What to do when you receive a personal grievance claim
She’d been with the organisation for months, doing good work on a funded project with a clear end date. Her contract ran through to the end of the financial year in June. It was straightforward. Everyone knew where they stood.
Then the funding got pulled early.
Now, there’s a process for this. When a fixed-term contract needs to end sooner than planned, you follow the natural expiry pathway. You give notice as per the contract, you have an honest conversation, and you part ways properly. It’s not complicated, but it does need to be done right.
That’s not what happened.
Instead, the organisation swept her into a wider restructure that was happening across the business. She received a letter telling her that her role was being “disestablished.” She was the only person in the entire team to receive an individual letter. No consultation. No conversation. Just a letter.
The same week, her mother passed away.
When she came back, she was expected to accept that her role was gone.
Here’s the thing that unravelled the whole case: one word. “Disestablished” means something very specific in employment law. It implies the employee had a reasonable expectation that the role would continue beyond the original end date. Natural expiry simply means the fixed-term arrangement has reached its agreed end. Two words, two completely different legal meanings, and the employer didn’t know the difference.
The predetermination was obvious. She hadn’t been consulted. She’d been told.
The outcome: a significant financial settlement, and non-monetary sweetners.
All of it avoidable. All of it down to not getting the right advice before acting.
If you’ve just received a personal grievance claim, or you can feel one coming, here’s what you need to know to handle it properly.
First things first: Is it actually a personal grievance?
This matters more than you’d think. For a complaint to qualify as a personal grievance, the employee must specifically use the words “personal grievance” and/or reference section 103 of the Employment Relations Act. If they haven’t done that, what you’ve received is a workplace complaint or concern. That still needs addressing, but through a different process.
A personal grievance is, as the name suggests, personal. It could relate to unjustified dismissal, unjustified disadvantage, discrimination, sexual harassment, or other serious workplace issues. The big categories are unjustified disadvantage, unjustified dismissal, and discrimination. If the complaint fits under one of those umbrellas, it has grounds to proceed.
Most personal grievances come from the same place: an employer making decisions without proper consultation. Changing someone’s agreement. Adjusting their pay. Altering working conditions like hours, days, or location. Making wage deductions without written permission. Consultation isn’t just good practice in New Zealand. It’s the foundation of the entire employment relations framework.
What do I do the moment I receive one?
Take a breath, then take these steps.
Check whether the employee has followed the employment relationship dispute pathway set out in your employment agreement or company policies. If they haven’t, you’re within your rights to redirect them, respectfully, and ask them to follow the agreed process first. Both parties are obligated to act in good faith, and that includes following the dispute resolution steps you’ve already agreed to.
But do your homework before you assume they haven’t raised concerns before this point. Sometimes employees have spoken to a manager about an issue, but nothing was documented. The concern was raised. It just wasn’t captured. This is why documentation matters every single time.
If the process has been followed and the grievance is properly raised, acknowledge the letter promptly. You don’t need to have all the answers yet. Just confirm you’ve received it and that you’ll respond in due course.
How long do I have to respond?
There’s no statutory deadline requiring you to respond within a specific number of days. However, “due course” doesn’t mean three months. Aim to provide a substantive response within two to three weeks. If you need more time, ask for an extension. There’s nothing wrong with that, and it demonstrates good faith.
One important caveat: read the letter carefully. If the personal grievance includes a Privacy Act data request, you have 20 working days to respond to that element unless you’ve requested an extension. People often bundle privacy requests into personal grievance claims, so don’t overlook this.
What are my options?
You have more options than you might think.
The first decision point is whether both parties are open to a resolving the matter amicably and informally through independent mediation or without prejudice converstaion. This is an off-the-record discussion that can’t be used in any legal setting. Think of it as an opportunity to resolve the matter outside of formal channels.
In practice, most parties are open to this because the formal process can take anywhere from three to eighteen months depending on complexity.
If that’s not on the table, you’ll move into a formal investigation based on what the grievance is about.
You can also access free mediation through the Ministry of Business, Innovation and Employment, but both parties need to agree to it. It’s completely voluntary. Depending on mediator availability, expect a five to ten week wait and sometimes even longer. If you need things resolved faster, you can engage a private accredited mediator, but that comes at a cost.
Other free resources include Citizens Advice Bureau and MBIE’s employment line, though these services are stretched thin and will typically advise you to consult a specialist because every case is different.
Can this really cost me serious money?
Yes. And the longer you delay, the more expensive it gets.
The cost of a personal grievance depends on the nature of the grievance, the employee’s length of service, the seniority of their role, and how long the process drags on. A junior role with a straightforward issue might settle at what might be reasonable. A senior role, like the general manager case where the settlement reached six-figures, takes into account that finding an equivalent position at that level takes considerably longer.
On top of any settlement, you may also be liable for the employee’s representation costs. If a lawyer or advocate has been involved for three months, those fees get passed on. Resolve it early, and representation costs might be reasonable such as $1,000 plus GST. Let it drag on, and you’re looking at a very different number.
Remedies for stress, humiliation, and loss of dignity can add $8,000 to $25,000, or more, depending on the severity and how long the situation has been going on.
What most employers get wrong
The biggest mistake is paying to make it go away when you haven’t done anything wrong. There’s a myth that once a personal grievance is raised, you just have to settle. That’s not true. If you’ve followed proper process, hold your ground. Don’t set a precedent for paying people off.
New Zealand employment law isn’t designed to favour employees over employers. It’s balanced. The reason outcomes often lean toward employees is that employers rush the process and skip steps. That’s when it tips.
And here’s something most people don’t realise: if the employee contributed to the situation that led to their grievance, any potential remedies through the formal pathway can be reduced by up to 80%. So even if you’ve missed a small step in the process, the outcome still accounts for whether the employee’s own actions played a part.
The non-negotiables are documentation, genuine good-faith consultation, and following the process set out in your employment agreements. Get those right, and you’re in a strong position regardless of what comes your way.
Where to from here?
A personal grievance doesn’t have to be a disaster. These situations are manageable when you follow the process, document everything, and get the right advice early.
The employers who get hurt are the ones who panic, cut corners, or throw money at a problem hoping it disappears.
The ones who come through it are the ones who take a breath, get expert guidance, and handle it properly from the start.