Worker seeks help after employer failed to comply with settlement agreement
The Employment Relations Authority recently ruled on a case involving a settlement agreement between an employee and their former employer.
The decision shed light on the Authority's jurisdiction and powers when it comes to enforcing settlement agreements and resolving employment relationship problems.
Kok Hong Leon Le, a former employee of Your Car (NZ) Limited (YCL), entered into a settlement agreement with the company on August 10, 2022, to resolve an employment relationship problem.
The agreement required YCL to pay Le a total of $5,000 in two installments - $2,500 on August 10, 2022, and the remaining $2,500 on September 10, 2022.
While YCL paid the first installment, Le claimed that the company failed to pay the second installment as agreed. As a result, he lodged an application to the Authority seeking a compliance order against YCL for the outstanding amount.
The Authority's jurisdiction and powers
The Authority's investigation revealed that the settlement agreement between Le and YCL was not certified by a mediator under the Employment Relations Act 2000. This fact proved to be a crucial factor in determining the Authority's jurisdiction and powers in this case.
Under the Act, the Authority's ability to order compliance is limited to settlements signed by a mediator. As the settlement agreement in question was not certified by a mediator, the Authority concluded that it had no jurisdiction to issue a compliance order in relation to the agreement.
Despite the lack of jurisdiction to issue a compliance order, the Authority noted that it is not bound to treat the matter as described by Le in his statement of problem.
The Authority has the power to decide the matter in another way to resolve the employment relationship problem.
In this case, the Authority found that YCL had breached the settlement agreement by failing to pay Le the second installment of $2,500.
Consequently, in accordance with the Act, the Authority ordered YCL to pay Le the outstanding amount of $2,500 within 21 days of the determination.
The Authority said the case highlighted the importance of having settlement agreements certified by a mediator to ensure their enforceability through compliance orders.
It also demonstrated the Authority's flexibility in resolving employment relationship problems, even when it lacks the jurisdiction to issue a specific type of order.
