The Government is considering a revamp of personal grievance laws. The moves include a crackdown on frivolous claims and new rules to control "no win, no fee" advocates who have been seen as ramping up claims against employers.
But unions are concerned that the Government is using the review to reduce employees' rights when they are sacked, including claims based on unfair process.
Labour Minister Kate Wilkinson said she had an open mind on whether changes were needed but a discussion document and questionnaire, yet to be approved by the Cabinet, would canvass what changes were needed. In some areas the law had tilted too far against employers.
Prime Minister John Key has said the Government "shares concern from many quarters about the fairness and consistency of personal grievance claims".
Ms Wilkinson said she wanted to ensure the regime was fair to both sides. "You hear stories anecdotally from employers who say, `Oh well, it's just too hard we will just pay some money to make it go away.' And that's not justice." She had also heard that some of the "no win, no fee" industrial law advocates "know their way around the procedures so well that, whatever the merits of the case, the employer might pay out".
Some employers who had a poorly performing employee, or one who was not working out, did not know how to resolve the issue. It was difficult to judge, because many cases were settled, paid out or withdrawn before they reached the Employment Relations Authority.
Of 2500 applications lodged with the ERA each year, only about 1000 go on to the first-stage investigative meeting.
She was also concerned that some cases might be "frivolous" and were clogging up the system.
She had consulted the Council of Trade Unions and Business New Zealand on the review. She said industrial relations law was generally working well, and did not need wholesale changes.
CTU president Helen Kelly said "no win, no fee" advocates tended to operate among non-unionised workers and moves to regulate them would not concern the CTU. But it had major concerns about other elements of the document. She said the Government saw procedural fairness and natural justice as an impediment when an employee was dismissed.
The remedies won through personal grievances were too low, she said. Surveys had found the average cost to employers was $5000, of which compensation paid to workers averaged $2800.
Thousands of employment relationships ended unfairly and employees did nothing about it, so a lot of employers got off lightly. The number of grievance cases was low, considering that about 600,000 people left their jobs each year.
Business NZ chief executive Phil O'Reilly said businesses had complained for years that the system was too bureaucratic and seemed to "emphasise form over substance". They were also concerned about "ambulance-chasing lawyers" that lodged claims with no real justification to pressure employers.
The Government is also reviewing the law covering vulnerable workers, mostly in cleaning, catering and laundry companies, whose jobs are protected if a contract changes hands.