HR Insights March 2025 | Restructuring Case Law Development

March 2025 Update

Considering redeployment options in restructuring

A recent case Laukau v KJ Randhawa Ltd has highlighted the importance of Employer’s needing to consider redeployment options during a restructuring process. While this case involved a claim for unjustified disadvantage, I will focus on the claim around unjustified dismissal in relation to the issue of redeployment.

Background

Ms Laukau worked at KJ Randhawa Ltd (KJR) from March 2023 in the company's bakery, café and gelato shop. Her employment ended in September 2023 due to a restructuring and redundancy process. The Employment Relations Authority accepted KJR had a genuine business need to change the rostering and shift methodology in avour of set days and hours of work. Ms Laukau indicated a preference for 30 hours per week, working alternative Saturdays and no Sundays. After considering her feedback, KJR formally advised it could not accommodate the request and Ms Laukau’s employment was terminated by way of redundancy.

There appeared to have been miscommunication between the parties. Ms Laukau gave evidence she would have been open to considering other fixed-hour arrangements and KJR gave evidence it would have been willing to consider different work arrangements if Ms Laukau had asked for them. The Authority observed that, regrettably, it was a situation where Ms Laukau and KJR’s director, Mrs Kaur-Randhawa, did not appear to have had a discussion which could have clarified whether Ms Laukau was willing to accept one of the options within the new system of set days and hours. If Ms Laukau had been willing to do so, and all KJR required was she indicate which option she preferred, then the matter could have been resolved at that stage. The Authority considered that KJR bore the responsibility of clarifying the matter and it failed to do so.

After reviewing correspondence and a transcript of a meeting between the parties, the Authority did not consider that KJR had met its obligations to offer Ms Laukau a place or to consider redeployment of Ms Laukau within the new system of set days and hours KJR had decided to implement. While KJR was a relatively small business, it was professionally advised during the restructuring process and in responding to Ms Laukau’s grievances. KJR’s actions were not considered what a fair and reasonable employer would have done in the circumstances. Consequently, Ms Laukau’s claim for an unjustified dismissal was established. 

Decision

The ERA found that Ms Laukau’s had been unjustifiably dismissed.

 

 

 

 

Penalties

KJR was ordered to pay Ms Laukau $8,300 in lost wages and $20,000 as compensation for hurt and humiliation. Costs were reserved.

Key Takeaways

• Employers must genuinely consult and consider the feedback of potentially affected employees

• Redeployment options must be seriously considered by employers and demonstrate to potentially affected employees they have done this
• Employers must ensure they meet their Good Faith obligations by providing sufficient opportunities for potentially affected employees to provide feedback during a restructure
  
  

For specialist advice in this area, please contact us at hradvice@cecc.org.nz.