Defective redundancy and dismissal processes...

The Employment Relations Authority has upheld claims for unjustified dismissal by two employees after they were made redundant and then dismissed during the notice period of the redundancy.

The ERA held that the dismissal occurred without any proper process as no allegations were put to the employees and there was no opportunity for them to respond and of course no consideration of any response by the employer. 

The ERA went on to look at the genuineness of the redundancy that had been put into place and it found that this failed both for procedural reasons and substantively.  The procedural failure was that the employees were given no opportunity to comment on a proposed redundancy before they were advised that they were being made redundant.  It is a requirement that employees are consulted before any final decision is made.

In addition the ERA found that the redundancy was not genuine because the reason given of the poor financial performance of the company was not borne out by the company’s financial records.  Those records showed that the returns of the company were good and that the company was advertising for further staff at the time it was making these other employees redundant.

The ERA ordered each employee be paid $5,000 compensation for the hurt and humiliation suffered plus lost wages for the periods they were out of employment following their dismissals.

Alan Knowsley

Employment Lawyer
Wellington