NZDF employee to receive $70,000 after winning employment battle

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A former financial controller for the New Zealand Defence Force will receive more than $70,000 in unpaid redundancy after winning an employment battle over an error in his contract.

Michael Beauchamp worked for the NZDF for almost nine years from November 2003, before being made redundant following a restructuring process.

He was paid $42,778 as compensation payment, but argued his contract specified he was entitled to $116,400.

However, the Defence Force said there was an error in his employment agreement, where his base salary as of April 1, 2006, had been stated as the value of his frozen redundancy entitlement.

Lawyers for the NZDF argued it should not have to uphold the mistake, and that Mr Beauchamp had acted in bad faith by not officially querying the "obvious error" in his contract when it was updated in 2008 to reflect a pay rise.

Mr Beauchamp took his case to the Employment Relations Authority (ERA).

It heard that an error had been printed in the 2008 contract, in which his annual base salary was inserted into the agreement instead of the amount which represented six weeks salary at that time. He was entitled to $13,430.77, but it was incorrectly stated as being $116,400.

Mr Beauchamp told the authority he had noticed the letter of offer included a redundancy payment which was higher than he had expected, but it did not seem unreasonable given he was receiving a more than $50,000 pay rise.

When he handed in his signed contract to a human resources adviser he commented on the amount, he said, but she joked that if her provision was similar she "would hope, nay seek, to be made redundant".

NZDF said this showed Mr Beauchamp was aware of the mistake and acted in bad faith by not raising the issue with his superior.

But the ERA sided with Mr Beauchamp, saying the "light-hearted response he received did not convey to him that he should query the matter at a higher level".

"I also find the HRA's (human resources adviser) response was likely to have allayed any questions he may have had about the size of the redundancy compensation. I accept Mr Beauchamp's evidence that it did."

The authority ruled that Mr Beauchamp was entitled to receive the full amount, and ordered the NZDF to pay the difference of $73,622 which was owed to him.

Comment was being sought from both parties.