Industrial Relations Research Centre

Employment law trends coming to light

University of Otago research centre analyses Employment Tribunal decisions
Otago Daily Times, 28 December 1999

Dunedin journalist Rob Tipa prepared this article for the University of Otago's research report He Kitenga, published in 2000.

The Industrial Relations Research Centre at the University of Otago has compiled a database of more than 10,000 decisions made by the New Zealand Employment Tribunal since its inception in 1991.

Dr Ian McAndrew, a senior lecturer in industrial relations in the Department of Management, is also a member of the Employment Tribunal and is in a unique position to analyse the data from both academic and practical points of view.

He recognised no-one was documenting the thousands of decisions by the Tribunal which could provide clues to how employment law was being applied. Previously, tribunal case details had not been aggregated or analysed for patterns or trends.

The project received a significant boost with grants from the New Zealand Law Foundation and the Otago University research committee to hire a full-time legally qualified researcher.

"It's really taken off this year and we've brought it pretty much up to date", Dr McAndrew said.

The Tribunal was created by the Employment Contracts Act in 1991, legislation, Dr McAndrew said, which has its merits and faults.

"It represents a very sophisticated and very extensive regulation of employee rights", he said. "In most other Western countries, you would not find a statutory, universally applicable mechanism available to employees for protection of their jobs.

"Where it gets a bit disappointing is in the whole area of bargaining and establishing wage rates and we do see some people who have got some terrible employment contracts that are fundamentally disrespectful of working people", Dr McAndrew said.

The vast majority of employers we deal with are perfectly decent and trying to do the right thing", he said. "But you also see the worst kind of cases where employees are treated as disposable assets."

The database had identified some obvious patterns and trends that were beginning to emerge, he said.

The bulk of the Tribunal's workload involves personal grievances, mainly dismissals, arrears of wages, holiday pay and costs and, to a lesser extent, discrimination, harassment and duress.

The first determinant of success is the merit of the case itself. The next clearest determinant is the nature of the grievance. Where employees are dismissed for misconduct, about 60% win their cases. Where dismissal is for poor performance, more than 80% win their grievance.

"There are potentially more hurdles for employers to overcome in dismissing an employee for performance-related issues than for misconduct", Dr McAndrew concludes.

Where employees are made redundant, they win about 75% of cases, which is significantly higher than misconduct cases. There were probably a couple of reasons for those, Dr McAndrew said.

Redundancies have some legally complex requirements on employers in terms of consulting employees, and obligations to consider redeployment and any available alternatives before they are dismissed. Dr McAndrew said this area had become less complex in the past year or so and he expects this trend to continue.

Gender, geography and occupation also appear to have a bearing on the success or failure of cases. Different factors seem to be important in different settings and types of cases.

"The most important predictor of whether or not you were going to win your grievance or not for misconduct was where you had your case heard", Dr McAndrew said.

Employees were more likely to succed if their case was taken in the South Island or outside Auckland. In Auckland, only 50% of grievances for misconduct have been successful, compared to 70% on average for the rest of the country.

"There could be any number of reasons for this", Dr McAndrew said. There could simply be a broader range of people representing employees in Auckland or it could be a cultural difference.

"People may be more inclined to take marginal cases forward in Auckland, whereas in Dunedin people tend to be a little more conservative and less inclined to take a case that is unlikely to be a winner."

For misconduct dismissal cases in Auckland, the next most important factor associated with the outcome was the gender of the applicant. Females in Auckland won 65% of their cases and males won 43%, quite a significant margin.

When the dismissal was for poor performance, the best predictor of success was the gender of the adjudicator. When applicants had a male adjudicator, 87% won their cases. If the adjudicator was female, 69% won their cases, again statistically significant figures, Dr McAndrew said.

Managers were the occupational group most likely to have won their grievance claims between 1992 and 1997, with a success rate of more than 70%. Professionals and agriculture and forestry workers were the least likely groups to succeed, with only 56% winning.

The vast majority of compensation awards in successful personal grievance claims ranged between $1000 and $10,000, with 72% under $5000.

Analysis to date has concentrated on compensation for hurt and humiliation because that is the area the Tribunal has the most discretion over. One telling factor is the importance of occupation, and therefore pay rates, which carries the implication that the hurt and humiliation of higher-paid employees is worth more than that of low-paid employees.

The patterns and trends identified by Dr McAndrew have filtered back to Employment Tribunal members and Law Foundation contacts for feedback and comment.