Redundancy is a lot more complicated than deciding savings can be made by losing an employee or two and then setting about choosing who goes. It’s also not the soft option for getting rid of a difficult employee.
Let’s take that last point first. If an employee has any idea that their employer is unhappy with them and then, by chance or not, they’re made redundant, the basis of the redundancy can be attacked for having a bad motive. It would be better to deal with performance or behavioural issues, before considering that same person for redundancy.
In terms of a business’ reasons for making staff redundant, the Courts are getting more and more detailed in their examination of the business case for redundancy. Rather than just accept that it was for genuine reasons, the Courts want to see a thorough business case which includes financial analysis. That’s just one step.
Then, just like any other dismissal of an employee, the process has to be fair. As a part of that, a surprising amount of information has to be given to anyone being considered for redundancy.
The employee or employees have to be given time to consider that information and provide comment back, including how they think redundancy could be avoided. The employer must take on board that feedback and give it proper consideration.
All in all, there is a lot to get right when you are considering making staff redundant.
If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:
Wallace Revell
wrevell@farry.co.nz
09 379 0055 or 03 477 8870
The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.