Settling Employment Disputes in NZ: What remedies can you expect?
- Anne-Marie Dolan
- Jul 31
- 5 min read
There can be a lot of mystery and rumour surrounding what you can expect to receive if you settle with your employer for unfair treatment or termination. Employees can have overinflated ideas of what they can ‘make their employer pay’ or don’t realise what they might be entitled to. An employment advocate can help to understand what remedies are available to them and what they can realistically expect in their specific circumstances.
Under the Employment Relations Act 2000 (ERA), if you bring a personal grievance, whether for unjustified dismissal, constructive dismissal, or unfair redundancy, there are four main types of remedies the Employment Relations Authority (ERA) or Employment Court can order:
Reinstatement to your previous role,
Reimbursement of lost wages (backdated pay and holiday pay until you return or find new work),
Compensation for humiliation, loss of dignity or injury to feelings, and/or
Other relief such as orders to comply with employment agreement terms or refund unlawful deductions.
If you reach a settlement directly with your employer, or during mediation, before it reaches an ERA hearing, these same remedies generally still apply as part of a negotiated package.
Unfair (Unjustified) Dismissal
If you’ve been terminated with no valid reason or through an unfair process, you can negotiate for:
Reinstatement, if you're willing and the workplace dynamic allows, or
Financial redress:
Back pay from dismissal date, and/or
Compensation for hurt and distress (often ranging from a few thousand to perhaps over $20,000 depending on severity ).
It is important to note, any personal contribution by you towards the situation (e.g. minor misconduct or performance issues) may reduce your remedy and a more serious fault could even eliminate it completely.
In a recent Mathews Walker case in Christchurch, the client accepted and commenced a role with a new employer only then to be told it did not exist and that instead they would have to work in the warehouse. The ERA held that this was a unilateral change to her terms of employment that resulted in our client feeling upset and leaving. This was not the action of a reasonable employer and the situation resulted in our client being unjustifiably dismissed. As a result, our client was awarded $10,000 compensation and reimbursement of $4,569.78 for lost wages.
Click here to read more about this case:
Constructive Dismissal
This is when you resign because your employer’s behaviour made your job untenable. The bar for proving constructive dismissal is high. You must prove you felt coerced, that your resignation was reasonably foreseeable, and that you had no reasonable alternative but to quit. You must also have raised concerns with your employer first. Most successful claims fall under breaches of good faith or contract obligations, such as ignoring serious complaints or safety issues. In settlement, possible remedies mirror dismissal claims:
Compensation (wages lost plus hurt and humiliation)
In very rare cases, reinstatement or partial reinstatement could be part of a deal especially if the resignation is treated as dismissal.
But because few constructive dismissal claims succeed formally, settlements often focus on financial outcomes rather than going back to the same environment.
In another Mathews Walker case in Wellington, the client made a complaint when difficulties arose between them and the managing director. In response, her employer told her that they considered the relationship was “irretrievable”, that she was a risk to the business and that she was going to be placed under investigation. Nothing was done regarding her complaint. After this, our client felt that they had no option but to resign and raise a grievance for constructive dismissal. The ERA found that the employer did not follow a fair process and that their formal communications contained emotive language, blaming and name calling. As a result, the ERA found that the employer's conduct was serious enough to cause resignation and that it was foreseeable that an employee in the client's position would do so. The client was awarded $20,000 compensation and reimbursement of five weeks of lost wages.
Click here to read more about this case:
Unfair Redundancy
If a redundancy is not genuine, or the process was unfair (e.g. no consultation, failure to offer alternative roles, or selection criteria were biased) it can amount to unjustified dismissal. Under settlement, you can seek:
Compensation for lost earnings,
Redundancy pay if not already contractually provided,
Treating the outcome as a dismissal to trigger remedies (back pay, hurt, etc.), and/or
In rare cases, reinstatement or redeployment, if desired and workable.
Another Mathews Walker client was employed for approximately 2 years in an internal sales role in Auckland. Due to declining sales a restructure was proposed. The client was selected for redundancy based on a criteria of cost, following a decision skills and experience were neutral factors in deciding between the three internal sales employees. The client was then terminated with 4 weeks notice paid in lieu and 5 weeks pay ex gratia. The client lodged a Personal grievance for unjustified dismissal. The ERA found that the business reasons for the restructure were reasonable but the selection criteria was not disclosed early enough for consultation and feedback resulting in unjustified dismissal. The client was awarded lost wages until they found new employment and $16k for humiliation, loss of dignity and injury.
Click here to read more about this recent win:
There are some key things to consider when looking at the potential remedies in your situation.
Act early: Your personal grievance must be submitted within 90 days of dismissal or disadvantage. Missing this window may close your options unless your employer consents otherwise.
Be open to negotiation: Settlements negotiated directly with your employer, with or without the help of a legal representative, can help avoid formal ERA hearings. Offers might include a wage top‑up, compensation, or performance references. Expert legal advice, such as an employment advocate, can assist you in weighing up whether an offer is fair.
Seek independent advice: An employment advocate can guide you through negotiations, mediation and all the way to the ERA, and reduce legal costs.
Tailor outcomes: Settlements can include confidentiality obligations, positive references, or agreed exit dates depending on your priorities. An employment advocate can help you craft a settlement which meets your needs.
If you are looking at raising a personal grievance or complaint about a recent employment dispute, get in touch with an expert sooner, rather than later, to ensure you have the best chance of resolving the dispute and receiving a fair settlement. Mathews Walker employment advocates can help you determine if you have a case and what remedies you can expert as an outcome. Call now for a free consultation. Mathewswalker.co.nz | 0800 612 355
Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal advice. While we strive to keep the information accurate and up to date, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. For specific legal advice tailored to your situation, please contact a qualified legal professional.
Comments