A New Zealand start-up CEO has been awarded more than $186,000 after her unjustified dismissal
The former chief executive of a start-up firm in Wellington has been awarded more than $186,000 after the Employment Relations Authority (ERA) rejected serious misconduct allegations made against her.
The ERA found that the dismissal of former Sleaktek CEO Juliet Hull was unjustified, ruling that the redundancy process was procedurally and substantively deficient.
"Ms Hull did not have a real opportunity to respond to Sleaktek's concerns, and the responses she did provide were not genuinely considered by Sleaktek," the ERA said.
"This evidence also fundamentally undermines any suggestion that the disestablishment of Ms Hull's position and her resulting dismissal was for genuine business-related reasons."
What happened at Sleaktek?
Hull joined Wellington-registered start-up Sleaktek as its chief executive in late 2022, initially on a $140,000 salary before renegotiating to $200,000.
For more than a year, Hull used her networks to raise $100,000 in funding that allowed salary payments to begin in May 2023, and Sleaktek secured positive independent laboratory testing results for its coating product by early 2024.
The relationship between Hull and sole director, Robert Lawrence, began to deteriorate in March 2024 when the latter criticised Hull in front of colleagues and the company's legal counsel at a meeting.
Lawrence said he did not trust Hull and advocated that his wife take over the running of the company. Mrs Lawrence later apologised to Hull for her husband's conduct.
By April 2024, with company funds nearly exhausted, Lawrence directed that Hull's salary cease. He then proposed making her position redundant, refused her requests for further information, and raised unspecified serious misconduct allegations before dismissing her by letter on 11 June 2024.
Hull raised personal grievance claims with the Employment Relations Authority (ERA).
The ERA's findings
ERA member Claire English found the redundancy process to be procedurally and substantively deficient.
Lawrence had told Hull in front of third parties on 17 April 2024 that, regardless of any fresh funding that might materialise, he wanted Hull "out" of the business, a comment English found fatally undermined the legitimacy of the restructure.
"This is consistent with his subsequent evidence to the Authority that despite contemporaneous correspondence referring to a restructure and disestablishment of Ms Hull's position, the real reason for the termination of her employment was due to his view that she had committed serious misconduct," the ruling states.
Lawrence raised three serious misconduct allegations against Hull: that she had allowed an investor to provide an unsecured loan to Sleaktek rather than a preferred form of investment; that a text message she sent to the same investor amounted to blackmail against Lawrence; and that a "begging email" she wrote to a potential funder in February 2023 had cost Sleaktek the investment.
Allegations against CEO get rejected
The ERA rejected all three. On the loan, English found Lawrence had personally attended the meeting at which the unsecured loan was agreed and had subsequently congratulated all parties on the outcome.
On the blackmail allegation, the determination noted Hull had drafted the text at the instruction of Mrs Lawrence, shown her the wording before sending it, and received explicit approval.
"The later characterisation of this message by Mr Lawrence does not change the fact that the message was requested and approved by authorised representatives of Sleaktek at the time it was sent," English wrote.
On the fundraising email, the Authority found the funder had declined to invest due to concerns about the timeline to commencement of sales, not because of Hull's correspondence.
English also dismissed Sleaktek's counterclaims, including allegations that Hull had attempted a hostile takeover of the company.
Sleaktek was ordered to pay Hull $45,000 in hurt and humiliation compensation, $50,000 in lost wages, $41,815 in unpaid salary and holiday pay, $16,615 in notice pay, $27,692 in outstanding annual leave, and a $5,000 penalty, as well as a further $2,000 payable to the Crown.
Lawrence was personally penalised $1,500 and declared a person involved in a breach of employment standards under section 142W of the Employment Relations Act 2000, leaving him liable for any amounts Sleaktek is unable to pay. Costs were reserved.
