Restructuring steps including selection process

During the first part of 2025 I provided many clients with assistance to restructure.

While most businesses understand they need substantive justification for the changes they are proposing and then must follow a procedurally fair process, many are not as familiar with the requirement to consult over selection criteria.

Where a business has a pool of employees employed in the same or similar positions, and that are consulting over a proposal to reduce the number of those roles, employers must also consult with the affected employees over the selection criteria and process that will be used to appoint individuals to the remaining positions.

The following recent Employment Relations Authority case is a timely reminder of this requirement:

Berridge v Triple S Management Ltd [[2024] NZERA 774; 23/12/24; A Gane]

Employer deemed to have missed restructuring steps including selection process

Triple S Management (Triple S) was a management company established to facilitate administrative functions across three companies, one of which was Strata Networks. Mr Berridge was employed as a service desk technician by Triple S in January 2019. His primary role was to support Strata Networks. He subsequently raised a personal grievance for an unjustified dismissal, arising from a flawed restructuring process.

In 2019, Strata Networks suffered a significant financial impact when income from its primary client substantially decreased. To ensure Strata Networks remained financially sustainable, Mr Cameron and Mr Comer, directors of both Triple S and Strata Networks, discussed restructuring the subsidiary companies. They decided the best approach was to start “at the bottom” and to balance saving money with retaining skills.

In August 2019, Mr Berridge was called into a meeting with Mr Comer without any forewarning to discuss proposed redundancies at Strata Networks. Mr Berridge was upset and left the meeting after a few minutes. Mr Comer still delivered a letter setting out that his role was to be made redundant. The letter also invited Mr Berridge to a meeting to discuss the proposal and included limited financial information about the reduction in monthly revenue.

At the meeting, Mr Comer stated that he had already informed Mr Berridge of the business reasons for the proposal and that the company was considering making his role redundant to reduce costs. He also said Triple S had considered other options as alternatives to redundancy but decided not to go with them, and asked Mr Berridge for ideas.

Mr Berridge was given one week to review the proposal and provide feedback, and Triple S took another week to consider the feedback. Mr Berridge was then dismissed by way of redundancy.

The Employment Relations Authority (the Authority) accepted Strata Networks had genuine business reasons for its restructure, but found its process was not procedurally justified. Under the Employment Relations Act 2000 (the Act), employers must provide employees with adequate information during a restructure, and a genuine opportunity to comment on said information.

First, the proposal letter from Triple S contained minimal financial information. Mr Berridge was not provided the relevant information he needed to provide meaningful feedback on cost-saving options.

Second, Mr Berridge was one of two service desk technicians who worked for Strata Networks. However, he was the only one given a redundancy proposal letter. As the roles were being reduced, Triple S should have carried out a selection process with the two technicians and consulted with them about the selection criteria.

Triple S also failed to genuinely consider alternatives to redundancy. It did not propose any redeployment options to Mr Berridge, instead putting the onus on him to suggest redeployment options.

The Authority held that the restructure process was procedurally flawed, and that Triple S had not acted as a fair and reasonable employer. Therefore, Mr Berridge succeeded in establishing a personal grievance for unjustified dismissal.

The Authority deemed that reimbursement for one months’ wages of $4,166 was reasonable. The dismissal also caused Mr Berridge significant stress, hurt his feelings and damaged his confidence. Triple S was therefore also required to pay him $15,000 as compensation for hurt and humiliation. Costs were reserved.

 

If your organisation is looking to undertake restructuring that will reduce the number of same or similar positions feel free to contact me for information on how to consult over an appropriate selection process.

 

Abandonment of Employment

I field many enquiries regarding situations that are described as “abandonment of employment”.

Today I will share information on your obligations as an employer in this area.

An employee may have abandoned their employment when they are absent from work for an extended period of time without explanation. Not all unauthorised absences are abandonment.
Not turning up for work for a few days without advising the employer does not always mean that an employee has abandoned work.

There are two possible issues:

  • The employee has abandoned employment and the employer does not know where the employee is
  • The employee fully intends to return to work, but has taken unauthorised leave.

There is a different process for each case.

Abandonment is where an employee walks away from their job with no intention of returning. For example, they may clear their desk, say things in the heat of the moment and slam the door as they go. Other times they may simply not turn up.

Some employment agreements have a clause which states that the employee’s employment may be terminated after a specific number of days of unauthorised absence (usually 3 to 5 days). It is good practice for all employment agreements to contain a clause on abandonment. Employment agreements may also provide for forfeiture of wages if an employee abandons their employment and does not give the required amount of notice in the agreement.

When an employee leaves in a dramatic fashion it’s important to try to fully understand what they really want to do, so everyone knows where they stand. If the drama is work-related they may not have meant to resign and just need some time to cool off before meeting to discuss.

Responding to abandonment of employment

Both employees and employers should communicate clearly with each other in abandonment situations.

  1. Employer’s duties
    When an employee has just not turned up, you, as the employer, must make a big effort to contact them. There’s no legal number of days before they’re considered to have abandoned their job, but it’s usually three days or more. Don’t be too hasty to start the process to end employment — sometimes employees have reasonable explanations.

