What Is the Average Payout for Unfair Dismissal (NZ)?

How to calculate the average payout for unfair dismissal (NZ)

 

When calculating the average payout for unfair dismissal (NZ), it should be noted that previous compensation awards bands are a matter of public record, but each actual payout will vary according to the specific factors of the individual case which remain confidential if at mediation but public if in the ERA.

Employment New Zealand is the government agency which stores the data regarding the compensation payouts for personal grievance claims. Using the data provided by Employment New Zealand, we have come up with the following guidance.

When looking at the levels of compensation awarded to employees by the Employment Relations Authority (ERA) and Employment Court under section 123(1)(c)(i) of the Employment Relations Act 2000 it is important to note that the data only takes into consideration those cases where compensation was actually awarded. In addition, it must be noted that precedent of payouts does not indicate potential future payouts as each case is assessed individually and on factors discussed briefly below.

In 2020 there were 7 cases awarded between $1 and $5,000, 24 cases awarded between $5,000 and $10,000, 58 cases awarded between $10,000 and $20,000, 11 cases awarded between $20,000 and $25,000, and 11 cases awarded more than $25,000.

From this we can see that the largest number of cases (the mode average) were awarded between $10,000 and $20,000. However, with the data provided and without case-by-case specific payout numbers we are not able to give a mean average payout for unfair dismissal (NZ). It should also be noted that the number of cases with a high level of compensation are only given as ‘over $25,000’ and so the average cannot take into account the highest compensation levels.

What are the factors of calculating a personal grievance payout?

Contractual Entitlements

If an employer has not paid employees for time that they have already worked, then the amount, in line with employee’s employment agreements, is likely to be awarded – including any bonuses previously agreed upon by employers and employees.

Note: Depending on the employment agreement specifics there may be a 90-day trial period under which an employee may be dismissed without the possibility of raising a personal grievance – unless that dismissal is deemed to be discriminatory.

Statutory Entitlements

If the employer has not paid out accrued holiday pay or leave, sick leave, or other statutory entitlements then these should be awarded.

Lost Wages

Lost wages can be awarded as the lesser of 13 weeks’ pay, or the actual time the employee was out of work or between jobs.

Note on Entitlement and Lost Wages Payouts

Where entitlements are concerned you must remember that you are required to pay income tax on these as normal. Additionally, when seeking lost wages, you are under obligation to try and mitigate your losses in this situation but trying to find new gainful employment.  Any lost wages that are awarded are also subject to income tax.

Compensation for Humiliation, Loss of Dignity and Injury to Feelings

Where your case involves personal damages over loss of dignity or injury to feelings the payout, if it happens, can vary significantly depending on the impact being unjustifiably dismissed has had.

Contribution to Costs

There may be a contribution to costs ordered by the ERA, this is calculated on a daily tariff and is only a contribution and does not cover the total costs. If the matter is conducted over a day the cost awarded to the successful party is normally $4500.00

Where more complex offers are made, or there is an unusual procedure, or the case is particularly severe then the payout may be significantly above or below the average payout for unfair dismissal – NZ employment law is multifaceted and there may be an alternate approach than filing a personal grievance claim.

There is a Time Limit on Raising a Personal Grievance

You only have 90 days to bring a personal grievance against your employer, it is best to gather the required information and evidence to support your claim and seek advice from employment specialists to discuss whether or not you have a case to bring against your employer.

If it has been more than 90 days since your dismissal, you may be able to raise a personal grievance but you would require the employer to agree to it, if this is not possible then you can apply to the Employment Relations Authority to be allowed to raise a personal grievance outside of the 90-day period, but this is only awarded when there are exceptional circumstances.

Contact our team of experienced employment specialists today.