What do I do if I receive a Personal Grievance from an Employee?

You’ve just received a personal grievance from an employee… so, what now?  If that thought makes your stomach drop, you’re not alone.  For many business owners, this is one of the most stressful HR moments you’ll face. You’ve worked hard to build your business, support your team, and do the right thing, and suddenly you’re dealing with a formal complaint that could cost you time, money, and peace of mind.  So what do you do first?

What Is a Personal Grievance?

A personal grievance (PG) is when an employee raises a formal complaint about something they believe has harmed them in the workplace.  Common examples include:

• Unjustified dismissal

• Unjustified disadvantage

• Discrimination or harassment

• Bullying

• Breach of employment agreement

  
  

In New Zealand, employees typically have 90 days from the issue to raise a grievance (12 months if it relates to sexual harassment).

What do you do if you receive a Personal Grievance?

1. Acknowledge the Complaint Immediately

Do not ignore it. As soon as you receive a personal grievance you should confirm receipt in writing, thank the employee for raising it, and let them know you will respond.  Even if you’re unsure what to do next, acknowledgment is critical.

2. Understand the Allegations

Take time to read the complaint carefully, identify exactly what the employee is claiming and clarify anything unclear.  If needed, ask for more detail, but do this respectfully and without defensiveness.

3. Know Your Legal Obligations

Under New Zealand employment law, you must:

• Act in good faith

• Be responsive and communicative

• Properly investigate the complaint

• Give the employee a fair opportunity to be heard

Good faith is more than just being polite.  It means you must be open and honest, not mislead or withhold key information, take the complaint seriously, and engage in a genuine process.  In simple terms you must act like a fair and reasonable employer would.

What Happens If You Don’t Respond?

This is where things can get serious.  If you ignore the grievance, delay unreasonably, fail to investigate or act in good faith, the employee can escalate the matter.  

Possible consequences of this include mediation and/or an Employment Relations Authority (ERA) hearing where you may face financial penalties such as lost wages claims, compensation for hurt and humiliation and legal costs.  

Should You Handle a PG Yourself?

You can, but here’s the reality.  Most business owners don’t deal with grievances regularly, are time-poor, and are already under pressure.  HR law is complex so trying to wing it can make things worse, increase risk and cost more in the long run.  

Personal Grievances are one of those situations where early advice can save you thousands. You might consider speaking to an employment law consultant to get guidance on your process and ensure you’re meeting legal requirements.  Even a quick conversation can give you clarity, reduce stress and help you avoid costly mistakes.  

If you haven’t received a PG yet, you might want to consider preparing for if one should arise.  That means having clear processes, using compliant employment agreements, training managers to treat employees fairly and handle complaints effectively, and getting support when needed.  

FAQs

How quickly do I need to respond?

As soon as possible.  There’s no exact number of days, but delays can be seen as acting in bad faith. Acknowledge immediately and move forward promptly.

What if the complaint seems unfair or exaggerated?

It still needs to be taken seriously.  Even if you believe it lacks merit, you must investigate properly and follow a fair process.  Dismissing it outright can backfire.

Can I discipline the employee for raising a grievance?

No.  Employees have the right to raise concerns.  Taking action against them for doing so could lead to further claims.

Do I have to go to mediation?

Not always, but it is strongly encouraged and often the most practical step.  Refusing mediation without good reason can reflect poorly on you.

How much can a personal grievance cost?

It varies widely, but settlements can easily reach tens of thousands of dollars, especially if process failures are involved.

Can I settle the matter privately?

Yes.  Many grievances are resolved through direct discussion, mediation or settlement agreements.  Often this is faster and less stressful than formal proceedings.

Receiving a personal grievance as an employer is never easy, but it doesn’t have to derail your business.  If you act quickly, follow a fair process, communicate openly and get the right advice, you can resolve the situation and protect what you’ve built. 

If you have received a PG from an employee, or want to be prepared should you receive one in the future, get in touch today for a free consultation.  Employer-Direct.co.nz | 0800 612 355 

Contact Employer Direct

Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal advice. While we strive to keep the information accurate and up to date, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. For specific legal advice tailored to your situation, please contact a qualified legal professional.