Concern over intimidating employment advocates

Employment advocates abusing the system do not have their clients' best interests at heart, MBIE says. Photo: Shannon Fagan/Getty

Tales of incompetency, intimidation, and “guerrilla tactics” are emerging in the unregulated employment advocate industry. Now, the Government is taking notice.

When workers and employers all out, the result can often be messy.

In New Zealand, employment lawyers are available to act in disputes, but a cheaper option is to engage an employment advocate.

But allegations of inappropriate behaviour and bullying tactics are being levelled at some of the advocates themselves charged with helping sort out employment disputes.

While not lawyers, many advocates are experienced in the area and play an important role in resolving disputes.

There are no regulations that govern advocates, however, and now the Government is considering whether that has led to a wild-west industry.

In a briefing to Immigration Minister Michael Woodhouse, the Ministry of Business, Innovation, and Employment (MBIE) said some advocates were performing poorly and charging “questionable” costs.

A small, but significant, number of advocates had inadequate knowledge of employment law and had failed to keep abreast of changes.

They were also behaving poorly, acting rudely, intimidating other parties, and not complying with directions, the briefing said.

Many advocates operated on a “no win, no fee” deal, and some were solely seeking a settlement to gain a payment fee for themselves, rather than looking for the best outcome for their client.

Some were also taking a large portion of any settlement as payment for themselves.

“Further, we have received anecdotal reports that some clients are agreeing to services without clarity about how much they will pay their advocate if they win a case or find settlement.”

It seems clear from the briefing that some sort of regulation is needed, with MBIE stating it is considering options.

Mark Nutsford, president of the Employment Law Institute of New Zealand, wants to be at the forefront of cleaning up the industry.

The Institute’s members sign up to a voluntary code but many advocates are not part of the organisation, which has no power to discipline bad behaviour.

Nutsford said the problem is very real, with complaints skyrocketing last year.

Most complaints were about advocates who were not Institute members, with one having 11 separate complaints made about him including tabling witness statements their client had never seen.

“To me that’s tantamount to tearing the shroud off the coffin mate, it’s dreadful,” Nutsford said.

While most people working in the industry were reliable there were several people who had taken advantage of how easy it was to set up to make some quick cash.

“You fire a website together and put some pretty pictures on it and Mr Joe Blow wouldn’t know you from a brown spider.”

Nutsford also singled out those working for no-win fees as an issue.

While the measure was of great benefit to those who could not afford a lawyer, some advocates were laying personal grievance claims with inexperienced employers in the hope of getting a quick settlement.

They would enter mediation and threaten employers with huge compensation sums to try and make them cough up a few thousand dollars, so they could move on to the next case, he said.

“The stories we’re hearing is definitely intimidation, there’s a certain amount of intimidation going on and most of it's…scare tactics.

“They come in and they do sort of a guerrilla strike and they’re gone.”

To fix the problem Nutsford, who said he has been head-butting against apathy in the industry for the past five years, wants things regulated and the Institute given the power to impose fines.

He envisions an organisation similar to the Law Society, with people practicing in the employment space having to either be a member of the Society or the Institution.

Yellow cards and red cards

Woodhouse is concerned about the “small cohort” of advocates acting inappropriately and is keen to do something about it.

He had heard about advocates displaying belligerent and aggressive behaviour, with lots of yelling and threats to walk out of negotiations.

“We’re not altar choir boys, this can be a tense process from time to time and these advocates are there to do just that…but I do think there are standards of behaviour that should be adhered to.”

He had also heard from businesses who had felt they had no choice but to pay money to make the advocates go away in order to avoid a time-consuming and costly process, even though they believed they had done nothing wrong.

Employees were also being taken advantage of, being told they could receive large sums when that was highly unlikely.

“It’s a bit like the real estate agents saying 'I’m going to get you $500,000 for your house' and then you find out to your horror it’s worth less than that.”

Woodhouse had met with Nutsford and the Institute but was not convinced that their suggestion to become the governing body was the right one.

He had asked MBIE to formulate some options, but one that had already been suggested to him was similar to the Fair Work Commission in Australia who basically had a yellow and red card system for advocates.

This power could be granted to the Employment Relations Authority, but would likely require a legislative change, Woodhouse said.

MBIE employment relations policy manager Jivan Grewal said there had also been concerns raised about advocate’s charges not being clearly disclosed to clients.

Possible solutions were being considered but it was too early to say what they were, he said.