ERA finds builder penalised carpenter's injury-related absences and predetermined his selection in a flawed restructure
A construction company has been ordered to pay $20,000 to a long-serving carpenter after the Employment Relations Authority (ERA) found it unjustifiably made him redundant, partly by counting his injury-related absences against him.
The ERA found that the employer failed to show that a carpenter position was surplus to its needs, unfairly penalised the carpenter for ACC-related and sick leave absences, and had settled on his selection before consulting him.
"These were not minor defects. They deprived [the carpenter] of a meaningful opportunity to influence the decision before it was made," ERA Member William Fussey said in the ruling.
Colleagues learned of redundancy before consultation
The carpenter joined the company as an apprentice in March 2013 and later qualified as a carpenter. He was off work on ACC for about two months after injuring his shoulder in November 2023, then for about six months after surgery in July 2024, returning in January 2025.
That month, the company's director warned staff of "difficult times ahead." Citing falling profit margins, costly unsuccessful tenders, and loss-making jobs, he announced in February 2025 that staff numbers would be cut by five.
With help from an HR adviser, the director scored every employee against selection criteria, where the carpenter received two out of ten for "unpaid time off," a score the employer conceded was "predominantly attributable" to his ACC absence.
In February 2025, the director emailed the carpenter to say his position was among those being considered for disestablishment.
About 40 minutes later, he emailed the remaining staff saying he was "looking to disestablish" five roles. Colleagues identified who had been left off the email and began messaging the carpenter, who replied to one: "Not yet bro, I haven't even had a meeting with him how did you find out about this bro?"
His meeting with management on 14 February lasted five to ten minutes. He was dismissed effective 28 March 2025. During his notice period, the company offered him continued work after securing a new project, but he declined, having already accepted a better-paid job. He then brought an unjustified dismissal claim to the ERA.
Was the dismissal justified?
The Authority accepted that the employer had genuine financial reasons to restructure, but found the dismissal both substantively and procedurally unjustified.
It said absences could be relevant to selection, but "the nature and circumstances of the absence must be considered in determining what, if anything, it indicates about the employee's future attendance or value to the business."
Because the carpenter had returned to work and no further absence was expected, his ACC-related absences "were not reasonably indicative of his likely future attendance," the ERA found.
It also ruled that the employer wrongly lowered his "reliability" score because of sick leave, stating that "an absence on statutory sick leave does not indicate any deficiency" in punctuality or performance.
The ERA further criticised the employer for cutting whichever roles the five lowest-scoring employees held across the company.
"Even if [the employer] had established a need to reduce overall employee numbers by five, that did not necessarily mean it could reasonably remove whichever five positions were occupied by the lowest-scoring employees," it said.
On consultation, it found the carpenter was not given other employees' anonymised scores, the weighting of factors or the scoring criteria. By emailing other staff about the five affected roles, the employer "effectively indicated that their own positions were secure."
The employer argued that the carpenter's claimed distress lacked evidence, pointing to staff who saw him in an "upbeat mood" about his new job. The Authority disagreed.
"A person may be pleased about obtaining new employment while remaining distressed and humiliated by the circumstances in which their longstanding employment relationship ended," it said.
It ordered the employer to pay $20,000 in compensation for humiliation, loss of dignity and injury to feelings. No lost wages were awarded, as the carpenter moved straight into higher-paid work.
The ERA also found the employer breached its duty of good faith but declined to impose a penalty, finding the breach was not deliberate, serious, and sustained. Costs were reserved.
