Failed claim reveals Air NZ exec fell out with top brass

Air NZ chairman John Palmer said Mr Miller had definitely been seen as a candidate for chief executive. Picture / Martin Sykes.

Former Air New Zealand chief operating officer Andrew Miller, the highest-ranking casualty of the airline's mass redundancies in 2003, has lost a claim for unjustified dismissal.

Mr Miller applied to the Employment Relations Authority for $450,000 in lost wages, $150,000 compensation for hurt and humiliation, and a $150,000 bonus he would have received had he not been dismissed.

The authority's determination released this week rejects Mr Miller's claim and reveals a fallout between him and airline top brass before the restructuring in late 2003.

The authority notes that in less than two years from when he was chief operating officer until the end of his six months' leave he was paid more than $1.7 million, including redundancy pay and bonuses.

Had he accepted a pro-rata bonus payment for 2003, he would have received another $125,000.

"That is to say, for a period of less than 18 months actually worked, the total paid out or otherwise offered to him was $1.86 million," authority member Yvonne Oldfield says.

Mr Miller also claimed he was misled into thinking he was a prospective chief executive of the airline when he took up the chief operating officer position in 2002.

"Mr Miller says he passed up other opportunities to stay at Air New Zealand and would not have done so if he had known the truth about his prospects."

But Ms Oldfield says Mr Miller "demonstrated a tendency to embellish the plain facts" and she found the airline's former chief executive Ralph Norris (now chief executive of the Commonwealth Bank of Australia) and chairman John Palmer more credible witnesses.

Mr Miller had contended that in December 2003 Mr Palmer told him that when he took the chief operating job, Mr Palmer and others had made up their minds he would never have the makings of a chief executive.

Mr Palmer strenuously denied this. He told Ms Oldfield that when Mr Miller was appointed chief operating officer in 2002 he was definitely seen as a potential candidate for chief executive.

"However, by late 2003 he was no longer seen in this light. The board felt that in his time as Mr Norris' deputy he had failed to demonstrate the sort of leadership qualities that would be needed in the role of chief executive."

This had impacted on Mr Miller's chances of getting one of three second-tier positions after the airline restructuring, because "succession planning was one factor considered in the selection process".

Mr Norris' view of Mr Miller as a potential successor also changed between 2002 and mid-2003.

Mr Miller had joined Air NZ in 1997 and was based in Australia from early 2001 as senior vice-president of sales and distribution for the Ansett-Air NZ group. When Ansett Australia collapsed in September 2001 he returned to New Zealand with the primary purpose of pursuing the chief executive's job because the then incumbent was planning to leave. Otherwise he says he would have taken redundancy compensation when Ansett collapsed.

He applied for the chief executive's position but Mr Norris was appointed.

The airline was, nevertheless, keen to retain Mr Miller's expertise and offered him a new chief operating position, deputising for the chief executive where necessary.

But the two men "did not always have an easy working relationship", Ms Oldfield says.

Ms Oldfield found Mr Miller failed to establish a personal grievance of unjustified dismissal. She says he was properly consulted about the proposed restructure and the selection process for the new jobs was fair.

He had to vacate his office "in swift and unceremonious fashion" on the day he was told he had not been selected for one of the new jobs. But Ms Oldfield felt the speedy changeover was justified because the airline could not afford further damage to its credibility.

- NZPA