Ex-Microsoft staffer loses employment case

Redundancy was legitimate and carried out properly, ERA rules

A former Microsoft New Zealand senior staff member who took the company to the Employment Relations Authority over the handling of his redundancy has lost his case.

Alex Broughton was employed by Microsoft from February 2007 until January 2010, when the role of Citizenship Lead, which he held, was eliminated.

Broughton took a case with the ERA, alleging the redundancy was a sham and that the duties he carried out as Citizenship Lead were duplicated in other roles, specifically so that Microsoft could make him redundant. His Statement of Problem, lodged with the ERA, claimed that Microsoft has failed to deal with him in good faith, among other complaints.

The ERA held investigation meetings in September and November and heard submissions from Broughton’s and Microsoft’s counsel in December, before issuing a determination on January 24.

Microsoft prevailed, with the ERA ruling that “MSNZ’s actions and how it acted were what a fair and reasonable employer would have done in all the circumstances”.

The determination, by ERA member Rachel Larmer, identified that “the issues to be determined are:

a. Was the disestablishment of the Citizenship Lead position substantively justified?

b. Was MSNZ’s proposal to disestablish the Citizenship Lead position carried out in a procedurally fair manner?

c. Should MSNZ have redeployed Mr Broughton instead of making him redundant?

d. Did MSNZ breach its good faith obligations under the [Employment Relations] Act?

e. Did MSNZ breach Mr Broughton’s employment agreement? f. What, if any, remedies should be awarded? and g. Should a penalty be imposed on MSNZ?

The elimination of the Citizenship Lead role was prompted by the global round of redundancies at Microsoft in 2009, which resulted in 17 local positions being disestablished and 12 redundancies in May 2009, followed by an order in August 2009 that further headcount reductions were needed.

The ERA determination reads: “The global financial crisis was a catalyst for Microsoft Corporation to undertake a worldwide review of its structures, which resulted in subsidiaries (including MSNZ) being given revised headcounts.”

An instruction from head office was that subsidiaries should focus on revenue-generating positions and eliminate non-revenue generating ones.

MSNZ identified several positions that could potentially be restructured, including Citizenship Lead.

It was decided that the duties contained in the Citizenship Lead role could be reallocated within the company, and the role disestablished. At the same time, a new corporate affairs role for New Zealand was created.

It was against this background that ERA member Larmer tackled the issue of “Was the disestablishment of the Citizenship Lead position substantively justified?”.

Larmer ruled “yes”, noting that the Citizenship Lead role was different to the new corporate affairs role and that it wasn’t created so that the Citizenship Lead position could be eliminated.

Moving on to “Was MSNZ’s proposal to disestablish Mr Broughton’s position carried out in a procedurally fair manner?”, Larmer ruled that it was, because MSNZ had consulted extensively with Broughton about the elimination of the role, and that the consultation wasn’t a sham, because “MSNZ kept an open mind and actively engaged with Mr Broughton during the consultation process.”

Regarding, “Should MSNZ have redeployed Mr Broughton instead of making him redundant?”, Larmer found that Microsoft had considered redeploying Broughton to the OEM director and corporate affairs roles, but that after being interviewed for them it was determined he was unsuitable for what are highly-specialised roles, and ones requiring very different skill-sets to those of the Citizenship Lead role.

“I am satisfied MSNZ had good reasons for not redeploying Mr Broughton and that it followed a fair and proper process before reaching that conclusion,” Larmer concluded.

The next question, “Did MSNZ breach its good faith obligations under the Act”, involved a claim by Broughton that Microsoft failed to fulfil its obligations under the Employment Relations Act by not providing him with certain documents relating to the new corporate affairs position.

Lamer concluded: “The evidence did not support these allegations.”

As to “Did MSNZ breach Mr Broughton’s employment agreement”, Larmer ruled: “I find that MSNZ did not breach Mr Broughton’s employment agreement.

“It dealt with him in good faith, and he was treated fairly.

“MSNZ’s actions and how it acted were what a fair and reasonable employer would have done in all of the circumstances.”

All of Broughton’s claims were dismissed.

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