When is a redundancy not a redundancy?

As awful as it sounds, the closer we get to Christmas the more and more we hear about organisations needing to make the tough calls about the structures and resourcing that they require to see them be successful in the coming year.
 
There’s never a good time to have to make people redundant, but when it’s done right (sensitively, for genuine reasons, fairly and transparently), it does make a difference on how exiting employees view (and talks about) their organisation in the future.  
 
In New Zealand over recent years, there have been ebbs and flows in terms of the level of interference the government has had in decisions made by organisations when it comes to redundancy processes and the results of those processes. 
 
However, recent decisions in both the Court of Appeal and the Employment Court suggest that there is much closer scrutiny of organisational restructures with the following key elements being identified as critical to an organisation’s success in running a good process and staying on the right side of the law:
 

1. Substantive justification. 

 
This means that the employer must be able to establish that a position is genuinely surplus to its requirements (based on clear evidence and ideally presented to the employee at the time of the proposal), and that it is not a change being implemented for any other reason (i.e. to exit a problem employee). 
 

2. Procedural fairness. 

 
This means that the employer must follow a fair process in implementing the redundancy (and this is covered in s 4 of the Employment Relations Act and implied obligations of good faith) which includes:
 
  1. Consultation the employer must consult with all employees impacted by a proposed change. This consultation needs to be genuine and all feedback received as a result of the consultation needs to be given real consideration prior to the organisation making a decision on how to proceed;
  2. Consideration of alternatives – these include redeployment and transfer, and should be genuinely considered prior to making an employee redundant.
  3. Fair selection processes – where an organisation is proposing to have more employees than roles available, it must undertake a fair selection process. This includes the use of objective selection criteria (based on the requirements of the remaining roles) and should (ideally) be given to the candidates of the roles prior to being finalised to ensure they understand which criteria they are being assessed against.
  4. Informing the employee of the outcome – ideally this occurs in a face to face meeting, and should occur ahead of anyone else in the organisation becoming aware of your employee’s situation.
  5. Notice and redundancy compensation – making sure that any payments made to your employee are in line with the requirements as outlined in their employment agreement. 
 
I’ve detailed above what an organisation needs to do in order to run a great restructure process – but my post wasn’t called “how to run a great restructure”!
 
I asked the question “when is a redundancy not a redundancy?”
 
I suspect for many organisations, it’s where they have a challenge with an employee and they think that perhaps a restructure might be easier than managing performance.
 
Or the organisation thinks it might be easier to do a restructure, especially where there are no substantive disciplinary issues that would form the basis for a termination. 
 
For small organisations without an HR function, a restructure might seem like something to cure all ills.
 
Let me stop you there!

Organisations will get into just as much trouble from a poorly conceived restructure as a badly run / unsubstantiated disciplinary process.

 
The result will be exactly the same – an employee claiming an unjustified dismissal
 
I understand that getting restructures and redundancies right can seem like a herculean task and the likelihood (and cost) of getting it wrong, is very scary indeed! 

Sometimes, the best thing you can do for your organisation, is admit that it’s not your skill set and ask for help!

We can help you design and execute a seamless, end to end restructure process that ticks all the boxes and mitigates the risks for your business.
 
A good process, executed fairly, can make the difference between losing the trust and confidence of your team or ensuring that your business is set up for future success. 
 
Genuine restructures, while difficult, if communicated appropriately and sensitively, will more often than not trigger understanding from those most impacted.
 

If you’re looking to kick off a restructure process and need some help, call us on 0800 669 466 and let us connect you with the right people and processes to help or email us using the form below. 

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Think you’ve got a grievance? Who you gonna call…?

I think I speak for most employees when I say that we want things to be simple. We want to find a job we love, with people we like to work with, doing something that adds value or brings us joy.

However, sometimes it’s not that simple. For whatever reason, things can get complicated.

Sometimes this complication can end up with us losing our job or with us making the decision to move on.

Not every ending equals a grievance though.

So how do you know if you have a grievance?

As a starting point, there are some pretty general guidelines that can help you determine if you might have a grievance. Take a look at the questions and answers below. If they sound like your situation it may definitely be worth giving us a call.

1. Termination of your employment – Dismissal:

– Did your employer follow a process (i.e. give you a letter outlining their concerns, allow you to bring a support person to the meeting, outline their concerns and give you an opportunity to present your version of events, take enough time to consider all the information before making a decision) to get to the decision to terminate your employment?

