Work and Income has failed to respond to an employers' claim that it has no processes to recover provisional unemployment benefits from workers who win or lose unfair dismissal payouts.

The Northern Employers and Manufacturers Association made that claim yesterday after accusing the government agency of encouraging workers to lodge personal grievance cases to escape a 13-week stand-down before being entitled to receive regular benefits.

Association employment services manager David Lowe said a survey of 759 members showed that 56, or 7 per cent, believed that was the reason for personal grievance claims taken against them by former staff.

"It encourages people to take grievances when they are not genuine," he said of an alleged lack of follow-up by Work and Income staff after provisional benefits are granted.

Mr Lowe said the only cost to workers of lodging a grievance claim was that of "a 50c stamp", yet many employers chose to make out of court settlements for cases which they believed were too costly to defend, regardless of their merits.

Agency deputy chief executive Patricia Reade denied her organisation encouraged people to take personal grievances against their former bosses, although she said 27 were granted provisional benefits in the year for September 30 while seeking legal redress.

Ms Reade said that was on condition they repay any such benefits if they lost their cases when their dismissals were found to be justified.

Similarly, workers awarded lost wages for periods during which they received benefits may have to repay part or all of these, she said.

But she could not explain what, if any, measures her staff took to monitor the progress of personal grievance cases and whether refunds had been claimed from anyone paid a provisional benefit.

"We have been meeting with EMA [the employers' association] and follow-up with clients has been identified as an issue," Ms Reade said in response to questions from the Herald about recovery processes, or a lack of them. "Work will be undertaken to improve our system around this, if necessary."

Minister of Social Development and Employment Paula Bennett said the issue had only recently come to her attention, but she was happy to meet the employers association in the New Year to "talk through their concerns".

Ms Reade said people who voluntarily left their jobs without good reason or had been dismissed could also avoid the 13-week standdown period by undertaking work-related activities for at least six weeks, such as attending training, performing voluntary work or providing proof they were looking for new employment.

She said 1560 people met that criteria in the 12 months to September 30, a demonstration that staff were not encouraging people to lodge personal grievance claims.

But she also confirmed Work and Income policy and practice "not to decline someone a provisional unemployment benefit if a personal grievance is taken." Despite that, 147 people were stood down over the same period for "voluntary unemployment".