ERA says employer did not 'sufficiently investigate' before dismissing the employee
A butcher in New Zealand who was unknowingly promoted to be the director of the business he was working for — before he was made redundant — has won more than $55,000 at the Employment Relations Authority (ERA).
Karel Van der Linde was a butcher employed at a local supermarket who moved from South Africa to New Zealand with his family but lost his job and struggled to find new work due to the COVID-19 pandemic.
He was eventually employed by Pieter Steyn, the sole director of Rawgold NZ, who was also at the time a full-time manager for another large company.
Director promotion without consent
Steyn was aware that Rawgold was not performing well, and due to the stress of managing the director, he turned over the role of sole director and shareholder of Rawgold to Van der Linde without the butcher's consent.
"I felt relieved - [if] something goes wrong, it's on him and not on me," Steyn said as quoted by the ERA's court document.
Van der Linde was alarmed when he found out about Steyn's decision as it put him in breach of his visa conditions. He then went on leave without pay, looked for other employment, while raising the issue of his role to Steyn.
According to Van der Linde, his work visa renewal was initially denied as a result of the situation.
Steyn, at the butcher's urging, eventually took back the directorship and shareholding for Rawgold, while Van der Linde took on administrative tasks while he looked for other jobs.
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Returning to Rawgold
The butcher, however, failed to find another employer and was eventually appointed as "butchery manager" and became the only contact for the company.
On Steyn's end, he remained concerned that Rawgold was not making enough to cover its expenses. Van der Linde offered to take a pay cut to help the situation but was instead made redundant by his employer.
According to Steyn, the decision to make the butchery manager redundant was "emotional," as he found the move to give him a pay cut "very stressful."
The director added that he had a "sickening feeling" that he was "stuck" with Van der Linde.
The butcher eventually raised a grievance with the ERA for unjustified dismissal, as well as breach of good faith after he was named director without his consent, as well as loss of income.
ERA's decision
The ERA ruled in favour of Van der Linde and said he was unjustifiably dismissed, after Steyn admitted that he only considered selling the business or closing it.
"Rawgold did not sufficiently investigate the relevant circumstances facing the business before dismissing Mr Van der Linde," the ERA said in its ruling.
"[Steyn] did not consider restructuring, or re-sizing (which was essentially what Mr Van der Linde proposed)."
According to the ERA, Steyn also made the decision to end Van der Linde's employment without discussing the proposal to take a pay cut, or the possibility of ending the butcher's employment.
"The lack of consultation and genuine consideration of other options means that this was not a decision open to a fair and reasonable employer. Mr Van der Linde was unjustifiably dismissed," the ERA said.
Van der Linde's claim to a penalty for breach of good faith, however, did not proceed as he raised the matter to the ERA more than 12 months after he became aware of the issue.
The ERA then ordered Rawgold to pay Van der Linde $27,499.94 for lost remuneration, another $2,200 for lost annual leave entitlements, $825 for lost KiwiSaver entitlements, and $25,000 as compensation for injury to feelings.