2degrees must keep paying Edwards

TOM PULLAR-STRECKER
Last updated 14:25 10/09/2012

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2degrees has had another small set-back in its potentially landmark employment dispute with estranged co-founder Tex Edwards, who claims his job as "company strategist" was unfairly disestablished.

The mobile phone carrier failed to persuade the Employment Court it should stop paying Edwards' salary until the main case between them is heard next month.

However, in a consolation for the company, Judge Barry Travis ruled Edwards would have to repay the tens of thousands of dollars 2degrees will pay him for the period between September 3 and the hearing on October 29, should Edwards ultimately lose the case.

The dispute arose after 2degrees sought to disestablish Edwards' job. Chief executive Eric Hertz labelled him a "distraction" for the company and said the telecommunications firm was "not well served by his presence".

In July, the Employment Court granted Edwards an interim injunction preventing his dismissal and placing him on paid "garden leave". At the time, the Employment Relations Authority was expected to hear Edwards' grievance claim on August 22.

However, the case was subsequently elevated to the Employment Court, at Edwards' request, and the hearing pushed back until next month.

2degrees said the delay meant it would fairer for Edwards to be put on leave without pay. But Travis rejected that, as well as a counter-claim by Edwards that he be allowed to return to work.

Travis said he was satisfied Edwards had the means to repay the salary he will earn during his last eight weeks of garden leave if required.

The main hearing in October is shaping up as an important test case for a controversial amendment to the Employment Relations Act in April last year.

The amended section 103A of the act means all the circumstances of a case need to be considered in determining whether the actions of an employer could have been fair and reasonable.

While the amendment was widely interpreted ahead of its enactment as making it easier for employers to justify dismissals, Travis previously ruled that "on face of it" it could mean courts were obliged to analyse "the business decision" itself. He acknowledged that interpretation, which would bring into question business owners' right to restructure their businesses as they saw fit, would be "controversial".

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- BusinessDay.co.nz

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