide whether the conduct was inappropriate, and whether it can amount to bullying, harassment, sexual harassment, etc. An employer may wish to seek basic advice on this; however, there are free online tools provided by Employment NZ which can assist an employer in making a decision.

  • Lastly, the employer will be required to remedy the situation. This will depend on the circumstances but will usually involve disciplinary action and/or a mediation process between the parties to assist in repairing the relationship problem.

I am confident that many employees and employers can conduct this process themselves.

In another article, I try to dispel the myth that employment agreements need to be written by employment lawyers and employment representatives. In this article, I state that the biggest risk for new employers is not what their employment agreement does, or does not, contain; it’s how they use it. Nonetheless, despite a free alternative being provided by Employment NZ, employment representatives continue to charge upwards of $1,500 + GST for an employment agreement template.

These are only two examples, but they serve to highlight the current state of employment law in New Zealand; where, in my view, employment lawyers and representatives are actively working against the purpose of the legislation we aim to uphold.

There will always be a requirement for employment law representation. However, the current state of employment law only serves to increase an employer’s operational costs to the disadvantage of the employee. Small employers are, understandably, frustrated by this system; believing that the law unfairly favours employees. When, in my view, it is representatives who are driving and creating these unfounded beliefs, by trumping up their own importance.

The Egg: The Employment Relations Authority

Just like the chicken came from the egg, I ask whether the role of the Representative was a result of the Employment Relations Authority’s approach and interpretation to the law.

In almost every personal grievance, the Employment Relations Authority must determine whether the employer’s action or decision was fair and reasonable in all the circumstances. This is a subjective test, and will involve an analysis of both the subjective and procedural aspects of the decision.

In terms of the process, the Employment Relations Act 2000 is clear on the procedural expectations. Section 103A states that, the Authority must consider:

  • a) whether, having regard to the resources available to the employer, the employer sufficiently investigated the allegations against the employee before dismissing or taking action against the employee; and

  • b) whether the employer raised the concerns that the employer had with the employee before dismissing or taking action against the employee; and

  • c) whether the employer gave the employee a reasonable opportunity to the employer’s concerns before dismissing or taking action against the employee; and

  • d) whether the employer genuinely considered the employee’s explanation (if any) in relation to the allegations against the employee before dismissing or taking action against the employee.

Section 103A also states:

The Authority or the court must not determine a dismissal or an action to be unjustifiable under this section solely because of defects in the process followed by the employer if the defects were … minor … and … did not result in the employee being treated unfairly.

Procedurally, there is not much room for interpretation and in my view the Employment Relations Authority has been consistent in upholding these principles. However, in terms of the substantive side, the test is:

… whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal or action occurred.

This is where things become difficult. What is fair and reasonable? This is a question that you are asking one person to determine, based on their own views, experiences, and moral compass. There is a significant body of case law which can assist us in determining what is fair and reasonable, but the Employment Relations Authority is not bound by its past decisions.

For this reason, many employment lawyers and advocates will often claim that your chances of success at the Employment Relations Authority cannot be calculated. I ask; if I cannot definitively confirm that a decision is fair or reasonable, how can I expect an employer to confidently make this decision.

Don’t even get me started the decisions on 90-day trial periods

Therein lies the problem. This uncertainty has created a system where employers feel pressure to be legally represented at every turn. Any action or decision they take can be challenged by way of personal grievance. The stakes are high.

The Rooster: Section 236 of the Employment Relations Act 2000

When people ask themselves whether the chicken or the egg came first, they often forget about the rooster. Where was he? What was his role?

Afterall, without the rooster, there can be no fertilised egg and therefore no chicken.

Irrespective of whether the new employment relationship has been created by the Representative, or the Employment Relations Authority, we need to consider the role of the rooster: Section 236 of the Employment Relations Act 2000.

