The Employment Relations Authority – A Quick Guide for N.Z Employers
The Employment Relations Authority (‘the Authority’) plays a central role in investigating, determining and resolving employment disputes in New Zealand.
Whether it’s an unjustified dismissal claim, a disagreement over contractual interpretation, arrears and penalty claims, or other types of employment related legal claims, many employment relationship problems ultimately find their way to the Authority.
In 2024, an annual report published by the Authority showed a 22% increase in employment relationship problems lodged in the Authority. A total of 781 determinations were issued in that year across all offices (Auckland, Wellington and Christchurch). In 2024, 50% of parties were represented by lawyers, 24% were represented by advocates and 19% were self-represented, highlighting the need for employers to engage professional assistance when dealing with employment disputes.
According to recent statistics, compiled by Thomson Reuters Westlaw New Zealand, it showed that 65% of personal grievances, which includes personal grievances for unjustified dismissal determined by the Employment Relations Authority, were found in favour of employees. These statistics underscore the need for employers to have access to affordable and competent professional support when dealing with employment disputes.
For employers, understanding what the Authority does, how it works, and how best to manage a litigation process before it is vital to navigating employment disputes effectively and minimising risk.
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What is the Employment Relations Authority?
The Authority is a statutory investigative tribunal established under the Employment Relations Act 2000. It is not a Court, but an independent adjudicative body tasked with investigating and determining employment relationship problems, including personal grievances, contractual disputes, and employee status questions.
The Authority examines the facts, issues and applies the law on their merits, rather than on strict legal technicalities.
The Authority operates informally relative to a Court process and focuses on establishing the substantive merits of a dispute. Its decisions – called ‘determinations’ are legally binding and enforceable unless successfully challenged in the Employment Court.
What Can the Employment Relations Authority Do?
The Authority’s core functions include:
Investigating Employment Disputes
The Authority investigates a wide range of employment relationship problems, such as:
Personal grievances (e.g., unjustified dismissal, disadvantage, unlawful discrimination).
Interpretation or application of employment agreements, including contractual disputes.
Minimum entitlement disputes.
Status disputes (e.g., employee versus contractor).
During these investigations, which are called ‘investigation meetings’, the Authority gathers evidence, hears submissions, and makes findings of fact, before issuing a determination based on those facts and applicable law.
Determining Remedies
If the Authority finds in favour of an employee’s claim, it can order a range of remedies, such as:
Compensation for lost wages or hurt and humiliation.
Reinstatement to a position.
Rectification of contractual terms.
Penalties where relevant.
Apportionment of remedies where a controlling third-party is involved.
These orders are legally binding and enforceable in the same way as a Court judgment.
Facilitating Fair Process
The Authority expects parties to co-operate, provide information, and comply with directions. The Authority may also refer issues to mediation or to the Employment Court (e.g., for important questions of law).
Commencing Legal Proceedings in the Employment Relations Authority
A matter generally begins when a claimant (usually an employee) lodges a Statement of Problem (or statement of claim) with the Authority, outlining the nature of the dispute, their claims and the remedies sought. The Respondent, usually the employer, then files a Statement in Reply setting out its position in respect of the alleged claims.
The Authority checks these documents to make sure they sufficiently describe the issues in dispute. If clarification is needed, an Authority officer will contact the parties and/or require them to liaise further with the Authority on clarifying any important matters in advance of the investigation meeting being set down.
Investigation Meetings
Once the preliminary steps are complete such as the scheduling of the Authority’s case management and associated logistics are completed, the Authority holds an investigation meeting. This is not a formal Court hearing but rather an inquiry where the parties present evidence, including documents and witness statements. For employers, the process can involve substantial resource, time and cost, so it pays to ensure access to affordable and effective representation.
Investigations are focused on uncovering the facts and understanding the employment relationship problems or issues. Once completed, the Authority then deliberates and issues a legally binding determination, which can be enforced.
Timelines and Compliance
After an application is filed and fees are paid, the Respondent typically has 14 days to reply. Extensions can be requested and granted at the Authority’s discretion. This is a useful tool employers can use to ensure sufficient time to prepare a comprehensive response to the claims against them.
Often employers find it takes longer than 14 days to work through a claimant’s Statement of Problem, engage professional support and work with their chosen representative to prepare the employer’s response, so requesting an extension (if needed) can ultimately help strengthen the employer’s position in terms of defending the claims.
Expectations of Parties and Representatives
The Authority has published a range of Practice Notes and a consolidated Practice Direction that address:
Steps in proceedings.
Costs and how they are treated.
Conduct of representatives.
These guidelines provide useful information for employers who are faced with managing a process in the Authority and can be found here.
