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Employer failure to encourage new employer to take on redundant employee leads to $8,000 damages…

An employee made redundant took a personal grievance for unjustified dismissal.  His employer was winding up its business and transitioned 2,500 of its 2501 employees to a new employer.  It made no effort to transition the only other employee because it regarded him as a troublemaker for raising other grievances.

The Employment Relations Authority held that the employer had an obligation to encourage the new employer to take on all employees and that its failure to do so meant it was in breach of its employment agreement.  The ERA awarded $8,000 damages.

The employee had sought reinstatement but this could not be awarded because the employer no longer had any employees and did not conduct any business and the new employer had no obligation to take on the employee as it was never his employer (despite being a related company to his employer).

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