Carol Chesmar v Rooney Earthmoving Limited [2026] NZERA 502

Carol Chesmar had worked for Rooney Earthmoving Limited for more than nine years when her labourer position was disestablished. The Employment Relations Authority accepted that the redundancy was not a sham and that the company had genuine work and financial concerns. But genuine business reasons did not excuse a predetermined and largely meaningless consultation process. Rooney Earthmoving withheld the financial and operational information later relied on to defend the redundancy, did not consult Mrs Chesmar about removing her from a major landfill project, and had effectively decided her role would go before giving her any real opportunity to respond. The dismissal was unjustified. Rooney Earthmoving was ordered to pay $14,471.60 gross lost remuneration and $25,000 compensation. The full determination is embedded at the end of this page.

Background

Mrs Chesmar began working for Rooney Earthmoving in April 2015. Her normal hours were 40 per week. Although employed as a labourer, she also drove a roller and dump truck and operated a compactor. She was based at the Ashburton branch but worked at sites between Christchurch and Twizel.

Her employment agreement required Rooney Earthmoving to act as a good employer. It also allowed the company to modify and update her duties after consultation and required her to perform other reasonable duties. If her employment ended for redundancy, she was entitled to two weeks' notice but no additional redundancy compensation.

In 2024, Ashburton labourers were being deployed to projects operated by the Christchurch and Timaru branches. Mrs Chesmar worked at the Taiko landfill construction project, a large and long-running Timaru branch job requiring substantial staffing. On 30 August 2024, the Ashburton staff at Taiko were told they were no longer required there.

The redundancy process

After the Taiko deployment ended, Mrs Chesmar returned to the Ashburton yard. She was assigned some yard and cleaning work and took periods of annual and sick leave. Rooney Earthmoving also paid her normal hours on several wet days, consistently with her employment agreement.

General manager Colin Dixon met separately with the three Ashburton labourers on 6 September. His note referred to a lack of work in the immediate future and the possibility of redundancy unless the employees moved to casual employment. Mrs Chesmar said she was not interested in casual employment.

Mrs Chesmar received a letter dated 9 September on 10 September. It said there had been no suitable work for her from the week beginning 2 September and that Rooney Earthmoving appeared unlikely to find suitable ongoing work for her for six to eight weeks. It offered three options: move to a casual agreement, take annual leave or leave without pay, or accept voluntary redundancy. The letter also said the company was considering making roles redundant and that her role was under review.

On 25 September, Mr Dixon phoned Mrs Chesmar. His diary recorded that she had not chosen one of the options and that he would contact her and meet with her the following week. No meeting took place. Instead, on 2 October, Mr Dixon phoned Mrs Chesmar and told her that her employment would end that Friday. She collected the written termination letter on 3 October, and her position was disestablished on 4 October. She received two weeks' pay in lieu of notice.

Relevant information was withheld

Rooney Earthmoving produced financial evidence to the Authority showing Ashburton branch turnover from January 2024 to February 2025. It relied on that evidence to show the branch was operating below the level required to sustain itself. But it had not shared that financial information with Mrs Chesmar during consultation.

The Authority said that if the financial information was necessary to establish the redundancy before the Authority, it should have been provided to Mrs Chesmar when the decision was being considered. It was not enough to expect her to infer from being deployed to the Taiko project that redundancies might later follow at Ashburton.

Rooney Earthmoving also gave evidence that the Taiko client wanted construction activity reduced so it could begin generating cashflow. The resulting reduction in earthmoving activity reduced the need for labourers and other workers. Ending the use of staff from other branches also reduced travel costs. None of those factors appeared in the diary notes or letters provided to Mrs Chesmar.

The decision to remove Mrs Chesmar from Taiko was important because Ashburton had limited demand for labouring work. It was therefore a decision likely to affect whether her employment continued. The Authority found that Rooney Earthmoving did not give her access to the relevant information or an opportunity to comment before ending both her Taiko deployment and, soon afterwards, her employment.

The investigation was insufficient

Rooney Earthmoving was a substantial regional business with several South Island branches. It had sufficient internal and external resources to investigate properly before proposing to dismiss a long-serving employee. The Authority also emphasised its contractual obligation to act as a good employer.

