David Garrett: National's laws better for workers

There are a number of amusing ironies about the payout to the graffiti-painting plasterer. First, he probably would have got considerably more than $2400 if his case had come before the Employment Tribunal - which handled grievances under the Employment Contracts Act - rather than the Employment Relations Authority set up by the Labour Government.

Second, it is not Labour's Employment Relations Act which caused the so-called "explosion of personal grievances"; it was the supposedly "draconian" Employment Contracts Act 1991 introduced by the National Government, led by Jim Bolger.

Before 1991, personal grievances could only be pursued by union members. Non-union tradespersons and middle managers could theoretically have recourse to the High Court, but that avenue was never pursued by people in those categories of employment because of cost.

They had no practical remedy when badly treated.

The Employment Contracts Act (ECA) allowed any aggrieved employee - whether a union member or not - to pursue a personal grievance.

The result could indeed be described as, if not an explosion, then at least an exponential growth in personal grievance cases.

Under the ECA, awards for humiliation, loss of dignity and injury to feelings would frequently be in excess of $10,000, even when the facts were unremarkable.

Since the passing of the union-friendly Employment Relations Act (ERA), and since the Employment Relations Authority replaced the Employment Tribunal, there has been a marked decline in the level of awards for "hurt and humiliation".

Awards of $10,000 are now rare, and there must be real and compelling evidence of emotional distress suffered as a result of an employer's poor treatment of an employee.

One of the stated aims of the ERA was to "get the lawyers out of the process". The labour minister at the time, Margaret Wilson, said lawyers just led to litigation instead of warm and fuzzy mediated settlements and reinstatement.

The attempt to remove lawyers from the employment arena has been only partially successful, and again, there is rich irony in the result.

While there are still many specialist employment lawyers, the real growth industry under the ERA is not unions - as no doubt the Government intended - but non-lawyer "advocates", who work on a "no-win, no-pay" basis, which few lawyers are prepared to do.

Andrew Little of the Engineers Union - a former union lawyer - is being somewhat disingenuous when he says that taking a case against an employer is a stressful business not entered into lightly.

In my considerable experience, that is not the case at all - and even less so when the aggrieved person's case is handled by an advocate.

Like many employment lawyers, I have advised numerous clients against pursuing a personal grievance because, on the facts, the cost-benefit ratio is not high enough, and because the chance of losing is too high.

Many of those clients have gone from my office to an employment advocate up the road because if they take his case the client literally has nothing to lose - they have already lost their job and they pay no fee unless they extract a settlement or award.

There is one final irony of the ERA, the supposedly worker-friendly replacement for the Employment Contracts Act.

The latter act contained a provision allowing an employee to challenge an employment contract which was arguably "harsh and oppressive".

Over time, the Employment Court and Court of Appeal established precedents which allowed the well-advised employer to avoid being accused of offering or imposing such a contract.

The ERA contains no such provision, which at first puzzled me.

Then it dawned - the Labour Government doesn't care if an unwitting individual enters into a harsh and oppressive contract rather than allowing his brothers in the union to negotiate the employment contract - now pointlessly renamed an agreement - for him.

In my view - and having been an employer and a union official in my time - the regime under the Employment Contracts Act was the best industrial relations framework we ever had in New Zealand.

Contrary to popular belief, the act removed none of the requirements for fair treatment when dismissing employees, and the act was never amended to override the courts - although there were occasional threats to do so.

It allowed anyone to bring a personal grievance for unfair treatment, whether a member of a union or not.

Once some of the silly decisions had been reviewed on appeal, the Employment Tribunal's decisions were, on the whole, fair, reasonable and consistent. There was legislative protection - now removed - against being compelled to accept harsh and oppressive contracts.

The Employment Relations Act is another wonderful example of the Labour Government's inability to resist trying to fix something which is not broken - or at least to admit that their ideological opponents got something right.

* David Garrett is an Auckland employment lawyer.