Posted on: Jul 12, 2013

An employer who entices an employee into leaving a good job with promises of an even better job, and who subsequently makes the employee redundant, may find that its earlier representations amount to an estoppel which will support a conclusion that a fair and reasonable employer would not have dismissed the employee.

In Brake v Grace Team Accounting Ltd [2013] NZEmpC 81, Ms Brake was happily employed by KPMG. In 2009, Grace Team Accounting Ltd (the employer) contacted Ms Brake and offered her a position that the employer said was long-term. Ms Brake took the job and after about six months was made redundant. Ms Brake brought a personal grievance for unjustified dismissal and, among other submissions, said that both parties had entered into the employment agreement on the mutual assumption that the employer’s workload would be sufficient to sustain her employment on a permanent basis.

The Employment Court held that Ms Brake’s redundancy was not justified in financial terms and also said the employer’s earlier representations regarding long-term employment amounted to an estoppel which supported its conclusion that a fair and reasonable employer would not have dismissed Ms Brake in the circumstances. The Court awarded Ms Brake 12 months’ lost salary and $20,000 compensation.


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