Costs in the Employment Relations Authority: Who Pays?
The Employment Relations Authority (ERA) is a tribunal established under New Zealand law to resolve employment relationship problems. While the ERA aims to provide an accessible and less formal forum for dispute resolution compared to traditional courts, it has the power to order one party to contribute to the costs incurred by another party during proceedings. This section outlines the legal framework and principles governing costs awards in the ERA.
General Principles for Costs Awards
Unlike in some court proceedings where costs might be awarded more routinely, in the ERA, the awarding of costs is at the discretion of the Authority. Generally, parties involved in ERA proceedings are expected to bear their own costs. However, the Authority has a statutory power to make orders for costs and expenses [Source: Employment Relations Act 2000, s 159(1)].
Legal Basis for Costs Orders
The power of the Employment Relations Authority to award costs is explicitly provided for in the Employment Relations Act 2000.
- Section 159(1) states: "The Authority may make such order as it thinks fit for the payment of the costs and expenses of any hearing or investigation, and of the costs of any proceedings before it."
- Section 159(4) clarifies that "costs and expenses includes, without limitation, costs relating to legal representation and witness expenses."
This means the ERA has broad discretion to decide whether to award costs and the amount of those costs. The intent is often to provide a contribution to a party's expenses rather than to fully indemnify them (i.e., fully cover all their costs).
Factors Considered When Awarding Costs
When determining whether to award costs and the amount, the ERA typically considers various factors. These factors are not exhaustive and are applied at the Authority's discretion based on the specific circumstances of each case. Common considerations include:
- Success of the Parties: Whether one party has been largely successful in their claims or defence [Source: Employment Relations Act 2000, s 159(1)].
- Conduct of the Parties: The behaviour of the parties during the process, including whether a party has acted vexatiously, unreasonably, or caused unnecessary delay or expense [Source: Employment Relations Act 2000, s 159(1)]. For instance, a party who unnecessarily prolongs proceedings or refuses reasonable settlement offers might be at a higher risk of having costs awarded against them.
- Nature and Complexity of the Case: More complex cases requiring extensive preparation or expert evidence may warrant a higher costs award [Source: Employment Relations Act 2000, s 159(1)].
- Financial Means: In some instances, the Authority may consider the financial circumstances or ability to pay of the party against whom costs are sought [Source: Employment Relations Act 2000, s 159(1)].
- Offers to Settle: If a reasonable offer to settle the dispute was made by one party and unreasonably rejected by the other, this can influence a costs award [Source: Employment Relations Act 2000, s 159(1)].
- Public Interest: The Authority may also consider broader public interest factors in ensuring justice and upholding employment law principles [Source: Employment Relations Act 2000, s 159(1)].
Types of Costs That Can Be Awarded
Costs orders typically cover:
- Legal Representation Costs: Fees for lawyers or advocates representing a party [Source: Employment Relations Act 2000, s 159(4)].
- Witness Expenses: Costs associated with witnesses attending hearings, such as travel and accommodation [Source: Employment Relations Act 2000, s 159(4)].
- Disbursements: Other out-of-pocket expenses directly related to the proceedings, such as filing fees, printing costs, or expert reports [Source: Employment Relations Act 2000, s 159(4)].
Distinction from Employment Court Costs
It is important to note that the approach to costs in the Employment Relations Authority can differ from that in the Employment Court. The Employment Court, being a higher judicial body, generally has broader powers to award costs, and its cost awards may be more aligned with those of other courts, potentially covering a higher proportion of actual legal costs [Source: Employment Relations Act 2000, s 209]. However, the ERA's focus remains on fair and accessible resolution, with costs awards serving as a discretionary tool rather than an automatic entitlement.
When to Seek Independent Legal Advice
Navigating the process of the Employment Relations Authority, particularly concerning potential costs awards, can be complex. It is recommended that individuals involved in employment relationship problems or ERA proceedings seek independent legal advice from a qualified legal professional or an employment advocate. Community Law Centres throughout New Zealand also offer free legal assistance and can provide guidance on employment law matters.