At the coalface: a settlement signing, cannabis, and an angry parent
A real-world employment mediation story (details changed) about capacity, cannabis, and why you should never sign a Record of Settlement unless you are clear-headed.
At the coalface: capacity to sign a settlement (and the phone call afterwards)
This is a true story from employment mediation. Details have been changed and identifying facts removed. The point is not the drama. The point is the lesson: do not sign a Record of Settlement unless you are clear-headed and you understand what you are agreeing to.
What is a Record of Settlement?
In New Zealand, employment disputes are often resolved at MBIE mediation. The written settlement document is commonly called a Record of Settlement. If the settlement is certified by a mediator under section 149 of the Employment Relations Act 2000, it is designed to be full and final and enforceable. That strength is exactly why the process matters.
If you are curious about the official process, MBIE explains it here: Records of settlement (employment.govt.nz).
The core idea
Settlement is a contract. For it to hold, the parties need to understand the bargain and agree to it freely. Capacity and consent are not theoretical concepts. They come up in real cases, in real rooms, with real consequences.
Why it matters
- A settlement can end a Personal Grievance (PG) permanently.
- It may include confidentiality, non-disparagement, repayment terms, and tax treatment.
- Once signed and certified, it is hard to unwind unless you can prove a serious problem like duress or lack of capacity.
The story (details changed)
The employee was an adult. We were at settlement stage. The employer and employee were both sick of the dispute, and the settlement terms were reasonable. On paper, it was the kind of outcome most people would take.
Then the complication: the employee looked flat, slow, and unfocused. When asked directly, the employee said they had smoked cannabis earlier. Not drunk. Not falling over. But not sharp either.
That is where good practice matters. If someone signs while affected, you create a future argument that they did not properly understand what they were signing. And if the other side knows it, you make that argument easier.
What we did in the room
- We slowed everything down and went clause-by-clause in plain English.
- We asked the employee to explain the terms back in their own words (not just nod yes).
- We offered to pause and reconvene when they were sober, with no pressure either way.
- We documented the process carefully.
The employee still wanted to settle. We ended up proceeding, but only after confirming understanding and voluntariness as best as you can in a practical setting. The settlement was signed.
The phone call afterwards
A day or two later I received an angry call from the employee's parent. You know the type: high emotion, high certainty, low interest in the process. In internet slang, a "Karen" call.
The parent was furious that their adult son had signed settlement terms while "stoned". They wanted the settlement undone. They also wanted someone to blame.
Here is the uncomfortable truth: parents often think they can control an adult child's dispute. They cannot. But what they can do is fuel regret, second-guessing, and attempted walk-backs. That is exactly why you need strong process around capacity and informed consent.
The practical lessons
If you are the person signing
- Do not sign if you are impaired (alcohol, cannabis, prescription meds, lack of sleep, panic).
- Ask for time. A one-day pause is cheaper than years of regret.
- Make sure you understand the "full and final" clause. That is the point of settlement.
- Get advice if there is any doubt. A quick call before signing can save you later.
If you are negotiating the settlement
- If capacity is in question, pause. Do not rush a signature.
- Use a "teach-back" method: ask the person to explain key terms back to you.
- Document the steps taken to confirm understanding and voluntariness.
- Be cautious about family interference. Keep communication with the actual party.
What I do now, every time
- Direct question: "Have you had alcohol, drugs, or anything today that affects concentration or decision-making?"
- Two-minute summary of the deal in plain English, then ask the person to repeat the key parts back.
- Pause option on the table: "We can reconvene tomorrow."
- Written note of the steps taken, including who was present and what was explained.
If you are dealing with a settlement and you want it done properly, the theme is simple: slow down, make it clear, confirm understanding, and remove pressure.
If you want help with a settlement, a Personal Grievance (PG), or an Employment Relations Authority (ERA) matter, send a short timeline and the key documents.
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