Its investigation into both the end of the Taiko deployment and the disestablishment of Mrs Chesmar's position was insufficient. Because she had not been involved properly in the decision-making process, Mrs Chesmar was left believing that she had lost the Taiko work because she was not a friend of the site supervisor and had then been targeted for redundancy. The evidence did not support either concern, but the Authority found they arose naturally from Rooney Earthmoving's inadequate communication and consultation.

Consultation was more apparent than real

The Authority found that by 6 September, if not earlier, Rooney Earthmoving had in substance decided Mrs Chesmar's role would be disestablished. The three options presented to her did not invite genuine comment on whether the role should go. They invited her only to choose how the decision would affect her.

Mr Dixon said on 25 September that he would meet Mrs Chesmar, but did not do so. He instead phoned her on 2 October and told her her employment would finish two days later. The timing and manner of the process gave her no reasonable opportunity to respond before the company made its decision.

Why the dismissal was unjustified

Section 103A of the Employment Relations Act 2000 required the Authority to assess whether Rooney Earthmoving's actions, and how it acted, were what a fair and reasonable employer could have done in all the circumstances. The good-faith requirements also required access to relevant information and an opportunity to comment before the decision was made.

The Authority found that Rooney Earthmoving controlled the timing of its decisions and interactions with Mrs Chesmar. There was no evidence of an external emergency forcing it to act when and how it did. It withheld relevant information, investigated insufficiently and failed to provide a reasonable opportunity to respond. Its actions were therefore not those of a fair and reasonable employer, and Mrs Chesmar was unjustifiably dismissed.

Lost remuneration

Mrs Chesmar made reasonable efforts to find work and eventually obtained part-time employment. Three months' ordinary earnings at Rooney Earthmoving were calculated at $14,471.60, based on $27.83 per hour for 40 hours over 13 weeks. Her actual loss was substantially greater, but the Authority did not award more than the statutory three-month starting point.

Rooney Earthmoving had disestablished all three Ashburton labourer positions and did not recruit labourers again until later in 2025. The Authority accepted that the company might have been able to justify making Mrs Chesmar redundant if it had consulted properly. That counterfactual limited the lost-remuneration award to $14,471.60 gross.

$25,000 compensation

Mrs Chesmar, her husband and her daughter gave compelling evidence about the dismissal's effects. It damaged her sense of self-worth, caused emotional and physical harm, affected her personal relationships and had significant financial consequences. Some effects continued, although they were diminishing.

The Authority accepted that the redundancy was not a sham and that Rooney Earthmoving was motivated by efficient business management. But it had managed the situation without proper regard for its contractual and statutory obligations to a long-serving employee. The harm was placed around the midpoint of the middle compensation band, resulting in an award of $25,000.

No contribution reduction

Rooney Earthmoving argued that Mrs Chesmar should have engaged more actively with the options presented to her. The Authority rejected that argument. Mrs Chesmar believed her fate had already been decided, and the Authority had found that belief was justified. Her failure to initiate a response was neither blameworthy nor a contribution to the grievance. No reduction was made.

Why this case matters

Chesmar v Rooney Earthmoving illustrates the difference between having a genuine business problem and carrying out a justifiable redundancy dismissal. The company may have been able to justify disestablishing the role after a proper process. That possibility did not cure a process in which important information was withheld and the employee was consulted only after the outcome had effectively been decided.

It also shows why consultation must extend to operational decisions closely connected to a later redundancy. Ending Mrs Chesmar's deployment at Taiko was not a neutral scheduling decision. It materially affected the availability of ongoing work and therefore the security of her employment. She should have been given the relevant explanation and an opportunity to comment at that stage.

Practical takeaways

• Disclose the real case: information relied on later to justify redundancy should ordinarily be given to the employee during consultation.
• Consult before deciding: presenting options about the impact of an already-made decision is not meaningful consultation.
• Explain connected operational decisions: removing an employee from a major project may require consultation where it creates or accelerates a redundancy risk.
• Consider skills and alternative duties: Mrs Chesmar was more than a labourer and had contractual flexibility to perform other reasonable work.
• Long service matters: a good-employer obligation and lengthy loyal service reinforced the need for careful investigation and genuine engagement.
• A real downturn is not enough: even a genuine redundancy can be unjustified if the process is predetermined or materially unfair.
• Contribution requires blameworthy conduct: an employee is not necessarily at fault for failing to engage with a process that offers no real opportunity to change the outcome.

Read the full ERA determination (embedded)

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Source: Employment Relations Authority determination hosted on determinations.era.govt.nz.