| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 2/00 |
| Determination date | 29 November 2000 |
| Member | James Wilson |
| Representation | R Mark ; R Harrison & L Murray |
| Location | Auckland |
| Parties | Williams v Alfred Holt & Co Ltd |
| Summary | UNJUSTIFIED DISMISSAL - Genuine redundancy - Position disestablished during restructuring - Inadequate consultation - Unilateral withdrawal of offer of employment of new position - Reinstatement not practicable |
| Abstract | This was successful unjustified dismissal claim investigated by the Employment Relations Authority.;The respondent was a family owned manufacturing company. The majority shareholder and managing director was the applicant's father. Between 1991 and 1998 the applicant was employed as company secretary and accountant. In 1998 his role was expanded to finance and operations. Later the applicant's wife was employed. The salary from the previously combined position was split between the applicant and his wife. In September 2000 the company decided that the position occupied by the applicant's wife should be declared surplus and a restructuring took place. She received a redundancy settlement and her employment was terminated.;At a subsequent formal meeting the applicant was advised by the managing director and an external adviser (C") that his position (shared with his wife) had been disestablished, that the position held over the previous month had been an interim arrangement and that the company needed a full-time accountant in the form of "Team Leader - Financial Management Team". The applicant was offered this position. However during the following weeks the negotiations broke down. The applicant believed he had accepted an offer of the position via his representative. Following an unsuccessful attempt at mediation the company withdrew the offer of employment. The company took the view that agreement had not been reached on the terms and conditions for the new position.;The applicant originally sought interim reinstatement. An undertaking was given by the company that it would not fill the new position pending the determination of the substantive case. The Authority gave an undertaking that it would make a formal determination of the matter within 2 weeks.;HELD: (1) The position held by the applicant was genuinely redundant. The position held by the applicant and his wife did not meet the company's needs in respect to changing financial management requirements. The company assessed that the position of Team Leader - Financial Management Team was a new position. It was for the company to make this assessment. The changes required were of sufficient magnitude to find that this was a new position.;(2) The applicant had a personal grievance in respect of the inadequate level of consultation regarding the disestablishment of his position. While it was not mandatory for an employer to consult with all potentially affected employees in making any redundancy decision the company had not meet its obligations of good faith and fair treatment. Not to consult directly, either jointly with, or parallel to consultation with his wife, fell far short of the requirements of a reasonable employer.;(3) The applicant was offered, and accepted, the position of Team Leader - Financial Management Team and, in that his position was then unilaterally withdrawn, he had a further personal grievance. Baker v Armourguard Security Ltd [1998] 1 ERNZ 424 applied.;(4) It was not "practicable" for the purposes of s125(2) ERA for the applicant to be reinstated. The relationship between the applicant and the company's managing director was strained and reinstatement was not in the applicant's or company's best interests. The applicant's relationship with C had also completely broken down. If the applicant were reinstated he would be required to work in close proximity, and possibly report to, C. Despite the applicant's assertion that he would have no problem fitting in, the management structure was small. In such a small group, the level of breakdown in relationships could render the team inoperable.;(5) The applicant was entitled under s123(c)(ii) ERA to 3 months' salary for loss of future remuneration to be calculated at the rate offered for the position of Team Leader - Financial Management Team, to be adjusted to take account of salary already paid. The applicant was entitled to $10,000 compensation for humiliation etc for the failure to consult over restructuring and the withdrawn and accepted offer of employment." |
| Result | Application granted ; Reimbursement of lost wages (3 months) ; Compensation for humiliation etc ($10,000) ; No order for costs |
| Main Category | - |
| Statutes | ERA s123(a);ERA s123(c)(ii);ERA s125 |
| Cases Cited | Aoraki Corporation Ltd v McGavin [1998] 1 ERNZ 601;Association of Marine etc Engineers v Tasman Express Line Ltd [1990] 3 NZILR 946;Baker v Armourguard Security Ltd [1998] 1 ERNZ 424;NZ Educational Institute v Board of Trustees of Auckland Normal Intermediate School [1992] 3 ERNZ 243;NZ Educational Institute v Board of Trustees of Auckland Normal Intermediate School [1994] 2 ERNZ 414;NZ Fasteners Stainless Ltd v Thwaites [2000] 2 NZLR 565 |
| Number of Pages | 10 |
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