Can an employer redeploy a potentially redundant employee to another position within the company?
Redundancy agreements commonly provide that redundancy will be avoided where a "suitable alternative position" is available to the employee.
A suitable alternative position should be offered with minimum conditions not less favourable than those of the superfluous position.
Ifthe proposed position is too dissimilar to the original position and the offer of another position is refused, the employee can be made redundant.
The question of whether a suitable alternative position was available was considered by the Employment Court in two recent decisions.
In one case, an ARC employee did not want to take up the alternative position offered to him because it did not involve supervision, training of staff or any of the other management responsibilities of his previous position.
The Employment Court found that the proposed position was not a suitable alternative position. The employee did not have to accept it, and was therefore entitled to redundancy compensation in terms of his employment contract.
The other case involved an employee who was employed by a company as the group finance manager. After a review of the company and the restructure of its finance section, the employee's job was disestablished and replaced with the position of financial accountant.
The alternative position involved a loss of supervisory responsibilities and a drop in salary. The company assumed that the affected employee would not be interested in the position and did not offer it to him.
However, the hearing revealed that the employee would have accepted the position because of the difficulties he faced in finding another job - namely, his age and the depressed economy.
The court said that it was not up to the company to decide that the employee would not have been interested in the new position. The employee was the only person qualified to make such a decision.
Thus an employer must consider whether there is a suitable alternative position for an employee facing the possibility of redundancy. The employer must also discuss any redeployment options with the affected employee.
* Auckland-based CCH New Zealand Ltd is a tax, management and business law publisher. For more information call 0800 500 224 or visit the CCH Website at www.cch.co.nz.
