Employer cites contract: 'Position may change in response to business needs'
The Employment Relations Authority (ERA) recently dealt with a case involving a worker who claimed unjustified disadvantage and dismissal against her employer, a credit union. The dispute centred around changes to the worker's place of work and a subsequent redundancy.
The worker argued that she had always worked from home and that the sudden requirement to work from a branch office was inconsistent with her employment agreement.
She also contended that the subsequent redundancy proposal appeared to be in response to her objections rather than a genuine organisational need.
This case raises important questions about workplace flexibility, the rights of employees to maintain established working arrangements, and the processes employers must follow when implementing significant changes.
‘Work from home’
The worker had been employed as a member service ambassador, working from home since August 2021. Initially hired by Westforce Credit Union, her employment transferred to First Credit Union in August 2022 when the organisations merged under the Friendly Societies and Credit Unions Act 1982. The worker's role was unique, and she was one of only two staff members who worked from home.
The worker's employment agreement included clauses about place of work and potential changes to the position. Clause 6.1 stated that while the employee was initially assigned to a specific branch, she agreed to work at any branch as required by business conditions, subject to this requirement being reasonable in terms of travel distances.
Clause 2.1 specified that the position may change in response to changing business needs at the discretion of the employer, and the employer would consult with the employee prior to such change.
In early 2023, the employer faced difficulties recruiting staff for their branches, with some branches unable to open every day of the business week. This led to a review of resources, including considering whether employees who worked from home could work in the branches.
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The chief executive officer decided that the worker should work from the Avondale branch and communicated this via email on 3 May 2023, giving three business days' notice.
The worker was shocked by this sudden change and responded that she had always worked from home. She pointed out that her employment agreement didn't specify working from a branch and requested further clarification on why the change was necessary.
The worker emphasised that her role was designed to be performed remotely and that she was fully discharging her duties from home.
Consultation and redundancy
When the worker objected to the proposed change, the employer's focus shifted to a restructuring proposal. On 8 May 2023, the CEO invited the worker to a meeting to discuss a proposal to disestablish her role. This meeting was eventually held on 18 May 2023.
The employer argued that the member services ambassador role working from home no longer suited business requirements. They emphasised the need for staff to be in branches to fully serve members.
As stated in the ERA decision:
"Our initial view is that the matters you have outlined as being unique to your role are in fact catered for throughout the organisation. In fact, a lot of what is set out, is an existing expectation of a Members Solution Consultant across the organisation."
The worker was offered redeployment opportunities at the Avondale or Whangarei branches, with no change to her pay. However, these options were not suitable for the worker due to the impractical travel distances involved.
In response, the worker provided detailed information about her role, highlighting its uniqueness and value to the organisation. She emphasised her proactive approach to engaging with members and fostering a sense of community within the credit union.
The worker's letter stated: "I wish to remain home based and as you have already pointed out, continue to perform the role and similar duties of a Member Solution Consultant."
Unjustified disadvantage but justified dismissal
The ERA found that the worker had been unjustifiably disadvantaged when the employer required her to work from the Avondale branch without proper consultation. The Authority noted:
"First Credit was required under clause 2.1 to consult with [the worker] before making changes to her position."
The ERA emphasised that the employer should have considered the worker's consistent working from home arrangement and provided a reasonable opportunity for her to comment on working from the Avondale branch before making a final decision.
However, the ERA determined that the subsequent redundancy was justified. The Authority accepted that the employer had a genuine business need to focus resources on branches and that the restructuring process was fair and reasonable. The ERA stated:
"[The worker's] redundancy dismissal was justified – her member services ambassador role was made redundant for genuine reasons, the consultation process was fair and reasonable including that she was provided with relevant information to allow her to meaningfully comment on the proposal and redeployment options were provided which unfortunately [the worker] was unable to accept due to the distance between her home and the job location."
This case serves as a reminder of the importance of following proper procedures when making significant changes to employment conditions. Employers should consult with employees before making changes to their positions, especially when it involves a change in work location.
They should provide clear reasons for proposed changes and allow employees to comment meaningfully. It's crucial to consider the impact of changes on individual employees, particularly those with unique working arrangements. Employers must also ensure that redundancy processes are genuine and fair, even if they arise from earlier disputes or disagreements.
The ERA's decision also highlights the distinction between unjustified disadvantage and unjustified dismissal. While the initial requirement to work from the branch without proper consultation was found to be unjustified, the subsequent redundancy process was deemed fair and reasonable.
As the Authority noted:
"While that initial requirement was flawed I am not satisfied it has been established the refocus on restructuring was significantly tainted by that flaw."
This underscores the importance of employers rectifying procedural errors and ensuring that subsequent processes are fair and transparent.
In conclusion, the ERA awarded the worker $12,000 in compensation for humiliation, loss of dignity, and injury to feelings related to the unjustified disadvantage. The Authority said: "[The worker] has not contributed to the circumstances which gave rise to her personal grievance."