Sian Lucas believed that she had been unjustifiably dismissed by her employer, Te Rito Daycare Limited. In a January 2018 decision the Employment Relations Authority agreed, and Ms Lucas was awarded compensation of $5,000. However this amount was reduced by 50% to $2,500 to reflect the degree to which her behaviour was found to have contributed to the situation giving rise to the grievance (what is referred to in the Employment Relations Act 2000 as “contributory conduct”).
Ms Lucas’s representative in the Authority was an employment advocate by the name of Alex Kersjes, a former hotelier and discharged bankrupt, now operating an employment advocacy business known as Sacked Kiwi. Non-legal employment advocates are not subject to the same professional requirements imposed upon qualified lawyers.
Mr Kersjes applied to the Authority for costs of more than $7,000 on behalf of Ms Lucas. The Authority referred to Sacked Kiwi’s terms of engagement as specifying an hourly rate that “fluctuates from $150 to $350 plus GST per hour.” It noted that:
“In the case of an unregulated advocate, without the expenses and obligations carried by qualified and registered professionals, a rate of $350 was not reasonable for the purposes of the Authority’s assessment of costs.”
It also pointed out that the “fluctuating” hourly rates were substantially higher than the applicable legal aid rates for employment advocates. The legal aid payable to an employment advocate for the matter would have amounted to $2,531.
The Authority said that it was “evident from the submissions that there was a lack of specialist knowledge about the law relating to contributory conduct and how it may apply to the applicant. If properly advised, the applicant should have expected a reduction of any award for contributory behaviour. The invoice of $7,048.39 was therefore out of proportion to any reasonably expected award”.
The investigation hearing took a full day, although the Authority said it could, if Ms Lucas’ briefs and statement of problem had been properly prepared, have taken only a half day. Taking all of these factors into account, the employer was ordered to pay Ms Lucas $2,250 towards her actual costs.
It is vital to get informed advice about the legal merits of a claim, and what the realistic prospects of success might be. As the Authority said, cases must be “conducted in ways that are…proportionate to the likely compensation award”, otherwise you can, like the applicant in this case, find yourself out of pocket even though you might have notionally “won” the case.
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