Improper redundancy process leads to $16,000 award to employee...

The Employment Relations Authority has ordered an employer to pay over $16,000 after finding that it had failed to follow the correct redundancy process.

After being employed for nearly two years the employee was invited to a meeting to discuss a restructuring proposal. Prior to attending this meeting, the employee was informed that the restructure may reduce the size of the employee’s team from 4 to 2. There was no discussion around how the size of the team would be reduced.

When the employee attended the meeting the employer asked her for feedback regarding the restructuring proposal. The employee was also asked if she was interested in a different role which she confirmed she wasn’t. At this meeting there was no discussion about how the employee’s team would be reduced in size.

The meeting was reconvened later that day. At this meeting it was confirmed that the employee was being made redundant and was given 4 weeks’ notice.

The employer stated that the decision was made purely because of economic reasons and not because of her job performance. It was explained to the employee that she had the largest salary in the team and that making her redundant would therefore save the employer the most money.

The employer confirmed this decision four days later and offered the employee 5 weeks’ pay. She accepted these payments.

Usually if a settlement agreement is reached an employee is prohibited from bringing a personal grievance claim to the Authority. In this situation the employer did not state that these payments were in full and final settlement of the matter, and the employee was not prohibited from bringing her claim to the Authority.

The employee raised a personal grievance claim of unjustified dismissal.

The Authority determined that the employer did not make the selection criteria known to the employee before informing her that she was being made redundant. This deprived the employee of the opportunity to be consulted on the criteria and whether it was reasonable.

The Authority decided that the dismissal was unjustified, as the employer failed to consult fairly and reasonably with the employee regarding the selection criteria and how it applied to her.

The Authority ordered the employer to pay $16,000 to the employee because of the hurt and humiliation caused by the unjustified dismissal, as well as 3 weeks’ lost wages.

If there is confusion regarding the correct redundancy process, it pays to seek advice from a professional with experience in the area.

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