| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2012] NZERA Auckland 398 |
| Hearing date | 17 Aug 2012 - 5 Oct 2012 (2 days) |
| Determination date | 14 November 2012 |
| Member | R A Monaghan |
| Representation | C Eggleston ; M Smyth |
| Location | Auckland |
| Parties | Munro v Pukekohe Motorcycles (1993) Ltd |
| Summary | UNJUSTIFIED DISMISSAL – Redundancy – Applicant claimed unjustifiably dismissed by respondent – Respondent claimed applicant justifiably dismissed on ground of redundancy – Authority found nothing inappropriate in respondent’s change from general manager’s (“M”) earlier recommendation as respondent needed to reconsider level of payroll to persuade bank to provide required funds – Found no underlying intention during restructure to create position for M’s partner – Found although some comments in M’s previous recommendations on perception of staff attitudes unhelpful, comments general and did not mean applicant dismissed for poor performance in another guise – Found redundancy genuine – Found managing director intended to discuss contents of restructuring document and applicant’s questions but unfortunate intention not conveyed to applicant and word ‘proposal’ not used in restructuring document – Found applicant entitled to opportunity to provide input before final decision made – Found applicant entitled to constructive response to questions even if decisions in question management decisions – Dismissal unjustified – REMEDIES – 10 per cent contributory conduct – Respondent to pay applicant $5,535 reimbursement of lost wages – $7,500 compensation appropriate – Compensation for loss of medical insurance benefit appropriate (parties to determine quantum) – Accounting and administration assistant |
| Abstract | Applicant employed by respondent as accounting and administration assistant. Applicant claimed unjustifiably dismissed by respondent. After financial position deteriorated, respondent’s managing director (“S”) asked general manager (“M”) to undertake work on restructuring. M recommended creation of additional part time administrator position in addition to applicant’s position but no action taken. Five months later respondent reconsidered M’s report after further finance required and bank indicated respondent’s payroll too high. Respondent decided to proceed with creation of part time position but also to create new full time position with lower remuneration than applicant’s current position. S prepared agenda for restructuring including consultation and applicant invited to meeting. Applicant informed of proposal but wording used suggested decision to restructure made already. At further meeting applicant presented S with list of questions, including whether S had considered reducing applicant’s role to four days per week with 20% reduction in salary. S only answered three questions and claimed other questions related to other staff and were confidential, related to management prerogative and related to historical matters discussed at initial meeting. Applicant claimed position untenable and stated did not wish to accept either of two new roles. S asked applicant for meeting to discuss matters properly but applicant replied could see no point. Applicant dismissed. Applicant claimed redundancy attempt to reduce applicant’s salary as M had recommended previously that new part time position be created without reduction in applicant’s remuneration and relatively little difference in likely wage cost between two proposals, and M’s partner (“G”) employed in new position at higher salary. Applicant claimed redundancy tainted by inappropriate motive.;AUTHORITY FOUND –;UNJUSTIFIED DISMISSAL: Nothing inappropriate in respondent’s change from M’s earlier recommendation as respondent needed to reconsider level of payroll to persuade bank to provide required funds. Respondent considered for genuine reasons applicant paid at upper end of range at time when respondent under financial pressure and respondent’s actions not arbitrary attempt to reduce applicant’s pay. No underlying intention during restructure to create position for G as G reluctant to work at same place as partner and fact G offered higher salary than planned due to lower remuneration rate for part time position and respondent’s subsequent improved financial performance. Nothing to suggest wrongful attempt to reduce applicant’s salary. Although some comments in M’s previous recommendations on perception of staff attitudes unhelpful, comments general and did not mean applicant dismissed for poor performance in another guise. Redundancy genuine. S intended to discuss contents of restructuring document and applicant’s questions but unfortunate intention not conveyed to applicant and word ‘proposal’ not used in restructuring document. Applicant entitled to opportunity to provide input before final decision made but S conveyed to applicant at first meeting applicant’s role redundant giving applicant impression respondent not open to feedback. Applicant entitled to constructive response to questions, especially relating to rationale for changes and applicant’s alternative proposal, even if decisions in question management decisions. Dismissal unjustified. REMEDIES: Applicant should have engaged with S when asked to attend meeting rather than assume invitation not genuine. 10 per cent contributory conduct. Prospect dismissal may have been delayed or avoided if proper consultation process followed. Respondent to pay applicant $5,535 reimbursement of lost wages. $7,500 compensation appropriate. Compensation for loss of medical insurance benefit appropriate (parties to determine quantum). |
| Result | Application granted; Contributory conduct (10%); Reimbursement of lost wages ($5,535); Compensation for humiliation etc ($7,500); Compensation for loss of benefit (medical insurance)(parties to determine quantum); Costs reserved |
| Main Category | Personal Grievance |
| Statutes | ERA s4;ERA s4(1A);ERA s103A;ERA s128(3) |
| Cases Cited | Bay Milk Distributors Ltd v Jopson (2009) 7 NZELR 201;GWD Russells (Gore) Ltd v Muir [1993] 2 ERNZ 332;Jinkinson v Oceana Gold (NZ) Ltd (2011) 9 NZELC 93,655;Simpsons Farms Ltd v Aberhart [2006] ERNZ 825 |
| Number of Pages | 19 |
| PDF File Link: | 2012_NZERA_Auckland_398.pdf [pdf 294 KB] |