An employer’s failure to follow fair redundancy procedures has cost them over $28,000. Learn your rights around unjustified dismissal and what steps employers must take under New Zealand law.

Unfair Redundancy Process Costs Employer Over $28,000 in Employment Law Breach

A recent decision by the Employment Relations Authority (ERA) highlights the serious consequences employers can face for failing to follow proper redundancy procedures. In this case, an employee was awarded over $28,000 after his personal grievance for unjustified dismissal was upheld.

The employee had been working 45 hours per week when, in October 2022, he and another staff member were invited to a meeting. At that meeting, the employer claimed the business was “on the verge of bankruptcy.” Just one week later, the employee was informed that his position was being made redundant, and his hours were immediately reduced to 30 hours per week without consultation or agreement.

What Went Wrong? Key Legal Failures by the Employer

The ERA found multiple procedural breaches that led to the ruling of unjustified dismissal by redundancy:

• Unilateral changes to employment terms: The employer reduced the employee’s hours from 45 to 30 per week, violating the terms of the employment agreement.
• Lack of genuine consultation: The employee was not properly consulted about the redundancy process and was not given reasons for why his role was selected.
• No consideration of redeployment: The employer failed to offer or even consider alternative roles within the company.
• Insufficient financial evidence: Despite claiming financial hardship, the employer provided no documentation or proof of the alleged financial instability.

The ERA’s Decision and Financial Consequences

The ERA ruled that the employer had failed to act as a fair and reasonable employer, both procedurally and substantively. As a result, the employer was ordered to pay:

• $3,400 in unpaid wages
• $1,020 for the unpaid notice period
• $1,430 in lost wages
• $20,000 in compensation for humiliation, loss of dignity, and emotional distress
• $2,250 towards legal costs

This case is a clear example of the legal risks employers face when employment law obligations are not met, especially around redundancy and termination.

Get Expert Advice on Employment Law in Wellington & Masterton

If you’ve been made redundant or dismissed and feel the process was unfair, or if you’re an employer needing guidance on how to carry out lawful redundancies, seek legal advice as early as possible.

Core Legal, based in Masterton and Wellington, offers fixed-fee initial consultations to help employees and employers understand their rights and responsibilities under New Zealand employment law.

???? Contact Core Legal today for clear, practical advice on employment disputes, redundancy, and personal grievance claims.