Woman wins $40K over unfair redundancy

A woman has been awarded nearly $40,000 after her redundancy was ruled to be unfair. Photo / 123RF

A woman has been awarded nearly $40,000 after the Employment Relations Authority (ERA) ruled her redundancy was unfair.

Marlborough Vintners 2011 Limited (MVL) was ordered to pay Anna-Maree Lynch $19,326.96 in lost remuneration and $18,000 compensation for humiliation, loss of dignity and injury to her feelings.

Lynch worked as an accounting and administration manager for MVL between July 2013 and February 2017.

Lynch was informed by MVL's sole director Anthony Moore on the afternoon of February 10, 2017 that her position was to end and that she would be made redundant.

She was told that MVL had decided to use the services of the accounts department, a bookkeeping bureau run by Johnston Associates South Chartered Accountants, to do her role.

According to the law on redundancy, an employer must be able to prove a number of criteria to ensure that a redundancy is genuine and fair, including carrying out consultation with an affected employee about the proposal with an open mind and fairly consider an employee's feedback.

However, MVL was unable to provide evidence satisfactory to the authority that they had met this criteria.

According to ERA documents, Moore said that in 2016 it became apparent to him that MVL's business structures were not efficient and were not working sufficiently well.

Moore said he sought external advice from Deloitte as to how to progress with the undertaking of a major restructure and refinancing, however, no written advice from Deloitte was provided to the authority or to Lynch before she was made redundant.

Moore defended the lack of documentation supporting his decision to make Lynch's role redundant, saying he was a "big picture" person instead of a "details" person.

MVL accepted that the process it used to make Lynch redundant was lacking, and on that basis it was not fair but asserted that the redundancy was substantively justified.

The authority said MVL's assertion of substantive justification lacked evidence in showing what MVL set out to achieve with Lynch's redundancy at that time, nor did it explore any alternative to redundancy, such as redeployment.

In addition, the authority heard that the accounts department was not ready and able to replace Lynch's functions at the time of her being made redundant.

Because of this, the authority said it was impossible for MVL to prove that it acted in the way a fair and reasonable employer could have acted, and therefore Lynch was unjustifiably dismissed.

Lynch told the authority that her dismissal had caused her to suffer ongoing feeling of anger, loss and grief and that her self-confidence had diminished.