The
Employment Court has ordered an employer to pay an employee $15,000, and one
week’s wages, after following a sub-standard redundancy process.
The
employee had been working for the employer for over two years. During this
time, the business did not perform well. The employer called a meeting with the
employee and a colleague. During the meeting they discussed the business’s
viability and the likelihood of closure.
A
few days later other workers told the employee that the employer had decided to
close the business and that they were to be made redundant.
The
employee requested another meeting with the employer. During the meeting she
was provided with written notice to work out her two-week notice period before
being made redundant. The employee raised personal grievances for unjustified
dismissal and lost wages.
The
Court noted that despite the business having legitimate financial grounds to
undertake a redundancy process, the process undertaken did not comply with the
law.
It
explained that a fair redundancy process requires an employer to meet with
staff and discuss the process and impacts of the process.
The
Employer must then accept input from all affected staff and genuinely consider
it before coming to a conclusion. This includes meeting individually with
employees. Once a conclusion has been
reached, employees may then be given notice of redundancy.
In
this case, the Court decided the failings were significant, and a $15,000
penalty and one week of lost wages should be paid to the employee.
When
undertaking a redundancy process, it is vital that all stages are followed
correctly, otherwise employers may be leaving themselves vulnerable to personal
grievances.
If
you are considering undertaking a redundancy process, or think your employer
has failed to follow the correct process, it is advisable to consult a
professional experienced in the area.
Alan Knowsley
Employment Lawyer
Wellington
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