Few winners in job fights

Almost anyone can sue their employer, either while still employed or following a resignation or dismissal. But is it worth it? What can employees gain from the experience and can it adversely affect career progress?

In 2002, Lynne Snowdon - then head of Radio New Zealand news - fell out with her employer over a budget blowout and took leave, on full pay, for more than two years. Her return to work had been blocked as lawyers battled in employment courts.

Snowdon was fired in June and is now litigating for unjustified dismissal.

On Monday, Snowdon lost a bid in the Employment Court to be reinstated. Judge Coral Shaw ruled that although Snowdon had an arguable case, the outcome of a substantive hearing - scheduled for November - could not be predicted with certainty.

Protracted cases of alleged unjustified dismissal, with hefty legal fees, pose the questions as to why anyone would want to go through with it, and why people would even want to return to employers who did not want them back.

Lawyers say that people rarely attempt to be reinstated following dismissal. If they do, it is usually for two reasons - financial gain or to uphold a principle. Either way, the road to success is a rocky one.

Mark Ryan, a senior solicitor with Haigh Lyon, says that if an employee has been treated unfairly then the whole process of trust and confidence in the employer has gone. On the employer's side, there will be difficulty in the relationship if the employer had no choice other than reinstatement.

Employment lawyer Kristina Andersen says very few reinstatements work out happily and it is usually healthier for both parties to go separate ways. And Philippa Reed, chief executive of the Equal Employment Opportunity Trust (EEO), says it is hard to stay in a position or to be reinstated once legal proceedings have occurred.

In Snowdon's case, Judge Shaw said it was not possible to say, before the unjustified dismissal hearing, that justice required Snowdon's reinstatement because distrust and suspicion would make reinstatement on an interim basis impractical and unrealistic.

Ryan, who specialises in representing employees, says that although 95 per cent of his clients instruct him not to seek reinstatement, that course is preferred under the Employment Relations Act. But he says this is inconsistent with reality and usually requested by employees for financial reasons.

Reinstatement could be beneficial if you are a long-serving employee nearing the end of your working life and where sticking with the employer for an extra year would trigger a superannuation payment, Ryan says.

So why do some people seek reinstatement purely on principle? Andersen says it is necessary to ask what kind of relationship there would be if the employee were reinstated. Employees can't be fired just for taking legal proceedings, but if that happens and they find themselves still working for the same employers it can be very uncomfortable.

Ryan says some people pursue a case on the principle alone, regardless of cost. But where cases are unsuccessful, employees may be left with legal fees they can't pay.

"I advise all my clients to do a cost-risk analysis before committing to [litigation]," he says.

This raises an important point. How much does it cost to litigate against an employer, whether the aim is to receive a compensation payout or be reinstated? And what happens if you lose?

Ryan and Andersen say that at the worst end of the scale is employees spending money on their own solicitors, losing, and having to pay part of the employers' legal costs as well.

The three cost stages - excluding the Court of Appeal - are: first-stage mediation, which can cost $3000; a one-day Employment Relations Authority hearing, which may cost another $4000 to $7000 depending on the solicitor; and $6000 to $10,000 more if the dispute goes to the Employment Court. Then, if you lose, it can be another $2000 or so towards the employers' fees.

Ryan says cases lost at the Employment Relations Authority (ERA) may later be won in the Employment Court, which is why some employees choose to continue litigating after the ERA has ruled against them.

Clearly, there are many levels on which to litigate. But with payouts generally small and stress levels high, is it really worth it?

That, say the lawyers and Reed, depends entirely on what the dispute is about. For example, in cases where people are discriminated against because of gender or ethnicity, or are sexually harassed, the victim often decides to litigate in order to achieve peace of mind and to help ensure the company won't treat future employees the same way.

One woman who came across some sexually explicit emails that referred to her made it a condition of her settlement that the employer went through a training and awareness programme on avoiding sexual harassment. Reed says the EEO Trust can talk to employers who have faced legal proceedings from former employees to discuss how to avoid the same problem recurring.

However, for personality clashes or differences of opinion, a softly-softly approach may produce better results for an employee. Reed says one incident involving a legal dispute saw a person reassigned to a different area after mediation rather than having to leave the company.

When it is more a matter of performance, or a complaint about behaviour, it can be best to avoid the employer getting positional by having a solicitor draft a letter that comes from the employee and just outlines the issues, says Ryan.

Andersen says that is often all it takes for an employer to get their act together. And although some employers have a policy that stipulates that they will fight all legal disputes and avoid payouts, most prefer to resolve disputes in the workplace or during first-stage mediation.

Some employers will apologise from the outset and then be on their best behaviour. And most, Andersen says, really do welcome a formal approach because they see it as a recognition that things can't carry on the way they are.

Ryan and Andersen say there are definitely cases where it is wiser to walk away from litigation - when you can't afford the fight, when the fight might permanently damage your health or personal relationships, or when there is a strong possibility of losing the fight and your reputation as an employee along with it.

Reed says that once a dispute gets to litigation it is hard to come back from that - and New Zealand is a very small place.

Pros and cons

* If an unfair dismissal looks increasingly likely, contact a lawyer and start negotiations for an exit package while you are still employed. Although you can litigate after dismissal, it is more difficult and it is a longer process to obtain justice.

* If you are litigating while still employed, tread carefully. Keep all correspondence, and takes notes on all meetings and conversations. Expect micro-management and close observation from your employer.

* Think long and hard about what you can lose through litigation and ask your lawyer to help you analyse your case dispassionately. Emotions and principles are important. But if you lose, your emotional problem will remain and you will have lost money to boot.

* Realise that many dispute payouts are small - a few months' salary and possibly a payout for stress and humiliation.

* Don't seek reinstatement to a position unless it is financially crucial and you can cope with the awkwardness and career progression problems that can result.

* Realise that unsuccessful and even successful litigation can affect future job prospects and make new employers wary.