Each year in New Zealand thousands of employees lodge personal grievances with their employers.  Over 9,000 of these end up at the Mediation Service for formal mediations, while a further 2,200 proceed to the Employment Relations Authority and beyond.

Many of these personal grievances are justified.  Many, however, are not.  Most employers at some stage will face what they consider to be a frivolous or unjustified personal grievance.

Most employers faced with a personal grievance will act in good faith to try to resolve it.  However, many employers faced with a frivolous personal grievance make the pragmatic business decision to settle the grievance to avoid the costs and lost productivity involved in defending it.  This is a sensible business approach, and we regularly advise employers on the possible outcomes of personal grievances in terms of this “cost/benefit” balancing approach.

However, with the numbers of personal grievances expanding (perhaps partly because of heavily advertised no win/no fee advocacy services), there is a benefit in taking a “principled” approach to certain personal grievances.  When faced with a frivolous personal grievance, it may be in the employer’s best interest to defend the personal grievance rather than settle to make it go away.

The benefits of this include:

• Calling the employee’s bluff as to how far they are prepared to take the personal grievance.
• Establishing a precedent within the business that frivolous personal grievances will not automatically receive a settlement.
• Preserving the integrity of your staff performance and disciplinary procedures.

Rainey Collins is experienced at advising employers on their options and possible exposure when dealing with personal grievances.  Wherever possible, we do recommend settlement on favourable terms as an outcome.

However, we recommend that there are cases that employers should defend all the way – and that establishing this principle will have ongoing benefits for the future.