The Employment Relations Authority has upheld a personal grievance and ordered an employer to pay an employee over $14,500 for unjustified dismissal after the business was closed.

Over the period that the employee worked for the employer she noticed that the business was not doing well.

Since it was unable to pay rent, the Director of the business was given notice that the premises was going to be repossessed in several weeks’ time.

The employer did not tell the employee about the notice. Of the last day of the notice, the employee received a message from the employer saying that the business was evicted and that it had now closed down permanently.

The employer informed the employees that there was no further work for them and wished them well in the future.

The Authority held that the employee was unjustifiably dismissed by the employer.

Although there was a genuine reason that would have allowed the employer to perform a redundancy process, it failed to do so. Despite knowing about the eviction for several weeks, the employer chose not to tell the employees or take any steps to legally end their employment.

The Authority ordered the employer to pay the employee $12,000 in compensation, $708 for wage arrears, $1,796 in unpaid holiday pay, and costs of $1,500.

Even where a business is doing poorly and may face closure, it is still important to carry out an appropriate redundancy process. Failure to do so may result in an expensive personal grievance against an already struggling business.

If there are uncertainties about how to carry out a proper redundancy process, it is wise to speak with a professional experienced in the area.

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