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Employment Dispute Cases - Costs Awarded - Take Care

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Costs Against You in the Employment Authority or Court

You must take great care.  Up until a relatively short time ago, large costs were not usually awarded against the unsuccessful party in an investigation hearing before the Employment Authority.  A personal grievance is usually started by formal letters exchanged between employer and employee and then the next step of the proceedings is the Mediation.  Frequently cases are settled that the Mediation level.  Costs cannot be awarded at that level.

But if the case proceeds to the next level which is an investigation hearing before the Employment Authority then costs can be awarded and costs between $2000 and $3000 are now not unusual.  In our view, this puts a horrible pressure on the employee who is requesting the investigation hearing, usually from an unemployed and penniless standpoint, only to be asked to factor in to the decision-making process are likely award of costs if he or she is unsuccessful.

The Employment Relations Authority and Employment Court adopt different approaches towards cost awards.  Costs awards are discretionary, but usually inevitable. Unless there are special circumstances, the general rule is that a successful party is entitled to recover at least some of their legal costs. An award of costs is not to punish or express disapproval of the unsuccessful party’s conduct but to make a fair contribution to the legal costs of the successful party.

Costs may also be awarded where the Court has granted a party an indulgence, such as an extension of time or obviously where a case has little or no merit.  This applies both to employer and employee.

Authority’s approach to costs

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