A Strategic Guide to Resolving Employment Problems
Are you facing an employment dispute such as bullying, poor performance, misconduct, or an unfair dismissal? Employment problems are stressful, so prompt resolution is critical.
Let’s explore how employment disputes are generally resolved and what strategic tools can assist.
Employment problems come in many shapes and sizes, but generally, are commenced by an employee raising a personal grievance and requesting mediation. Mediation is the primary resolution mechanism for employment problems and approximately 85% of employment disputes settle at mediation.
However, there can be significant delays getting to mediation (the current wait time for mediation is approximately nine weeks). This means early resolution allows both parties to move on with as little stress as possible.
But what tools are available to seek an early resolution and how do these benefit you?
Without Prejudice Negotiations
We can resolve disputes early by negotiating, and Calderbank offers are one strategic tool utilised in settlement negotiations. A Calderbank offer, named after the English case Calderbank v Calderbank, is a written settlement offer made "without prejudice save as to costs." This means:
The offer is confidential and cannot be disclosed.
The offer will only be brought to the Court's attention when it is determining costs.
It serves as a protected communication for negotiation purposes but can influence cost judgments.
The law recognises the ability to make without prejudice offers in various regulations like the High Court Rules, District Court Rules, and Employment Court Regulations. In Body Corporate S73368 v Otway, the Court of Appeal provided guidance on these written offers, stating to be effective the offer needs to be:
Clearly and unambiguously stated.
Capable of contractual acceptance.
More beneficial (or close in benefit) to the other party than the judgment actually obtained.
Without prejudice offers must be carefully considered and carefully drafted to maximise their strategic effectiveness. This will include a thorough assessment of the financial elements of any offer, but non-financial can be equally important, as the Employment Court recently highlighted.
Case example: Wiles v The Vice-Chancellor of the University of Auckland
Wiles v The Vice-Chancellor of the University of Auckland, provides a recent example of how the Employment Court assesses Calderbank offers.
In this case, Associate Professor Wiles argued that she was the successful party in the substantive proceedings and that because the University’s without prejudice offer (despite exceeding what the Court awarded her) did not address non-financial matters, it was irrelevant to the Court’s cost assessment.
The University disagreed, and believed its Calderbank offer entitled it to cost, but it was prepared to let costs fall where they lie. This means that both parties cover their own legal costs.
The Court recognised that while the monetary component of an offer is important to its assessment, other factors were also relevant. In this instance, the Court found that it was reasonable for Associate Professor Wiles to decline a purely financial offer that required confidentiality, as it did not address the non-financial remedies she sought. Accordingly, the Court awarded Wiles more than $200,000 in costs and disbursements.
How can Young Hunter help?
Calderbank offers are a powerful strategic tool. They encourage settlement and can influence cost awards significantly. However, they require careful consideration and drafting to maximise their effectiveness. This includes recognises the importance of the non-financial aspects of disputes.
If you have an employment problem and want advice about resolving it, please contact one of our employment experts on (03) 379-3880.
