Poor Process in Relatively Straight-Forward Redundancy Leads to $342,000 Compensation for Wrongful Dismissal

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By Alan Knowsley, Tuesday, 11 May, 2010, Business, Employment

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An employer which got the redundancy process wrong has been ordered to pay $128,000 redundancy, $15,000 hurt and humiliation plus $193,000 lost wages, and $6,000 for lost benefits, to a former Deputy Managing Director.

The employer had predetermined the outcome of the process, failed to engage in proper consultation, unilaterally varied the employment agreement, and caused damage by claiming that the employee had not been the Deputy Managing Director despite her having filled that position for several years.

Once again an employer has tripped up on the process required when contemplating a redundancy. They should have put a proposal to the employee and engaged in a genuine consultation process. If they had not predetermined the outcome and also engaged in other behaviour which made the damage to the employee higher then they could have implemented their proposed redundancy at little cost other than contractual redundancy obligations.

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