$6.8-m payout for unjust redundancy

THE Industrial Disputes Tribunal (IDT) has ordered Spectrum Insurance Brokers to pay a former employee $6.8 million after it found that his dismissal by way of redundancy in 2019 was “unjustifiable”. In a ruling handed down on Tuesday the IDT rejected the company’s arguments that it was facing financial challenges at the time it decided to make the position of Claims Manager Laurel Smith redundant. Initially, lawyers representing the company had argued that the IDT lacked the jurisdiction to hear matters regarding redundancies after the Ministry of Labour sent the dispute for its hearing in 2021.

Lawyers representing Spectrum took the matter to the Supreme Court seeking to challenge the authority of the IDT, but in a 2023 ruling the court said there was no legal basis for it to grant a stay of the judicial review proceedings. When the matter finally started before the IDT in January 2025 the company argued that Smith’s post was made redundant as it was experiencing financial difficulties in 2019 and it was agreed that his position of claims manager would be absorbed into the operations manager position for the purpose of greater efficiency. The company, however, admitted that Smith’s post was the only one made redundant and argued that he was offered a new post of recovery officer but he did not express an interest in that job.

It was also confirmed that there was no issue with Smith’s performance and no disciplinary matter pending against him. Witnesses who testified on Smith’s behalf pointed out that he was a good manager and claimed that “he would be ranked among the best in the industry”. In his testimony Smith claimed to have had a problem with how a senior manager — who was employed by the company five years after him — spoke to the staff and, after he tackled her about this, his department was faced with significant attacks, until it was indicated that his post would be made redundant.

According to Smith, he was embarrassed and traumatised by the redundancy, which affected him financially with his house being put on the market for sale. In its ruling the IDT said despite the company’s claims of facing increasing financial challenges, the records show that its operating profit moved from approximately $17.3 million in 2018 to approximately $20.2 million in 2019, with its total revenue climbing to $19.3 million compared to a budgeted 16.5 million.