The Authority did not use s 150A to disadvantage advocates
I have been saying for a while now that s 150A is routinely over-read by Authority Members who clearly do not like employment advocates (mediators from the mediation service have specifically told us this on several occasions based on ministry meetings between members and mediators), do not understand what the section is aimed at, or want to interfere with bargains the parties were perfectly entitled to strike.
For background, see my earlier article 150A payment on resolution of problem and advocates GST invoices. There have also been inconsistent Authority decisions involving advocacy invoices in s 149 settlements, including 2023-NZERA-50 and 2023-NZERA-72.
Mackey v Shearing NZ Ltd is not an express appellate-style ruling on s 150A, but it is still a useful case because the Authority enforced a certified s 149 settlement that required $3,500 plus GST to be paid directly to the employee's non-lawyer representative's company on invoice.
What happened
Ms Mackey applied for compliance because Shearing NZ had not paid her the agreed $3,000, had not paid the agreed representative-costs contribution, and had not provided the certificate of service promised by the settlement. Shearing NZ accepted that it had withheld those things, but tried to justify its own non-compliance by saying Ms Mackey had breached confidentiality.
Shearing NZ then widened the fight by seeking penalties against Ms Mackey and also against SK & Co Employment Law Limited, trading as Sacked Kiwi Limited, on the basis that Kara Orviss had supposedly aided, abetted and procured the alleged breach of confidentiality.
The background was not complicated. Ms Mackey's employment ended in September 2024. A personal grievance was raised on her behalf by Sacked Kiwi. The parties attended mediation on 4 March 2025 and entered into a settlement that was certified under s 149.
The employer's position was a bad one
The Authority restated the obvious but apparently necessary point: once certified, the agreement was final and binding and could only be brought before the Authority for enforcement purposes. That finality point destroyed the employer's theory that it could stop performing once it became unhappy.
Mr Watson-Paul said the company made a deliberate decision not to pay and not to provide the certificate because he believed the settlement had effectively been cancelled by Ms Mackey's alleged confidentiality breach. Member Kennedy-Martin dealt with that point exactly as it deserved. She said the submissions were not clear about the legal basis on which Shearing NZ thought it could withdraw from its obligations under a certified settlement. She then set out the actual position: certification under s 149 makes the terms final and binding, the cancellation provisions in ss 36 to 40 of the Contract and Commercial Law Act 2017 do not apply, and under s 151 the remedy for repudiation of a settlement is compliance.
In other words, a certified settlement is not a menu item. One side does not get to decide it is cancelled because it thinks the other side has been naughty.
The confidentiality allegations only partly succeeded
The employer only got part of what it wanted, and not the useful part. The Authority found Ms Mackey did breach the confidentiality clause by telling her partner about the settlement and mediation. But the more pointed allegation, that she directly told Brooke Smith, was not proved. The Member said the evidence of Ms Mackey and Ms Smith was too conflicted and she could not treat either as more reliable than the other. The Authority went no further than saying it seemed likely Ms Smith knew about the settlement, but it could not determine how she came to know it.
The Sacked Kiwi angle also went nowhere. Shearing NZ alleged Sacked Kiwi and Ms Orviss had aided and abetted the breach because Ms Mackey supposedly thought she could confidentially tell her "nearest and dearest". The Authority rejected that. Ms Orviss accepted that on some occasions she has discussed limited confidential sharing in mediation contexts, but she could not recall doing so here. The Member found there was no evidence of aiding and abetting and no penalty was awarded against either Sacked Kiwi or Ms Orviss.
Nor did the employer get much mileage out of the one breach it did prove against Ms Mackey. The Authority made an order that she comply with the confidentiality clause going forward, but declined to impose a penalty. The Member took into account Ms Mackey's evidence that her partner would have found out once the money was transferred and, having regard to the merits and the Authority's equity and good conscience jurisdiction, held that a penalty was not appropriate.
An s 150A interpretation on advocate invoices is a bullshit
Meanwhile, on the issue that actually mattered, Shearing NZ was found to be in breach of clauses 2, 3 and 4 and was ordered to comply within 28 days. The Authority also noted the breaches were intentional, adjourned the question of penalties against Shearing NZ under s 138(5) to allow compliance first, and reserved costs. That is not a vindication of the employer's stance. That is the Authority effectively telling it to stop mucking around and do what it agreed to do.
This is where the case becomes genuinely useful on advocate fees. I am not saying Mackey finally determines every possible s 150A argument. It does not. The determination does not expressly analyse s 150A. But in practical terms the Authority was faced with a certified settlement containing a direct-payment advocate-costs clause and enforced it exactly as written. That is how it should be done, and no more dumb interpretation of s 150A.
That is entirely consistent with the view I have set out elsewhere. As I have argued before, parties can agree that an advocate is paid directly by the employer under an s 149 settlement, and "payment" excludes legal or advocacy services where those services are a separate term of settlement and a GST invoice for a defined sum is provided.
The Anderson Law article also records the Legal Services view that payment includes a monetary settlement sum, but excludes goods or services and arguably legal or advocacy services where they are separately provided for and invoiced. That is a sensible reading because it targets the actual mischief behind s 150A: representatives taking the employee's own settlement money first and skimming from it before passing the balance on. It is a completely different scenario from a separately agreed contribution to advocacy costs payable on invoice. A mediator from MBIE also seeks confirmation that the employee wishes the settlement to be full, final and binding before signing. If the employee has reservations, there is more than one opportunity to pull out.
Parliament always intended this distinction
As I have pointed out before, it was always Parliament's intention that non-lawyer advocates can be paid separately in s 149 settlements. The explanatory note to the Employment Relations Law Reform Bill 2003 said the Bill was aimed at requiring monetary settlements in mediation to be paid directly to the applicant rather than the representative, except where legal aid had been granted. The mischief was obvious: representatives taking a cut from the employee's own settlement money.
"The Bill reduces the incentives for representatives to inflate monetary claims in mediation, and enhances the authority of the applicant, by requiring any monetary settlements in mediation to be paid directly to the applicant rather than the representative, except in cases where legal aid has been granted."
The Department of Labour practice note then drew the same distinction and, in my view, drew it correctly. It said payment includes any monetary settlement, but excludes goods or services and arguably legal or advocacy services where those services are a separate term of settlement and a GST invoice for a defined sum is provided. It went on to say that where a respondent agrees to pay a contribution to representation costs on receipt of a GST invoice for those costs, that payment would be excluded from s 150A.
"... payment includes any monetary settlement ... but excludes any goods or services and arguably legal or advocacy services where such service is a separate term of the settlement and a GST invoice for a defined sum is provided ... where a respondent agrees to pay a contribution to the costs of the applicant's representation on receipt of a GST invoice for those costs such payment would be excluded from s 150A."
That approach cures the real mischief behind s 150A. It stops unethical representatives from taking their fees out of the employee's settlement before passing the balance on. It does not prevent parties from separately agreeing that a defined contribution to advocacy costs will be paid directly on invoice as part of a full and final mediated settlement.
Final point
The real significance of Mackey is not that the Member wrote some grand theory of s 150A. She did not. The significance is that in the real world, when confronted with a certified settlement containing a direct-payment advocate-fees clause, the Authority enforced it. For all the noise about confidentiality, and for all the effort spent trying to pin blame on Ms Mackey, Sacked Kiwi and Ms Orviss, the employer still ended up ordered to comply with clause 3. That is the practical answer to a lot of nonsense in this area.
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