A lot of employment grievances/disputes between employer and employee are resolved before a decision of the Tribunal or Employment Court.
It is customary to record the terms of any settlement in a document signed by both parties.
What is less understood is that there is a difference between the types of settlement document that can be utilised. One is a record of settlement which is essentially recognised under the Employment Relations Act. The other is a traditional common law Deed of Settlement / Settlement Agreement.
The significance of the difference between the two forms of document has been emphasised by the Court of Appeal in a recent decision. The employee and employer had reached a settlement and recorded it by way of a Settlement Agreement.
The employee alleged that the employer was breaching the Settlement Agreement and referred the matter to the Employment Authority however the Employment Authority and Employment Court held that they did not have authority to enforce the Settlement Agreement as it was not a “record of settlement” under Section 149 of the Employment Relations Act.
The Court of Appeal has upheld that decision.
The importance of the form of document is not insignificant because it can be relative to the matters that any party might be trying to enforce.
Essentially if the only issues are regarding payment of money then a record of settlement will provide a generally easier and cheaper option for enforcement, although this may not always be the case.
However if there are more complicated matters that need to be protected such as confidentiality or restraints of trade then a Settlement Agreement may be more appropriate as it can be enforced in the ordinary Courts and the significant aspect of this is this enables damages to be awarded for breach which cannot be done under a record of settlement in the employment jurisdiction.
Farry and Co. can assist in all aspects of employment disputes and grievances acting for either employer or employee.
If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:
Paul Farry
pfarry@farry.co.nz
09 379 0055 or 03 477 8870
The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.