A recent case highlights that unresolved employment relationship issues have the ability to derail a potential restructuring process. This will be exacerbated when there is evidence that redeployment opportunities were not properly considered.
We regularly manage matters where there may be issues with an employee and there may also be a case to disestablish the employee’s role and make them redundant.
The Employment Relations Authority (Authority) recently issued a determination, in the matter of ADO v Joan Fernie Charitable Trust Board which dealt with this very issue.
If you’d like help navigating this tricky area of the law, please reach out to our experts.
ADO v Joan Fernie Charitable Trust Board – the details
An employee, referred to as ADO, successfully challenged their redundancy following a restructuring process claiming a restructuring wasn’t the real reason for the termination of their employment.
During the course of their employment, they were the subject of many discrediting allegations.
The Chairperson of the Joan Fernie Charitable Trust Board (JFCT) Board of Trustees, Mr Barham, “embarked on a course of making ill-advised allegations without due process,” alleging misconduct and performance concerns.
Moreover, Mr Barham sent correspondence to fellow employees seeking to sequester information to support his baseless accusations. While unfounded, this behaviour negatively affected ADO, damaging their character, and therefore disadvantaging them at their workplace.
The restructure
In relation to the restructuring, ADO was employed by JFCT, to work at Chesterhope Station as a Fencer General.
Initially, in the 1990s, the Station was split into two blocks. In October 2023, ADO was informed that the stations would be amalgamated through a restructuring process. This change led to ADO’s position being surplus to requirements and a livestock manager was appointed, encompassing ADO’s role.
ADO was ultimately given notice of termination on the grounds of redundancy in January 2024. While they interviewed for the position of livestock manager, they were not appointed.
ADO lodged a statement of problem seeking to be permanently reinstated, believing they had been unjustifiably dismissed. They believed the redundancy was procedurally unfair and motivated by allegations of misconduct and performance concerns which were unsubstantiated.
Unjustifiable dismissal – Authority finding
The Authority determined that ADO was unjustifiably dismissed, finding that their dismissal was motivated by “matters other than genuine commercial considerations.” In assessing JFCT’s actions, the Authority applied an objective test, evaluating whether they aligned with what a fair and reasonable employer would have done.
JFCT failed to meet this standard. They were unable to substantiate their claim that ADO’s role was in “surplus”, because they did not understand ADO’s duties or the scope of them. Consequently, JFCT failed to act with substantive and procedural fairness. The Authority further concluded that JFCT did not consider redeployment with an open mind. Rather, the process was held to be “insincere and predetermined,” giving rise to the unjustified dismissal.
The Authority also found that ADO was unjustifiably disadvantaged at work on two grounds. Firstly, for “unfair treatment arising from the making of unsubstantiated allegations” and secondly, for “an unjustified investigation and findings made.”
Costly outcome
While the Authority held that ADO was unjustifiably dismissed and disadvantaged, the Authority was not prepared to grant permanent reinstatement. Rather, the Authority deemed that there was “significant disharmony” which would prohibit the parties from working cohesively going forward.
The Authority found that ADO had been “profoundly impacted”, due to the “erroneous conduct… [that] undermined ADO’s employment”. Consequently, ADO was granted $45,000, as compensation for humiliation, loss of dignity, and injury to feelings.
ADO was further compensated $8,055.19 as reimbursement for lost wages.
Author: Kaitlin Windmeyer
