After Restructure Options: Employee Redundancy

After going through a full and sound restructure process, you may have to make some roles redundant. Although redundancy is about roles, not people, people are affected. It can be a difficult and upsetting process. Redundancy is generally considered to be a situation where an employee’s position is surplus to the employer’s commercial needs. It is important to remember that it is the position that is surplus, not the employee. If a “redundant” person is replaced by someone else in the same position, the redundancy is very unlikely to be justifiable.

Genuine Redundancy:

Employers are entitled to make commercial decisions about their business and these decisions may lead to positions held by Employees becoming unneeded. Examples of these types of decisions are:
• an election to become more efficient by automating departments;
• abandoning unprofitable activities;
• re-organising the structure of the business;
• re-locating a business;
• implementing cost-saving mechanisms;
• outsourcing work to independent contractors.

A genuine redundancy is determined in relation to the position and not the Employee and will usually be genuine if made for valid commercial reasons. An Employer faced with the prospect of dismissing an Employee for reasons of redundancy must be genuine in the decision which gives rise to the redundancy and act in good faith by:

• Being fair, reasonable, and sensitive to the employee;
• Abiding by the agreement entered into between the employer and employee;
• Consulting with the employee prior to the decision to render an Employee redundant being made;
• Providing all information to the Employee to enable the Employee to contribute meaningfully during the consultation process;
• Providing further assistance to the employee if redundancy is the ultimate outcome of the process.

To make sure you’re being fair, following best practice and doing everything you’re legally required to follow these steps and guidelines HERE.

Find an easy to follow 6 Step redundancy process under the Members Section / Employment Documents,  available to NZSDA Members only,  HERE