Section 236 of the Employment Relations Act 2000 provides that the employee or employer may choose “any other person” to represent them with respect to their employment relationship, or any action at the Employment Relations Authority or the Employment Court.

Section 236 opens the market of employment law representation to anyone. Subsequently, this clause has oversaturated the market with unqualified, unregistered, and inexperienced representatives. The market is now such that an employee will usually always find an advocate who is prepared to pursue their claim.

The result of this is that many employees are provided with bad legal advice and insufficient legal evaluation with respect to their options, and employers are therefore often faced with frivolous and vexatious personal grievances. Unfortunately, it is often more cost effective for an employer to settle a baseless personal grievance than defend it; a reality that many unethical representatives rely on. This process is made easier by the “No Win, No Fee” structure, which allows an employee to pursue their claims to mediation without any financial risk.

This problem is not only prevalent in employee representation. For employers, bad legal advice can cause significant barriers in resolving the employment relationship problem, often resulting in significantly higher costs and greater risks at the Employment Relations Authority.

It is important to remember that these representatives have not had to undertake comprehensive studies on ethics, nor have they been required to prove that they are fit and proper people in the eyes of the law. They have not been required to prove their ability to understand basic legal principles, and there is no ongoing obligation of professional development. In short, there is no obligation under the Employment Relations Act 2000 to provide good legal advice.

Unlike lawyers, there is little consequence for unethical and unqualified representatives who continue to flood the market with poor legal advice. In comparison, if the law society finds a lawyer has acted unsatisfactorily, the law society has the ability to censure or reprimand the lawyer, as well as the ability to order an apology, compensation for actual loss, rectification of the error, a reduction in legal fees, a fine of up to $15,000, and reimbursement of the complainants expenses in making the complaint. For serious complaints, the lawyer risks being struck off the roll of barristers and solicitors.

Therefore, while Employment Representatives and the Employment Relations Authority may have contributed to the new employment relationship, it is the Employment Relations Act 2000 which allowed this situation to occur: doing so under an umbrella of promoting access to justice.

This system does not provide justice to anyone. It has created an unregulated market, whereby employees have no guarantee over the quality of advice they are receiving. Unfortunately, the current situation is that it is mostly unqualified advocates who provide “No Win, No Fee” solutions; meaning that premium legal advice is still only available to those who can afford it.

The employee cannot be blamed for raising a frivolous or vexatious personal grievance, in circumstances where they have been encouraged to do so by their representative.

The employer cannot be blamed for involving legal representation into the employment relationship. It is a reaction to the oversaturation of unqualified employee representation, and a need to mitigate the real financial risks of defending a baseless personal grievance.

It is the system that has allowed this to occur. It is the system that needs to change.

Conclusion: Where to from here?

Setting analogies aside, we are now faced with the problem.

Remember how I said that “access to justice” is a buzzword? This is not limited to Employment Representatives. While I believe that the Employment Relations Act 2000 did intend on improving access to justice, it aimed to do so without disrupting lawyers and their structures and processes.

The Employment Relations Act only opened the floodgates to more options for representation. Access to justice does not mean promoting a system whereby the financially disadvantaged can only realistically receive advice from unqualified, inexperienced, and unregistered representatives. It does not mean promoting a system whereby small employers are overburdened with baseless claims.

It does not mean promoting inequality.

It means driving real change.

If parliament genuinely wants to promote access to justice, it must focus on improving the legal aid systems so that they are truly accessible in employment law matters. It must focus on regulating and controlling fees in the employment law field. It must create a requirement for employment law representatives to be licenced: like Immigration Advisors are.

On an industry level, we need to take accountability: remove ourselves from the employment relationship, and work as a collective group to provide employees and employers with the tools they need to effectively manage the employment relationship themselves. Knowledge is not ours to keep. Start writing informative blog posts. Create booklets for distribution. Provide open-source templates and documents. This can all be done without affecting the bottom line: there will always be a demand for quality representation.

Things need to change.


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