The Employment Relations Authority has upheld a personal
grievance for unjustified dismissal following the redundancy of the business
owner’s wife. There were two owners of
the business and the wife of one of them also worked in the business. A meeting was held between all three at which
the other owner alleged that a settlement had been reached with a payment of
$30,000 to the other owner and his wife for all pay, holiday pay and redundancy
notice. No record was kept of that
meeting, nor any settlement agreement signed by the parties.
The other owner and his wife both deny that the $30,000
payment (which was made) was in relation to the wife.
The Employment Relations Authority held that as there was
no signed agreement and no proof that the wife had agreed to receive such a
payment in settlement of her claims, she was entitled to compensation as no
proper redundancy process was carried out.
She was awarded $11,781 lost wages and $5,437 for unpaid notice. She was also awarded $7,140 holiday pay. Interest on the holiday pay and unpaid notice
was also ordered to be paid.
The ERA declined to award her any unpaid wages for the
period she was employed. The wife had
alleged that, although the books showed she had been paid in each pay period,
she had in fact never received any pay.
The ERA said that she had failed to prove that claim as the books
clearly showed payments to her. She was
also not entitled to any compensation for hurt and humiliation in relation to
the poor redundancy process as she was intimately involved in the running of
the business and was well aware that it was in financial trouble and likely to
close.
As the settlement agreement between the two owners
involved the transfer of all shares from one owner to the other, the owner who
bought the shares is responsible for payment of all of these payments to the
other former owner’s wife.
A failure to document the settlement agreement reached has
cost the second owner dearly in this case.
Alan
Knowsley
Employment
Lawyer Wellington
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