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Section 123: Remedies for Personal Grievance

Updated: Feb 21

It can be difficult to understand the remedies available for a personal grievance. While these are laid out in section 123 of the Employment Relations Act 2000, the Act does not provide much detail as to the quantification or reason for these remedies.


In this article, I aim to provide enough detail to assist you in understanding your claim and quantifying your remedies.


Please note that these remedies are for personal grievances. If you have a claim for unpaid wages, unpaid holiday pay, breach of employment agreement, or any other claim which is not a personal grievance, you can claim reimbursement of these losses in accordance with those claims.


Section 123(1)(a): Reinstatement


Reinstatement is the primary remedy available in the Employment Relations Act 2000. This means you can claim to be reinstated to your former position, or a position no less disadvantageous, as a part of your personal grievance.


However, to be reinstated, you must show that it is practicable and reasonable to be reinstated. This will largely depend on the facts and the reasons for your termination of employment: but it will not depend on whether the employer has already rehired someone for the role.


Section 123(1)(b): Lost Wages


You may seek to claim lost wages, as a result of the Personal Grievance. This is typically claimed in cases of unjustified dismissal, and the claim of lost wages is to compensate the employee for wages they would have reasonably expected to receive had they not been dismissed.


In accordance with section 128 of the Employment Relations Act 2000, lost wages is usually capped at the lesser of:

  • The wages lost between the date of dismissal, and the date that the employee found alternative employment.

  • Three months' ordinary time remuneration (being 13 weeks').

I note that the three months' ordinary wages relates to quantification, and not necessarily time period. This means that if an employee found alternative employment on a lesser pay rate within eight weeks, the employee could still seek to claim the difference in pay to increase their claim to a quantification of 13 weeks' wages.


For example, Employee A was unjustifiably dismissed on 1 January 2021. He was paid $25/hour, and was required to work 40 hours per week. His weekly earnings were $1,000.


This means he could claim up to $13,000.


If Employee A found alternative employment on 26 February 2021 (eight weeks later), his actual lost wages would amount to $8,000. However, let's say that the new role was paid at $20/hour, and he was required to work 30 hours per week. This means that Employee A will continue to make a loss of $400 per week. Employee A could then still claim the total of $13,000 for lost wages, on the basis that he was unemployed for eight weeks, and continues to experience a loss.


However, the Employment Relations Authority does have the discretion to award compensation for remuneration above three months' wages. This may be suitable where the circumstances associated with the termination of employment were so grave that the employee was unable to find alternative employment within the three month period.


You do not need to quantify this in the Statement of Problem: one reason for this is that many applicants are not aware of their losses at the time they file the Statement of Problem. Personally, I have many applications that are filed within three months' of dismissal.


However, you will need to be able to quantify this by the time you reach the Investigation Meeting at the Employment Relations Authority.


Section 123(1)(c)(i): Compensation for Hurt and Humiliation


You may also make a claim for the "hurt and humiliation" you have suffered as a result of your personal grievance. You will need to submit evidence to support this: but this evidence can be your own verbal evidence, the verbal evidence of someone close to you and/or medical reports.


This is a tax-free sum. It is not classified as income, and it does not need to be declared to IRD or WINZ as income.


You can see charts of average compensation awards here. Note that this chart will include claims for all personal grievances; not just unjustified dismissal claims.


It can be difficult to determine what to claim in hurt and humiliation. The Employment Court has attempted to implement a "band" system to ensure a consistent approach, but this is not regularly implemented by the Employment Relations Authority:

  • Low-level hurt and humiliation: up to $10,000

  • Mid-range hurt and humiliation: between $10,000 and $40,000

  • High-level hurt and humiliation: Above $40,000

Awards above $30,000 are very rare, and the average award for an unjustified dismissal appears to be around $15,000 - $20,000.


