A New Zealand Steel company found out the hard way, the cost of getting a redundancy process wrong. The employee was awarded $25k in compensation, 18 months lost wages and was reinstated.
After deciding a position is not needed in your organisation and going through the pain of the subsequent redundancy, what happens when things change and you decide the position is needed after all? Can the redundant employee raise a personal grievance when you readvertise, even if it is months later?
This scenario was tested in the Employment Relations Authority this month in the case of Teague v Pyroclassic Fires. The company had made Mr Teague redundant in October 2020 from his position of Business Development Manager which he had held for five years. The primary stated reason for the disestablishment of the position was the owner having the capacity and wanting to be more involved in the business.
Five months later a similar position to the one Mr Teague was made redundant from was advertised. He applied but was not successful in his application. Mr Teague raised a personal grievance for unjustified dismissal.
The first obstacle was whether Mr Teague had raised a personal grievance within the 90 day time limit for raising one. The employer was of the view the 90 days started from Mr Teague’s termination date in October 2020. Mr Teague was of the view it started when he saw the advertisement for his previous role.
The Employment Relation Act says a personal grievance must be raised “within the period of 90 days beginning with the date on which the action alleged to amount to a personal grievance occurred or came to the notice of the employee, whichever is the later”.
The Authority agreed with Mr Teague on the basis that the advertisement for the position was, on the face of it, fundamentally the same as the one he was made redundant from and “the changes to the role evident from both the advertisement and the fact of advertising, as compared with what was consulted on, cannot have been known to Mr Teague until the role was advertised”. As such the 90 day timeline began when that new information – the advertisement – came to the attention of Mr Teague.
With the 90 day issue resolved in Mr Teague’s favour he is now able to pursue his grievance for unjustified dismissal.
It should be noted that just because he can raise a personal grievance, it does not necessarily mean he will be successful in his claim. Circumstances can change for an organisation. Information that made a decision a justifiable one at a point in time can change. It is important to ensure a business can demonstrate what those changes are and why they could not be anticipated at the time of the redundancy.