Costs in the Employment Relations Authority – Daily Tariff Approach
The Authority applies a “daily tariff” approach to costs. This is intended to make a modest contribution to the successful party’s costs, rather than to fully reimburse legal expenses.
The daily tariff is a standardised cost guideline used by the Authority to assess costs following an investigation meeting. As a general rule:
The Authority may award costs on a per-day basis for the investigation meeting; and
The tariff is commonly applied at $4,500 for the first day of an investigation meeting and $3,500 for each additional investigation meeting day.
This means the starting point for assessing costs for a successful party after a two-day investigation meeting is $8,000 and a three-day investigation meeting is $11,500.
It is important to be aware of how the daily tariff can impact the ability to claim legal costs since the costs of using professional representation such as employment lawyers will typically significantly exceed what the successful party is able to recover.
This tariff is a starting point only. The Authority retains broad discretion to increase, reduce, or decline costs depending on the circumstances of the case.
Costs are more likely where a party is substantially successful, has unreasonably prolonged proceedings, or has failed to comply with Authority directions. Conversely, costs may be reduced or declined where parties have acted reasonably, had mixed success, or raised genuine issues. Strategic Calderbank settlement offers can also represent a very powerful tool for employers to use who are faced with imminent legal proceedings. An operative Calderbank offer can have the effect of reversing costs, so even if the employer is unsuccessful, the effect of a Calderbank offer can mean the employee has to contribute towards the employer’s legal fees, despite the outcome.
Employers should be aware that while costs awards in the Authority are generally modest, they are not automatic and can escalate where conduct is poor. Things like failing to engage constructively or comply with directions can expose employers to adverse costs orders.
From a risk-management perspective, early issue and legal risk identification, timely responses, and a cooperative approach to the Authority’s process are often the most effective ways to limit costs exposure in Authority proceedings. Employer Pro is available to represent and assist employers with managing proceedings in the Authority and has proven experience in this area.
Typical Matters the Employment Relations Authority Deals With
Employers appear before the Authority in disputes such as:
Unjustified dismissal claims, where the employer did not follow fair process.
Disadvantage claims, where contractual changes are imposed without consultation.
Minimum entitlement arrears, including holiday pay or public holidays.
Employee status disputes, such as whether a worker is an employee or contractor.
These matters may involve factual inquiries (e.g., who exercised control), contractual interpretation, or procedural fairness, all of which the Authority is well equipped to assess.
Managing an Authority Process – Employer Considerations
Keep Good Records
Ensure relevant dates, performance reviews, warnings, and correspondence are well documented. Clear records help in establishing facts. Taking time to put together a concise chronology of key events, or important information can be an effective tool.
Respond Within Timeframes
Failing to file a timely reply or comply with directions can prejudice your position and may lead to adverse inferences or costs.
Use Representation Wisely
Use professional representation. Ensure your chosen employer representative has experience with navigating the Authority’s process, can provide sound risk assessments and effective strategy input.
Consider Mediation
The Authority may encourage or require mediation either before or during proceedings – parties to an employment dispute are usually required to attend mediation first. Early settlement at mediation can avoid the time and expense of a full investigation process.
Further, outcomes secured at mediation give the parties control over where a dispute lands and effective negotiation can be used to mitigate risk and shut a dispute down before it escalates.
If mediation fails, and the parties proceed to the Authority, then they will lose control over the matter and have a decision imposed on them, which is important to understand as a party contemplating legal proceedings in the Authority.
Key Employer Takeaways
The Authority is a key adjudicator in the New Zealand employment law landscape and is designed to resolve relationship problems. For employers, managing the Authority process effectively can make the difference between informed decision making and adverse litigation outcomes
Knowing how the Authority works, its expectations of parties, and how to engage with its procedures will help you protect your business interests and ensure disputes are managed on solid footing.
Employer Pro is ready and well-equipped to help employers with managing proceedings in the Authority and offers a range of competitive representation rates for members starting at $150 plus GST per hour, depending on subscription level.
Employer Pro’s professional consultancy service rates are considerably less than what employers pay for other professional employment representatives in the market and are highly regarded by employers. Employer Pro believes employers have had to pay far too much for far too long to access competent assistance and representation when managing employment disputes. Our model responds to this issue effectively by providing an affordable and accessible employer-focused service offering, which is designed exclusively for employers.
This article is provided for general information only and does not replace professional advice. Employers should seek advice specific to their circumstances from Employer Pro if in doubt on their matters involving the Employment Relations Authority, including managing and defending legal proceedings. Employer Pro has a range of employer focused resources and services available through our competitive Employer Protection Packages.
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