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REDUNDANCY – news flash!

Published 01 Dec 2010

Wang v Hamilton Multicultural Services Trust [2010] NZEMPC 142

This was a genuine redundancy, with a failure to consider redeployment or to offer an alternative position by way of redeployment. The employee was asked to apply for new role, but refused to apply. Held: there was contributory fault and therefore a 50% reduction of the awards was made by the Employment Court's Judge Perkins, to 6 month's salary and $5,000 for hurt and humiliation.

Judge Perkins also commented: the employee's decision not to apply for a new role which attracted a 50% increase in salary, "would have been different if he had obtained sensible legal advice…."

This is a major change in the law, as formerly a genuine redundancy did not attract payment for lost income post dismissal, except in the most unusual circumstances, e.g. where the unjust upset and hurt was so intense the employee was rendered medically unable to work.

This was an unusual case as the employer conceded that Mr. Wang "was well able to perform the duties of the new position".

Implied within the Judge's reasoning, but not expressly stated, was a finding that the new position was substantially different from the old one. There were differences, especially much greater responsibilities regarding other staff. The employer was not said to have had a right to simply force redeployment, the employer had to offer the redeployment to the employee, and the employee could accept or reject. [refer para 40]

To support this ruling, his Honour relied on Jinkinson v Oceania Gold (NZ) Ltd [2010] NZEmpC 102 at [38] which held "all the actions" of the employer, "up to and including the decision to dismiss" could be reviewed by the Courts. (Because the redundancy was held to be not genuine, Ms Jinkinson was awarded over three years lost wages, and $4,000 for hurt and humiliation.)

Using the platform created by Jinkinson Judge Perkins in Wang at [40] extended the employers obligations to "The obligation was on the Trust to consider other alternatives to making Mr. Wang redundant".

"..he should have been offered the position by way of redeployment …rather than apply[ing] for the new position" ".

So where does this leave us?
If an employee is capable of performing an alternative, available position then (s)he should be offered in preference to redundancy.