REDUNDANCY
Community Law New Zealand / Te Whainga Tika Aotearoa
SESSION OBJECTIVES
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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?
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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
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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
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Just cause to restructure
Fair process is used
Acts in good faith
JUST CAUSE TO RESTRUCTURE?
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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
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The employee must not be at fault
o Must be sound commercial reason not poor performance
THE PROCESS
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Giving appropriate notice of a restructure / redundancy
proposal
Being open minded to alternatives such as redeployment
Offering counselling and career advice services
CONSULTATION
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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
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Decision conveyed to employee - can be either
o Reconfirmation of the status quo
o Reassignment
o Redundancy
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Needs to be done in an open and transparent manner!
RESOLUTION
For those employees made redundant
Exit package which may include:
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Help with CVs
Time off for interviews
Careers Guidance
TECHNICAL REDUNDANCY
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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
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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
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Right to transfer on same terms and conditions
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Can stay with current employer
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Must given information to make an informed decision
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Must be given time to decide
COMPENSATION
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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
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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
info@wclc.org.nz
www.wclc.org.nz
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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
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