REDUNDANCY Community Law New Zealand / Te Whainga Tika Aotearoa SESSION OBJECTIVES • • What is redundancy? What is the proper process for redundancy? MEDIA REPORTS Casino redundancies Stuff – 2 April 2011 More Foodstuffs jobs go as staff pick redundancy Manawatu 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 employer o Must be genuine o The employee can not be replaced by another doing the same job • The employee must not be at fault o 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 either o Reconfirmation of the status quo o Reassignment o Redundancy • Needs to be done in an open and transparent manner! RESOLUTION For those employees made redundant Exit 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 Cleaning Company A Sold to Cleaning Company B Employees • 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 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! Questions? Community Law New Zealand / Te Whainga Tika Aotearoa THANK YOU This presentation was put together by: Wellington Community Law Centre PO Box 24005, Wellington 6142 (04) 499 2928 [email protected] www.wclc.org.nz 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 Please feel free to download, adapt, improve, distribute, remix, tweak and build upon this presentation.