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Some interesting stats from MBIE on employment mediations

Updated: May 3



Yesterday we received a response to a request under the Official Information Act (OIA), and have some basic, but interesting statistics to report.


The Ministry of Business, Innovation and Employment has roughly 6,000 employees and includes the Employment Relations Authority (ERA similar to the UK’s Employment Tribunal) currently with 24 Members, and a free mediation service.   If a party raises a grievance in the ERA, the ERA usually refers the parties to mediation.  The vast majority of mediations result in the parties signing a Record of Settlement (RoS, otherwise known as a NDA).  Where the parties are unable to reach an agreement, the ERA takes the case back and eventually publicises its Determination.  As to the ratio of completed mediations to ERA determinations, you’ll get a different figure for every employment law practitioner you ask but we believe it to be around 10 to 1.


A 2021 OIA response gave the following figures for mediations conducted and recorded settlements.



In 2012 it appears that around 88% of mediations resulted in a settlement.  However, the 2013 figures showed 5% more settlements than mediations.  That could only mean that a fairly large minority of settlements were conducted without an MBIE mediator being present.


We’ll disregard 2020, which may have been skewed by issues arising from Covid lockdowns.  In 2019 there were 9,892 recorded settlements but only 4,723 mediations conducted, and allowing for a small percentage of mediations that were unsuccessful, only around 40% of mediations were supervised by a MBIE mediator.


Our latest OIA response shows figures from the last three years:



It’s unsurprising; the trend continued, but slowed.  In 2023 there were 2.5 times as many settlements as MBIE-supervised mediations, and allowing for unsuccessful mediations, an employee raising a grievance has about a 65% chance of a mediation taking place without an MBIE mediator.


With that said, at the bottom of employment.govt.nz there is a link to submit (upload) a record of settlement and even a RoS template to assist DIY'ers.  The latest OIA response confirms that these figures are for RoS that have been certified by MBIE (usually remotely these days) under s149 of the Employment Relations Act. 


Certification entails MBIE making a phone call to the parties on the numbers provided by the RoS to ensure the parties understand what it means, and confirm that no breach of minimum entitlements has occurred.


At this stage we’re not saying this change is good, bad or indifferent, but it does warrant further research.


When making the OIA request we explained that “What [we’re] hoping to do is publish the raw data from MBIE’s response and lead a discussion group on the implications of the trend towards mediations being conducted without a MBIE mediator, whether private mediators (eg: AMINZ members) have filled the gap, and whether AML compliance is being compromised with respect to unsupervised mediations involving public sector employees.”


SKEWED STATS


A discussion on LinkedIn quickly followed and it appears that there are two things that skew the statistics:


  1. The number of parties raising employment relationship problems has increased significantly, putting pressure on Mediation Services, increasing wait times, and pushing parties into privately-run mediations.  One practitioner commented that the wait time was too long and in her experience 80% were conducted by Zoom, unlike pre-Covid, although there was nothing wrong with the MBIE mediations themselves.

  2. The increase in employment relationship problems has led to an increase in matters being resolved after without-prejudice discussions, which don’t require MBIE’s involvement, so MBIE does not have visibility of these.


The increase in grievances etc. (regardless of how they’re resolved), relative to population growth, should raise productivity concerns.  Employment relationship problems can be costly to the employer and often highly disruptive to the employee.


AML


Why our interest in anti-money laundering (AML)?  One of our contacts came to Wellington for a public sector job to replace someone who had resigned, apparently on good terms, to take up a position in Australia.  Our contact was surprised to learn that her predecessor remained on a salary and had use of a credit card for six months after she had left.  It was discovered years later that such an “arrangement” can be facilitated in a mediation, usually unsupervised, under legal privilege.  It would require a level of opportunism, rationalisation, and cliquishness among the core participants within and at the periphery of the victim organisation (the ultimate victim usually being the taxpayer).  Any outsider to a clique who discovers that sort of thing had better get a Plan B together before they get ostracised as a potential whistleblower!


 

Comments and analysis by Tristam Price, LA

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