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Manager Awarded Over $76K Following Flawed Redundancy

Brett Arthur was emailed an offer of employment on April 8, 2019 by Tech company OSS.

The offer did not include an employment agreement, however the key terms and conditions, including a base salary and on-target earnings of $300,000, (base salary and commissions) were outlined in the agreement. No details were offered on how commission would be decided.

Arthur accepted the role a day later and commenced employment on April 26 while still negotiating the specific terms that would dictate the bonus structure. He repeatedly asked for financial information that could inform his negotiations with them.

Later that year on September 9, Arthur received a written proposal to disestablish his role as head of sales and marketing, and included a document setting out the restructuring proposal, the number of roles that were potentially affected by the restructuring and the principles of how the restructure would be conducted. He was then invited into a meeting on September 11 to discuss it further.

Arthur provided the company with feedback on the restructuring proposal within four days of the meeting taking place. He claimed that OSS had failed to keep the redundancy process private to those affected by talking about it to other staff and publishing the fact of it in an open calendar invite.

Arthur also argued the process was not in good faith because the real reason for disestablishing the roles was performance issues with one of the affected employees and his own repeated requests for financial information.

He stated that he could not provide informed comment on the financial basis of the decision as he had not received the financial information that he had been requesting and no cost saving measures had been put in place before the restructuring proposal was communicated.

The Managing Director, Ian Soffe, responded to Arthur, saying he was surprised by his feedback, disagreeing with the points raised by Arthur and said the restructure was required to cut costs because of lower-than-expected occupancy and revenues. Soffe stated that Arthur, as a senior manager, would have known about the revenue issues.

Arthur was given two months’ redundancy notice and the option to take “garden leave”, which was accepted.

Authority member, Marija Urlich, rejected Arthur’s claims that OSS did not have a genuine need for restructuring or that there was an ulterior motive to the process, however, she determined that the company had failed in its obligation to consider Arthur for other roles as during his notice period, a member of the sales team resigned and his last day with the company was 20 November 2019.

“OSS had an obligation to offer the vacant role to Mr Arthur given the role was within Mr Arthur’s capability (it fell within his then team) and became available during his notice period,” Urlich said.

The failure to offer the vacant role to Arthur meant he was unjustifiably dismissed by the company.

The company was ordered to pay Arthur three months in lost wages, amounting to $52,000, $4200 holiday pay and $20,000 for hurt and humiliation.

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