In my experience, if you are wishing to claim more than $20,000 for hurt and humiliation, I would suggest that you would need some good evidence to show that you have genuinely been hurt. Some questions you may want to address are:

  • If you suffered anxiety or depression as a result of the unfair treatment, do you have evidence to substantiate this? Were you required to seek professional assistance? Have you ever sought medical assistance for anxiety or depression before?

  • Did you suffer financial stress? Can you provide evidence to show that you were required to seek financial support?

  • Did your physical appearance change as a result of the stress? Can a friend or family member substantiate this?

  • Did you develop unhealthy behaviours as a coping mechanism: for example, did you drink more, did you harm yourself, did you become aggressive towards family members, and/or did you withdraw from social situations?

  • Did you lose a sense of mana? Were you ashamed that you could not provide for your family? Did you feel a loss of self after losing a respected job?

The Employment Relations Authority does recognise that people process emotions differently; so you don't need to fabricate the situation. However, you will still need to show that you were impacted.


You should provide an indication in your statement of problem; however, it is not necessary, and you can always amend the statement of problem later. The Employment Relations Authority understands that hurt and humiliation continues past the date of termination, and it is likely that signs of stress may not show for some time after the termination of employment.


Section 123(1)(c)(ii): Compensation for Loss of Benefit


In my Statement of Problem template, I provide a broad claim for loss of benefit. This includes any benefit (whether or not of a monetary kind) that the employee may have reasonably expected to obtain if the personal grievance had not arisen.


This does not include wages. However, it may include compensation for:

  • Kiwisaver contributions.

  • Company vehicle.

  • Health insurance.

  • Bonuses and/or Christmas Gifts.

  • Commissions.

You do not need to quantify this in the Statement of Problem: one reason for this is that many applicants are not aware of their losses at the time they file the Statement of Problem. However, you will need to be able to quantify this by the time you reach the Investigation Meeting at the Employment Relations Authority.


Section 123(1)(ca): Recommendation to the Employer (Workplace Conduct or Practices)


Section 123(1)(ca) of the Employment Relations Act 2000 states:


If the Authority or the court finds that any workplace conduct or practices are a significant factor in the personal grievance, recommendations to the employer concerning the action the employer should take to prevent similar employment relationship problems occurring.


This is not something that is often claimed, and there isn't much case law on how this remedy works in practice.


Section 123(1)(d): Recommendation to the Employer (Sexual Harassment)


Section 123(1)(d) of the Employment Relations Act 2000 states:


If the Authority or the court finds an employee to have been sexually or racially harassed in the employee’s employment, or treated adversely in the employee’s employment on the ground that the employee is, or is suspected or assumed or believed to be, a person affected by family violence, recommendations to the employer—

  1. concerning the action the employer should take in respect of the person who made the request referred to in section 108(1)(a) or was guilty of the harassing behaviour or of the adverse treatment on that ground, which action may include the transfer of that person, the taking of disciplinary action against that person, or the taking of rehabilitative action in respect of that person:

  2. about any other action that it is necessary for the employer to take to prevent further harassment, or adverse treatment on that ground, of the employee concerned or any other employee.

This is not something that is often claimed, and there isn't much case law on how this remedy works in practice.


Section 124: Remedy Reduced if Contributing Behaviour by Employee


Section 124 does not provide a remedy which can be claimed, but I wanted to bring this to your attention: if the Employment Relations Authority finds that the employee contributed to their personal grievance, they may seek to reduce the remedies.


This is especially important in cases where an employee has been unjustifiably dismissed as a result of a disciplinary process, but which they were still partially at fault.


The amount reduced varies, but it is commonly known amongst that representatives that 30% is a high amount for contributory behaviour. Sometimes, representatives will claim that an employee's behaviour was so bad that it would amount to 100% reduction: however, I personally cannot understand how the Employment Relations Authority could find that an employee has a personal grievance, but that they are 100% responsible for that personal grievance.


Would that not mean that the actions of the employer were justified?


I'll peg that thought for another day.




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