Interesting comments from an Insolvency practitioner!!

Many employers feel aggrieved by the employment law in NZ and the approach of the ERA, which they feel is biased towards employers.

Here is an emerging trend I have noticed (and been apart of) when it comes to avoiding large determinations handed down by the ERA in the SME space.

A quick example, the employer has serious concerns about the employee. The employee is not a good fit; they have been caught doing something that is serious to the employer and seriously inconsistent with values. Maybe some minor theft. Maybe bulling behaviors within the business. The employer is clear that this employee must go... But, they don't follow the protracted and, quite frankly, complicated process (to the lay SME employer) to dismiss the employee.

They got the outcome right for the business, but the process wrong.

They get a large determination against them for unjustified dismissal. Hurt feelings compensation (hurt and humiliation), lost wages until the employee found a new job, etc.

Options at this point look limited: 1. Appeal. 2. Pay. 3. Try to settle. Every option is costly.

Some employers have engaged us to restructure their business instead. Assets/staff/business are moved to a new company. The old company is liquidated. The determination isn't paid. They are creditors in a liquidation with nothing. Yes, there are fees to do it properly. But those fees are MUCH less than the determination. Those fees are happily paid in preference to an individual who is getting paid because of law that prioritises process over good decisions for a business and everyone else impacted by the actions or inactions of this employee, despite their wrong doing.

Yes, there are possible reputational impacts - but they own the story they tell their key stakeholders. Most other business owners get it. Totally understand this kind of approach is not fit for many established businesses, but for a SME, this is an option. Another alternative is that we update the law. I am yet to meet an employer who wants to dismiss good employees. Employers should be able to choose whom they employ, whom they pay, and whom they expose to their team and clients. And if that employee isn't a fit, they should have a swift way to exit and a much quicker process available. Have our current employment laws gone too far to protect employees and is it time for a more balanced approach? Or shall we continue to look for innovative solutions that keeps lawyers busy?

Regards, Not an employment lawyer.