ERA examines consultation process and final pay entitlements in workplace restructure
The Employment Relations Authority (ERA) recently dealt with a dismissal case where a worker claimed his redundancy was predetermined, his feedback wasn't properly considered, and his employer owed him money for his notice period and holiday pay.
The worker's grievances raised questions about proper redundancy consultation processes and accurate calculation of final pay entitlements.
His case highlighted common workplace issues that affect both employers and workers during restructuring situations.
The worker started his role in August 2021, took a brief break to explore an apprenticeship, then returned to work at a beverage company.
His duties involved bottling water, packing, and managing stock movements. He typically worked between 60 and 70 hours per fortnight.
The company faced financial difficulties that eventually led to voluntary administration in 2023. In December 2022, the company directors called all production plant staff to a meeting where they received letters about potential job losses due to restructuring.
The worker held a permanent position with 35 ordinary hours per week according to his employment agreement, which also provided for four weeks of annual holidays.
A significant dispute emerged about what transpired at the worker's feedback meeting on 20 December 2022. During this meeting, the worker provided suggestions about focusing on core products and discontinuing less popular lines.
The ERA noted: "[The worker] says that at the end of that meeting, he was told he could finish early and go home, because there was no more work. He understood that he was not to come to work the following day, because the work had ended."
However, the directors presented different evidence. They maintained they told staff they would "be in touch" after considering the feedback, though neither could recall their exact words.
The case revealed inconsistencies in holiday pay records. While the worker's regular payslips showed accumulated annual leave of 126 hours, the employer later provided different versions of these payslips to the ERA showing zero balance.
The Employment Relations Act 2000 requires employers to maintain accurate wage and time records. The ERA found:
"Where there is a failure by [the employer] to keep or produce wage and time records, and this failure prejudices [the worker's] ability to bring an accurate claim for arrears, the Authority may accept as proved all claims by [the worker]."
The ERA ordered the employer to make several payments to the worker, including two weeks of unpaid contractual notice, holiday pay on that amount, and payment for 126 hours of annual leave.
"Although [the employer] accepts that [the worker] was entitled to payment for his 4-week notice period, there have been ongoing disputes between the parties about what that payment amounts to, how many hours a week should be paid, and how to deal with annual leave," the ERA stated.
The Authority emphasised: "[The employer] was in control of the terms in the employment agreement and over the details shown on the payslips. Through these documents, [the employer] led [the worker] to expect he had an entitlement to annual leave amounting to 126 hours."
The case underscored the importance of maintaining clear employment records and following proper redundancy procedures. The ERA's decision provided clarity on holiday pay entitlements during redundancy situations and the significance of accurate employment documentation.
