Employment Relations Authority Costs

The Employment Relations Authority may order any party to pay to another party such costs and expenses connected with its investigation as the Authority thinks fit. The Authority may also apportion any costs and expenses between the parties and has this power under the Employment Relations Act 2000, schedule 2 clause 15. The discretionary power to award costs must be exercised on a principled basis.

The Authority awards costs on the basis of a daily tariff approach and will adjust the amount upwards or downwards according to the party conduct, Calderbank offers, and in accordance with the principles set out by the Employment Court in PBO Limited (formerly Rush Security Limited) v Da Cruz [2005] 1 ERNZ 8080, these are:

• There is a discretion as to whether costs will be awarded and as to the amount.
• The discretion is to be exercised in accordance with principle and not arbitrarily.
• The statutory jurisdiction to award costs is consistent with the equity and good conscience jurisdiction of the Authority.
• Equity and good conscience is to be considered on a case-by-case basis.
• Costs are not to be used to punish or to express disapproval of a party’s conduct although conduct that has unnecessarily increased costs can be taken into account in inflating or reducing an award.
• The Authority can consider whether all or any costs incurred were unnecessary or unreasonable.
• Costs generally follow the event.
• "without prejudice" (Calderbank) offers can be taken into account when setting costs.
• Awards will be modest.
• Frequently costs will be judged against a notional daily rate.
• On occasion the nature of the case will influence awards of costs so that in certain circumstances an order will be made that costs should lie where they fall.

The principles in the Da Cruz case have been accepted as being the law on costs in the Authority. It was subsequently reviewed in 2015 in Fagotti v Acme & Co Ltd [2015] NZEmpC 135 where the Employment Court decided that the Da Cruz decision was still good law.

Looking at the daily tariff alone, the first day is $4,500 and subsequent days $3,500. That is the starting point as directed by the Authority's Practice Note on costs.

There is a lot more case law and circumstances surrounding costs in the Employment Relations Authority, and it is the objective of this page and related articles to discuss real costs awards and how the Authority came to decide these.

While an unsuccessful employee who has taken a claim to the Authority is found to be liable for costs, often what occurs is that the employer threatens much higher costs than can actually be claimed to contribute toward the expense of having to pay a lawyer to defend the claim against them. We say, ignore the threats, and observe the actual law on costs in the Employment Relations Authority.

We will also describe issues of costs regarding successful employee claims as well.