Neil Hall v Consultex Company Limited [2026] NZERA 410

This Employment Relations Authority (ERA) determination concerns the redundancy dismissal of Neil Hall, a Northland asbestos surveyor and certified mould-testing technician employed by Consultex Company Limited. The Authority accepted that Consultex had genuine commercial reasons to reduce Northland headcount: falling revenue and profitability, increased competition, a slower construction market and reduced public-sector demand meant that retaining one field-based consultant was commercially defensible. But a genuine business rationale did not make the process fair. Consultex did not meaningfully answer Mr Hall's request for financial information, did not engage with his request to discuss redeployment, and sent a consultation response that strongly suggested the decision to disestablish his role had already been made. The ERA found the dismissal unjustified for breach of the statutory good-faith obligations, ordered $8,000 compensation, made no contribution reduction, and reserved costs. Mr Hall had withdrawn his lost-wages claim before the decision. The full determination is embedded at the end of this page.

Background: a Northland hazardous-materials consultancy role

Consultex provides asbestos and hazardous-materials testing, assessment and identification services across several regions. Mr Hall started with Consultex in August 2021 and, by the time of the restructure, worked in Northland as an asbestos surveyor and mould specialist. His fieldwork included attending residential and commercial properties to take samples and complete surveys.

In 2024 and early 2025, Northland had no physical branch. Mr Hall worked in the region with the Northland Regional Manager, Gareth Jones, while much of the administration was handled from Auckland. Mr Hall had business experience, including running a separate tiling business while employed by Consultex.

The commercial basis for reducing headcount was genuine

Consultex said a downturn in demand for asbestos and hazardous-materials identification, increased competition, lower construction-sector activity, and changes to public-sector social-housing work had affected Northland revenue. It concluded that Northland could sustain only one field-based consultant.

Mr Hall said he had remained busy and had not noticed a reduction in work. The Authority nevertheless accepted the evidence that profitable work had slowed and that the Northland operation had been losing money in the latter part of 2024. It held that a fair and reasonable employer could have concluded a reduction in headcount was appropriate.

The proposed restructure

On 10 February 2025, Consultex told Mr Hall that a review of upper North Island operations had identified a need to restructure. The proposal referred to falling revenue and profitability, increased competition and the need to reduce costs. It proposed to disestablish the Northland Regional Manager role held by Mr Jones, replace it with a Senior HAZMAT Consultant role, appoint Mr Jones to that new role, and disestablish Mr Hall's role.

Consultex said Mr Hall did not hold the Asbestos Assessor Licence required for the proposed senior role. Feedback and alternatives were invited by 14 February 2025, with a stated final decision date of 28 February 2025.

The Authority noted limitations in the proposal document. It did not explain how the proposed Senior HAZMAT Consultant role differed from the existing Northland Regional Manager role, what would become of Mr Hall's work, or why the new role's criteria excluded him beyond the licence assertion. Those problems alone did not make the process unfair, because Mr Hall understood the proposal sufficiently well to ask informed and probing questions.

Mr Hall's questions and proposed alternatives

Mr Hall responded on 13 February 2025. He asked how the proposal affected his ongoing employment rather than simply his position, whether redeployment was available, and whether reduced hours could be considered. He also requested six months of relevant financial information and asked what other cost-cutting measures had been considered.

He questioned the commercial rationale because a December 2024 communication to his ACC case manager had referred to a full workload in the area. He identified different ways work could be organised, suggested alternatives to making his own role redundant, and said he could take on administrative functions if that was part of the proposed change. He asked for more time to provide feedback and said the proposal had affected him emotionally.

These were not irrelevant objections. The Authority held that Mr Hall's requests for information, questions and proposals were consistent with his own good-faith obligations: they showed he understood the proposal, wanted to engage with it and wanted to preserve his employment where possible.

Why Consultex's consultation response was insufficient

Consultex responded on 20 February. It said a single consultant was all that Northland could sustain, explained why Mr Jones was considered more suitable for the proposed role, supplied some revenue information, and responded to Mr Hall's contracting alternative. It also offered to arrange a call.

The Authority accepted that some of those answers would have helped Mr Hall understand the proposal. However, they did not cure the central deficiencies. Consultex did not provide the financial material Mr Hall had requested, and it did not explain why it would not do so. Referring only to a 30 percent gross-revenue reduction against the prior 12-month average was not a meaningful response to his request for the relevant financials needed to test the proposal and suggest alternatives.

Consultex also did not address redeployment or explain whether Mr Hall's skills could be used elsewhere. Mr Hall had raised that question directly. Given that Consultex had offices around the country, the Authority held that if there were no realistic redeployment prospects, that position should have been put to Mr Hall during consultation so he could comment on it.

The omission mattered even though the later evidence established that no realistic redeployment opportunities existed. Good faith required engagement with the question at the time it was raised, not merely a retrospective demonstration that redeployment would ultimately have failed.

Apparent predetermination before consultation had ended

The Authority found that Consultex's 20 February email presented as though the critical decisions had already been made: Mr Hall's role would be disestablished and he would not be appointed to the new role. Although the email said that a meeting could still occur, its tone and definitive language strongly suggested that Mr Hall's employment was already due to end.