    Before you can fire them, you need to have tried to find them and clarified whether they plan to come back to work. This means calling all contact numbers several times, leaving messages to call back, perhaps visiting their home before sending a letter or email telling the absent employee that you’re considering ending their job.

    If you contact your employee, and they have a good reason for their absence and intend to return to work, then you can’t rely on abandonment to dismiss them.

    Before you decide that the employee has abandoned their job, it’s important to listen to the employee with an open mind and consider any other information you may have about the absence, such as medical certificates, or conversations with family members of the employee.

  2. Employee’s duties
    If an employee is not able to get into work and cannot let you know, they should make sure someone tells you on their behalf.

Dismissing an employee for abandonment

If a number of days have passed and you still haven’t been able to contact the employee and they haven’t had any contact with you, follow these steps:

  1. Advise the employee by phone or email and in writing to their last known address that their employment is at risk. Make it very clear that unless they contact you by a certain time you’ll regard their employment as ended due to abandonment. Quote the relevant clause from their employment agreement if there is one.
  2. If there is still no response, advise the employee by phone or email and in writing that, in accordance with your previous communication, you now regard their employment as terminated by reason of abandonment.

It is very important that you keep a record of all attempted contact and communication so that, if should there be a dispute in the future, you have it all documented. If it’s a matter of taking unauthorised leave it should be handled in the same way as any other suspected misconduct.

Remember, if you’re going to end an employment relationship, you must have a good reason and act fairly and reasonably. If you have any questions or would like help to respond to this type of situation, please feel free to contact me to discuss it.

Interpersonal Workplace Conflict

In this newsletter I provide guidance on how to effectively address interpersonal conflict in the workplace before it escalates into allegations of bullying or harassment.

As a licensed investigator of harassment and bullying, sexual harassment and general investigations, I see first-hand the lost opportunities within organisations to take proactive steps to manage these disputes before they escalate into formal complaints requiring independent investigation.

The key is to be proactive and identify when interpersonal difficulties and disputes first begin occurring. This requires the organisation to create an environment where all members can proactively raise issues, either on their own behalf or when they observe escalating tensions between others.

Early intervention and action are essential to creating a process through which individuals experiencing interpersonal difficulties can seek support. Good communication and leadership are critical. Having guidelines and company policies that set out processes to help address and resolve interpersonal conflict is a sound investment. Let me know if you would like more information about these processes.

I have seen well-managed internal mediated conversations between individuals or groups experiencing difficulties constructively address disputes for the benefit of all stakeholders before matters escalate. Providing information to help team members understand their own personality preferences and those of others can create more tolerance, flexibility and a willingness to adapt when disagreements and disputes occur.

If matters have escalated and a formal complaint has been made, I recommend engaging a licensed independent investigator, such as myself, to ensure you meet your obligations as an employer.

There is a wide variety of behaviour that can qualify as bullying. It can be physical, verbal or relational and social, such as excluding someone from a peer group or spreading rumours.

Workplace bullying is not:

  • One-off or occasional instances of forgetfulness, rudeness or tactlessness
  • Setting high performance standards
  • Constructive feedback and legitimate advice or peer review
  • A manager requiring reasonable verbal or written work instructions to be carried out
  • Warning or disciplining workers in line with the organisation’s code of conduct
  • A single incident of unreasonable behaviour
  • Reasonable management actions delivered in a reasonable way
  • Differences in opinion or personality clashes that do not escalate into bullying, harassment or violence

Investigations must follow a formal, structured process of inquiry. Obtaining an independent report into allegations helps avoid a conflict of interest for the organisation and ensures it meets its obligations as an employer.

If you have received a complaint and would like more information about how to respond, please feel free to contact me to discuss it.

Conditional Offers of Employment

A recent decision involving Fire and Emergency New Zealand has explored the area of “Conditional Offers of Employment”.

In KNN v Fire and Emergency New Zealand [2025] an appointment was made conditionally pursuant to the Fire and Emergency Act 2017 (the FENZ Act). A completed review in their favour was required for the employment to become unconditional. This essentially mirrors the Public Service Act 2020.

The Public Service Act 2020 provides (s.72) appointments are on merit (preference to person best suited to the position) and (s.71) that appointments … are provisional pending the outcome of a review …

However, this case also has relevance for employers who are waiting for such things as criminal background checks to come through.

In this case the employee started work before the review had been completed. They argued (unsuccessfully) that the conditional offer was waived by allowing the employee to start work before the condition was met. The employee’s appointment was cancelled and re-advertised.

The Employment Court held that as an employee, they were entitled to raise a personal grievance. Consideration would need to be had as to whether the employer acted as a fair and reasonable employer in the circumstances. The review process undertaken would inform this assessment.

Where a provisional appointee has not yet commenced, they are not an employee; they do not fall within the extended definition of employee, which includes “a person intending to work.”

If a conditional appointment was withdrawn prior to starting work, the provisional appointee would not be able to bring a personal grievance.

