Even if a redundancy is justified, make sure you follow the correct process…

A redundant general manager has received an award for $7,000 compensation from the Employment Relations Authority – despite redundancy being justified.

The ERA upheld the manager’s personal grievance claim because of flaws in the process.

The employer’s decision to make the manager redundant was deemed justified as the business was undergoing genuine financial difficulties, and the project the manager worked on was a legitimate area where cuts could be made. The position had also not been re-established following dismissal.

Despite the decision being justified, the ERA determined the employer’s termination process was flawed because the manager was not given any information relating to his dismissal, and had no opportunity to comment on the redundancy. As a result, he was unable to offer alternatives to the employer (such as a reduction in his pay).

The ERA noted two other vacant managerial roles within the company could have been offered to the manager. While the employer was entitled to find that the employee did not have the skillset required for the positions, the employer should have discussed his eligibility for the position and the possibility of him fulfilling the role.