Anderson Employment Law Advocate Anderson Employment Law Advocate
0800 WIN KIWI Quick Contact

Costs in the Employment Relations Authority

ERA Costs ERA Costs

The Employment Relations Authority issued an updated practice note on costs which came into effect on 2 May 2022. The last practice note was issued in June 2016. The relevant daily tariff remains at $4,500 for the first day of any matter and $3,500 for subsequent days.

Employee Case Review

Practice Note 2 - 29 April 2022

COSTS IN THE EMPLOYMENT RELATIONS AUTHORITY
TE RATONGA AHUMANA TAIMAIHI(see note 1 below)

  1. The Authority has the power to order any party to pay any other party in the matter the costs and expenses that the Authority thinks reasonable.(see note 2 below)
  2. Where an applicant or a respondent party has incurred costs for representation by a lawyer or other advocate, the Authority may order whichever party is unsuccessful to contribute a specified amount towards the reasonably incurred costs of the other party. And, whether or not any legal costs were incurred, reimbursement of some expenses may also be ordered (such as the Authority lodgement fee, printing and some travel).
  3. The Authority uses a notional daily tariff as the starting point for assessing costs. The tariff is based on the length of the investigation meeting held in each matter. This tariff may then be adjusted upwards or downwards according to the circumstances of each case
  4. The current tariff is $4,500 for the first day of any matter and $3,500 for any subsequent day of the same matter.
  5. From 2 May 2022 the Authority’s discretion regarding costs is generally to be exercised on a presumption that the following categories of matter are not subject to a daily tariff and that parties bear their own costs:(see note 1 below)
    1. referrals for bargaining facilitation;(see note 3 below)
    2. disputes about the application, interpretation or operation of a collective agreement;
    3. pay equity processes;
    4. screen industry processes;
    5. fair pay agreement processes;
    6. collective bargaining disputes;
    7. disputes about access to workplaces; and
    8. fixing of the terms of a collective agreement.
  6. For all other matters that the Authority may investigate (such as personal grievances and breaches of employment agreements) parties should evaluate what they do in those proceedings on the understanding that, if unsuccessful, they will usually have to contribute to the costs of the successful party, as well as meeting their own costs.
  7. The Authority will typically not consider an assessment of costs and expenses until the substantive determination has been made.
  8. Parties are encouraged to first try to solve costs on their own terms. If they cannot agree, the Authority will set a timetable for assessing costs. Usually the Member will require the successful party to lodge any claim for costs in writing, providing a copy of that document to the other party. The other party will then have the right of reply.
  9. The daily tariff applied by the Authority is a starting point for assessing the successful party’s entitlement to costs. More information about factors and principles guiding any upward or downward adjustment of the amount to be awarded is available on the Authority’s website: www.era.govt.nz/determinations/awarding-costs-remedies/
  10. For instance, where a successful party’s behaviour unnecessarily increased its costs, the Authority may reduce the daily tariff amount. Conversely, if an unsuccessful party turned down an effective settlement offer, the Authority may increase the costs above the daily tariff.(see note 4 below)
  11. When the parties cannot agree costs and an Authority determination is needed, a party seeking costs must clearly set out in its submission what amount is claimed and the reasons for that position. The claim should be supported by copies of invoices for any fees or other expenses incurred, the time taken by the practitioner or advocate and the relevant hourly rate.
  12. Costs associated with preparation for and attendance at mediation, whether by agreement of the parties or at the direction of the Authority, are not typically included in costs awarded (unless some particular or unusual circumstance of the case makes it appropriate to do so).
  13. If parties wish to obtain further information about how the Authority sets costs, they may ask the Member during the case management conference.
Andrew Dallas
Chief of the Employment Relations Authority
29 April 2022

1. This Practice Note replaces “Practice Note 2: Costs in Employment Relations Authority” issued on 30 June 2016.

2. Employment Relations Act 2000, Schedule 2 clause 15.

3. Unless the Authority finds the application for referral was frivolous or vexatious.

4. An effective settlement offer is one where a party offered to accept a particular sum of money or terms that would have provided an outcome better than later achieved in the Authority’s determination, so the parties could have saved the costs incurred of having to go ahead with preparing for and attending an investigation meeting. Information about that offer may be put before the Authority when costs are being assessed to show a reasonable offer to resolve the matter was not accepted and any amount in costs should take this into account.

