"Gold-diggers" who lodge grievance claims against employers alleging unjustified dismissal or disadvantage may be hit by a Government bid to make Employment Relations Authority decisions more consistent.
New Minister of Labour Kate Wilkinson plans to make the authority act more "judicially", reining in what one lawyer has labelled a "kangaroo court".
The authority was set up by the former Labour Government in 2000 as an investigative lay body to resolve employment disputes by "establishing the facts and making a determination according to the substantial merits of the case, without regard to technicalities".
Auckland lawyer Eska Hartdegen says it has become "a law unto itself" because each of its 16 current members is free to decide how to run their own hearings.
Some members hear witnesses from each side one after the other as in a court, but others go through what happened chronologically, asking everyone present about each incident.
Some allow lawyers to cross-examine witnesses, but others sometimes don't.
No record is taken of authority hearings because they are meant to be fast, cheap and accessible.
Only 10 of the 16 members are legally trained, yet applicants are paying an average of $7156 to lawyers or employment advocates for representation.
Ms Wilkinson, a Christchurch lawyer, said some advocates were abusing the system by encouraging employees to lodge grievance claims in the hope that employers would settle for perhaps $3000 or $5000 rather than pay more in legal costs to fight the claim.
"I've heard of advocates who know how to use the system and, whether the merits of the case are right or wrong, they can use the system to get a monetary payment." she said. .
"If we can make the process in the Employment Relations Authority more consistent and more certain, then that might actually look at resolving that problem."
She plans to make the authority record its proceedings so its rulings can be challenged more effectively at the next level up in the Employment Court.
She also plans to restore the right to cross-examine witnesses, which was removed by Labour in 2004, and allow complicated cases to bypass the authority and go straight to the court.
The reforms will be part of a package of employment law changes which include National's controversial bill to let small employers with under 20 employees negotiate a 90-day probation period for new employees, with the right to sack employees in that time with no access to personal grievance procedures.
National has also promised to let workers bargain collectively without having to join a union, to let them trade in the fourth week of annual leave for cash, and to require employer consent for union access to the workplace, provided that employers cannot withhold their consent "unreasonably".
A Labour Department survey concluded last year that "no-win-no-fee" advocates were not creating a "grievance gravy train" as had been alleged by the Employers and Manufacturers Association (EMA).
The survey estimated that no-win-no-free advocates were involved in 16 per cent of employment relationship problems, but found "no evidence that no-win-no-fee advocates have dramatically changed the landscape or encourage meritless claims".