Employment disputes system 'straining at the seams' since COVID-19 lockdown - advocate

By Harry Lock for RNZ

A justice advocate working on the frontline of employment disputes says the system is "straining at the seams", with those who work in the field reporting a vast increase in the number of incoming complaints.

It is a situation caused by COVID-19 and the lockdown, with employees bringing forward complaints relating to wage cuts, enforced taking of annual leave, and issues surrounding the wage subsidy.

"In normal circumstances there's probably a six to eight month delay between raising an issue and it being heard, but the timeframe certainly seems to be lengthening out," said Gerard Elwell, a community advocate specialising in employment law.

"What I understand talking to people at MBIE [Ministry of Business, Innovation and Employment] is the workload has doubled since the first COVID lockdown and that's presenting a real strain on resources."

Chief executive of Community Law Centres o Aotearoa, Sue Moroney, said getting access to justice for those with grievances is "worse than it has been for some time".

An early intervention service to help process the complaints quickly and early is due to be launched in the coming weeks.

Wage subsidy source of thousands of complaints

Employment disputes system 'straining at the seams' since COVID-19 lockdown - advocate
Photo credit: RNZ / Vinay Ranchhod

The exact number of complaints that have been filed since the pandemic hit New Zealand is unknown.

Although RNZ requested those figures from MBIE, they said those figures were not easily accessible, and would have to be filed under an Official Information Act request.

More accessible is the data relating to wage subsidy complaints, as these have been submitted through the subsidy-dedicated portal.

In total, 5583 wage subsidy complaints have been made to MBIE through the portal, although the real number is higher, with some opting for the traditional route of filing a personal grievance.

The vast majority of those complaints related to the subsidy not being passed on, while more than 400 complaints were issued regarding to enforced taking of leave, and unilateral variation of conditions each.

Data from MBIE showed 1688 of these complaints have been resolved. Meanwhile, 1325 complaints remain unresolved, most of which have been passed onto the Ministry of Social Development's fraud investigations unit.

In a statement, MSD said as of 28 August, they have received 3776 complaints relating to the wage subsidy, which includes the complaints passed on by MBIE. Of those, 2579 have been resolved.

There are 320 investigations currently underway, with 153 investigations resolved. Details around which companies are subject to investigations were withheld.

Data from MBIE showed that the number of complaints made in regards to the wage subsidy has decreased significantly over time, from a high of 2603 complaints issued in April, down to less than 300 in August.

Employment disputes system 'straining at the seams' since COVID-19 lockdown - advocate
Photo credit: RNZ / Vinay Ranchhod

That has not lessened the overall workload for those dealing with complaints, however.

"We're still seeing a steady flow of these cases come in around people's work, and that doesn't look like it's going to abate any time soon," Moroney said.

What other types of complaints are people filing?

"People have been made redundant without the correct processes," Moroney said, describing the type of complaints community law centres are dealing with.

"We've seen a trend of a range of employees forced to have a reduction in pay [and] effectively what we're seeing is a range of situations in which people's work conditions are being changed on them without the right process."

One man, a bus driver in his 70s and on a casual contract, was told the day before the level 4 lockdown by his employer, he would not be working, and would not be getting paid.

But he then found out the bus company had utilised the wage subsidy in his name, claiming the full-time provision of $585 per week, of which he did not see a cent. So he wrote to as many people within the company as he could, to no avail.

"Pretty much got zero response," he said. "[They told me] 'No there's no wages being paid out, and that's the just the way it is. We haven't got any wages from the government for the wage subsidy.'"

It led him to file a personal grievance, after which the company came back saying they had refunded the subsidy.

"It's all quite nebulous and quite uncertain. I felt very uneasy, firstly about the lack of response, and secondly the type of responses that I was getting from the company."

In place of the refunded subsidy, they paid him a lump sum of $1000, based on his average weekly earnings over the past year.

The driver - who wished to remain anonymous - said that does not resolve the grievance: the bus company should have withdrawn the part-time subsidy, and paid it to him, as part of their good faith obligations.

He is now looking to mediation to get his complaint resolved.

Double the workload, a justice system under pressure

Sue Moroney said the accumulation of complaints is having a fundamental impact.

"At the moment, because of the sheer volume of employment cases, I think all of us are struggling to provide those services in a time sensitive way," she said.

"So that's very difficult. I would say that access to justice for people who are being exploited in their workplace at the moment is worse than it has been for some time."

MBIE chose not to comment on the scale of the number of complaints that are being made, but community advocate Gerard Elwell said he has had it reported to him from senior ministry officials that their workload has doubled.

"That's not surprising, but that doubling has really loaded a strain on the whole system and I think our system hasn't really been designed and it hasn't operated with the severe impact of COVID-19 in mind.

"It's definitely straining at the seams."

He said the time and effort it takes for a worker trying to see through this complaint brings an immense burden.

"The delays are causing hardship to a large number of people, and we probably only see the tip of the iceberg, and a lot of people are probably suffering without seeking advice or additional support."

Concerns have previously been raised about the impact the rise in complaints would have on the Employment Relations Authority.

To try and lighten the load, the Ministry of Business, Innovation and Employment is in the process of creating an early intervention service, which will be up and running in the next couple of weeks.

It is hoped that will be able to sort through complaints and engage both parties before they become entrenched in their positions.