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New research into how employment disputes are resolved has found little evidence to back perceptions of a "grievance gravy train" featuring high payouts for disgruntled employees.
The Department of Labour research found the incidence of employment problems was low, and the median direct cost to private sector employers
was $5000 - with just $2800 representing payouts to employees.
Labour Minister Trevor Mallard released the research yesterday after the Cabinet considered if changes were needed to improve the employment dispute process.
Mr Mallard said it had been decided that a code of practice would be drawn up to help resolve workplace relationship problems more easily.
Further work would also be done on fine-tuning parts of the system, because while it was working well, it could be "built on", he said.
The research and discussions inside the Cabinet follow high-profile criticisms by employer groups of how the grievance provisions in the Employment Relations Act operate.
The Department of Labour research acknowledged a "prevailing belief" that employment issues that led to personal grievance claims were expensive to settle.
It also noted an employer group had suggested there was a "grievance gravy train" being pushed along by "no win, no fee" advocates who encouraged people to take cases.
The private sector employers in the survey said "no win, no fee" advocates were involved in 16 per cent of employment problems.
However, the research said there was "no evidence" they had dramatically changed the landscape or encouraged meritless claims.
The Council of Trade Unions yesterday welcomed the findings, which president Helen Kelly said she hoped would lead to a more "level-headed" debate about employment protections for workers.
Ms Kelly said that, if anything, part of the research was worrying because it showed compensation payments were minimal and didn't go far enough to rectify the loss of economic security that came from losing a job.
Business New Zealand chief executive Phil O'Reilly warned against reading too much into the research and he questioned its methodology.
He said perceptions had a wider effect on how people behaved than had been acknowledged.
For example, if an employer thought grievance claims were expensive, he or she might decide to settle a problem quietly with a payment and never tell anyone about it.
Mr O'Reilly backed the Government's plans to look further at fine-tuning the process, and appeared pleased with the areas that were going to come under closer scrutiny.
But he urged the Beehive to look more closely at other areas that employers wanted change in - including a probationary period for new employees
