"No win, no fee" politics: what National proposed and what it would mean
National has a Small Business Policy and JobStart scheme aim to get rid of No Win No Fee Employment Law in addition to National's other proposed changes. We present our view on this.
The National party has announced amongst other objectives of its Small Business Policy and JobStart scheme that it will Get rid of the "no win no fee" provisions in the Employment Relations Act.
No win no fee is about access to justice. Done properly, it lets employees pursue a legitimate Personal Grievance (PG) without being priced out. Done badly, it creates nasty surprises. This page explains how the model works, where the risks are, and what to watch for before you sign anything.
Quick overview
- No win no fee is not free: read termination, disbursement, and GST terms carefully.
- Settlement strategy matters: take reasonable offers, keep pushing on weak offers.
- Employer-paid fees are common: but you need a contract that protects payment if the employer pays the client instead.
- Costs risk exists: particularly if a matter goes to hearing and you lose.
- The Act is absent of any "no win no fee" provisions.
- We therefore cannot see how National pinned the tail on that donkey.
What National has said
National has released a Small Business Policy
- Repeal the Government's changes to the Employment Relations Act.
- Simplify the employment dispute resolution process.
- Get rid of the "no win no fee" provisions in the Employment Relations Act.
- Ensure our laws and polices get the right balance between health and safety and productivity.
Small businesses need to be trusted to do the right things by their staff without overly burdensome employment law and red tape holding them back.
National believes in a flexible, productive workplace where workers get a fair deal and businesses are productive. National supports an approach where employees and employers are trusted to work employment matters out themselves in good faith.
We will first deal with No Win No Fee
National: Get rid of the "no win no fee" provisions in the Employment Relations Act
The Act is absent of any "no win no fee" provisions so we don't see how that makes any sense.
Let's say if National were to legislate against No Win No Fee preventing employees entering into a contract with their employment lawyer or employment advocate that provides for a fee at the end if they win, what will happen?
- Hourly rate fees and fixed fees for everything.
- The employer can afford to get legal advice, but the employee cannot get legal advice if they cannot afford it.
- If employees cannot afford access to justice or representation, and if the fee cannot be obtained later, the New Zealand public would be disadvantaged.
- As part of a record of settlement the parties can still agree that the employer pays the employees costs or a contribution toward costs directly to the employees lawyer or advocacy firm.
- The lawyer or advocacy firm can just produce an initial engagement letter with an invoice on it which is legally to be paid by the employee regardless of outcome of the case. Whether the employee pays it or not, the lawyer or advocacy firm will just pursue the employee taking debt recovery procedures.
National, what does the public want? No Win No Fee.
No Win No Fee supplies Employment Lawyers with work
It is of important note that No Win No Fee Advocates supply work to the Lawyers and Employment Lawyers. If it wasn't for No Win No Fee employment advocates the Employment Lawyers will have a shortage of work.
A Personal Grievance is raised, or an Employment Relations Authority application is made by Statement of Problem. The employer engages Lawyers.
Take away No Win No Fee and the Lawyers and Employment Lawyers are going to have less work to do.
No Win No Fee resolves employment problems early
More importantly, as No Win No Fee advocates, what we do best is negotiate with the Lawyers, with the employers, and with our clients and we help resolve the employment relationship problems early and realistically, often settling the case for much less than what the ERA might award in the efforts of pragmatism and getting paid the No Win No Fee early. The client will get their more than fair share of the winnings.
Rest breaks and meal breaks; 90 Day Trial
National: Repeal the Government's changes to the Employment Relations Act.
Amongst the repealing of many other changes that the Labour government implemented, the effect of National saying that they will repeal the changes Labour has made will also affect rest breaks and meal breaks which are currently prescribed by Part 6D of the Employment Relations Act 2000.
We will also see a full return of the 90 Day Trial for all businesses which is designed to preclude the employee from bringing personal grievance proceedings for unjustified dismissal.
Simplify the employment dispute resolution process
National: overly burdensome employment law and red tape
When you look at Employment Relations Authority decisions within the first roughly four years that the ERA was created in 2000, you will notice that many of its decisions were short and to the point, reflective of what a Disputes Tribunal decision would look like, quick and easy.
Now, ERA decisions are extremely long and complex in comparison to its earlier years. Our view is that this is unfortunate but unlikely to change significantly.
Our view is that the ERA should be more like Judge Judy, parties turn up and speak to the merits of their case following Judge Judy having examined initial paperwork. This is what our Disputes Tribunal looks like as administered by the Ministry of Justice. Why can't the ERA be more like that?
When we take cases to the ERA, it is the same amount of paperwork and preparation that is required in the Employment Court. It should be easier and we would really like to see it become easier.
Needless to say, the Employment Relations Act 2000 was designed such that a factory worker on the floor can take their own case to the ERA.
National's expectation of good faith
National: employees and employers are trusted to work employment matters out themselves in good faith
The real question is do they? Do employees and employers work employment matters out themselves in good faith. The short answer is they don't.
That is why we get all these calls to our 0800 numbers from employees who need help because their employer is being unreasonable to them and the employee needs representation.
If you want to know whether no win no fee is available for your matter, submit the case form with a short timeline and key documents. We will confirm suitability and explain the fee structure clearly.
Employee Unfair Dismissal Case Form
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