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Home / New Zealand

Former SMX director goes from boardroom to odd jobs man: ERA awards IT executive $50k

NZ Herald
4 Feb, 2021 12:01 AM7 mins to read

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A man has been awarded nearly $50k after the Employment Relations Authority deemed his redundancy from a tech firm unjustified. Photo / 123RF

A man has been awarded nearly $50k after the Employment Relations Authority deemed his redundancy from a tech firm unjustified. Photo / 123RF

A former director of a cyber communications company has been awarded nearly $50,000 after a botched redundancy which saw him become an odd jobs man to make ends meet.

The Employment Relations Authority has found Brendon Petrich was unfairly dismissed from his senior role at SMX Ltd after falling out with the company's leadership team.

Petrich, who had been with the email security company for more than a decade, the first eight years as an independent director before becoming a product owner in 2017, was made redundant last January.

The former manager claimed his dismissal was unjustified and lodged a personal grievance claim.

He sought reimbursement for lost wages and compensation for humiliation, loss of dignity and injury to feelings.

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He had since struggled to get a similar job in IT at the same salary, telling the authority he had to do odd jobs for friends and work as a digger operator and roofer to make ends meet.

He later changed this evidence saying he had been operating his own company from home soon after losing his job.

In written evidence Petrich said the ongoing unemployment situation had put him under severe stress affecting his sleep and mental health.

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Petrich claimed the restructuring that axed his job was not for genuine business needs but based on ulterior motives to remove him after he raised concerns with the SMX board about financial forecasts accuracy and his relationship with the chief executive.

In addition Petrich claimed the company's chief executive Ian McDonald and chief financial officer Colin Print had raised a loss of confidence at board level.

The ERA said after two senior sales staff resigned Petrich was appointed into a caretaker role to oversee sales and provide feedback to the board until a new sales head was found.

At board meetings the "pipeline of potential new business" was discussed and instructions from the board to McDonald and his team was to focus on converting the pipeline into a bankable business.

In April, Petrich contacted the board's chair and raised concerns about how this was being reported to the board.

Relationships started to sour at a May board meeting over a disagreement between Petrich, Print and McDonald on a plan to reduce company costs.

"Following the meeting Mr McDonald approached Mr Petrich and Mr Print and
claimed they had "thrown him under the bus".

"Mr Petrich says from this time onwards Mr McDonald stopped engaging with him and says this was the beginning of the end of his employment with SMX," said authority member Vicki Campbell.

In September, Petrich contacted the board's chair for a second time raising concerns about how McDonald was running the business.

That same month the board instructed the chief executive and financial officer to find at least $200,000 in savings.

At the same meeting the management pair said they had lost trust with Petrich and could no longer rely on his information.

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The ERA said Petrich did not become aware of the comments made about him until he received copies of the board minutes during the restructuring process.

A further meeting was held that month but no minutes or notes were available to the ERA about the discussions at that meeting, said the finding.

On September 30 Petrich was asked to go on garden leave, which he refused.

"Mr Petrich says he asked whether the invitation arose as a result of a restructuring or performance issues and was told it was neither," said Campbell.

"Mr McDonald says he suggested that Mr Petrich take a period of garden leave
because he had learnt that Mr Petrich had sent an email to the board chair setting out
his concerns about his ability to work with him [Mr McDonald]. Mr McDonald told
me the garden leave was to provide Mr Petrich with the opportunity to take some time
out.

"I have preferred Mr Petrich's evidence in relation to this conversation because
the email Mr McDonald refers to was sent to the board chair after 30 September, on
11 October 2019."

Meanwhile an updated cash flow forecast given to the board by the chief financial officer showed a $200,000 savings but did explain how this would be achieved.

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"During the restructuring process Mr Petrich claimed the savings identified in
the cash flow forecast related to his salary being removed from the forecasts. This was
denied by Mr McDonald and Mr Print who maintained Mr Petrich's salary was included
at all times," said the ERA.

Petrich emailed the board chair telling him the situation in the management team had deteriorated, and the working environment had become "intolerable" despite attempts to resolve issues directly.

"The board chair forwarded Mr Petrich's email to Mr McDonald with a question
mark. In response to the board chair Mr McDonald advised that he had not had any
issues raised by Mr Petrich and was not aware of any attempts made by Mr Petrich to
resolve any issues. He advised the board chair that his door was open for Mr Petrich
to discuss the work environment."

The chief executive emailed the board with a proposal to disestablish the role of product owner and chief financial officer, with a projected $277,000 saving.

On October 20 McDonald and Petrich met, where he was given a letter outlining a proposal to restructure SMX's operations. The letter advised Petrich two management roles would go.

The expected savings would be $216,000 for 2020 and $519,000 for2021. In the end one role was cut.

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Petrich started working from home. In meetings, he complained of being singled out and alleging ulterior motives were behind the restructuring.

He also labelled the redundancy process a sham, concerned with a lack of company financial information, internal correspondence relating to proposals and chief executive reports over the savings' proposal.

SMX responded in writing denying his claims.

Last January Petrich's role was disestablished. He was offered redeployment, with three days to apply for other roles.

Petrich refused the offer saying the position was at a much lower level in the organisation and paying a significantly smaller salary.

He was dismissed three days later.

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Campbell said after considering and weighing the evidence she found there were mixed motives behind the decision to make Petrich redundant.

"SMX has failed to satisfy me on the balance of probabilities that the predominant motive for the dismissal was for genuine business reasons.

"Given my conclusions, I find Mr Petrich's dismissal by reason of redundancy
was unjustified. The decision to dismiss Mr Petrich by reason of redundancy was not
a decision an employer acting fairly and reasonably could make in all the circumstances
at the time the decision was made."

The finding said SMX should have provided all relevant information to Petrich when he requested it.

"Mr Petrich's job was in jeopardy. SMX was under a duty to properly consider
his concerns and address them by providing all relevant information.

"Standing back and considering and weighing all of the evidence, I am satisfied the
consultation process was lacking," said Campbell.

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Petrich was awarded $49,990, with $20,000 recognising loss of dignity and $29,990 in lost earnings.

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