What Happens When an Employee Files an ERA Claim Against Your Business?
Ron Mckenzie | Februarty 24, 2025
For many Kiwi small-to-medium businesses, receiving notice that an employee has filed a claim with the Employment Relations Authority (ERA) can feel overwhelming.
You might be asking:
What does this mean for my business?
Do I need a lawyer?
How serious is this?
If you employ staff in New Zealand, understanding ERA claims — and how employer defence works in NZ — is essential to protecting your company, cashflow, and reputation.
Let’s walk through what really happens.
What Is an ERA Claim?
An ERA claim is a formal employment dispute raised by a current or former employee. It usually follows a breakdown in communication or failed mediation.
Most claims involve:
Personal grievances
Unjustified dismissal
Wage or holiday pay disputes
Breach of employment agreement
Constructive dismissal
Bullying or harassment allegations
Once lodged, the ERA investigates and makes a legally binding determination.
For NZ employers — especially SMEs without in-house HR — this process can move fast if you’re not prepared.
Step-by-Step: What Happens After a Claim Is Filed
1. You Receive Official Notice
You’ll get formal documents outlining:
The employee’s allegations
What compensation or remedy they’re seeking
Your deadline to respond
This is not something to “reply to later.” Every response becomes part of the legal record.|
2. You Must Prepare Your Employer Defence (NZ)
This is where many businesses stumble.
You’ll usually need to provide:
Employment agreements
Performance or disciplinary records
Emails and written communication
Workplace policies
Evidence supporting your decisions
Your response must show that you acted:
Fairly
Reasonably
In good faith
Weak documentation or emotional replies can seriously damage your position — even if you did nothing wrong.
3. Mediation Is Often the First Step
Most employment relations authority claims go to mediation before a formal investigation.
Mediation gives both sides a chance to resolve the matter privately and cost-effectively. Many NZ businesses settle here and avoid further legal action.
If no agreement is reached, the claim moves forward.
4. Investigation Meeting
If mediation fails, the ERA holds an investigation meeting.
Both parties present evidence. The Authority member may:
Question witnesses
Review documents
Request further information
This isn’t a traditional courtroom — but preparation is critical.
5. A Binding Decision Is Issued
The ERA may order:
Compensation
Reinstatement
Lost wages
Penalties
Or dismissal of the claim
Unless appealed to the Employment Court, this decision is final.
Why NZ Employers Should Get Support Early
Many SMEs wait until things escalate — often costing far more in the long run.
Early employer defence helps you:
- Respond correctly from day one
- Avoid procedural mistakes
- Strengthen your evidence
- Improve mediation outcomes
- Reduce financial exposure
Even “small” ERA claims can quickly turn into expensive business disruptions.
Practical Tips for Kiwi Business Owners
Don’t miss response deadlines
Keep all employment records
Avoid emotional communication
Stay professional at every stage
Get advice before submitting anything
Being proactive can save thousands — and months of stress.
An ERA claim doesn’t mean your business is doomed.
With the right employer defence strategy in NZ, many claims are resolved efficiently and fairly. The key is acting early, understanding the process, and protecting your business with informed decisions.
Facing an ERA claim or employment dispute?
You don’t need to face it alone.
Our NZ employer defence specialists help small and medium businesses respond confidently to ERA claims — from first notice through mediation and investigation.
👉 Book a confidential consultation today and protect your business before issues escalate.
