ERA examines boundaries between employment disputes and workplace returns
The Employment Relations Authority (ERA) recently examined a case involving disputes over bonus payments, property arrangements, and a redundancy process that ended a general manager's employment.
The worker alleged his employer had agreed to increase his bonus entitlements when he relocated, claiming this would have raised his total annual remuneration from $600,000 to $1,785,000.
He also challenged his dismissal through redundancy, arguing it was influenced by ongoing disputes rather than genuine business needs.
The case centered on whether verbal agreements modified the original employment terms and whether the redundancy process was justified given the surrounding circumstances of unresolved bonus disputes and property-related arrangements.
In October 2016, the worker started as general manager with a written employment agreement that included specific bonus provisions. The agreement stated that variations "can be" rather than "must be" recorded in writing.
A significant dispute arose over whether bonus terms were modified during May 2018 discussions about the worker's relocation to Hamilton. The worker claimed new terms were agreed upon verbally, while the employer maintained that no such agreement was reached due to unresolved discussions about Key Performance Indicators (KPIs).
The employer's review through PwC concluded the worker had been paid $540,833 more in bonuses than entitled to under the original agreement for the years 2018-2021. The Authority ultimately found in the employer's favor on this issue, determining the original 2016 bonus terms remained applicable.
In June 2022, matters escalated when the worker took stress leave over remuneration issues. Despite providing a medical certificate, he faced resistance returning to work.
The employer's email stated: "We haven't resolved the matter which caused you to be stressed... therefore I cannot have you return to work till this stress has been resolved via resolving the 'contractual dispute'."
The Authority found this action unjustified, as the employer had used the stress leave situation to pressure the worker into accepting their position on bonus terms. The worker was eventually allowed to return after providing a counsellor's report. This period formed part of the worker's successful claim for unjustified disadvantage.
In August 2022, the employer proposed reallocating the general manager's duties to the director's role. While citing business needs and economic pressures, the Authority found the decision was improperly influenced by other factors.
The Authority's decision stated: "It was more likely than not that the decisions made by [the employer] to disestablish the general manager's role and to dismiss [the worker] were predominantly made for more than the immediate business needs of the company, that is those decisions were unfairly influenced by other motives concerning the interrelated employment and business disputes."
The Authority ordered the employer to pay six months' salary as lost wages and $25,000 in compensation for humiliation, loss of dignity, and injury to feelings.
The Authority noted the worker's successful personal grievance claims for both unjustified disadvantage and unjustified dismissal warranted these remedies.