If they didn’t do these things, you might have grounds for a grievance. (There is some flexibility around small employers who may not understand all of their obligations under the law, but we can talk you through this.)

2. Termination under a 90-day trial provision:

– Did your employer meet all of their obligations in relation to your employment agreement (i.e. did they make you aware of the 90-day trial provision in your agreement, does the clause in your agreement comply with the requirements under the law)?

We find that more often than not employers are breaching their obligations in relation to how they treat their employees when there is a 90-day trial provision in the agreement. There’s a good chance that your termination may be unjustified if the provision in your agreement is found to be invalid. We can have a look at your employment agreement and talk you through a potential course of action.

3. Suffering disadvantage in your employment:

– Are you being treated differently because you’re an immigrant?
– Have you been threatened or forced to work in a way that you don’t think is right or breaches the terms of your visa?
– Are you being paid for all the hours you work?
– Did you get the right training and tools to do the job you’re being asked to do?
– Is your employer communicative with you?

There are a number of ways that you may have suffered disadvantage in the workplace. We can talk through your particular situation and help work out if you have the grounds for a grievance.

4. Redundancy:

– Did your employer provide a clear and supported rationale for the decision to disestablish your role?

While business’ do have the right the restructure they need to ensure that they do it in a way that is fair and reasonable. That means that they need to provide enough information to support their proposal and the restructure needs to be for genuine business reasons (it can’t be to get rid of a problem employee!). If you don’t think the restructure completed by your employer was genuine it would be worth giving us a call.

5. No option but to resign:

– Was there something happening in your workplace that made you uncomfortable, made you not feel safe or for any other reason where you believe that you might not have any other option to resign. This may include being bullied, being asked to perform work that is unsafe or that you’re not trained to do or because you’ve been threatened while at work. (Please note that this does not include your employer requiring you to participate in performance improvement processes – if they’ve identified that there are performance concerns, or your is employer taking you through a disciplinary process because there has been an issue at work.)
– Did your employer tell you that if you didn’t resign that you would be fired?

Constructive dismissal is difficult – but not impossible. If you have a concern at work and you’ve raised your concerns with your employer and they have chosen not to do anything to resolve your concerns, you may have the grounds for a constructive dismissal claim.

6. Just need some advice and support?

We don’t just work with employees who want to raise personal grievance claims with their employers.

We can also advocate for employees in meetings and provide advice in regards to all employment matters.

The best place to start is with a phone call – call us on 0800 669 466 to see if we can help you. Or complete our Contact Form

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BACKGROUND OF SITUATION

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Restructuring

Is your employer restructuring your workplace?

Employers may need to make changes with restructuring in the workplace for a variety of reasons, such as:

The law requires employers to provide information to employees when they are considering changes that will affect their jobs and to give them an opportunity to contribute to any decisions.

If you find yourself in the position of being subjected to a restructuring process – our company can provide representation to ensure that your rights are upheld.

Check our page on redundancy

More: When is a redundancy not a redundancy?

Is your employer making you redundant?

Have you been made redundant due to Covid-19?

Covid-19 Subsidy:

The  Government has provided support in an attempt to keep as many New Zealanders in work as possible.  Unfortunately, this will not protect everyone from job loss.  It is not compulsory to apply for the subsidy, but if employers do apply, they MUST pass the subsidy on to their employees.

 If your employer has not applied for the subsidy and instead has told you you are redundant, they still need to follow the correct procedures.

If your employer is considering redundancy, you can ask if they have considered taking the government wage subsidy and paying you with that.

If your employer has received the subsidy for you, the government expectation is that you will remain in employment until at least the end of the subsidised period (end of June 2020).

There should be a genuine reason.

Sometimes employers use ‘Redundancy’ to dismiss staff when they don’t have grounds for dismissal.

If your employer is facing hardship they must enter into a consultation process where you are told your position could be made redundant and given the chance to provide feedback.  You can counter the proposal with your own suggestions such as taking a pay cut, leave without pay or changing the role to include other work.

If your employer says the business is struggling and if you are the only person who is facing the redundancy process then it may not be genuine.  Your employer can’t employ a new person to do the same job as you, but they may be able to combine two jobs.  They can’t make you redundant and then advertise for someone to fill your role.

