Ogilvy New Zealand, an arm of Australasia's biggest business communications company STW Group, has been ordered to pay its former deputy managing director nearly $350,000 after it made her redundant.

Parnell-based advertising and public relations firm Ogilvy New Zealand has been ordered to pay Margaret Whitten after she complained to the Employment Relations Authority that she had been unjustifiably dismissed.

She had been employed by Ogilvy and its predecessors since 1993 when Ogilvy managing director Greg Partington told her in July 2008 that he had appointed a new deputy managing director - Fraser Holland. He offered her a seat on the Ogilvy board if she relinquished her job title, and said that if she did not, the role would be downgraded from a national position to Auckland only.

Mr Partington then put the "offer" in writing on July 9, and said the directorship would recognise the contribution she had made to the business and reflect the importance of one of her accounts, Sanitarium.

Mrs Whitten was still considering the offer when Mr Holland's appointment was announced on July 11, and five days later her lawyer was told she had never been deputy managing director, and the offer of a directorship was withdrawn "because the shareholders believe it would no longer be in the best interests of the business". It also announced it wanted to raise "performance concerns".

Authority member Marija Urlich said Ogilvy seriously breached Mrs Whitten's employment agreement by unilaterally varying it, unreasonably terminating the consultation process, and saying she never did the deputy's job, despite having filled the role for over three years.

"Ogilvy's actions backed Mrs Whitten into a corner," Ms Urlich said, and ordered redundancy of $128,615 be paid to the employee, who was on a salary of $209,000.

She noted the hurt and humiliation involved was compounded when Ogilvy threatened High Court proceedings for "malicious process" because Mrs Whitten took the case to the authority, and ordered the company to pay another $15,000 as compensation.

The company was also ordered to pay $193,333 for eight months lost wages up to the time of the hearing, and another $6344 for lost benefits such as a cellphone, petrol and medical insurance.

The authority turned down Mrs Whitten's request for additional punitive damage, but noted the case was not due to any blameworthy conduct on her part.

"She maintained the obligations owed to her employer to be active, responsive and communicative," Ms Urlich said. "Ogilvy has not."