Community Law New Zealand / Te Whainga Tika Aotearoa

REDUNDANCY

SESSION OBJECTIVES

• What is redundancy?• What is the proper process for redundancy?

MEDIA REPORTS

Hundreds of Military staff face redundancy

Stuff – 23 June 2011Casino redundanciesStuff – 2 April 2011

Rail workshop redundancy process under fireNZ Herald - 21 July 2011

600 Job cuts at meatworks, Defence

NZ Herald – 29 June 2011

Pumpkin Patch cuts 55 NZ Jobs

NZ Herald – 15 June 2011

More Foodstuffs jobs go as staff pick redundancyManawatu Standard - 3 August 2011

WHAT IS REDUNDANCY?

• A situation where a “worker’s employment is terminated by the employer, the termination being attributable, wholly or mainly, to the fact that the position filled by that worker is, or will become, superfluous to the needs of the employer.”Section 184(5), Labour Relations Act 1987

RESTRUCTURING AN ORGANISATION

• Part of doing business, which is often required to ensure business survival and future profitability, but…

• it can have a major impact on employees and they must be treated fairly

THREE FACTORS TO CONSIDER

• Just cause to restructure• Fair process is used• Acts in good faith

JUST CAUSE TO RESTRUCTURE?

• Position must be superfluous to the needs of the employero Must be genuineo The employee can not be replaced by another doing the

same job

• The employee must not be at faulto Must be sound commercial reason not poor performance

THE PROCESS

• Giving appropriate notice of a restructure / redundancy proposal

• Being open minded to alternatives such as redeployment• Offering counselling and career advice services

CONSULTATION

• Intention to restructure relayed to employees• Opportunity for employee to express views and opinions• Employee has time to absorb and give feedback• Employer considers feedback• Decision communicated to staff

IMPLEMENTATION

• Decision conveyed to employee - can be eithero Reconfirmation of the status quoo Reassignmento Redundancy

• Needs to be done in an open and transparent manner!

RESOLUTION

For those employees made redundantExit package which may include:

• Help with CVs• Time off for interviews• Careers Guidance

TECHNICAL REDUNDANCY

• Arises with the sale of a business• Employees who are offered employment with the new

owner are technically redundant because their contract terminates when the business is sold

VULNERABLE EMPLOYEES

• Different rules for redundancy in terms of vulnerable employees under the Employment Relations Act 2000:

• Cleaning services and food catering services• Laundry services for education / health or age related

care• Orderly services for health or age related care• Caretaking services in education sector

VULNERABLE WORKERS

• Right to transfer on same terms and conditions

• Can stay with current employer

• Must given information to make an informed decision

• Must be given time to decide

Cleaning Company A

Cleaning Company B

Sold to

Employees

COMPENSATION

• No right to redundancy payments unless employer and employee have agreed.

• Can be done before or after redundancy is planned.• In some situations employees can ask the ERA to

determine payments.

UNJUSTIFIED DISMISSAL

• Redundancy is a dismissal and therefore employee can claim unjustified dismissal under s103A of the employment Relations Act

• Must be lodged within 90 days!

Community Law New Zealand / Te Whainga Tika Aotearoa

Questions?

This presentation was put together by:Wellington Community Law CentrePO Box 24005, Wellington 6142(04) 499 2928info@wclc.org.nzwww.wclc.org.nz

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Disclaimer: We’ve made every effort has been made to ensure this information is correct at the time of publication. However, we can’t take responsibility for errors or omissions. Teachers and learners may need to seek specific advice for your particular situation. Where appropriate, we urge you to do so. Visit your local Community Law Centre: www.communitylaw.org.nz

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