How Much Compensation Can You Actually Get at the Employment Relations Authority?
- maryline627
- Jul 31
- 4 min read
If you listen to chatter or scroll through social media after a workplace dispute, you might get the impression that going to the Employment Relations Authority (ERA) is like winning a mini lottery. People often talk about $80,000 or $90,000 payouts as if they are the standard baseline for a personal grievance.
The reality? For the average claim, that myth is simply not true.
Understanding how compensation actually works at the ERA and what it realistically costs to get there is essential before engaging in litigation.
1. The Real Numbers Behind ERA Compensation
When the ERA awards financial remedies, they typically fall into two main categories:
Compensation for Humiliation, Loss of Dignity, and Injury to Feelings (under Section 123(1)(c)(i) of the Employment Relations Act 2000).
Reimbursement for Lost Wages (capped by law at a maximum of 13 weeks, unless exceptional circumstances apply).
For an everyday claim, remedies for "hurt and humiliation" usually range between $10,000 and $20,000, with particularly severe cases occasionally creeping into higher bands ($25,000+). There have been cases that have gone to the Employment Court and received higher awards but these are not your everyday cases.
How would someone ever reach $80,000 or $90,000?To hit those figures, an employee would need to be a very high earner (e.g., earning $200k+ per year) and receive the absolute maximum 13 weeks of lost wages alongside a top-tier compensation award.
Legislative Update: The Income Threshold
Recent legislative changes under the Employment Relations Amendment Bill make achieving massive payouts even more unlikely. The legislation introduces an income threshold (set at $180,000 per year) above which high earners cannot pursue a personal grievance for unjustified dismissal unless their employment agreement specifically opts into it.
In short, the very group of high earners who could mathematically reach $80,000+ in lost wages are now restricted from taking dismissal claims in the first place.
2. What Do Real ERA Awards Look Like?
To give you a realistic picture, here are examples from actual cases where I represented employees at the Authority:
Bendall v Precut Construction Limited [[2023] NZERA 448] (Christchurch): My client raised serious concerns about workplace bullying and safety. He resigned. The ERA ruled the dismissal was an unjustified constructive dismissal and awarded $23,000 in compensation for injury to feelings plus $9,070 gross in lost wages.
Atkins v Alpine 182 Degrees Limited [[2023] NZERA 334 / [2024] NZERA 40] (Wellington): In an unjustified dismissal case, the ERA awarded the applicant $25,000 in compensation, $1,280 in lost remuneration, plus holiday pay and wage arrears. (Because the employer failed to comply, a subsequent order was made for $30,217 in total remedies plus costs and interest).
Piacun v Cooper No 1 Limited [[2025] NZERA 32] (Auckland): My client was unjustifiably dismissed after being on ACC leave when the business was sold without proper process or transfer negotiations. The ERA awarded $18,000 in compensation for humiliation, loss of dignity, and injury to feelings.
Drake v Maniototo Health Services Limited [[2024] NZERA 582 / [2024] NZERA 730] (Dunedin): In a claim involving an unsafe workplace and unaddressed bullying, the ERA found my client was unjustifiably disadvantaged and awarded $8,000 in compensation under Section 123(1)(c)(i).
Notice the pattern? These were strong, fully successful cases involving serious employer breaches, yet the compensation awarded reflects the real-world scale of $8,000 to $25,000—not $90,000.
3. The Hidden Factors: Time and Legal Costs
Before jumping straight into an ERA investigation, two critical factors must be weighed: time and representation costs.
Timeframe
The ERA is working through significant case backlogs. From the moment you lodge a Statement of Problem, it can take anywhere between 18 months to 2 years to receive a final written determination.
Costs Awards vs. Actual Representation Fees
There is a widespread belief that if you win at the ERA, the employer pays all your legal bills. They do not.
The ERA awards costs based on a fixed daily tariff, it is only a contribution toward your actual legal expense. You remain personally responsible for paying the difference to your lawyer or advocate.
Representative Type | Typical Hourly Rate | Impact on Your Payout |
Employment Lawyer | $400 – $600 / hour | High overheads can rapidly eat away at a $15,000–$20,000 ERA award. |
Employment Advocate | $200 – $300 / hour | Lower fee structure allows you to retain a much higher percentage of your award. |
A Warning on "No Win, No Fee" Advocates:While "no win, no fee" arrangements might sound risk free upfront, these advocates often take a large percentage of your total award (sometimes up to 30%–50%+). This can drastically cut into the money intended to compensate you for your lost wages and hurt feelings.
My Approach to Keeping Client Costs Fair
In my practice, I maintain lean overheads so I can focus on keeping costs down for my clients. I do not charge for phone calls or catch-ups.
I have had business owners, mediators, and opposing lawyers and advocates comment that my fees are more than reasonable. Recently, while representing an employer in negotiations, the opposing advocate demanded $4,000 in costs despite having done very little work (a classic sign of a scam "no win, no fee" operation; thats another blog; https://www.selwynconnect.co.nz/article/dealing-with-chancer-employment-advocates-a-small-employer%E2%80%99s-guide-to-spotting-the-bluffs). My client noted that my total fees were nearly half of what the opposing advocate was asking, even though I had done a far more detailed job.
4. Common Misconceptions That Sabotage Claims
Misconception 1: "I'll get a massive payout at mediation."
Many clients head into mediation expecting a huge settlement offer. However, mediation takes place in the shadow of the ERA. If you demand $60,000 at mediation for a claim that would realistically only yield $15,000 at the ERA, the employer will simply say no. An employer will not pay in mediation what you cannot win at the Authority.
Misconception 2: "They'll pay up to avoid public shame."
Employees often assume an employer will settle out of fear of reputational harm. The reality? Unless a case involves a unique national news hook, the media will rarely cover it. Even when an ERA determination is published, news cycles move fast, it is headline news for a day, and forgotten by the next. Relying on "reputational threat" as leverage rarely works.
Final Thoughts
The Employment Relations Authority provides an essential mechanism for justice, but going in with realistic expectations is vital. Knowing that an average award sits around $10,000–$20,000 and choosing cost effective representation ensures that a legal victory actually leaves you financially ahead.
Coming Up in the Next Blog:
What actually happens inside a mediation session, how to prepare, and what realistic settlement payouts look like behind closed doors.
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