Four tips to avoiding a personal grievance claim in your business
Personal grievance claims cost Kiwi businesses on average up to $20,000 per claim, plus the costs to defend yourself or your business, which can be substantial. It’s the most common way employees can bring a formal complaint against their employer or a fellow employee.
Complaints usually fall under one of the following categories:
Unfair or unjustified dismissals, warnings, or suspensions
An actual or perceived demotion
Discrimination
Bullying or sexual harassment
Restructuring without adequate consultation
So what can you do to help your business avoid a personal grievance claim?
Ensure every employee has a signed employment agreement, including casual, fixed term and permanent employees and for any new employees, have this agreed and signed before their first day of employment. A signed agreement ensures both parties have an agreed understanding of employment terms, roles, and responsibilities, and you can quickly address any breaches. Employers are liable for a $1,000 infringement fee for any employee without a written, signed agreement.
Keep records. Document and date any meeting or conversation with employees where there is potential for an issue, complaint, or dispute to arise. You never know when you might need to refer to it. Remember, before you react when someone has done something wrong, consider the words you use, the tone of your voice, and where you speak to them.
Seek expert advice. There are multiple pieces of legislation that employers must comply with and processes that must be followed. Employers can be liable for penalties of up to $20,000 per breach, even when acting under the best intentions. An employee can be successful in their claim against the Employer even when the employee is found to have done something seriously wrong, because a process was ignored, or inadequate opportunity was afforded the employee to defend himself. You must follow the appropriate processes.
Act fast before issues escalate. Ignoring issues, even though it is uncomfortable, may make things worse. The earlier issues are addressed, the quicker a solution is found and the less likely it is to result in an official complaint.