It is a genuine redundancy if a person’s employment has been ended because their employer has decided, for ‘genuine reasons’ that the employee’s job is no longer needed. A ‘genuine reason’  could, for example, be that the employer is making changes to enable the business to operate more efficiently and cost-effectively; or closing down or selling the business.

Minor alterations to a job’s role and responsibilities should not be a reason for redundancy.

    Check your Employment Agreement

    What does it say about redundancy in your Employment Contract?  You should always make sure you are familiar with the terms of the employment agreement. This will usually have specific provisions dealing with the redundancy process and any entitlements.

    Redundancy Payments

    Under New Zealand law it is not compulsory for an Employer to pay redundancy compensation.  Check Your Employment Agreement:
    If your employment agreement mentions redundancy compensation, it will probably also show what the amount of compensation will be.  If there is no mention of the amount it could be up for negotiation.

    Notice of redundancy

    If there is no specific clause in an employment agreement giving a period of notice in a redundancy situation, ‘reasonable notice’ must be given. The length of ‘reasonable notice’ depends on a variety of factors, such as:

    • the reason for the redundancy
    • the employee’s length of service
    • the employee’s seniority and/or remuneration package
    • custom, practice and industry norms
    • the employee’s ability to find alternative employment
    • the amount of compensation being paid (if any).

    A ‘reasonable’ notice period is usually two weeks to a month.

     

    The decision must be about the position and must not be about an individual employee personally.  The employer cannot use redundancy as a means of getting rid of under-performing employees or disciplining employees for misconduct.

    When can a person be made redundant?

    1. The position must be superfluous to the employer’s needs.
      For example, where a larger number of employees are employed than necessary to operate the business efficiently, certain positions may be disestablished.
    2. The position must actually disappear. The employer cannot claim redundancy by changing a job description slightly or employing new employees to undertake the same or a similar position.
    3. The business is closing down

    What is the process for making a person redundant?

    Your employer must follow the proper process when they need to make you redundant.

    Restructuring or redundancy must be carried out in good faith and your employer must not mislead or deceive you.

    Your employer must;

    • Give you written notice of a discussion/meeting. The letter should say that the meeting is to discuss redundancy or restructuring ;
    • tell you the reasons for the proposed changes, and how they will affect your job;
    • consult with you and anyone else who may be made redundant;
    • give you a chance to get independent advice, and to have a representative or support person with you when you attend the meeting to discuss your possible redundancy or restructure;
    • consider your suggestions before they make any decision about their proposed changes; and
    • consider alternatives to making you redundant e.g. giving you a job elsewhere in the company or reducing the hours you work.

    If the redundancy is false and amounts to an unfair dismissal we can pursue a grievance on your behalf.

    We can help you with all aspects of redundancy.

    It’s free to discuss your situation with us.

    What does redundancy mean?

    To be made redundant from your job position means that your position is no longer needed in the company. Redundancy is a type of dismissal. This may be due to a company re-structure or shifts in the economy or job industry.

     

    What am I entitled to?

    Throughout the redundancy process as an employee, you are entitled to seek legal advice, negotiate and provide feedback to the employer.

    It is important that you have read and fully understood your employment agreement. Your notice period will be outlined in this agreement along with information regarding final pays. Generally, an employee will be paid our their annual leave once the redundancy has been finalised.

    What is the redundancy process?

    Your employer must notify you in writing that your position may be up for redundancy. You should be supplied with a letter/notice of redundancy that asks you to attend a meeting with your employer.

    The employer must explain the situation to you and give you adequate time to process the news, seek legal advice and provide feedback. Feedback can be where the employee offers a reduction in hours, pay or other factors of your role. Although this may not save your job, it is a good chance to negotiate your redundancy in the case these offers change anything on the employers’ end.

    Once you (the employee) has had the opportunity to provide feedback and seek legal advice the decision now sits with the employer. You will receive confirmation of your redundancy and you will start working out your notice period (check your employment agreement).

    CONTACT US FOR A FREE CASE EVALUATION
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    Statistics prove that legal representation for employees  by an employment lawyer or employment law advocate improves your chance of a successful outcome. You have nothing to lose by having a free chat with an Employment Law Advocate.

    You can email us using the form below.   When you receive the automated reply to your email please reply with any correspondence you have received from your employer regarding your job loss. 

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