Gregory Brian Clarke v Omni Health Limited [2026] NZERA 265

This is a redundancy case where the Employment Relations Authority (ERA) accepted the employer had genuine financial reasons to restructure and disestablish a senior role, but still awarded compensation because the process was handled in a way that caused avoidable stress and humiliation. The full determination is embedded at the end of this page.

Background: Omni Health's financial position

Omni Health Limited operated a network of GP clinics in New Zealand. Its model involved acquiring practices financed partly by equity and partly by working capital from its bank and a United States business partner (Sandford World Clinic). Omni charged a management fee for providing services to the acquired practices.

The determination records that profitability had been declining across several financial years and that liquidity/cashflow pressures became acute after COVID-related testing funding ended and broader cost-of-living pressures reduced demand. The evidence accepted by the Authority was that by late 2023 / early 2024 the company was struggling to pay creditors and was at real risk of receivership unless major cost savings were achieved.

The restructure proposal

Mr Clarke was employed as COO from 27 March 2023. He attended monthly board meetings and received budget information from which he could infer the business's financial position. On 31 January 2024, the CEO/managing director, Mark Wills, issued a consultation document proposing a restructure.

The proposal noted the declining financial performance and proposed disestablishing three senior roles: (1) manager people and culture (already vacant), (2) a senior administrator, and (3) Mr Clarke's COO role. It also proposed establishing new roles focused on recruitment/telemedicine coordination and enhanced finance capability (including moving from an external accountant to an in-house accountant).

The proposal set out a consultation timetable with feedback initially due 9 February 2024. The decision was originally expected 7-8 March 2024 and later pushed out.

Consultation and information disputes

Perception of predetermination

Mr Clarke said the process felt predetermined. He pointed to (a) feeling humiliated attending a senior leadership meeting on 1 February 2024 when the restructure was known to others, and (b) a Google chat message from an executive partner, Karolina Slack, on 4 February 2024 offering support and offering to act as a referee before feedback was even provided. The Authority did not treat Ms Slack's message as evidence of predetermination, but accepted it landed at an inopportune time and contributed to Mr Clarke's anxiety.

Feedback and request for financial forecasts

Mr Clarke provided feedback on 12 February 2024. He criticised the proposal as light on detail and asked for a quantified explanation of "financial sustainability". He suggested increasing the management services fee and questioned how adding a bookkeeper would improve financial outcomes.

On 6 March 2024, Mr Clarke requested a detailed profit and loss for 2020 to 2023 and a forecast comparing the restructure proposal with the status quo. Mr Wills provided the profit and loss information but did not provide a forecast. Mr Wills said he did not want to disclose the forecast because it contained confidential salary information.

The Authority held that if a forecast existed, salary information could likely have been redacted to balance the employee's access-to-information rights (good faith) against the privacy interests of other employees. However, the Authority also concluded that producing the forecast would not have changed the outcome given the scale and urgency of the liquidity problem.

Substantive justification: redundancy was genuine

Applying s 103A (and redundancy principles), the Authority accepted the redundancy was genuine. The decision to disestablish the COO role was based on business requirements, not as a pretext to remove a disliked employee. The evidence accepted by the Authority was that the company needed cost savings in the hundreds of thousands of dollars, had limited ability to raise cash, and its business partner was not willing to inject further capital.

The Authority also considered and rejected alternative solutions raised during consultation (such as increasing management fees). In substance, the Authority accepted the company was making a "cry halt" decision in a financial crisis.

Redeployment

An in-house accountant role was one of the proposed new roles. The role was not offered to Mr Clarke as a redeployment option and he did not apply for it or express interest at the time. By the time of the Authority process, redeployment became more important because Mr Clarke had difficulty finding comparable employment post-termination (including only short-term contracting work and many job applications).

The Authority found there were no suitable redeployment roles. It accepted there was no bad faith in not offering the accountant role because it was substantially different and materially more junior than the COO role (including lower pay).

Procedural fairness: why the process was held unfair overall

Even where redundancy is genuine, process still matters. The Authority found multiple process shortcomings that, taken together, caused avoidable distress:

• Delay: the decision timetable shifted and the final decision was made on 21 March 2024, later than the plan (initially 7-8 March, then 11 March). The Authority found this prolonged stress unnecessarily.
• Clumsy communications: a circulated delegations schedule omitted the COO role, increasing isolation and hurt.
• Support: there was no clear reference to EAP support in the proposal and the evidence was equivocal on whether the employee was properly informed about accessing support.
• Unnecessary call: after notice was given, Mr Wills phoned on 25 March 2024 to ask if Mr Clarke would take annual leave during the notice period (effectively funding part of notice himself). The Authority said the request should not have been made.
• Drafting quality: an exit letter was described as clumsily drafted and risked giving the wrong impression about the cause/effect of the restructure.

The Authority accepted each issue could be characterised as minor in isolation, but held that in totality the process was not what a fair and reasonable employer could have done in all the circumstances. Because the redundancy was substantively justified, the outcome was not an unjustified dismissal remedy outcome. Instead, the process defects founded an unjustified disadvantage remedy.

Remedies and orders

The Authority made a global award of compensation for hurt, humiliation, and injury to feelings arising from the procedurally unfair process. It also reimbursed the filing fee. Lost remuneration, interest, and penalty claims were sought but were not awarded.

Practical takeaways

• Redundancy cases separate substance and process: genuine financial need may justify disestablishing a role, but process defects can still create liability via unjustified disadvantage and compensation.
• Information disclosure needs balance: where forecasts contain confidential salary information, redaction is often a workable way to comply with good faith access-to-information duties.
• Small missteps can add up: delays, clumsy documents, and poorly timed communications can cumulatively make a process unfair even if each item looks minor alone.
• Support matters: where a restructure affects senior staff, explicitly offering EAP or similar support and managing confidentiality can reduce unnecessary humiliation and stress.

Read the full ERA determination (embedded)

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