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REDUNDANCY. Session Objectives. What is redundancy? What is the proper process for redundancy?. Media Reports. 600 Job cuts at meatworks , Defence NZ Herald – 29 June 2011. Hundreds of Military staff face redundancy Stuff – 23 June 2011. Casino redundancies Stuff – 2 April 2011.
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Session Objectives • What is redundancy? • What is the proper process for redundancy?
Media Reports 600 Job cuts at meatworks, Defence NZ Herald – 29 June 2011 Hundreds of Military staff face redundancy Stuff – 23 June 2011 Casino redundancies Stuff – 2 April 2011 More Foodstuffs jobs go as staff pick redundancy Manawatu Standard - 3 August 2011 Rail workshop redundancy process under fire NZ Herald - 21 July 2011 Pumpkin Patch cuts 55 NZ Jobs NZ Herald – 15 June 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 • Must be genuine • The employee can not be replaced by another doing the same job • The employee must not be at fault • 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 • Reconfirmation of the status quo • Reassignment • 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 • 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!
