Authority awards demoted teacher $10,000 in compensation

A Gisborne Boys High School (GBHS) teacher has succeeded in a personal grievance for unjustified disadvantage, after a restructure demoted her from the senior leadership position of assistant principal. The Employment Relations Authority (Authority) awarded Christine Swann $10,000 in compensation, stating it would have been willing to award more had she claimed it.

What happened?

The removal of two permanent management units reduced Ms Swann’s earnings and responsibilities, while also changing her line of reporting from the principal to a deputy principal. The Authority considered both factors constituted unjustified disadvantage to Ms Swann’s employment conditions.

Accordingly, Ms Swann sought reinstatement, restoration of the permanent management units, backpay and compensation for hurt and humiliation of $10,000, as well as a declaration that GBHS had acted in breach of good faith duties.

Ms Swann cited feelings of on-going embarrassment, as well as loss of mana and dignity, at GBHS and in the community. Notably, Ms Swann was the only wāhine and non-Pākehā member of GBHS’ senior leadership team.

Key to the restructure was the aim of improving GBHS’ financial situation, the school having been running in a $50,000 deficit at the end of 2021. The re-allocation of the school’s management units was considered essential to reducing this deficit. GBHS claimed it was within its rights to restructure its senior leadership team in the way it did, and that Ms Swann was in fact consulted.

The decision

On the evidence, the Authority was not satisfied the removal of management units from Ms Swann was carried out in a way which met the requirements of the test of justification under section 103A of the Employment Relations Act (Act). The overarching test under section 103A is whether the employer’s actions were what a fair and reasonable employer could have done in all the circumstances.

In finding that GBHS had not acted fairly and reasonably, the Authority considered GBHS had failed to raise with Ms Swann all the concerns it had about the school’s financial situation, as evidenced by the lack of detail contained in its restructure proposal. This was not cured by reliance on general information which GBHS said Ms Swann “should have known”.

Ms Swann was not given a reasonable opportunity to respond to the matters relating to the decision to restructure, because of the lack of detail provided to her. This meant GBHS was unable to genuinely consider Ms Swann’s explanations and responses, in that it reduced her ability to provide targeted and relevant feedback.

The corollary of this was that GBHS made no real effort to consult with Ms Swann and explain why it had chosen the various members of the SLT for their positions in the new structure. Through its actions, GBHS had breached its duties under the Act.

In addition to the $10,000 compensation, the Authority made a declaration that GBHS has breached its good faith obligations. However, the Authority considered it was not reasonable or practicable for Ms Swann to be reinstated to her former position and for restoration of the management units.

Implications for employers

This decision is a reminder that in a proposed restructure situation, the onus is on the employer to set out all the information necessary to explain both the rationale for change and how it envisages such a change will work in practice. This includes explanations as to what duties and responsibilities may be removed or added to the employee’s job description.

Where relevant, the position of other employees relative to that person, especially where some and not others remain in the same positions or are being promoted, should also be clearly explained.

Please reach out to a member of our Employment team if you have any questions.

Special thanks to Law Clerk Stella Smith for her assistance in writing this article.

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