HR Insights August 2024 | Redundancy with Michael Prisk

August 2024 Update

Redundancy Process Case Law Development:

A recent case, Simonsen v Talley’s Group Limited, highlights key procedural steps around following a fair process when initiating a Restructure and Redundancy process and how an employer can ‘get things right’.

Background

Ms. Simonsen worked for Talley’s Group Limited (TGL) as a Senior Technical Adviser in the Injury Management Unit (IMU) since July 2018. She filed a complaint with the Employment Relations Authority, alleging that she was unfairly dismissed under the guise of a "sham redundancy."

On May 22, 2020, Ms. Simonsen met with TGL’s Group HR Manager and received a letter titled “Proposed Redundancy” announcing the disestablishment of her role. TGL cited lost revenue, partly due to the COVID-19 pandemic, as the reason for the proposed restructure. Ms. Simonsen was given one week to provide feedback, and a final decision was scheduled for June 1, 2022. 

Ms. Simonsen's queries were addressed during the feedback process. Subsequently, a meeting involving the parties and their legal representatives took place on May 29, 2020. The following day, the decision to disestablish the role of Senior Technical Adviser was communicated via email, resulting in Ms. Simonsen’s redundancy, subject to any redeployment opportunities. TGL gave Ms. Simonsen a six weeks’ notice of termination, effective from June 5, 2020.

On July 3, 2020, Ms. Simonsen raised a personal grievance, contending that the redundancy was a foregone conclusion, given the brief consultation period.

Decision

The Employment Relations Authority (ERA)found no evidence to support Ms Simonsen’s claims.

• The proposal discussed lost revenue from COVID-19, with one solution    being to completely reorganise the IMU. TGL provided the details of its     plan in its correspondences to Ms Simonsen
• TGL acknowledged Ms Simonsen’s feedback. While the decision to     disestablish her role was prompt, this did not mean the consultation was  a charade or TGL had a closed mind or indicate they were not prepared  to consider her views
• Ms Simonsen claimed she should have been considered for a Compliance Officer role. The ERA found that she had been considered for alternative roles that she herself admitted she was not suitable for. The ER found TGL met its obligation to consult with her on alternative roles

The Authority dismissed Ms Simonsen claim’s due to TGL running a fair redundancy process. Read the case law here. 

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For specialist advice in this area or any HR/ER related matters, please contact me at michaelp@cecc.org.nz.