Postie Plus redundancies confirmed
The union for workers at clothing chain Postie Plus is seeking advice on what it calls a "highly irregular" move to close 12 shops and sack 64 staff.
Administrators say the company had already identified a number of stores that were not viable before they were appointed, and the union says that in that case, staff at those stores should have been consulted.
An employment expert also says the company should have informed and consulted the workers about the jobs at risk, but probably didn't in a bid to save the company from liquidation.
Company administrators said this week they would close a dozen of the company's 82 stores and have made 64 staff redundant.
Postie Plus went into voluntary administration on June 3.
Administrator Colin McCloy of PwC said Postie Plus management had identified a number of stores that were no longer viable before PxC was appointed,
The Birkenhead, Bishopdale Mens, Bishopdale Womens and Kids, Dannevirke, Gore, Mt Roskill, Papatoetoe, Rangiora Kids, St Lukes, Sydenham, Te Kuiti and Westgate stores will close in the first week of July.
McCloy said the "difficult decision" to close the stores had been made in a bid to save the business.
The workers' union, First Union, said it was shocked by the announcement and would be seeking legal advice.
"What has happened is highly irregular," general secretary Robert Reid said.
"Neither employees or the union were advised that there was a review on the future of stores before Postie went under administration. No indication was given at last Thursday's creditors meeting that so many stores would be closed and redundancies made.
"In fact at the creditors meeting the administrator gave the opposite impression, that it would be business as usual for the next few weeks.
"This action raises the question of whether the voluntary administration that the company is under is simply a ruse to implement pre-determined restructuring under the protection of administration.
"The way this has been handled is unacceptable."
PwC's McCloy said only one of the affected 64 staff was a First Union member.
While some job cuts had to be made, the company was so far retaining 90 per cent of its staff, he said.
Taylor Shaw employment lawyer James Pullar said it was highly likely the workers should have been informed and consulted about the redundancies before Postie's management put the company into voluntary administration.
However, notifying staff of financial difficulties would have put the company into receivership or liquidation by a creditor, he said.
"Voluntary administration is about keeping the creditors on-side while determining if the company can be kept alive," he said.
Once in voluntary administration though, there should have been consultation.
"There are very limited grounds to avoid consultation, which possibly could be to avoid the employer going into receivership or liquidation i.e. withholding confidential information may save the company," he said.
The workers who have lost their jobs could apply for an injunction requiring consultation or they could raise a personal grievance for unjustified dismissal/unjustified action of the employer.
The day after Postie Plus' administration, it was announced that an unnamed major international retail group was doing due diligence with a view to buying the firm.
Postie Plus' chairman Richard Punter said then that he could neither confirm nor deny that large South African investment group Pepkor was behind the offer, as one media report stated.
Pepkor has retailing chains in Africa, Eastern Europe and Australia.