The Employment Relations Authority has ordered a small Snell’s Beach Cafe business to pay its workers $136,800 for incorrectly dismissing their staff due to the Covid-19 lockdown, even though they had a clause in their employment contracts that said they could dismiss their staff if the business was “interrupted by unforeseen events beyond its control” including a heath pandemic!
That’s a big payout for a small business, so it’s important to understand where they went wrong!
All of the Café’s employees were asked to attend a meeting on March 19 and then issued with letter stating that they were being made redundant without notice. The letters referred to the clause in their employment contracts about dismissing them due to unforeseen circumstances e.g a health pandemic.
Crucially the café owners made this decision:
Without going through a consultation process with their employees
Prior to the full lockdown – on March 19 gatherings of 100 people could still take place so the Café could still operate.
So - in summary they got their timing and the process wrong. This case is a great reminder that even though you may legally have grounds to dismiss someone, if you get the process or the timing wrong it can still cost you.
If you are considering dismissing someone – please call us so we can help you get it right!