When A Falsified ‘Golden Handshake’ Is Neither ‘Golden’ Nor A ‘Handshake’

On 7 May The Post published a paywalled article by Tom Hunt under the eye-catching heading of Wellington council’s $200k-plus club quietly keep personal grievance pay: Alleged ‘golden handshake’ for Council staff.

Legislate amendment to reduce employee protection

At the heart of the issue is a recent amendment to the Employment Relations Act that excludes employees earning $200,000 or more from access to the Act’s personal grievance procedures for unjustified dismissals.

This legislative amendment was driven by ACT MP and Workplace Relations Minister Brooke van Velden.

It is an attack on employee rights successfully pursued by a particularly rightwing politician from a particularly rightwing political party.

There is provision in the amendment, however, to elect to opt out of this exclusion providing the employer agrees. This is what happened with the Wellington City Council (WCC).

Its chief executive, who is the legal employer of Council staff, simply exercised this opt out provision for those senior staff who would have otherwise lost the legal entitlement they previously had.

In other words, WCC has restored the employment protection rights as they existed prior to van Velden’s amendment.

Golden handshake – when legend replaces fact

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In addition to the provocative heading there is also another misleading subheading; Wellington council’s $200k-plus club quietly keep ‘golden handshake’ pay.

There are two common meanings of a golden handshake. One is where a large amount of money is paid to someone to go quietly by resigning earlier than expected from their job.

The other involves paying a large amount of money when an employee leaves as a reward for long service or good work. However, neither of these situations apply in the case reported in The Post article. Far from it in fact!

This is the point made in a severe but justified critique of the article by law professor Gordon Anderson in his blog Law, Labour and Life later the same day: Legend rather than fact becomes the story.

Professor Anderson is an active newcomer to blogging. Commencing last August this is his 15th post. His posts are recommended reading – insightful, empirical, brief and in plain language.

He makes a useful analogy with legends and facts. Legends are traditional, usually popular, and historical stories that are not authenticated.

His assessment of the article is that, with particular reference to its headings, it is legend rather than factually based.

Anderson singles out the rightwing Taxpayers’ Union Executive Director Jordan Williams for his reported comment that it was “simply unbelievable” that WCC’s chief executive would:

…so blatantly against the interests of the organisation and ratepayers….This decision effectively locks in golden handshakes at a time when Wellington City Council know they are overstaffed and lacking competence.

In fact, Tom Hunt acknowledges in his above-mentioned article that there has been no relevant claim by a $200,000+ employee since 2021.

What are personal grievances

Personal grievances are taken when an employee challenges a claimed unjustified action (including disadvantaged, under duress, discriminated against, or dismissal) by their employer).

They have formed an important part of employment law in Aotearoa New Zealand since 1973 although they were then known as ‘wrongful dismissals’.

The history of personal grievances is discussed in an article by Professor Anderson published in the King’s Law Journal in 2022: Employment Protection in New Zealand: 49 Years of Personal Grievance Law.

Personal grievances over dismissals are not large financial rewards for long serving, good or wayward employees.

There is an important threshold factor. It has to be first established that the employer’s decision to dismissed was unjustified. As Anderson notes this is “not an insubstantial barrier.”

Further, again in Anderson’s words:

Even then the maximum amount payable in most cases is three month’s lost remuneration – and such an award is unusual. Against this must be set the legal costs of bringing the grievance, never fully recoverable…. Successful grievants rarely come out with a substantial payout after the deduction of legal costs.

Salaried medical and dental profession

Salaried specialists and other senior doctors and dentists employed by Health New Zealand (Te Whatu Ora) are almost certain to have the greatest number in the income bracket to which Brooke van Velden’s exclusion applies. Airline pilots are likely to be another group.

From my own experience, when I was Executive Director of the Association of Salaried Medical Specialists (ASMS), that the responsibility on health employers to have justified cause in order to sack positively contributed to moderating same bad behaviours.

It is interesting to note, as Anderson also does, that in the recent settlement of the national collective employment agreement by ASMS and Health New Zealand covering senior doctors and dentists it was agreed, with the approval of the Public Service Commission, to opt out of this exclusion.

That is, senior doctors and dentists covered by this collective agreement will, in Anderson’s words, “…rightly continue to be able to raise a personal grievance for unjustified dismissal.”

No doubt part of the reason for Health New Zealand agreeing to the retention of this protection was that it would worsen the already precarious specialist shortages in our public hospitals.

Afterall, what sane senior doctor or dentist would want to choose to work for an employer who had the legal right to sack them without cause.

Let me finish with the final word from Professor Gordon Anderson:

A golden handshake? I think not.

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