Court observed:

“Once a person commences employment, they are an employee, and the Employment Relations Act applies to their employment. This includes … termination … giv[ing] rise to the right to bring a personal grievance.” And “… it would be open to the Authority or Court to find the decision to withdraw the appointment and terminate the employee’s employment was not one that was open to a fair and reasonable employer in the circumstances. That exercise would be a limited one, the Court and Authority could be expected to generally defer to the views of [the employer] as to whether the appointment should be confirmed or cancelled, but nevertheless, could determine that the decisions were not ones that a reasonable person could have made in the circumstances.”

Summary:

If your Company is wanting protection of a conditional offer, it is preferable not to start the person. However, you may still invoke the conditions if they do. If starting an employee before conditions have been met, it will be prudent to clarify in writing before they start, that the appointment is conditional and may potentially be terminated if the conditions are not met.

Employer Guide to Medicinal Cannabis

In this Newsletter I provide a guide provided by the New Zealand Drug Foundation (attached) to assist you in navigating the issue of medicinal cannabis in the workplace.

Understanding Medicinal Cannabis

  • Legal Status: Medicinal cannabis is a prescription-only pharmaceutical product accessed through the Medicinal Cannabis Scheme (since April 2020). It must meet minimum quality standards (Good Manufacturing Practice).
  • CBD vs. THC:
    – CBD (Cannabidiol): Non-intoxicating, does not cause impairment, and is undetectable in standard drug tests.
    – THC (Tetrahydrocannabinol): The intoxicating component that can cause impairment. It is detectable in drug tests.
  • Testing Limitations: Drug tests detect the presence of substances (metabolites) but cannot definitively measure or prove current impairment. THC can remain detectable for days or weeks after its intoxicating effects have worn off.

Employer Obligations & Rights

  • Health and Safety: Employers have a duty under the Health and Safety at Work Act 2015 to eliminate or minimise risks. This includes managing risks from impairment, especially in safety-sensitive roles.
  • Non-Discrimination: Sanctioning an employee solely for a positive cannabis test when they have a valid prescription may constitute unlawful discrimination on disability grounds under the Human Rights Act 1993 and the Employment Relations Act 2000.
  • Privacy: Medical information is confidential under the Privacy Act 2020. However, employees may be required to disclose medication use if it could affect their ability to safely perform their duties
  • Dismissal: Dismissal for using medicinal cannabis is generally not considered serious misconduct unless it involves a breach of safety obligations that cannot be mitigated. Alternatives like medical incapacity or medical retirement may be considered if an employee cannot safely perform their role for the foreseeable future.

Best Practice for Workplace Policies

The guide recommends that employers review and update their policies to explicitly address medicinal cannabis. Effective policies should:

  • Define Impairment: Focus on identifying and responding to actual impairment from any cause (fatigue, stress, or medication) rather than just substance presence.
  • Clarify Disclosure: Provide a confidential process for employees to report the use of medications that might cause impairment without fear of repercussion.
  • Outline Testing Procedures: Specify who will be tested (prioritising safety-sensitive roles), under what circumstances, and what actions will follow a result.
  • Support Accommodations: Include steps for temporary or permanent redeployment to less safety-sensitive roles if impairment poses a risk.

Key Takeaways for Employers

  1. Safety First: Focus on managing the risk of impairment rather than just the presence of a substance.
  2. Individual Assessment: Evaluate each case based on the specific role, the nature of the medication, and medical advice.
  3. Good Faith: Always act as a “fair and reasonable employer,” following established processes and investigating thoroughly before taking disciplinary action.

Due Process for Dismissal

In this newsletter I highlight the need for Employers to follow due process when dismissing employees.

I often get asked by Employers, if an employee has committed serious performance or conduct breaches can the employer simply dismiss?

For example, two employees having a physical fight during work time.

While the action may appear to justify summary dismissal, the employer must still run a formal investigation to put the concerns to the employees and seek their comments or explanations before reaching any decisions.

Summary dismissal does not mean immediate dismissal with no process; it simply means dismissal without notice.

In a recent case “Patury v Watson Builders Ltd [2025]” the Employment Relations Authority (the Authority) considered whether Watson Builders’ actions, and the process it followed, were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal occurred.

The Authority acknowledged that performance issues can be serious and, in some cases, may justify disciplinary action up to dismissal. To justify a dismissal without notice, an employer must show that the employee’s conduct was so serious that it destroyed the necessary trust and confidence in the employment relationship.

Whilst there was no dispute that Mr Patury had made several mistakes, most were relatively minor, and Watson Builders had not put in place any formal performance management or provided support aimed at helping him avoid repeating those errors. Thus, due process was not followed.

The Authority ordered Watson Builders to pay Mr Patury $18,304, representing three months’ lost wages and $7,500 compensation awarded for hurt and humiliation.

If you have any serious employee performance or conduct issues, make sure you follow due process before reaching any decision to dismiss. If you would like assistance with understanding the key steps required, feel free to contact me for more information.