Resolving employee disputes

If at all possible, you need to resolve a dispute with an employee internally before investigating other options. Simply sitting down and communicating with the other party is always going to be the most straightforward way to move forward.

However, if that doesn’t resolve the issue, you’re far from alone. Both employers and employees can use the mediation services offered by the Ministry of Business Innovation and Employment – Labour (or seek an independent mediator).

If mediation fails, you can then ask the Employment Relations Authority (ERA) to look at the case and give a determination. And as a last resort, you can take the issue to the Employment Court.

On this page:

• Internal dispute resolution
• Mediation
• Employment Relations Authority
• Employment Court

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Internal dispute resolution

If an employee believes they have a personal grievance, they must raise it with you within 90 days of the dispute-causing action taking place or within 90 days of when they first became aware of it (whichever is the later date).

Ideally, a set process for resolving disputes should be included in the employment agreement you negotiated when you hired the employee.

Having a set dispute resolution process included in a contract:

• helps protect your rights
• provides information to support decision making
• helps to ensure the issue doesn’t grow or repeat through future inconsistencies and misunderstandings.

In some cases, process problems themselves can cause the breakdown of the employment relationship and lead to an employee claiming unfair treatment, so it’s important to get the process right.

If the employment agreement doesn’t include an internal process for dispute resolution, you should still agree to meet with the employee to discuss the issue.

Any meetings should:

• Be based on each party having had time to investigate the issue, gather information and consider the problem.
• Treat all parties with respect and consideration.
• Deal with sensitive issues in a confidential manner (by, for example, conducting meetings behind closed doors rather than in communal areas like staff lounges or cafeterias).
• Aim to recognise the underlying causes of the problem in good faith without emotion.
• Be documented with accurate notes recording meetings and any outcomes.

Third-party support

Make room in the process for any support people the employee wishes to include, such as a union delegate or legal representative. You may wish to seek support from your own legal counsel or from any employers or industry associations you may be a member of.

It is always advisable to have a third party present to clear up any misunderstandings and help make sure meetings remain constructive.

Principles of dispute resolution

Check the contents of your employment agreement with the employee and, if necessary, seek professional advice on the law before following the principles below. If you need advice, call the Ministry of Business Innovation and Employment – Labour on 0800 20 90 20.

1. Be clear about the facts
   Make sure that what each side thinks has happened or is happening is not based on an assumption or a misunderstanding. You or your employee may get help to clarify the issue by talking to the Ministry of Business Innovation and Employment – Labour or a representative organisation such as a union or employer or industry association.
2. Talk to each other
   You and your employee should try to resolve the problem by discussing it with each other. Both parties are responsible for this. Union members can ask their union to make contact with you on their behalf, and you can ask your representative association to approach the other party on your behalf.
3. Clarify whether there is a problem, and if so, what it is
   This shouldn’t be delayed. The problem should be fully discussed to clarify what the problem actually is.
4. Consider what assistance is needed to help resolve the problem
   Parties may consider whether mediation assistance might be useful at this stage.

If internal resolution doesn’t prove fruitful, your next step is to seek mediation.

Find out about What to put in employment agreements and read up more in the Guide to hiring for employers.

Find out more about about Minimum employment rights and Supporting staff.

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Mediation

Mediators are third-party intermediaries professionally trained to help parties in conflict to resolve their differences.

A mediator does this by helping each party identify and discuss the issues at hand before agreeing on a solution that suits both of their interests.

Mediations can take place in different ways – they don’t have to be conducted as face-to-face meetings – and they allow each party involved in the dispute to represent themselves and invite support personnel into the process.

Find out more about mediation from the Ministry of Business Innovation and Employment – Labour.

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Employment Relations Authority (ERA)

An employee who believes they have a personal grievance against their employer may file in the Employment Relations Authority.

Once a case has been accepted, the Authority looks into the facts and works to make an independent decision. It only investigates employment relationship problems, including personal grievances, and has the power to make legally binding decisions on these matters.

If the ERA finds that more mediation could be beneficial, or if the matter has not previously gone to mediation, it can refer your case back to a mediator.

However, if the ERA establishes that a personal grievance does exist, it can order certain remedies. These can include one or more of the following:

• paying a dismissed employee lost wages
• paying compensation to a dismissed employee for humiliation, loss of dignity and injury to feelings
• re-instating a former employee in the role they were dismissed from.

The Authority can also order one party to cover the other’s costs. However, this isn’t automatic, and parties are expected to make cost claims with the Authority in writing.

Find out more about the Employment Relations Authority from the Ministry of Business Innovation and Employment – Labour.

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Employment Court

If you’re unsatisfied with a determination given by the ERA, you can take the dispute to the Employment Court for a full judicial hearing of the original issues.

Taking this option is not a way of appealing against an ERA decision because the Court will start investigating the dispute from scratch rather than referring back to the Authority’s determination.

You can also take action in the Employment Court:

• to seek damages, an injunction or compliance orders in the event of an unlawful strike, lock-out or related picketing that is taking place or is about to take place
• to review how various persons have exercised, or refused or proposed to exercise, any of their powers under the Employment Relations Act
• when an individual seeks a declaration of whether or not he or she is an employee
• when people are alleged to have committed offences under the Employment Relations Act.

Like the ERA, the Court will consider whether mediation might contribute constructively to resolving the matter and your case could be referred back to a mediator.

Getting help with applying to the Employment Court

When a case needs to be heard by the Employment Court, it is strongly recommended that you use outside expertise. Neither the application nor the hearing procedures are straightforward.

It is wise to have someone with experience to conduct the case. Unless the party is confident and familiar with the workings of employment agreements, legislation and legal procedures, the use of a lawyer, union official or other person skilled in advocacy and acquainted with Court procedures should be considered.

Find out more about Employment Court application forms, fees and information on procedures.

Find out about Restructuring and redundancy and Ending an employment relationship.