| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 40/08 |
| Hearing date | 7 Feb 2008 |
| Determination date | 12 February 2008 |
| Member | A Dumbleton |
| Representation | Y Lu (in person) ; W Huang |
| Location | Auckland |
| Parties | Lu v Institute of Commercial Education (NZ) Ltd |
| Summary | UNJUSTIFIED DISMISSAL – Redundancy – Applicant entered fixed term individual employment agreement (“IEA”) with respondent expressed to replace all former employment agreements between them – At meeting with staff respondent handed out letter stating former employment contracts (“EC”) would expire and restructuring planned – Letter not addressed to staff personally but collectively – Respondent advised staff that could apply for positions in new structure but had to sign new EC – Restructuring required because respondent lost contract which would have sustained original operations – Authority satisfied restructuring carried out for proper commercial reasons – Authority found loss of contract and subsequent redundancy a possibility known to staff – Found applicant’s fixed term employment agreement a hybrid where could only terminate contract before expiry of fixed term if redundancy event as defined in IEA – Authority found words in letter effectively gave applicant two weeks notice of termination as required by IEA – Applicant claimed letter breached IEA by purporting to vary IEA contrary to express provision that variation required signature by both parties – Authority found clauses in IEA could be interpreted to mean in event of genuine redundancy employment could be ended unilaterally by respondent announcing it – Authority satisfied letter effectively invoked early notice of termination clause although letter could have been more precise – Applicant also argued “redundancy process” clause not complied with – Authority found even if could effectively consult retrospectively after notice, no adequate consultation in this case – Found respondent needed to initiate and actively engage in consultation rather than simply advising employees could speak to employer if they wished – Authority noted that if consultation required before proposal to make change then employees must know what is proposed before expected to give views – Found fair and reasonable employer would have consulted applicant before deciding to terminate employment – Dismissal unjustified – Remedies – No contributory conduct as termination out of applicant’s control –Alternatives available which were likely to have preserved applicant’s employment had there been proper consultation – Not a case where loss of employment inevitable following genuine redundancy – Reimbursement of lost wages $3,000 – Authority considered any claim for damages addressed by remedies given for personal grievance – $750 compensation appropriate – No costs award as applicant did not incur any costs of professional advice – Tutor |
| Result | Application granted ; Reimbursement of lost wages ($3000) ; Compensation for humiliation etc ($750) ; No costs awarded |
| Main Category | Personal Grievance |
| Cases Cited | Williams v Attorney-General in respect of the Secretary for Justice [1999] 2 ERNZ 457;Wellington International Airport Ltd v Air New Zealand Ltd [1993] 1 NZLR 672;Communication and Energy Workers Union Inc. v Telecom New Zealand Ltd [1993] 2 ERNZ 429 |
| Number of Pages | 7 |
| PDF File Link: | aa 40_08.pdf [pdf 27 KB] |