Genuine reason, botched process: how one redundancy still cost a small employer
Employment Relations Authority member Helen van Druten ruled on 12 August 2026 that a genuine redundancy still amounted to unjustified dismissal.
The case centred on a marketing employee who joined a small, predominantly online Auckland wholesaler in August 2023. She raised several personal grievances after her position was disestablished during a restructure in March 2024, including unjustified disadvantage, sexual harassment and unjustified dismissal.
The determination accepted the wholesaler's reasons for restructuring were genuine, pointing to a real drop in wholesale revenue in early 2024 that justified looking at cost savings. However, it found the process that followed fell short of what a fair and reasonable employer would do.
One director's email to staff said only that "we will be meeting with you all individually about the roles going forward," giving no further detail on timeframes or what changes to expect. The determination noted there were no meeting notes, no written proposal and no clear explanation of what "roles will change" meant for individual positions, and that staff experiences of the consultation varied considerably.
The employer accepted it never told the employee her role was at risk before the decision was made, and the determination found she was left to draw her own conclusions about what was happening to her job.
Comparing the disestablished role with the newly created position the employee was invited to apply for, the determination found little separated the two. The employee had described them as "awfully close," a characterisation the member agreed with, and found no adequate explanation had been given for why she needed to reapply rather than simply move into the role.
The disadvantage and bullying claims were declined, the determination noting no formal complaint had been raised with the business at the time. A separate claim that she had been sexually harassed at a work function was found to have been raised within the required notification period, but was ultimately unsuccessful for insufficient evidence, after a witness said she did not recall the alleged comments or notice any change in the employee's conduct afterwards.
No penalty was ordered for an alleged breach of good faith, with the determination noting this had already been addressed through the compensation awarded for the dismissal. Lost wages were also declined, as the employee had turned down the opportunity to apply for the new role and had chosen to finish four weeks before her official end date.
The wholesaler was ordered to pay $11,000 for humiliation, loss of dignity and injury to feelings under section 123(1)(c)(i) of the Employment Relations Act 2000. Costs were reserved, with both parties encouraged to resolve the matter between themselves.
