If a personal grievance action is brought against your business the costs can be high. Employers and Manufacturers Association data for 2017 shows the average costs incurred by employers unsuccessfully defending themselves against personal grievances was $60,665; the employee success rate was 70% nationally. However, even with a ‘win’ the cost to the employer is significant. Add to that the loss of productivity and the negative impact of taking the focus off day-to-day operations. Not ideal if you’re a business owner.
Protecting yourself and your business is not difficult; it simply requires a thorough and methodical approach:
- You must have robust employment contracts
- Document your policies and procedures and make them easily accessible to employees
- Train your managers and key staff in basic employment law and practice
- Put in place performance review and dispute resolution procedures
- Take out employment disputes insurance
Robust employment contracts
Investing in a well drafted template employment agreement could save you thousands. Small mistakes such as omitting a compliant trial period clause could lead to a personal grievance.
Accessible policies and procedures
Let’s face it. No one reads policies and procedures if they are locked away in a cabinet or buried on an intranet. Team members should learn policies and procedures in an interactive way so that they remember them when it counts. That’s why it makes sense to load them as an online training module.
Train managers & key staff in basic employment law
Employment law in NZ is very technical and procedural. Even if you think you are making a common sense decision, it could easily lead to a personal grievance if proper process isn’t followed. You can drastically reduce your exposure through online training modules and business tools.
Implement performance review procedures
It’s important to document and record performance reviews, particularly if a team member isn’t performing to the required standard. Under NZ law you need to let the employee know what they’re doing wrong and give them an opportunity to improve before showing them the door. If you miss even a small detail you could end up with a personal grievance claim.
Employment disputes insurance
Employment disputes liability insurance protects employers against personal grievance claims made by current, former or future employees, covering them for legal costs and damages. Claims will usually be subject to employers making a reasonable effort to comply with employment legislation, affirming the importance of training managers and key staff.
How can you reduce your risk and reduce insurance premiums?
With Dacreed's powerful online compliance training you can train managers and staff in basic employment law and practice. Once completed, you'll be able to demonstrate a lower risk profile to our partner insurers and get lower premiums – saving you and your business money.