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No Personal Grievance Available Once Settlement Has Been Reached

Published 01 Aug 2014

In March 2014, Ms Hamilton, the Employee, was advised that her position was to be made redundant with two weeks’ notice. Ms Hamilton argued that she was unjustifiably dismissed and/ or disadvantaged due to alleged lack of consultation leading up to the redundancy. Ms Hamilton also alleged that the Employer (Kelly Chambers) failed to make various payments which were due to her.

Kelly Chambers resisted the claims stating that the employment was terminated on notice for genuine reasons of lack of work and financial hardship. Kelly Chambers further stated that the parties “reached a binding termination agreement with Ms Hamilton by virtue of which Ms Hamilton cannot now pursue personal grievances. Further that the termination agreement was subsequently repudiated by Ms Hamilton but such repudiation was not accepted by Kelly Chambers.” It was further alleged that Ms Hamilton’s grievance claim was raised outside the 90 day period.

Between March and July 2012 correspondence around settlement took place between the parties. In April 2012, Ms Hamilton made a counter-offer to an offer made by Ms Kelly to her. As part of her correspondence Ms Hamilton attached draft settlement agreement under s 149 of the Employment Relation Act 2000 (the Act). This prompted discussions between the parties on settlement agreements reached under s149 of the Act, and signed off by a mediator. The correspondence did not lead to a “signed” agreement. On 15 June 2012 Ms Hamilton’s lawyer wrote to Ms Kelly setting out the issues arising from the termination. This prompted a response from Ms Kelly stating that the matters had already been subject to agreement. Mediation eventually took place. The Employment Relations Authority (ERA) determined that “Participating in mediation is not necessarily inconsistent with having a binding agreement. The ERA cannot in any event make any inquiry about what occurred." 

The ERA ultimately determined that as part of the correspondence there was a counter-offer made by Ms Hamilton which was accepted, including that the payments Ms Hamilton asked for were to be paid as compensation under s123 (1)(c)(i) of the Act.

Ms Hamilton, therefore, could not pursue a personal grievance in respect of the redundancy as she “compromised her rights to do so by virtue of the binding agreement reached with Ms Kelly in April 2012.”

In dealing with the issues relating to s 149 of the Act, the ERA held that “The evidence and the relevant documents do not support a clear intention that the agreement was not binding on the parties unless there was approval and signing of a settlement agreement under the s.149 process of the Act”.

The Employer was ordered to make a payment in respect of Employer contributions to Ms Hamilton’s KiwiSaver account that was due but unpaid. 

When requiring a legal settlement agreement document refer to our product here: settlement-agreement-product.aspx, or for Employer Support Package members this is available to you in the dashboard library of the Employers Toolbox online.