| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2011] NZERA Auckland 437 |
| Hearing date | 27 Jul 2011 |
| Determination date | 06 October 2011 |
| Member | R Larmer |
| Representation | P Pa'u ; T Michaels |
| Location | Auckland |
| Parties | Coles v Salus Clubs Ltd |
| Summary | UNJUSTIFIED DISADVANTAGE - Applicant made redundant due to respondent’s financial difficulties – Applicant accepted dismissal substantively justified but claimed were procedural irregularities in redundancy process - Applicant claimed not aware of redundancy until announcement made – Respondent approached landlord about rent reduction and applicant attended meeting on respondent’s behalf five months before respondent announced closure - Respondent claimed attendance at meeting put applicant on notice redundancy was possibility – Respondent claimed repeatedly told applicant had been no response from landlord and applicant should have understood risk respondent could not afford to continue – Authority found respondent’s director (“M”) did not have sound basis to assume applicant knew about respondent’s ability to continue operating – Applicant questioned respondent’s operations manager about closure rumours and told was business as usual, respondent had extended lease and landlord would hold respondent to obligations - M claimed did not discuss early termination of lease before announced respondent’s closure as would not have changed anything – Found highly unlikely applicant anticipated respondent would close – Applicant had meeting with M – Applicant claimed went into shock when M said respondent would close in two weeks and had been made redundant – Respondent made announcement without prior consultation and employees not spoken to individually – Found reasonable employer would have made personal contact with applicant – Found respondent failed to put process in place assisting employees with finding new employment – Found redundancy substantively justified but applicant unjustifiably disadvantaged by implementation of redundancy - REMEDIES – Authority found applicant treated in callous and uncaring way - $6,500 compensation appropriate – GOOD FAITH – Applicant claimed respondent breached good faith obligations – Found respondent did not consult with applicant and therefore applicant unaware respondent’s closure was imminent – Found although consultation was unlikely to have changed respondent’s decision would still have put employees on notice – Respondent claimed if told employees of closure earlier would have undermined respondent’s business – Found fair and reasonable employer would have consulted with applicant about redundancy on confidential basis – Found respondent’s failure to consult caused applicant unnecessary distress, hurt and anxiety – Found M’s view that consultation would not have made any difference did not avoid good faith obligations – Found respondent failed to take practical steps to support applicant – Found misunderstandings between parties about alternative employment and applicant’s wages due to lack of consultation – Found respondent’s actions breached good faith obligations - Authority recommended M seek legal advice on consultation and good faith obligations - PENALTY – Applicant sought penalty for breach of good faith in closing submissions – Authority found natural justice principles meant inappropriate to raise penalty claim in closing submissions – No penalty – COSTS – One day investigation meeting – Applicant sought full costs – Found full costs inappropriate – Respondent to pay applicant $3,500 contribution towards costs - Reception Administrator |
| Result | Applications granted (unjustified disadvantage and good faith) ; Compensation for humiliation etc ($6,500) ; Application dismissed (penalty) ; Costs in favour of applicant ($3,500) ; Disbursements in favour of applicant ($71.56)(filing fee) |
| Main Category | Personal Grievance |
| Statutes | ERA s4;ERA s4(1A);ERA s4(1A)(c)(i);ERA s4(1A)(c)(ii);ERA s4(1B);ERA s4(1C)(c);ERA s103(1)(b);ERA s103A;ERA s122;ERA s123(1)(ca) |
| Cases Cited | Aoraki Corporation Ltd v McGavin [1998] 1 ERNZ 601;Communication & Energy Workers Union Inc v Telecom New Zealand Ltd [1993] 2 ERNZ 429;Coutts Cars Ltd v Baguley [2001] ERNZ 601;Simpsons Farms Ltd v Aberhart [2006] ERNZ 823;Wellington International Airport Ltd v Air New Zealand [1993] 1 NZLR 671 |
| Number of Pages | 16 |
| PDF File Link: | 2011_NZERA_Auckland_437.pdf [pdf 71 KB] |