The Employment Court has upheld a challenge to an
Employment Relations Authority finding following a successful unjustified
dismissal and unjustified disadvantage claim.
The ERA had found that a redundancy was carried out
without a proper process and was unjustified.
It had awarded $10,000 compensation, but reduced that award because it
held that the employee was 50% responsible for the redundancy, having acted
inappropriately towards his employer and other staff during the process.
The Court held that the $10,000 compensation award made by
the ERA was too low. It was outside of
the range which should have been awarded which was between $10,000 to $40,000
and that a proper compensation amount was $22,500.
The Court also found that the 50% contribution level found
by the ERA was incorrect. A 25%
contribution was substituted.
The Court’s findings increased the compensation from the
$5,000 awarded by the ERA (after a 50% reduction) to $16,875 (after a 25%
reduction).
The Court dismissed the employee’s claims for increased
lost wages. The ERA had awarded three
months and the Court reached the same conclusion, but for different
reasons. The Court also dismissed the
claim that the employer should be penalised for breaches of good faith and for
breaches of the employment agreement.
In setting the compensation award the Court adopted the
three band approach. Low level hurt and
humiliation will result in awards of up to $10,000, mid-range compensation will
be in the range of $10,000 to $40,000 and high level compensation will be over
$40,000.
It pays to get your processes right and the business case
for redundancies correct before embarking on a redundancy process. Getting it wrong can prove very expensive.
Alan
Knowsley
Employment
Lawyer Wellington
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