Unfair Redundancy process carried out by employer despite genuine reason

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Employment Relations Authority: Unfair redundancy process carried out by employer despite genuine reason

Mr Hawkins was employed by MRL Power Solutions Limited (MRL Power) as a mechanical technician, from 8 December 2018 until 15 September 2020, when he was made redundant. Mr Hawkins claimed he was unjustifiably dismissed in that his redundancy process was neither genuine nor procedurally fair. MRL Power denied this and pointed to the loss of a major client as justification for his redundancy.

In late 2019 and continuing into 2020, Mr Hawkins was issued with multiple “letters of concern” and a written warning regarding his lateness and non-attendance at work. He claimed the issues stemmed from his persistent migraines. 

Mr Hawkins was interviewed and employed by MRL Power’s General Manager, Mr Patterson. Mr Hawkins disclosed to Mr Patterson that he suffered from recurrent migraines and often took codeine under his doctor’s supervision to manage the pain. Mr Hawkins’ migraines resulted in him being late for work at least once a month, and sometimes as often as once a week. When he awoke with a migraine, he would need to wait for his pain medication to take effect before he was able to attend work. 

Mr Patterson had no problem with this as long as it was managed. He did not find it difficult to accommodate Mr Hawkins’ absences and would “adjust and prioritise tasks” to ensure appropriate work was available for Mr Hawkins to do on the days he needed to start late. In October 2019, Mr Patterson resigned from MRL Power, and his role was taken over by MRL Power’s owners, Mr and Mrs Head. 

MRL Power had a significant contract with Centerport. By the time Mr Patterson resigned, both Mr and Mrs Head and MRL Power’s staff generally knew that the work it performed for Centerport was for a fixed period and would come to an end. Centerport advised MRL Power that when its own machinery arrived, it would no longer need MRL Power’s services, and the contract would come to an immediate end hence the redundancy process. 

When Mr Hawkins was late for work due to migraines, Mrs Head began directing him to take sick leave for the day. Mrs Head assigned work to team members, including Mr Hawkins, through meetings which commenced at 8.30am. If Mr Hawkins was not present for a meeting, then the work that needed to be done that day would effectively be assigned to others. If he arrived late, there would generally be no work for him to do. 

In late July 2020, MRL Power’s contract with Centerport came to an end. In lieu of the redundancy process, the financial impact of losing this contract to MRL Power was immediate, resulting in a loss of revenue of approximately $30,000 per month. 

On 17 August 2020, Mr Hawkins was given a consultation document, proposing a restructure of MRL Power’s mechanical team, on the grounds that there was no longer adequate resources to maintain the same staffing levels. The proposal was to reduce the mechanical team by one, disestablishing a mechanical technician role, while retaining senior roles and renaming the apprentice role as a junior mechanical technician. As Mr Hawkins was a mechanical technician, his role was proposed to be disestablished. Mr Hawkins chose to apply for a senior technician role but was unsuccessful. 

On 15 September 2020, Mr Hawkins was accordingly made redundant. He was paid four weeks’ wages in lieu of notice. Mr Hawkins found new employment on 23 November 2020, resulting in a total of five weeks’ lost wages. Mr Hawkins sought recovery of lost wages for that period and as his new employment was at a lower rate of pay, he also claimed lost wages at the rate of $60 per week on an ongoing basis. 

The Employment Relations Authority (the Authority) found that the redundancy itself was held for genuine business reasons; however, MRL Power failed to provide all relevant information fairly and properly. This information existed at the time of consultation and could have been provided to Mr Hawkins. Instead, the consultation document referred in a vague and inaccurate way to “COVID-19 causing significant and ongoing uncertainty”, which was not the rationale for the disestablishment of Mr Hawkins’ role. Mr Hawkins’ dismissal was therefore unjustified. As a result, he was entitled to his claim of remedies including lost remuneration and compensation payments for humiliation, loss of dignity, and injury to feelings. 

MRL Power was ordered to pay Mr Hawkins five weeks of lost wages, being $4,600 plus holiday pay of $368. MRL Power was also ordered to pay to Mr Hawkins the sum of $12,000 without deduction for hurt and humiliation, $184 in outstanding wages plus holiday pay of $14.72. Costs were reserved.

Considering going through a redundancy process, talk to our team of redundancy experts today to get the process done the right way. Russell Drake Consulting are your redundancy specialists and have been doing redundancy consulting for over a decade.

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