In a recent decision that clarifies an important aspect of New Zealand employment law, the Employment Relations Authority (ERA) ruled that former employees are not entitled to backpay under a collective agreement if they were no longer employed when the agreement was renegotiated. This case highlights the limitations of personal grievance claims and underscores why timing is critical in employment disputes.

At Core Legal, serving clients in Masterton, Wellington, and throughout the Wairarapa, we regularly advise both employers and employees on their rights and obligations during and after the employment relationship. Here’s what you need to know from this ruling.

⚖️ The Case: Former Employees vs. Public Sector Employer

A group of former employees brought a personal grievance for disadvantage to the ERA. Their claim stemmed from a new collective agreement negotiated between their former union and employer. The new agreement included backpay for employees in recognition that their roles had been mis-scoped and under-compensated.

Although no longer employed at the time of the new agreement, the former employees argued they should receive the same backpay. They claimed that the emotional and physical toll of their work, coupled with extended bargaining delays, had led to their resignations.

🧾 ERA Decision: No Backpay for Former Employees

The ERA rejected the claim, stating:

• A disadvantage grievance must occur during the employment relationship. Since the backpay was introduced after the former employees resigned, no current employment relationship existed.

• The backpay provision was not a term of their employment contracts at the time they left, so they had no legal entitlement to it.

• The claim of disparity was invalid, as the alleged disadvantage (missing out on backpay) occurred after the employment had ended.

💼 Key Takeaways for Employers and Employees

• Backpay is not automatically owed to former staff unless clearly agreed to during their employment.

• Personal grievances for disadvantage are limited to issues that happen while someone is still employed.

• Employees considering resigning due to poor conditions should seek legal advice before leaving, especially if collective bargaining is ongoing.

• Employers should carefully document employment terms and negotiations to minimise disputes.

🏛️ Get Legal Support from Employment Law Experts

At Core Legal, our team can guide you through employment disputes, personal grievances, and collective agreement issues. Whether you’re an employer or employee, it’s vital to know your position before making decisions that could affect your entitlements or liabilities.

We offer fixed-fee Initial Consultations to help you understand your legal options without unexpected costs. If you’re facing or considering an employment grievance, don’t delay.

📞 Contact Core Legal – Your Trusted Employment Lawyers in Masterton and Wellington – for clear, practical advice that protects your interests.