Key employment dispute authority mired in delay, as Government presses on with industrial relations change

New figures show employment disputes are mired in delay, even as the Government pushes ahead with new legislation that will expand the role of the country’s overburdened Employment Relations Authority.

Employment lawyers say delays are already impeding both employers’ and employees’ access to justice, and their member body has warned that anticipated Fair Pay Agreements – for which legislation was introduced in the House this week – risk making the situation worse.

The average waiting time for a resolution through the Employment Relations Authority (ERA) hit a record 340 days last year. At the last tally, in January, it had dropped only modestly to an average of 318 days, Ministry of Business, Innovation and Employment (MBIE) figures show.

In contrast, in 2018 and 2019 the process took an average of about 200 days. Officials said comparable figures for prior years were not available.

The figures were released to the National Party’s spokesperson for Workplace Relations, Paul Goldsmith, in response to written parliamentary questions.

Goldsmith said the Authority presides over an “important and complex area of law” and it should be officials’ priority to find ways to reduce delays and improve the system.

“But we know that the Government, and [hence] officials are distracted by their idealistic pursuits and Fair Pay Agreements, that are taking up all the attention, and meanwhile the basic bread and butter job isn’t getting done,” Goldsmith said.

He echoed the view of the Auckland District Law Society’s Employment Law Committee, that the Covid pandemic accounts for only part of the delays.

The ERA was set up to arbitrate disputes between employers and employees, as a swift and low-level way of finding resolution. The matters before the authority include the likes of wage arrears claims, personal grievances and breaches of employment agreements, and typically affect the livelihoods of ordinary working people.

Auckland-based employment lawyer David Fleming said delays for all parties seeking resolution through the ERA constitute a “huge burden, both financial and emotional”.

And he said the lengthening timelines had taken the authority “a long way” from its intended role as a fast and accessible arbiter of disputes.

The Government’s framework for Fair Pay Agreements, its signature industrial relations plan, includes extra work for the ERA.

Under the Fair Pay Agreement model, unions and employers will bargain to set minimum pay, terms and conditions for workers across a particular sector or occupation, with low thresholds to trigger mandatory negotiation.

The ERA will serve as a “backstop” body, among other additional roles, and will hear FPA cases where either a sector or employee group fails to form or nominate a bargaining unit. BusinessNZ, the employers’ main lobby group, has declined to play such a role because it opposes the plan. Consequently, it is expected that employer groups might often be without a negotiating body and that the ERA will play a larger role than originally expected.

Catherine Stewart, convenor of the Auckland District Law Society Employment Law Committee, said her group last year raised the issue of ERA delays with Michael Wood, Minister for Workplace Relations and Safety.

“Significant delays were being experienced before the pandemic, however Covid-19 has exacerbated an already difficult situation. Some practitioners are waiting months for a matter to even be allocated, and sometimes determinations are taking a year or longer to be released,” Stewart said.

She said the delays were often worse than the picture painted by official figures.

“As the authority generally handles urgent cases well and in a timely manner, the inclusion of urgent matters will drag the average number down, and therefore not indicate the full extent of the delays for standard cases.”

Stewart said that, “in light of the delays”, her committee “also has concerns about the Employment Relations Authority being the institution to hear and determine disputes over the coverage of the Fair Pay Agreements and to determine the terms of them, particularly if any right of appeal is limited.”

Wood said that last year’s Budget anticipated extra work for the ERA and provided funding for an additional three “members” (who hear cases) and associated support staff.

The MBIE figures show that three new authority members were appointed last year. One temporary member was also appointed this year on a 12-month contract.

As of last month there were 22 Authority members – an increase from 18 in 2021 and 16 in 2020.

Wood also said that he doesn’t intend the ERA to play a long-term role in the Fair Pay Agreement system.

“I have already signalled my commitment to undertake further work on institutional settings, including investigating the establishment of a new institution to help with the management of FPAs.”

The Government’s plan for Fair Pay Agreements has been contentious: both Labour and the Council of Trade Unions (CTU) say the changes will lift wages and improve working conditions, especially for those on very low pay. Under the plan, the CTU will be paid to act as a negotiator for employees.

BusinessNZ, opposition parties National and Act – and MBIE officials in advice to the Government – have warned that FPAs are an unnecessarily broad and scattershot remedy to a limited problem.

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