Practice Note 2 - 30 June 2016

  1. The power for the Authority to order any party to pay a contribution to the costs of any other party is set out in clause 15 of the Second Schedule to the Employment Relations Act 2000. The power conferred by that provision is a wide one but the Authority has traditionally used a notional daily tariff approach as the starting point for considering a costs award.
  2. That daily tariff approach and the principles that ought to apply to its exercise have been considered judicially by two leading decisions of the Employment Court and those decisions guide the Authority's practice in this area.(see note 1 below)
  3. From time to time, the Authority adjusts the daily tariff having regard to movements in the cost of legal and other advocacy services and a review of the position has just been completed by the Authority.
  4. As a consequence, for matters lodged in the Authority from 1 August 2016, the daily tariff will be $4,500 for the first day of any matter and $3,500 for any subsequent day of the same matter.
  5. Typically the Authority will not deal with costs until the substantive determination has been made and thereafter costs will fall for disposition either by negotiation between the parties or by determination of the Authority.
  6. Parties will always be encouraged to try to resolve costs on their own terms but in the result that costs are not able to be determined by agreement between the parties, the Authority will fix costs on the basis of a timetable that it may set.
  7. Most commonly, the Authority Member will require the successful party to file its claim for costs in the Authority, providing a copy of that document to the other party, and then the other party will have a right of reply on a timetable which the Authority will set.
  8. Parties to proceedings in the Authority ought always to remember in evaluating their proceedings that if they are unsuccessful, they will almost always face the prospect of having to make a contribution to the costs of the successful party, as well as meeting their own costs.
  9. The daily tariff that the Authority applies gives no more than a guide to the starting point that the Authority will use in calculating the entitlement of the successful party to costs; there may be factors in the particular case which require the Authority to either increase the daily tariff figure or reduce it.
  10. For instance, if the behaviour of the successful party created cost that was unnecessarily incurred, then the Authority may reduce the daily tariff amount. Conversely, if the unsuccessful party turned down an operative Calderbank offer(see note 2 below) then that may encourage the Authority Member to increase the daily tariff proportionately.
  11. Where it is necessary for the Authority to make a decision about costs (that is where the parties are unable to agree costs on their own terms), parties should make clear in their submissions what claim if any they make and the reasons for that position. If they are seeking an award of costs then it is important that that is supported by material such as copies of invoices showing fees and other expenses that have been incurred, the time taken by the practitioner or advocate and the relevant hourly rate.
  12. Costs associated with preparation for and attendance at mediation, whether by agreement of the parties or at the direction of the Authority, are not typically included in costs awards of the Authority (unless some particular or unusual circumstance of the case makes it appropriate to do so).
  13. If parties wish to obtain further information about the costs regime in the Authority, they should ask the presiding Member, during the case management conference, to provide them with further information.
  14. Generally, the presiding Member will discuss the costs regime at the case management conference if the issue appears to warrant such discussion, and Members will be ready to explain to parties, if requested, the principles that are used to apportion costs at the conclusion of an Authority investigation.
  15. Costs fixing in the Authority, as in all courts and tribunals, is often the source of controversy. The goal is to leave the successful party with a contribution to the costs that that party has reasonably incurred. Typically, successful parties want the award of costs to be as high as possible while unsuccessful parties want the converse.
  16. There needs to be a level of predictability concerning the fixing of costs and the exercise typically involves balancing the right of the successful party to have a contribution to its costs so as to ensure that it gets, as far as possible, the benefit of its win, against the need of the unsuccessful party not to have such a great impost on its financial resources as to preclude it contemplating litigation in the first place.
James Crichton
Chief of the Employment Relations Authority
30 June 2016

1. PBO Ltd v. Da Cruz [2005] 1 ERNZ 808, 819–820 and Fagotti v. Acme & Co Ltd [2015] NZEmpC 135 at [106]–[108]

2. An operative Calderbank offer is an offer made by one party to the other party in litigation the effect of which is that the offering party agrees to accept a particular sum of money in settlement of the claim in circumstances where, if that offer is not accepted by the other party and the Authority then makes a finding which leaves the offering party less well off than they would have been if the offer in the Calderbank were accepted, the terms of the Calderbank offer can be put before the Authority when costs are being fixed as evidence for the view that the offering party reasonably tried to resolve the matter by agreement but was unsuccessful.


Last Updated: May 17, 2022 0800 WIN KIWI