Redundancy law unchanged by Employment Relations Act

In a case brought by Michael Baguley against his former employer, Coutts Cars Ltd, the Employment Court is today considering whether the new Employment Relations Act introduces changes to redundancy law.

Coutts Cars employed four car groomers, including Mr Baguley. The company decided that it could save costs by making two groomers redundant, and contracting out some grooming work to an outside firm.

To decide who should be made redundant, it completed an assessment form in respect of each groomer and assessed them on quality and quantity of work, job knowledge, initiative, communication, adaptability and co-operation, attendance and qualifications. As a result of the assessment process, Mr Baguley and another worker were identified as being the two employees to be made redundant. Neither Mr Baguley nor the other employee had any input into the assessment.

After the assessment was completed, the Company met with Mr Baguley and informed him that the number of groomers had to be reduced by two, and that a selection process had been used to determine which two were to stay. Mr Baguley asked to be told of the selection criteria used, but the Company refused his request. After further discussions, Mr Baguley was made redundant.

Mr Baguley claimed unjustified dismissal and filed his claim with the new Employment Relations Authority. The Authority held an investigative meeting and issued a decision rejecting his claim.

Mr Baguley argued before the Authority that the new Employment Relations Act, and in particular the requirement that parties must act in good faith towards one another, meant that he was entitled to be told of the selection criteria used and have input into it. Because he was not given this opportunity, his dismissal was unjustified.

The Authority rejected this claim and held that the new Act made no changes to redundancy law. The Authority pointed out that the requirements of good faith in a redundancy situation existed before the new Act was passed, and that previous case law was therefore still valid because it had been developed with good faith principles in mind.

Mr Baguley appealed to the Employment Court. As the case raised important questions of law under the new Act, Chief Judge Goddard decided to convene a full Court of three judges, instead of the usual one, to hear the case. The Employment Court's decision is still pending.

More on Termination & Dismissal

An employer's rights: Surfing all the day	Driver lost license
Dealing with absent employees	Importance of procedural fairness
Must consult in redundancy dismissals	Dismissal must be procedurally fair
Misconduct discovered after dismissal	Another procedural fairness example
Dismissed for benefit fraud	Terminated before started
The danger of secret witnesses	Expired employment contract
Cannot intimidate employer	Cannot rely on police enquiry
Reasonable notice of redundancy	Contractural obligation must be met
Reinstatement and workplace democracy	Employment and criminal investigation
Attack not always good defence	Dismissal of persons in authority
Employee responds by going on offensive	Legality of secret video surveillance
ERA classifies contractor as employee	Redundancy law unchanged by ERA
Loss of use of company car	Significant difference
Resolution of criminal charges	Redundancy and changed hours
Discrimination for being non Asian	Cannot take retaliatory action
Failing to meet sales targets	Misconduct outside of work
Abuse of Internet & Email	Suicide and communication
Redundancy definition	Unjustified dismissal for pornography
Abandonment of employment

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