| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 1/00 |
| Hearing date | 1 and 2 August and 28 September 2023 |
| Determination date | 02 November 2000 |
| Member | Alastair Dumbleton |
| Representation | Dzintra King, advocate for the Applicant Alastair Espie, counsel for the Respondent |
| Location | Auckland |
| Parties | Baguley v Coutts Cars Ltd |
| Summary | UNJUSTIFIED DISMISSAL - Redundancy - Genuine redundancy - Reduction in positions to achieve greater efficiency - Objective selection criteria used - No requirement to disclose criteria - No express or implied redeployment options - Good faith requirements of ERA did not warrant revisiting redundancy principles - Dismissal fair and reasonable - Car groomer |
| Abstract | This was an unsuccessful unjustified dismissal claim investigated by the Employment Relations Authority.;The applicant was employed by the respondent as a car groomer. The respondent had been contracting out grooming work resulting in cost savings and flexibility. A decision was made to reduce four positions to two. The applicant was not consulted prior to the decision. The respondent obtained specialist advice about the implementation of redundancies and methods of selecting redundant staff. Assessment forms were completed by several representatives of the respondent independently of each other. Two employees including the applicant were identified to be consulted further about the possibility of redundancy.;The applicant attended a meeting with the respondent and was represented. He was informed of the decision to reduce positions to two. A request to be told the selection criteria that were used was rejected, the respondent maintaining that the criteria were confidential. The applicant's views on the proposed redundancy were sought and given. Following the meeting the applicant and one other employee were informed of their redundancy.;HELD: (1) The predominant motive of the respondent in dismissing the applicant was to reduce cost and achieve greater efficiency in its operations. The decision was based on commercial rather than performance reasons. The selection of redundant employees was carried out by an objectively fair method. The selection criteria were applied fairly to the applicant. In respect on the refusal to advise of the selection criteria, the approach in Te Kooro (rejecting a high level of disclosure) was preferred to that in Apiata (both cited below).;(2) As to redeployment, the respondent was not under any express or implied obligation to see whether there was a possibility of employment among the wider group of companies that the respondent was a part of. Reviewing the overall fairness of the respondent's actions, while the ideal of perfection was not achieved the level of fairness and reasonableness accompanying the dismissal was sufficient for it to be justified.;(3) It was not accepted that the good faith" philosophy of the ERA required the established law on redundancy to be revisited. Any major review of leading case law must ultimately be carried out by the Court of Appeal. The requirements of good faith in relation to the operation of employment contracts were already well established by the implied term of fair dealing between employer and employee.;COMMENT: Notes on the procedure followed by the ER Authority in the investigation and determination of the case were set out: (i) a formal request to have an employment relationship problem resolved was lodged with the Authority, (ii) a preliminary conference was held in order establish whether the parties had attempted mediation (a requirement of s159 ERA) and to prepare for an investigation meeting, (iii) voluntary mediation with the Mediation Service was undertaken and unsuccessful, (iv) there was no immediate need to consider the applicant's interim reinstatement application (as the applicant was still employed under a notice period), (v) a further telephone conference was held which discussed the procedure to be followed at the investigation meeting and matters of disclosure, (vi) the procedure followed at the investigation meeting was set out, (vii) the investigation meeting was held in public." |
| Result | Application dismissed ; Costs reserved |
| Main Category | Personal Grievance |
| Statutes | ERA s159;ERA s174;ERA s221;EA Schedule 1 Form 1;EA Schedule 1 Form 2 |
| Cases Cited | Aoraki Corporation Ltd v McGavin [1998] 1 ERNZ 601;Apiata v Telecom New Zealand Ltd [1998] 2 ERNZ 130;Mastertrade Ltd v Te Kooro unreported, Palmer J, 17 November 1998, CC 43/98;NZ Fasteners Stainless Ltd v Thwaites [2000] 2 NZLR 565 |
| Number of Pages | 9 |
| PDF File Link: | PDF file not available for download, please contact us to request a copy. |