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The employer was going through a restructure and disestablished the employee’s role. The Employment Relations Authority (ERA) considered whether the restructure was a commercial requirement and whether the restructure was done in a fair and reasonable way and with good faith.

The company relied on a decline in trading figures to justify the redundancy, however the ERA found the redundancy process was not carried out in good faith. The employee had limited notice of her role’s impending fate and the ERA also felt other options than redundancy were not properly considered.

Reinstatement was found by the ERA to be unreasonable, however reimbursement of lost wages over the period of three months and compensation for the hurt and humiliation caused to the employee of $10,000 were ordered to be paid by the employer.

 

Alan Knowsley

Employment Lawyer

Wellington