Employers ordered to pay more than $15,000 for sub-standard redundancy process…

The Employment Court has ordered an employer to pay an employee $15,000, and one week’s wages, after following a sub-standard redundancy process.

The employee had been working for the employer for over two years. During this time, the business did not perform well. The employer called a meeting with the employee and a colleague. During the meeting they discussed the business’s viability and the likelihood of closure.

A few days later other workers told the employee that the employer had decided to close the business and that they were to be made redundant.

The employee requested another meeting with the employer. During the meeting she was provided with written notice to work out her two-week notice period before being made redundant. The employee raised personal grievances for unjustified dismissal and lost wages.

The Court noted that despite the business having legitimate financial grounds to undertake a redundancy process, the process undertaken did not comply with the law.

It explained that a fair redundancy process requires an employer to meet with staff and discuss the process and impacts of the process.

The Employer must then accept input from all affected staff and genuinely consider it before coming to a conclusion. This includes meeting individually with employees.  Once a conclusion has been reached, employees may then be given notice of redundancy.

In this case, the Court decided the failings were significant, and a $15,000 penalty and one week of lost wages should be paid to the employee.

When undertaking a redundancy process, it is vital that all stages are followed correctly, otherwise employers may be leaving themselves vulnerable to personal grievances.

If you are considering undertaking a redundancy process, or think your employer has failed to follow the correct process, it is advisable to consult a professional experienced in the area.




Alan Knowsley
Employment Lawyer
Wellington