That appearance of finality was especially significant because it came before the stated consultation process had concluded. The Authority found that Consultex likely determined the outcome prematurely and did not comply with its obligation to be responsive and communicative on matters directly affecting whether Mr Hall's employment would continue.

The ACC injury was not the reason for the redundancy

Mr Hall had injured his back at work in September 2024 and remained on ACC compensation when the restructure began. He argued that Consultex was really trying to remove him because he was absent and recovering.

The Authority rejected that contention. It found Consultex did not need Mr Hall to return urgently, was not replacing him while he was away, and had only a limited financial exposure through a non-contractual ACC top-up. His injury and absence were not material factors in the decision to disestablish the role.

The software lockout did not cause unfairness

Mr Hall was also locked out of a platform used to track operations shortly after the proposal was issued. Consultex said this coincided with a subscription-renewal date and that he did not need access while on ACC with no return date. Mr Hall accepted he still had access to the company's other IT systems.

The Authority found the unavailable system would not have materially assisted Mr Hall to answer the core commercial reasons given for the proposal. In the circumstances, the software issue did not create an independent unfairness.

Mr Hall stopped engaging, but that did not reduce his remedy

After the 20 February email, Mr Hall did not take up further invitations to discuss the proposal. The Authority said his frustration was understandable, but also observed that good faith is robust: he could and should have raised his concerns in the period before Consultex confirmed the decision on 6 March 2025.

That did not reduce the remedy. His later non-engagement did not contribute to the content of the deficient 20 February email or to Consultex's earlier breaches of good faith.

Preparing a competing business was not blameworthy conduct

Mr Hall had incorporated a company on 10 February 2025, which later traded in competition with Consultex. The Authority considered whether that should reduce remedies under section 124 of the Employment Relations Act 2000.

It held that permissible preparatory steps, including incorporation of a potential competing business, are not blameworthy conduct for contribution purposes where they do not breach a contractual obligation and the employee does not trade in competition while still employed. Neither occurred here. No contribution reduction was made.

Finding: unjustified dismissal despite genuine redundancy

The Authority held that Consultex had a genuine commercial reason to restructure but failed to comply with the good-faith consultation requirements in section 4(1A) of the Employment Relations Act 2000. It did not properly consult or respond on important matters relevant to whether Mr Hall's employment would continue, including the financial information and redeployment issues he had raised.

Those were not minor technical defects. The failures went to Mr Hall's ability to meaningfully comment on the proposal and to advance alternatives that might have preserved employment. The dismissal was therefore unjustified.

Remedy: $8,000 compensation and no contribution reduction

Mr Hall withdrew his lost-wages claim in closing submissions. The remaining remedy issue was compensation for humiliation, loss of dignity and injury to feelings.

The Authority found that Consultex's inadequate responses on the financial justification and alternative roles caused unfairness, humiliation and distress, particularly because the initial articulation of the proposed change was itself confusing. It assessed compensation at $8,000.

No medical evidence was provided about the emotional impact. The Authority also noted Mr Hall's business experience and the fact he had another business and had incorporated a further enterprise. Those factors informed the quantum assessment, but did not remove the entitlement to compensation.

Why this case matters

Hall v Consultex is a useful reminder that a successful redundancy process requires more than a real financial or operational reason. The employer must give the affected employee a meaningful opportunity to understand and respond to the proposed change before the outcome is decided.

The case is particularly relevant where an employee asks for underlying financial information or raises redeployment. An employer does not always need to provide every document requested. But it must respond meaningfully: provide relevant material, identify what is not being provided, and explain why. Silence or a partial answer may breach good faith where the information is relevant to the employee's ability to comment on the proposal.

It also confirms that later employee conduct must be connected to the employer's breach before it can justify a remedy reduction. Refusing to engage after an employer has already communicated an apparently fixed outcome does not rewrite the earlier consultation failure. Nor does lawfully preparing a business that may later compete with an employer, without competing during employment or breaching a contractual obligation.

Practical takeaways

• Genuine commercial rationale is only the first step: a defensible business case does not excuse an unfair consultation process.
• Answer relevant information requests: where financial information is sought to test the rationale or propose alternatives, provide what is relevant or explain clearly why it is not being supplied.
• Address redeployment expressly: when an employee asks about other roles, engage with that question during consultation even if the eventual answer is that no realistic vacancy exists.
• Keep the proposal genuinely provisional: do not use final language or otherwise signal that the outcome has already been determined while consultation remains open.
• Put alternatives to the employee: reduced hours, altered duties and other arrangements may need active consideration where reasonably raised.
• Separate collateral issues from the consultation core: system-access concerns or an employee's ACC absence may not be determinative, but they should be assessed on their actual impact.
• Contribution requires a causal link: conduct occurring after the employer's breach will not necessarily reduce remedies merely because it was imperfect or unhelpful.
• Preparatory competition can be lawful: an employee may generally prepare a future business while employed, provided this does not breach contractual obligations or involve actual competitive trading during employment.

Read the full ERA determination (embedded)

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