Covid 19 coronavirus: Kathmandu manager claims unfair restructure during Covid-19

The ERA heard that Kathmandu's restructure was carried out quickly. Photo / NZME

A former senior manager employed by retail chain Kathmandu has accused the company of an unfair restructure during the Covid-19 pandemic.

Darren Barry, Kathmandu's former group design manager, claims that he was unfairly dismissed during the company's restructure, brought about by lost revenue due to the crisis.

In an application to the Employment Relations Authority, Barry, who had been in the role since May 2014, said the NZX-listed outdoor equipment and apparel retailer did not consult him properly over the proposed restructure and failed to offer him any redeployment opportunities.

He claims his redundancy was unjust as he could have been redeployed to two
available roles in the new structure: head of apparel or senior womenswear designer - which he said he had the skills and experience to do.

Barry seeks to be re-employed by the chain, compensated for unjustified dismissal and an interim injunction granted to prevent the company from appointing others to the roles.

Kathmandu denies that it unjustifiably dismissed Barry and opposes the orders sought.

In March and April, Kathmandu shut all its stores as a direct result of Covid-19 and the country's move to alert level 4. During this time, its online sales reduced significantly.

The Employment Relations Authority (ERA) heard that Kathmandu's consultation period for redundancies was carried out quickly.

Barry received a letter of the proposed restructure on April 3 and attended a consultation meeting by Zoom three days later.

After the meeting, he was sent another letter - which the ERA said was dated March 6 - providing further information and confirmed the proposed structure. In the letter, Barry was invited to provide any feedback by April 7.

The authority heard Barry responded in an email, asking to be considered for both roles.

Kathmandu responded on April 8, confirming that the restructure would proceed and that his role would be disestablished and he would be made redundant. The letter said it had reviewed alternative deployment opportunities and had found nothing suitable for Barry.

Barry sought further explanation from Kathmandu.

Authority member Peter van Keulen said he agreed there may be a case for unjustified dismissal, but the law did not oblige Kathmandu to redeploy Barry to an alternative role, and that Barry's case to be redeployed to either role was not strong.

"It is clear to me there is a serious question to be tried regarding possible unjustified
dismissal based on this process, particularly as that pertains to the adequacy of information provided, the opportunity for Mr Barry to respond and whether Kathmandu consulted properly and sufficiently over redeployment," van Keulen said in the determination.

"I am not sure that there is a strong arguable case that Mr Barry should be reinstated to one of the roles. That said I accept there is, at least, a serious question to be tried that Mr Barry should be reinstated to one of the roles because the case advanced is certainly not frivolous or vexatious."

Kathmandu told the authority that Barry did not have the skills and experience for either role and his offer to temporarily fill both roles if the injunction was granted did not address the immediate needs of the company.

"If the injunction is granted then Kathmandu faces delays in filling both roles when it has already taken urgent and dramatic steps to address the changed economic climate it is operating in and will continue to face for some time. It needs to continue with its restructuring as part of these steps being taken to stabilise Kathmandu and ensure it can achieve its goals," the determination outlined.

Van Keulen declined an interim injunction.

"I simply cannot accept that Kathmandu should be restrained from filling the roles as part of the bigger strategy it is implementing," he said.

"I am satisfied that there is a serious question to be tried in respect of the unjustified
dismissal claim but not a particularly strong case in respect of the remedy sought that I
reinstate Mr Barry by ordering Kathmandu to employ Mr Barry in one of the two roles he
seeks."

The case continues and van Keulen will determine if the consultation of redundancy was fair.

The Herald has contacted Kathmandu for comment.

Kathmandu has 165 stores across New Zealand and Australia.