Builder Pays $20,000 After Scoring Carpenter’s Surgery Against Him

A building company must pay a carpenter of 12 years $20,000 after the Employment Relations Authority found his redundancy unjustified. The company had a genuine financial reason to cut staff. What it could not show was why a carpenter’s position had to go, why time off after shoulder surgery should count against him, or why it told the rest of the staff who was going before it had spoken to him.

What happened

Dylan Allison started at Gregg Builders Limited as an apprentice in March 2013 and qualified as a carpenter.

In November 2023 he hurt his shoulder and spent about two months off work on ACC. He went back, worked for around six months, and then learned he had torn ligaments. Surgery followed in July 2024, and another six months on ACC. He returned to work in January 2025.

The business was under strain. Revenue was about 2 per cent ahead of budget, but the gross profit margin was 2.8 percentage points behind it. Tenders had cost a great deal and won little, including one for a $6 million project in Queenstown. There was no cash Christmas bonus that year.

In late January 2025 the sole director, Colin Gregg, told staff a restructure might follow and asked for ideas. On 3 February he wrote that the company would reduce staff numbers by five, and that employees would be assessed against a list of factors.

With an HR adviser beside him, Mr Gregg then scored every employee. He gave the scores and the adviser wrote them down. The scores were not routinely checked against employment records; they rested on Mr Gregg’s knowledge of each person. Two reviewers looked them over — his son, a site foreman who was not given the criteria explaining how the scores were assigned, and an external quantity surveyor. Neither changed anything.

Mr Allison scored two out of 10 for “unpaid time off”, the score for an absence of “more than 8 days”. Mr Gregg accepted that the score was predominantly down to the ACC absence.

At 4.40pm on 10 February 2025, Mr Gregg emailed Mr Allison a letter saying his position was one he was “considering disestablishing”, and asked him to a meeting four days later. About 40 minutes after that, he emailed every employee except the five, telling them he was “looking to disestablish” those five positions. Anyone could work out who the five were by looking at who had been left off the email.

The texts began to arrive. A colleague said he had heard about the cuts and hoped Mr Allison was doing OK. Mr Allison replied that he had not even had a meeting yet.

The meeting, when it did happen, lasted five to 10 minutes. He asked for his scores and was given them, though the adviser accepted they would not otherwise have been handed over. He was given nothing to compare them with. He raised the ACC absence and was told it was only one part of the overall assessment. Asked for suggestions, he declined; the company, he said, had already made up its mind.

On 24 February he was given four weeks’ notice. During that notice the company secured a new project and offered him continued employment. He had already found a better-paid job, and he said no.

The findings

Fewer people is not the same as fewer carpenters

The Authority accepted that the reasons for the restructure were genuine and that the company was not targeting Mr Allison. The problem was how the five were chosen.

The company scored employees across the whole business and proposed disestablishing whichever positions the five lowest scorers held, whatever those positions were. Mr Gregg said he was surprised the scoring took out two foremen; he had expected one person from each position. And because the maximum possible score differed by position, it was unclear how a carpenter had been ranked against a foreman at all.

The score sheet, in other words, decided what the workforce would look like afterwards. There was no evidence the company had asked whether that mix of positions suited its present and expected workload, and so it had not shown that a carpenter’s position was surplus. (at [47])

A healed injury says little about the future

Absences can be relevant to selection, the Member said, but the employer has to consider their nature and circumstances, and what they actually indicate about future attendance. Mr Allison’s unpaid absences came from one injury and the surgery it needed. He was back at work, no further absence was expected, and across about 12 years there was no pattern. Lowering his score because of them was not reasonable. (at [50])

The same went for “reliability”. He scored four out of eight, and Mr Gregg accepted under questioning that his sick leave had affected the score. Taking statutory sick leave says nothing about punctuality, consistent work, or meeting deadlines.

The Authority was candid that fixing both scores might not have saved him. Even with full marks on both, he would still have scored slightly below the second-lowest carpenter. But the five came from across the company, so the real question was whether the extra points would have lifted him out of the bottom five — and because the company had not disclosed everyone’s scores, that could not be answered.

The email told everyone the answer

The Authority did not find that the restructure itself was predetermined. It found that the selection was. By telling everyone else that five others were at risk, the company in effect told them their own jobs were safe, and treated the outcome as settled before it had consulted the people affected. (at [65]) Mr Gregg’s own evidence confirmed it: he meant the meeting to be about avoiding the restructure, not about who had been chosen, and he was not prepared to change the selection.

Then there was the information. Mr Allison was not given his scores before the meeting, the anonymised scores of the other carpenters, the weightings, the criteria, or what his scores were based on. He saw his scores for the first time in a meeting of five to 10 minutes, with no chance to examine them or take advice. The company invited comment again and again, but without that information he had nothing to comment with, so the invitations were not meaningful consultation. And when he raised the ACC point, the answer — that it was only one aspect — did not address whether the absence should have counted at all.

These were not minor defects, the Member said. They took away Mr Allison’s chance to influence the decision before it was made. (at [68])

The outcome

Mr Allison first sought $30,000 in compensation and later reduced that to $20,000. The company argued he had seemed upbeat about his new job. The Authority said a person can be pleased about new work and still be hurt by how a long employment relationship ended. He was awarded $20,000 for humiliation, loss of dignity, and injury to feelings under s 123(1)(c)(i).

There was no award for lost wages, because he moved straight into better-paid work. There was no reduction for contribution. The company breached its duty of good faith under s 4, but no penalty followed: the Authority was not satisfied the failure was deliberate, serious, and sustained, or intended to undermine the relationship. Costs are reserved.

Our view

He came back from surgery and went back to work. Then the score sheet counted the surgery against him.

A score sheet looks objective, and that is what makes it dangerous. Numbers turn judgement into something that looks like arithmetic. Here the arithmetic was never checked against the records, it was reviewed by people who had not been given the criteria, and it was not shown to the man it decided until he asked.

Three things for any employer running a selection process.

First, decide which positions are surplus before deciding which people. A matrix can choose between people. It cannot tell you what work the business still needs done.

Second, read every absence for what it is. An injury that has healed, or sick leave taken as the law allows, is not a forecast. If a criterion cannot tell the difference, the criterion needs fixing before anyone is scored on it.

Third, give the people at risk what they need to answer: their scores, the criteria, the weightings, and anonymised comparisons, with time to look at them before the meeting. Then keep the selection genuinely open until you have heard from them. And be careful what you tell everyone else. An email to the people who are staying is a decision announced.

One note on timing. Mr Allison was dismissed in early 2025, before the Employment Relations Amendment Act 2026 replaced s 103A(5). Under the new wording, a procedural defect makes a dismissal unjustified only where it resulted in the employee being treated unfairly. In our view the change would not have helped this employer: the Authority found the defects did treat Mr Allison unfairly, and the dismissal failed on substance as well.

Lex Praxis advises New Zealand employers on employment law and AI governance. This article is general commentary and does not constitute legal advice. For advice specific to your circumstances, contact us directly.